American University Business Law Review
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&e Extension Of &e Arbitral Agreement To Non-
Signatories In Europe: A Uniform Approach?
Eduardo Silva Romero
University of Paris Dauphine+*9'6*47/1:'642+64*+).+68)42
Luis Miguel Velarde Sa%er
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THE
EXTENSION
OF
THE
ARBITRAL
AGREEMENT
TO
NON-SIGNATORIES
IN
EUROPE:
A
UNIFORM
APPROACH?
EDUARDO SILVA
ROMERO*
&
LuIs
MIGUEL
VELARDE
SAFFER**
Introdu ction
...............................................................................................
372
II.
The
Law
Applicable
to
the
Arbitral
Agreement
...................................
373
A
.
E
nglan
d
......................................................................................
373
B
. S
w
eden
.......................................................................................
373
C
.
Sw
itzerland
................................................................................
374
D
. S
p
ain
..........................................................................................
3
74
E
.
F
ran
ce
.........................................................................................
374
III.The
Contrasting
Approaches
toward
Implied
Consent
........................
375
A.
England:
very
stringent
approach
towards implied
consent
......
375
1.
O
verview
............................................................................
375
2.
P
articularities
......................................................................
376
B.
Sweden:
Stringent
Approach
toward
Implied
Consent
.............
377
1.
O
verv
iew
.............................................................................
377
2.
P
articularities
......................................................................
378
C.
Switzerland:
Intermediate
Approach
toward
Implied
Consent.
378
1.
O
verv
iew
............................................................................
378
2.
Particularities
......................................................................
379
D.
Spain:
Flexible
Approach
toward
Implied
Consent
..................
380
1.
O
verv iew
.............................................................................
380
2.
P
articularities
......................................................................
381
E.
France:
very
flexible
approach
towards
implied
consent
..........
382
1.
O
verv
iew
.............................................................................
382
2.
Particularities
......................................................................
384
C
onclusion
.................................................................................................
385
*
Partner
at
Dechert
(Paris)
LLP.
Professor
of
International
Law
at
the
University
of
Rosario
in
Bogota,
of
Investment
Arbitration
and
International
Contract
Law
at
Sciences
Po
and
of
International Arbitration
at
the
University
of
Paris-Dauphine.
**
Associate
at
Dechert (Paris)
LLP.
LL.M.
by
Harvard Law
School.
Former
Professor
of
Contract
Law
at
the
Catholic
University
of
Peru
and at the
University
of
the
Pacific.
371
AMERICAN
UNIVERSITY
BUSINESS
LA
wREVIEW
INTRODUCTION
Nowadays,
there
is
no
doubt
that
-
under
certain
circumstances
-
an
arbitral
agreement
can
be
extended
to
non-signatories.
Many
theories
have
been
developed
to
this
effect,
such
as
implicit
consent,
pierce
of
the
corporate
veil, and
incorporation
by reference,
among
others.,
In
the
last
two
or three
decades,
especially
among
international
arbitration
practitioners,
consensus
has
emerged
on the
requirements
to
apply
these
theories.
Most
notably,
there
is
general
agreement
on
the
fact
that
-
all
things
being
equal
-
active
participation
by
a
non-signatory
in
the
negotiation,
execution,
performance
and/or
termination
of
the
contract
containing
an
arbitral
agreement
can
be
taken
as
evidence
of
implied
consent
to
arbitrate.
However,
when
the
theory
is
put
into
practice,
as
commonly
occurs,
dissimilar
approaches
resurge.
This
appears
especially
true
when
looking
at
national
courts'
decisions.
Indeed,
whereas
some
judges
interpret
the
circumstances
that
may reveal
implied
consent
in
a
strict
way,
others
show
a
more
relaxed
approach
and
are
willing
to
find
consent
more
easily.
We
believe
this
is
due, at
least
partially,
to
the
different
stance
taken
by
jurisdictions
(and
thus
judges)
towards
factors
that
may
exercise
great
influence
on
the
final
decision
to
extend
or
not
an
arbitral
agreement,
such
as
good
faith,
the
group
of
companies
doctrine
and
the
avoidance
of
a
denial
of
justice.
In the
pages
that
follow,
after
identifying
the
law
applicable
by default
to
arbitral
agreements
in
a
number
of
European
jurisdictions
(the
"Jurisdictions")
(which,
as
can
be
intuited,
is
also
of
relevance
to
the
final
decision
on
the
extension
of
arbitral
agreements),
we
will then
describe
the
contrasting
approaches
taken
in
these
same
Jurisdictions
towards
the
analysis
of
implied
consent,
emphasizing
-
as
mentioned
above
-
the
different
factors
given
relevance
to in
each
Jurisdiction.
Finally,
we
will
finish
our
analysis
with
some
conclusions.
The
Jurisdictions
covered
in
this
paper
are
England,
Sweden,
Switzerland,
Spain
and
France,
which,
according
to
ICC
statistics,
are
some
of
the
countries
chosen
most
often
as
seat
of
international
arbitration
in
2
Europe.
2
1.
See
generally
Eduardo
Silva
Romero,
El
articulo
14
de
la
nueva
Ley
Peruana
de
Arbitraje:
Reflexiones
sobre
cl
contrato
de
arbitraje
realidad,
l
Revista
del
Circulo
Peruano
de
Arbitraje
53
(2011)
(detailing
anaylsis
of
these
theories).
2.
2015
ICC
Dispute
Resolution
Statistics,
ICC
Dispute
Resolution
Bulletin
2016
No.
1
(2016).
Vol.
5:3
THE
EXTENSION
OF
THE
ARBITRAL AGREEMENT
II.
