Originally From Arbitration Law of Sweden: Practice and Procedure

Multi-party Arbitration

4.1 Introduction

A business project often involves more than two parties. A single contract may be binding on three or more parties. In other cases, a number of different contracts signed by two or more parties may be closely connected. These multi-party agreements entail two main problems of arbitration law. Firstly, difficulties arise when an arbitral tribunal comes to be formed. Secondly, there are difficult joinder problems—can a third party be forced into an existing arbitral dispute, and is he entitled to participate in the proceeding? When a contract or a number of interconnected contracts affect more than two legal subjects and contractual disputes arise, those controversies can lead to one or more arbitral proceedings with two or more parties. These proceedings are called multi-party arbitration.1 It is by no means necessary for all contracting parties to become involved in the arbitration disputes.

Multi-party problems have to be resolved by the parties on a contractual basis. Agreements are often difficult to reach when disputes have arisen and the conflicting interests of the parties become clearly apparent. If multi-party problems are to be provided for, this must as a rule be done already when the contract or contracts are signed.2 With one exception, the Swedish Arbitration Act makes no provision on the subject of multi-party proceedings.3 If two or more parties have signed a contract containing a standard arbitration clause and overlooked the need for special provisions in the clause, some arbitration questions can be resolved by adjustment interpretation. With this method of construction, the meaning of the arbitration clause and various statutory rules will be adapted to the multi-party situation and contract conditions, especially those of relevance to the relationship between the disputing parties. This method can also be used when the parties have only partly succeeded in solving the multi-party problems. Not all questions, though, can be settled by this method. Sometimes an express contractual provision is required, e.g., on the procedure for appointing arbitrators; see the next section.