Originally from American Review of International Arbitration - ARIA

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THE “GROUP OF COMPANIES DOCTRINE” –
WHERE IS IT HEADING?
Stephan Wilske, Laurence Shore & Jan-Michael Ahrens*
I. INTRODUCTION
Contrary to litigation before state courts, arbitration is a private dispute
resolution mechanism and has to be agreed upon by the parties. Where a person
has not submitted to arbitration, either by means of an arbitration clause in a main
contract or a separate arbitration agreement, he generally has a right to seek
recourse before the state courts; in many countries, access to the courts is granted
as a constitutional or human right.1 Accordingly, it comes as no surprise that the
“extension” of arbitration agreements from a contractual party to third parties,
e.g., to its affiliated companies or controlling shareholders, has become a crucial
issue in arbitral practice. Can such third parties rely on the lack of consent to
arbitration or may the need for effective dispute resolution justify sacrificing the
strict requirement of (real) consent? If so, in which circumstances might this be
warranted? Diverging arbitral awards and court decisions from various
jurisdictions recently re-ignited this important debate.2 The present article will
address these recent developments and seek to assess emerging trends.