THE LAW
APPLICABLE
TO
THE
ARBITRAL
AGREEMENT
The
analysis
of
the
extension
of
the
arbitral
agreement
to
non-
signatories
should
begin
by
identifying
the
law
applicable
to
said
agreement.
When
parties
are
silent
on
that
point,
the
Jurisdictions
adopt
different
approaches
to
determine
this
law:
England
and
Sweden
establish
a
strict
and
clear-cut
procedure
to
determine
the
applicable
law;
Switzerland
and
Spain
provide
the arbitral
tribunal
with discretion
to
determine
the
applicable
law; and
France
does
not require
the
arbitral
tribunal
to
refer
to
any
national
law
when
analyzing
the
validity
and/or
scope
of
an
arbitral
agreement.
How
strict
or
flexible
the approach
to
determining
the
law
applicable
by
default
to
the
arbitral
agreement
is,
and
how
much
discretion
is
given
to
the
arbitral
tribunal
for
this
purpose,
may impact
the
final
decision
on
the
extension
of
the
arbitral
agreement.
For
instance,
a
system
which
does
not
require
referring
to
a
national
law
to
determine
the
scope
of
an
arbitral
agreement
avoids
potential
idiosyncratic
requirements
that
may otherwise
prevent
its
extension
to
non-signatories.
In
the
following
paragraphs,
we
quote
the
relevant
provisions
for
each
of
the
Jurisdictions.
A.
England
In
the
Sulamkrica
case,
the
United
Kingdom
Court
of
Appeals
developed
a
clear-cut,
three
prong
test
to
determine
the law
applicable
to
the
arbitral
agreement.
It
held
that:
[T]he
proper
law
[applicable
to
the
arbitral
agreement]
is
to
be
determined
by
undertaking
a
three-stage
enquiry
into (i)
express
choice,
(ii) implied
choice
and (iii)
closest
and
most
real
connection.
As
a
matter
of
principle,
those
three
stages
ought
to
be
embarked
on
separately
and
in
that
order,
since
any
choice made
by
the
parties
ought
to
be
respected.
3
B.
Sweden
Pursuant
to
Art.
48(1)
of
the
Swedish
Arbitration
Act,
in
the
event
of
a
lack
of
agreement
between
the
parties,
the
law
of
the
country
in
which
the
proceedings
take
place
will
apply
to
the
arbitral
agreement:
Where
an
arbitration
agreement
has
an
international
connection,
the
agreement
shall
be
governed
by
the
law
agreed upon
by
the
parties.
Where
the
parties
have
not
reached
such
an
agreement,
the
arbitration
3.
See
Sulamrrica
Cia.
Nacional
de
Seguros
S.A.
v.
Engenharia
S.A.
[2012]
EWCA
(Civ)
638
[25]
(Eng.)
(emphasis
added).
2016
AMERICAN
UNIVERSITYBUSINESS
LA W
REVIEW
agreement
shall
be
governed
by
the
law
of
the
country
in
which,
by
virtue
of
the
agreement,
the
proceedings
have taken
place
or
shall
take
place.
4
C.
Switzerland
Art.
178(2)
of
the
Swiss
Private
International
Act
adopts
the
principle
of
in
favorem
validitatis,
which provides
that
an
arbitral
agreement
will
be
deemed
valid
as
long
as
it
complies
with
one
of
three
different
laws. The
Swiss
Act provides,
in
relevant
part,
"an
arbitration
agreement
is
valid
if
it
conforms
either
to
the
law
chosen by the parties,
or
to
the
law
governing
the
subject-matter
of
the
dispute,
in
particular
the
main
contract,
or
to
Swiss
law."
5
In
the
words
of
the
Swiss Supreme
Court
in
the
case
of
X
Ltd
v.
Y.
and
Z.
S.p.A:
It
behoves
[the
Arbitral
Tribunal]
to
determine which
parties
are
bound
by
that agreement
and
if
necessary
to
find out
if
one
or
more
third parties
not
designated
there
nonetheless
fall
within
its
purview.
Such
an
issue
of
jurisdiction
ratione
personae, which
relates
to the
merits,
must
be
resolved
on the
basis
of
Art.
178
(2)
P1LA ....
That
provision
recognizes
three alternative
means
in
favorem
validitatis,
without
any
hierarchy
between them,
namely
the law
chosen
by
the
parties,
the
law
governing
the
object
of
the
dispute
(lex
causae)
and
Swiss
law.
6
D.
Spain
Art.
9(6)
of
the
Spanish Arbitration
Act
also
adopts
the
principle
of
in
favorem
validitatis:
6.
In
respect
of
international
arbitration,
the
arbitration
agreement
shall
be
valid
and the
dispute shall
be
capable
of
arbitration
if
it
complies
with
the
requirements
established
by
the
juridical
rules
chosen
by
the
parties
to
govern
the
arbitration
agreement,
or
the
juridical
rules
applicable
to
the
merits
of
the
dispute,
or
Spanish
law.
7
E.
France
As
indicated
above,
French
courts
have taken
a
different
approach.
They
do
not
deem
it
necessary
to
refer
to
any
national
law
to
assess
the
validity
and/or
scope
of
an
arbitral
agreement.
The
arbitral agreement
remains
4.
Article
48(1)
of
the
Swedish
Arbitration
Act
(1999).
5.
Article
178(2)
of
the
Swiss
Federal
Act
on
Private International
Law
(1987).
6.
See
X.
Ltd
v.
Y.
and
Z.
S.p.A,
Bundesgericht
[BGer]
[Federal
Supreme
Court]
Aug. 19,
2008,
No.
4A
128/2008
134
ENTSCHEIDUNGEN
DES
SCHWEIZERISCHEN
BUNDESGERICHTS
[BGE]
III 565
(Switz.)
(emphasis
added).
7.
