When Should an Arbitrator Join Cases?

Abstract

ACCORDING TO the Registrar of the London Court of International Arbitration more than 50 per cent of the cases under the aegis of the LCIA involve more than two parties. In the period between 1984 and 1988 21 per cent of the pending ICC cases involved three or more parties. Contract practice as reflected by these figures shows that frequently there are more than two parties involved in international transactions. However, too often the ‘Dispute Resolution’ clauses in otherwise very detailed contracts do not provide for more than a standard arbitration clause and thus do not address the practical problems of ‘multi-party arbitration’. The question that frequently arises is whether an arbitrator may join cases, and in which circumstances they should do so. Joinder and consolidation of parallel or connected proceedings are commonly found in litigation.1 The reasons why national judges employ them are obvious: they prevent inconsistent judgments2 and they save time and money and thereby serve procedural efficiency.3 Hence, joinder and consolidation foster the good administration of justice.4 It is argued that arbitration ought to provide the same advantages,5 especially since arbitration has become a prevalent feature of international commercial transactions.6 There are, however, some problems with compulsory joinder and consolidation in arbitral proceedings. The main argument against them is that arbitration rests on consensus.7 This means that in the absence of specific provisions – or case law – in the lex arbitri the parties must have agreed on joinder or consolidation.8 In addition, problems regarding the composition of the arbitral tribunal may arise. If neglected, these factors open the door for challenging the award at the place of arbitration, and recognition and enforcement of the award might also be denied. As stated above, national judges can join (third) parties …