Originally from American Review of International Arbitration - ARIA

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I. MOUNT PRIVITY AND ITS INHABITANTS

Widening access to arbitration is for many reasons desirable. This section provides the framework and context of theoretical uphill challenges affecting calls for third-party rights and liabilities in arbitration as a result of the classical privity of contract doctrine.

A. Introduction

1. Conceptual Inquiries

How and why can it be said that a third party, i.e., a person who is not a signatory or direct creator of the arbitration clause or who did not perform the contract upon which a dispute is based, has a right or obligation to arbitrate or to have an award binding upon it? Is the absolute consent of a party to the arbitration agreement not needed or can an independent right of claim or defense be brought before arbitration proceedings? Is the claim of right or obligation compellable? What duty, power, or right does the arbitral tribunal have in these situations? In common-law jurisdictions, positive resolution of these and related questions involve a reappraisal of the application of the “privity of contract” doctrine.  This means highlighting the weaknesses and workings of the orthodox privity of contract doctrine, radically re-examining the juridical nature of an arbitration agreement, and engaging in the recontextualization and specification of an applied doctrine for arbitration law. The foregoing is in short what this piece is conceptually about.