Article
9(6)
of
the
Spanish
Act
60/2003
of
23
December
2003
Vol.
5:3
2016
THE
EXTENSION
OF
THE
ARBITRAL
AGREEMENT
375
independent
(or
delocalized)
from
the
various
national
laws,
which
might,
in
other
jurisdictions,
apply
to
it.
In
ComitW
Populaire
de
la
MunicipalitW
de
Khoms
El
Mergeb
v.
Dalico Contractors,
the
Cour
de
Cassation
said
that:
[B]y
virtue
of
a
substantive
rule
of
international arbitration,
the
arbitration
agreement
is
legally
independent
of
the
main contract
containing
or
referring
to it, and
the
existence
and
effectiveness
of
the
arbitration
agreement
are
to
be
assessed,
subject
to
the
mandatory
rules
of
French
law
and
international
public
policy,
on the
basis
of
the
parties'
common
intention,
there being
no
need
to
refer
to
any
national
law.
8
Similarly,
French
arbitrator
Yves
Derains
has
said
that
"[t]his
prominent
role
given
to
the
common
intent
of
the
parties
is
part
of
a
substantive
rule
of
French
law
that
French
courts apply
without
any
regard
to
any
national
law
that
might
be
applicable
to
the
arbitration
clause
pursuant
to
a
conflict
of
laws
rule."
9
III.
THE
CONTRASTING
APPROACHES
TOWARD
IMPLIED
CONSENT
We
now turn
to
comment
on the
approach
taken
by
courts
in
the
Jurisdictions
when assessing
whether
implied
consent
exists.
As
will
become
apparent
from
our
analysis,
we
attribute the
courts'
contrasting
approaches
-
at
least
partially
-
to
the
different
stances
taken by
the
Jurisdictions
towards
factors
such
as
good
faith,
the
group
of
companies
doctrine,
and the
avoidance
of
a
denial
of
justice.
This
idea
is
strengthened
by the
fact
that,
with
the
exception
of
England,
all
of
the
Jurisdictions
adopt
a
similar
theoretical
approach
towards implied
consent.
In
some
cases, we
will
also
make reference
to
other
regulations
that
reinforce the
approach
-
whether
strict
or
flexible
-
endorsed by
each
Jurisdiction
on
binding
non-signatories.
10
A.
England.-
very
stringent
approach
towards
implied
consent
1.
Overview
Based
on the
evolution
of
international arbitration
with
regard
to
implied
consent,
England
can
be
considered
a
rare
case.
Indeed,
we
have
not
found
decisions
where
an
English
court
accepted
to
extend
an
arbitral agreement
8. Comitd
Populaire
de
la
Municipalitd
de
Khoms
El
Mergeb
v.
Dalico
Contractors,
Cour
de
cassation
[Cass.]
[supreme
court
for
judicial
matters]
le
civ.,
Dec.
20,
1993,
Bull.
civ.
II,
No. 372
(Fr.)
(emphasis
added).
9.
Yves
Derains,
Is
there
A
Group
of
Companies
Doctrine?,
in
MULTIPARTY
ARBITRATION
131,
135
(Eric
Schwartz
and
Bernard
Hanotiau
eds.,
2010).
10.
See
infra
Section
III.
AMERICAN
UNIVERSITYBUSINESS
LA
WREVIEW
to
non-signatories
based
on
implied
consent
due
in large
part
to
the
fact
that
the
doctrine
of
privity
of
contract
has
been given
high
importance.
For
instance,
in
Arsanovia
Ltd.
&
Ors
v.
Cruz
City
1
Mauritius
Holdings,
the
High
Court
said
that
"English
law
requires
that
an
intention
to
enter
into
an
arbitration
clause
must
be
clearly
shown
and
is
not
readily
inferred.""
1
In
a
similar
vein,
in
the
partial
award
rendered
in
ICC
case
13777,
the
arbitral
tribunal
said
that
"English
law
contains
no
statutory
provisions
empowering
a
Tribunal
to
compel
arbitration
against
an
unwilling
non-
signatory.
'
1
2
This
rationale
was
confirmed
by
the
United
Kingdom
Supreme
Court
when,
in
the
famous
case
-
Dallah
Real
Estate
and
Tourism
Holding
Co.
v.
Pakistan
-
it
had
to
assess
the
extension
of
the
arbitral
agreement
to
Pakistan
under
French
law.
After
explaining
what
the
standard
was,
the
Court
said:
This
then
is
the
test
which
must
be
satisfied
before
the
French
court
will
conclude
that
a
third
person
is
an
unnamed
party
to
an
international
arbitration
agreement.
It
is
difficult
to
conceive
that
any
more
relaxed
test
would
be
consistent
with
justice
and
reasonable
commercial
expectations,
however
international
the
arbitration
or
transnational
the
principles
applied.
1
3
2.
Particularities
The
very
stringent
approach
of
English
courts
is
reinforced
by
two
factors.
First,
the
rejection
of
the
group
of
companies
doctrine
(i.e.,
no
weight
is
given
to
the
fact
that
non-signatories
and
signatories
belong
to
the
same
corporate
group).
14
Second,
the
rejection
of
a
general
principle
of
good
faith.
In
Interfoto
Picture
Library
v
Stilletto,
for
example,
the
United
Kingdom
Court
of
Appeals
said:
In
many
civil
law
systems,
and
perhaps
in
most
legal
systems
outside
the
common
law
world,
the law
of
obligations
recognizes
and
enforces
an
overriding
principle
that
in
making
and carrying
out
contracts
parties
should
act
in
good faith
....
English
law
has,
characteristically,
committed
itself
to
no
such
overriding
principle
but
has
developed
piecemeal
solutions
in
response
to
demonstrated
problems
of
11.
Arsanovia
Ltd.
&
Ors
v.
Cruz City
I
Mauritius
Holdings
[2012]
EWHC
(Comm)
3702
[
35]
(Eng.)
(emphasis
added).
12.
ICC
Case
13777,
partial
award
on
jurisdiction
dated
April
2006.
13.
Dallah
Real
Estate
and
Tourism
Holding
Co. v.
Pakistan
[2010]
UKSC
46
[10]
(Eng.)
(emphasis
added).
14.
Peterson
Farms
Inc.
v.
C&M
Farming
Ltd.
[2004]
EWHC
121
[62]
(Eng.).
Vol.
5:3
2016
THE EXTENSION
OF
THE
ARBITRAL
AGREEMENT
377
unfairness.
1
5
Based
on the above,
we
can
identify
as
particularities
of
the
English
system:
"
The
adoption
of
a
clear-cut,
three
prong
test,
to
determine
the
law
applicable
by
default
to
arbitral
agreements;
*
The
courts'
very
stringent
approach
towards
the
analysis
of
implied consent
to
arbitrate;
"
The
rejection
of
the
group
of
companies
doctrine;
and
"
The
rejection
of
an
overriding
principle
of
good
faith.
B.
Sweden.-
Stringent
Approach
toward Implied
Consent
1.
Overview
Non-signatories
may
be
bound
by
an
arbitral
agreement based
on
their
behavior.
In
a
recent
case,
Profera
AB
v.
Blomgren,
the
Court
of
Appeal
of
Western
Sweden
found
that negotiations
and
exchange
of
drafts
created
an
oral
arbitral
agreement
binding
upon
the
parties:
The
Court
found
that
the
parties
had
agreed
orally
in
regard
the
main
and
determining
issues
of
the
agreement,
which
was
the
purchase price.
The
parties had thus
entered
into
the
agreement, despite
the
fact
that
some
issues
remained
to
be
agreed
upon.
The
Court
then
considered
whether
the
parties
were
bound
by
the
arbitration
clause
in
the
drafts
exchanged.
The
court found
that
the
parties
were
bound
by
the
arbitration
clause
as
almost
all
of
the
discussed
drafts had
contained arbitration
clauses
that
referred
to
the
Swedish
Arbitration
Act.
Further,
the
Defendant-
Appealed
had
never
specifically
objected
to
or
protested
against,
or
otherwise
demonstrated
its
disagreement
with
the
arbitration
clause.
16
In
general,
Swedish
courts appear
to
have
a
stringent
approach
towards
binding
non-signatories.
In
another
recent
case,
the
Supreme
Court
construed
restrictively
the
reference
made
in
an
arbitration
clause
to
disputes
"arising
out
of
or
in
connection
with"
the
contract
that
contained
it,
concluding
that
disputes
that
arose
out
of
a
related
transaction
(to
said
contract),
and
its
parties,
were
not
bound
by
the
arbitral
agreement.
The
Court
reasoned
that
"[t]he
arbitration
clauses
that
are
relevant
in
the
present
case
do
not
specify
any
legal
relationship
except
the
agreement
that
is
regulated
by
the
respective
contractual
document.
Thus,
the
arbitration
clauses
govern
only
the
rights
and
obligations
that
arise
under
these
15.
Interfoto
Picture Library
Ltd.
v.
Stiletto Visual
Programmes Ltd.
[1989]
QB
433
[439]
(Eng.)
(emphasis
added).
16.
Profera
AB
v.
Blomgren
[HovR]
[Court
of
Appeal]
2008-03-12
p.
1
T
2863-
07 (Swed.)
(emphasis added).
AMERICAN
UNIVERSITY
BUSINESS
LA
wREVIEW
agreements.
17
2.
Particularities
The
group
of
companies
doctrine
is
not
endorsed
in
Sweden.'
8
On
the
other
hand,
in
exceptional
circumstances,
consent
to
arbitrate
may
be
inferred
from
passivity.
In
an
unpublished
decision,
the
Svea
Court
of
Appeal
said
that:
In
this
case, the
court
noted
that
the
party
not
singing
or
wishing
to
be
bound
by
an
arbitration
agreement
has
to
take
active
steps
to
make
his
disagreement
known
to
the
other
party.
Whereas
passivity
normally
would
not
result
in
the
formation
of
a
contract
the
case
should
be
distinguished
when
a
party
should
or
ought
to
realize
that
the
other
party
believes
or
assumes
that
a
binding
agreement
has
been
concluded.
This
was
the case
here.
In
such
a
situation,
which
applies
to the
Profura
case,
there
is
an
obligation
to
inform
the
other
party
that
no
such
agreement
has
been
formed.
1
9
Based
on
the
above,
we
can
identify
as
particularities
of
the
Swedish
system:
"
The
adoption
of
a
clear-cut
rule
to
determine
the
law
applicable
by default
to
arbitral
agreements;
"
The
courts'
stringent
approach
towards
binding
non-signatories;
"
The
rejection
of
the
group
of
companies
doctrine;
and
"
The
acceptance,
in
exceptional
circumstances,
that
consent
can
be
inferred
from
passivity.
C.
Switzerland.
Intermediate
Approach
toward
Implied
Consent
1.
Overview
Non-signatories
may
be
bound by
an
arbitral
agreement
based
on
their
behavior.
Consent
will
be
deemed
to
exist when
the
non-signatory
is
involved
in
the
performance
of
the
contract
that
contains
an
arbitral
agreement.
The
Swiss
Supreme
Court
has said
that
"a
third party
involving
itself
in
the
performance
of
the
contract
containing
the
arbitration
agreement
is
deemed
to
have
adhered
to
the
clause by
conclusive
acts
if
it
is
possible
to
infer
from
its involvement
its
willingness
to
be
bound
by
the
arbitration
17.
Concorp
Scandinavia
v.
Karelkamen
Confectionary
[HD]
[Supreme
Court]
2012-04-05
p.
5
0
5553-09
(Swed.).
18.
Anders
Relden
&
Olga
Nilsson,
INTERNATIONAL
ARBITRATION
IN
SWEDEN:
A
PRACTITIONER'S
GUIDE
67
(UlfFranke,
et
al.
eds., 2013).
19.
Ukraine
v.
Norsk
Hydra
[HovR]
[Court
of
Appeal]
2007-12-17
T
3108-06
(Swed.).
Vol.
5:3
2016
THE
EXTENSION
OF
THE
ARBITRAL
AGREEMENT
379
clause.
,
2
0
The
Supreme
Court
has
added,
however,
that
in case
of
doubt
regarding
the
existence
of
consent,
a
restrictive
interpretation
shall
be
observed:
To
interpret
an
arbitration
agreement,
its
legal
nature
must
be taken
into
account;
in
particular
it
must
be
taken
into
account
that
renouncing
access
to
the
state
court
drastically
limits
legal
recourses.
According
to
the
case
law
of
the
Federal
Tribunal,
such
an
intent
to
renounce
cannot
be
accepted
easily,
therefore
restrictive
interpretation
is
required
in
case
of
doubt.
2
1
In
a
similar
vein,
commentators
have
said
that:
As
a
consequence,
it
is
clear
that
under
Swiss
substantive
law
participation
in
the
performance
of
a
contract
may
result
in
an
extension
of
the
arbitration
agreement
to
a
third
party.
However,
in
order
to
[honor]
the
principle
of
relativity
of
contractual
obligations,
the
requirements
for
such
an
extension
are
rather
strict.
2
2
2.
Particularities
The
group
of
companies
doctrine
is
not
endorsed
in
Switzerland.
23
In
this
regard,
the
Supreme
Court
has
said
that:
The
Group
of
Companies
doctrine
does
not
per
se
justify
extending
an
arbitration
clause
to
another
company
within
the
group.
Unless
there
is
an
independent
and
formally
valid manifestation
of
consent
of
the other
company
of
the
group
to
the
agreement
to
arbitrate,
such
an
extension
will be
granted
only
in
very
particular
circumstances
that
justify
a
bona
•
24
fide
reliance
of
a
party
on
an
appearance
caused
by
the
non-signatory.
However,
Swiss
courts
do
consider
good
faith
when
assessing
the
extension
of
the arbitral
agreement.
In
a
decision
rendered
in
2014,
the
Supreme
Court
held
that
"the
principle
of
good
faith
(Art.
2
CC26)
would
nonetheless
require
the
recognition
of
X
's
right
to
act
against
Y
Group
directly
on the
basis
of
the
arbitration
clauses
contained
in
the
Contracts
in
consideration
of
the
circumstances
of
the
case
at
20.
X.
v.
Y
Engineering
S.p.A.,
Tribunal
Frdrral
[TF]
Apr.
7,
2014,
ATF
4A_450/2014
7
(Switz).
(emphasis
added).
21.
FC
X.
v
Y.,
Tribunal
Fdral
[TF]
Jan.
17,
2013,
4A_244/2012
11
(Switz.)
(emphasis
added).
22.
Thomas
Muller,
Extension
of
Arbitration
Agreements
to
Third
Parties
Under
Swiss
Law,
in
CROSS BORDER
ARBITRATION
HANDBOOK
11
(2010)
(emphasis
added).
23.
Matthias
Scherer,
Introduction
to
the
Case
Law
Section,
27
ASA
Bulletin
488,
494 (2009)
("Under
Swiss
law,
mere
affiliation
to
the
same
group
of
companies
is
not
sufficient
to
extend
an
arbitration
clause
signed
by
a
group
company
to
a
parent
or
sister
company.").
24.
X.
Ltd
v.
Y.
and
Z.
S.p.A,
Bundesgericht
[BGerl
[Federal
Supreme
Court]
Aug.
19,
2008,
No.
4A
128/2008
134
ENTSCHEIDUNGEN
DES
SCHWEIZERISCHEN
BUNDESGERICHTS
[BGE]
III
565
(Switz.)
AMERICAN
UNIVERSITYBUSINESS
LAW
REVIEW
hand.
,
2
5
And
in
another
similar
decision,
the
Supreme
Court
said
that
"[i]t
has
already
been
admitted
that
in
specific
circumstances,
a
certain
behavior
may substitute compliance
with
a
formal
requirement
on
the
basis
of
the
rules
ofgoodfaith.
2
6
"
Based
on
the
above,
we
can
identify
as
particularities
of
the
Swiss
system:
*
The
adoption
of
the
principle
of
in
favorem
validitatis,
which
provides
for
the
application
of
up
to
three
different
laws
to
the
arbitral
agreement
*
The
restrictive
interpretation
given
to
consent
in cases
of
doubt;
*
The
rejection
of
the
group
of
companies
doctrine;
and
"
The
relevance
given
to
the
good
faith
principle.
D.
Spain:
Flexible
Approach
toward Implied
Consent
1.
Overview
Non-signatories
may
be
bound
by
an
arbitral
agreement
based
on
their
behavior.
Consent will
be
deemed
to
exist
when
the
non-signatory
is
directly
implicated
in
the
performance
of
the
contract
that
contains
an
arbitral agreement.
The
Supreme
Court
stated
that
"[a]t
all
times,
we shall
ascertain
that
in
the
instant
case
the
arbitration
agreement
contained
in
the
contract
dated
31
July
1992
entails
its
application
to
the
parties
directly
implicated
in the
performance
of
the
contract.
'
,
2
7
Any
finding
that
consent exists
shall
be
strongly supported.
In
this
regard,
the
Spanish
Superior
Court
has
said
that:
[M]ore
controversial
is
the
problem
of
the
extension
of
the
arbitration
agreement
to
legal and
natural
persons that
have
not
signed
it,
not
only
as
a
result
of
the
requirement
of
consent
for
the
existence
of
the
arbitral
agreement
(art.
9.1
LA)
-
which
does not
exclude
implicit consent,
inferred
from
conduct
-
but
also because,
in
any
case,
inferring
such
will,
when
it
is
not
expressed,
shall
be
strongly
supported
given
its
radical
legal
consequences,
i.e.,
the
waiver
of
the
right
to
access
jurisdiction,
hard
core
-
in
the
words
of
the
Constitutional
Court
-
of
the
25.
X.
v
Y
Engineering
S.p.A.,
Tribunal Federal
[TF]
Apr.
7,
2014,
No.
ATF
4A_450/2014
19
(Switz.)
(emphasis
added).
26.
X.
S.A
v.
Z
Sarl,
Tribunal
Federal
[TF]
Oct.
16,
2013,
ATF
4P
115/2003
16
(Switz.)
(emphasis
added).
27.
Interactive Television,
S.A.
c.
Banco
Bilbao
Vizcaya,
S.A.
y
SATCOM
NEDERLAND
BV,
IGNACIO
SIERRA
GIL
DE
LA
CUESTA,
Case
No. 404/2005,
decision
from
the
Supreme Court
(
1
st
Chamber)
dated
26
May
2005, at
Fundamentos
de
Derecho,
First
Item (emphasis added).
Vol.
5:3
THE
EXTENSION
OF
THE
ARBITRAL
AGREEMENT
right
to
an
effective
access
to
justice.2
8
2.
Particularities
Two
factors
relax
the
apparently stringent
approach
of
Spanish
courts.
First,
according
to
commentators,
the
group
of
companies
doctrine
has
certain
weight
in
Spain.
In the IBA
Spanish
Guide for
2012,
for instance,
it
is
said
that
"[a]rbitration
agreements
may
bind
non-signatories
if
they
have
a
very
close
and
strong
relationship
with
a
signing
party,
or
they
have
played
a
strong
role
in
the
performance
of
the
contract.
29
And
Yves
Derains
adds
that:
On
the
basis
of
the
above,
one
may
be tempted
to
conclude
that
the
group
of
companies doctrine
represented
a
brief
momentum
in
the
evolution
of
the
French
case law
relating
to the
application
of
arbitration
clauses
to
non-signatories.
As
a
matter
of
fact,
this
doctrine
has
been
firmly
excluded
in
other
jurisdictions
with
the
apparent
exception
of
Spain.
3
0
Second,
good
faith
plays
a
very
important
role
in
the courts'
assessment
of
whether
implied
consent
exists.
For
instance,
in case
68/2014,
the
Superior
Court
said:
"[i]n
sum,
as
already
stated,
the
Chamber
understands
that
the
extension
to
DIMA
and
GELESA
of
the
arbitration
agreement
contained
in
the
Shareholders
Agreement
is
a
natural
consequence
of
the
contract,
and
is
consistent
with
a
good
faith
interpretation."
31
Finally,
since
it
points
into
the
same
direction,
it
is
worth
briefly
referring
to
the
rules
-
provided
in
the
Spanish
Arbitration
Act
-
for
arbitrating
in
the
corporate
context.
These
rules
effectively
force
minority
shareholders and
administrators
to
arbitrate their disputes.
Art.
11
(bis)
of
the
Spanish
Arbitration
Act
provides,
in
relevant part,
that:
28.
Dima
Distribuci6n
Integral,
S.A.,
y
Gelesa
Gesti6n Logistica,
S.L.
v.
Logintegral
2000,
S.A.U.,
Jesfis
Maria
Santos
Vijande,
Case
No.
68/2014,
decision
from
de
Superior Court,
Civil
and
Criminal
Chamber, dated
16
December
2014,
at
Fundamentos
de
Derecho,
Fourth
Item (emphasis
added).
29.
IBA
Arbitration
Committee,
Arbitration
Guide:
Spain
7
(March
2012),
http://www.google.com/url?sa--t&rct=j&q=&esrc=s&source=web&cd=
1
&ved=OahUK
Ewju4Ti-bMAhWGFj4KHYyXD
YQFggfMAA&url=http%3A%2F%2F;
www.iba
net.org%2FDocument%2FDefault.aspx%3FDocumentUid%3DE543
1E65-E56C-
4866-8E48-FF9996CF
1AC5&usg-AFQjCNEqgbsqXwroSDATg2hOq9oMkW-Zw
(emphasis
added).
30.
Derains,
supra
note
9,
at
135
(emphasis
added).
31.
Dima
Distribuci6n
Integral,
S.A.,
y
Gelesa
Gesti6n Logistica,
S.L.
v.
Logintegral
2000,
S.A.U.,
Jests
Maria
Santos
Vijande,
Case
No.
68/2014,
decision
from
de
Superior Court,
Civil
and
Criminal Chamber,
dated
16
December
2014,
at
Fundamentos
de
Derecho,
Fourth
Item
(emphasis
added).
2016
AMERICAN
UNIVERSITYBUSINESS
LA
wREVIEW
2.
The
inclusion
in
the
bylaws
of
an
arbitration
clause
will
require
approval
of,
at
least,
two
thirds
of
the
capital
shareholders.
3.
The
bylaws
may
establish
that
the
challenge
of
corporate
agreements
by
the
shareholders
or
administrators
is
subject
to
the
decision
of
one
or
more
arbitrators
....
32
Furthermore,
in
a
recent
decision,
the
Superior
Court
of
Catalonia
extended
an
arbitral
agreement
(contained
in
the
original
bylaws
of
the
company)
to
shareholders
that
acquired
their
shares
after
the
company's
incorporation.
The
Court
held:
By-laws,
as
a
constitutive
agreement
that
has
its
origin
in
the
will
of
the
company's
founders,
can
contain
an
arbitral
agreement
for
the
resolution
of
corporate
conflicts.
An
arbitral
agreement
is
an
accessorial
rule
to
the
by-laws
and
as
such
is
independent
from
the
founders'
will
and
represents
a
further
corporate
rule
that
binds
-
due
to
its
inscription
in
the
Commercial
Registry
-
not
only its
signatories
but
also
the
present
and
future
shareholders.
3
3
Based
on
the
above,
we
can
identify
as
particularities
of
the
Spanish
system:
"
The
adoption
of
the
principle
of
in
favorem
validitatis,
which
provides
for
the
application
of
up
to
three
different
laws
to
the
arbitral
agreement;
*
The
strong
support
needed
to
justify
any
finding
of
implied
consent;
*
The
importance
given
to
the
group
of
companies
doctrine
and
the
good
faith principle;
and
"
The
innovative
provision
of
the
Spanish
Arbitration
Act
for
arbitrating
in
the
corporate
context.
E.
France:
very
flexible
approach
towards
implied
consent
1.
Overview
Non-signatories
may
be
bound
by
an
arbitral
agreement
based
on
their
behavior.
Whether
or
not
this
is
possible
-
based
on the
particular
circumstances
of
each
case
-
will
depend
on the
common
intention
of
the
parties.
This
common
intention
was
initially
analyzed
by
French
courts
through
a
subjectivist
lens,
but
nowadays
an
objectivist
approach
is
mainly
used.
As
explained
by
Pierre
Mayer:
[i]nitially
there
was
a
certain
insistence
on the
fact
that
when
the
non-
32.
Article
I
l(bis)
of
the
Spanish
Act
60/2003
of
23
December
2003.
33.
Case
No.
9/2014,
decision
from
the
Superior
Court
of
Catalonia
dated
6
February
2014
(RJ
2014,
1987).
This
decision
follows
another
one
rendered
by
the
Supreme
Court
on
9
July
2007
(RJ
2007,
4960)
(emphasis
added).
Vol.
5:3
2016
THE
EXTENSION
OF
THE
ARBITRAL
AGREEMENT
383
signatory
had
participated
in
-
generally
-
the
performance
of
the
contract,
and had
been
aware
of
the
existence
of
the
clause,
it
was
to
be
presumed
that
it
had
accepted
to
be
bound
by
the
clause.
I
would
call
this
the
subjectivist
trend.
But
more
recently
a
more
objectivist
trend
has
surfaced.
3
4
Below
we
briefly
describe
the
subjectivist
and
objectivist
approaches.
Under
the
subjectivist
approach,
implied
consent
exists
when
(i)
the
non-signatory
has
an
active
role
in
the
performance
of
the contract,
and
(ii)
it
is
aware
of
the
existence
of
the
arbitral
agreement
(which
is,
in
principle,
presumed).
In
Socit
Ofer
Brothers
v.
The
Tokyo
Marine
and
Fire
Insurance
Co.,
the
Paris
Court
of
Appeal
said:
Considering
that
the
arbitration
clause
present
in
an
international
contract
has
its
own
validity
and
efficacy,
such
as
to
require
its
extension
to
the
parties
directly
involved
in
the
performance
of
said
contract
provided
their
situation
and
activities
indicate
that
they
were
aware
of
the
existence
and
the
scope
of
such
clause,
which
was
agreed
upon
according
to
the
usages
of
international
commerce.
3
5
Emphasizing
the
requirement
of
awareness,
the Paris
Court
of
Appeal
has
said
that
an
arbitral
tribunal
lacks
jurisdiction
over
third
parties
who
did
not,
and
could
not, know
about
the
existence
of
an
arbitral
agreement.
In
one
such
case,
it
affirmatively
stated
that
"[the
arbitral agreement
was]
manifestly
inapplicable
to
SOLEIL
DE CUBA,
third
party
to
the
contract,
who
could
not
know
about
the
existence
of
said
clause
given
its
confidential
nature."
3
6
Under
the
objectivist
approach,
implied
consent
is
only
assessed
based
on
behavior.
Awareness
as
to
the
existence
and/or
scope
of
an
arbitral
agreement
is
irrelevant.
In
the
Alcatel
case,
the
Cour
de
Cassation
said
that
"[t]he
effects
of
the
international
arbitration
clause
extend
to
parties directly
involved
in
the
performance
of
the
contract
and
the
disputes
that
may
result
from
it."
37
Similarly,
in
the
Kosa
France
case,
the
Paris
Court
of
Appeal
said
that
34.
Pierre
Mayer,
The
Extension
of
the
Arbitration
Clause
to
Non-Si
natories
-
The
Irreconcilable
Positions
of
French
and
English
Courts,
27
AM.
U.
INT'L
L.
REv.
831,
831-32
(2012)
(emphasis
added).
35. Soci&t6
Ofer
Brothers
v.
The
Tokyo Marine
and Fire
Insurance
Co.,
Cour
d'appel
[CA]
[regional
court
of
appeal]
Paris,
civ.,
Feb.
14,
1989
(Fr.)
(emphasis
added).
36.
S.A.
Cubana
de
Aviaci6n
v.
Societ6
Becheret
Thierry
Senechal
Gorrias,
Cour
d'appel
[CA]
[regional
court
of
appeal]
Paris,
civ.,
Oct.
23,
2012, 12/04027
(Fr.)
(emphasis added).
37.
Soci6t6
Alcatel
Bus.
Sys.
v.
Amkor
Tech.,
Cour
de
cassation
[Cass.]
[supreme
court
for
judicial
matters]
le
civ.,
Mar.
27,
2010,
Bill
civ.
II,
No.
129
(Fr.)
(emphasis
added).
AMERICAN
UNIVERSITYBUSINESS
LA
wREVIEW
the
arbitral
agreement
should
be
extended
"to
the
parties
directly
involved
in
the
performance
of
[the]
contract
and
in
the
disputes
that
may
result
from
it."
3
8
2.
Particularities
In
general,
French
courts
have
taken
a
flexible
approach
when
assessing
whether
implied
consent
to
arbitrate
exists.
This
is
clearly
evidenced
by
the
decision
rendered
in
the
famous
Dallah
case
by
the
Paris
Court
of
Appeal
(referenced
below).
This
flexible
approach
is
supported
by
two
factors.
First,
the
endorsement
of
the
group
of
companies
doctrine.
As
explained
by
Yves
Derains,
"the
existence
of
a
group
of
companies
is
a
circumstance
that
plays
an
important
role
in
revealing
the
intent
of
parties.
39
Second,
the
weight
given
to
justice
considerations.
Commenting
on
the
decision
of
the
Paris
Court
of
Appeal
in
the
aforementioned
famous
Dallah
case,
where
a
contract
and
its
concomitant
liability
were
extended
to
Pakistan,
non-signatory
party,
Pierre
Mayer
said
that:
Is
the
French
position
shocking?
At
first
sight
it
is,
since
the
consent
of
the
parties
to
arbitrate
is
the
cornerstone
of
arbitration,
and the
Government
of
Pakistan
had
made
clear
its
intention
not
to be
a
party
to
the
contract
containing
the
arbitration
clause.
However,
the
refusal
to
recognize
the
award
would
have
meant
a
denial
of
justice,
since
the
Trust
had
disappeared
and
there
was
no
other
defendant
against
which
Dallah
could
have
acted
than
the
Government.
4
0
Based
on
the
above,
we
can
identify
as
particularities
of
the
French
approach:
"
There
is
no
need
to
refer
to
a
national
law
to
analyze
the
validity
and/or
scope
of
an
arbitral agreement;
*
The
use
of
a
preeminently
objectivist
approach
when
assessing
whether
implied
consent
exists;
and
"
The
relevance
given
to
the group
of
companies
doctrine
and
justice
considerations.
Based
on
what
has
been
said,
the
figure
below
shows
the
placement
of
each
Jurisdiction
in
terms
of
"stringent
approach
v.
flexible
approach"
towards
implied
consent:
38.
Kosa
France
v.
Rhodia
Operations,
Cour
d'appel
[CA]
[regional
court
of
appeal]
Paris,
civ.,
May
5,
2011,
No.
10-04688
(Fr.)
(emphasis
added);
see
also
Amplitude
v.
Promodos,
Cour
de
cassation
[Cass.]
[supreme
court
for
judicial
matters]
le
civ.,
Nov.
7,
2012,
Bill
civ.
II,
No. 11-2589
(Fr.)
(supporting
the
same
approach
as
the
Kosa
France
case).
39.
Derains,
supra
note
9,
at
137
(emphasis
added).
40.
Mayer,
supra
note
34,
at 836
(emphasis
added).
Vol.
5:3
2016
THE
EXTENSION
OF
THE
ARBITRAL AGREEMENT
-;tiigent
:Very
CONCLUSION
The
explanation
given
in
section
III
above shows
that,
with
the
exception
of
England:
* All
of
the
Jurisdictions
accept that
consent
to
arbitrate
can
be given
implicitly;
*
Active
participation
is
the
common
way
to
show
implied
consent;
and
*
A
finding
of
implied consent
needs
to be
strongly
supported.
However,
on
similar
facts,
courts
in
the
Jurisdictions
may
reach
opposite
conclusions because
they
weigh different
factors
in
their
analysis.
If
appertaining
to
the same
corporate
group
may
be
indicative
of
intent,
then
it
is
easier
to
bring
a
non
signatory
parent
company
to
an
arbitration
agreed
upon
by
its
subsidiary.
The
same
applies
to
justice
considerations,
which
it
may
be
argued
-
allow
binding
non-signatories
in
total
absence
of
a
contractual basis.
Developments
that
make
it
easier
to
bind
non-signatories
have
also
taken
place
in
the
legislative
arena,
as
evidenced
by
the
innovative
provisions
of
the
Spanish
Arbitration
Act
to
bind minority
shareholders
and
administrators.
4
'
If
one
goes
beyond
Europe,
Article
14
of
the
Peruvian
Arbitration
Act
can be
considered
as
a
move
in
the
same
direction.
4
2
Finally,
as
pointed
out
earlier,
43
the
placement
of
Jurisdictions
in
the
figure
shown
above
is
generally
consistent with
the
higher
or
lower discretion they
give
to
arbitral
tribunals
to
determine
the
law
applicable
by
default
to
arbitral
agreements.
41.
Article
I1
(bis)
of
the
Spanish Act
60/2003
of
23
December
2003.
42.
Peruvian
Arbitration
Act,
art.
14
(stating
that
"[t]he
arbitral
agreement
extends
to
those
whose consent
to
arbitrate,
according
to
the
good
faith,
can
be
inferred
from
their
active
and
determinant
participation
in the
negotiation,
execution,
performance
or
termination
of
the
contract
that
includes
the
arbitral
agreement or
to
which
the
agreement
relates
.... ").
43.
See
supra
notes
28-35
and
accompanying
text.
