Both of these decisions of the English High Court concern the extension
of contractual rights to parties who did not sign the contract which
provided for arbitration. In the first, the court used the powers conferred
by statute to permit a third party to access both the contractual obligations
and the agreement to arbitrate. In the second, the court struck down the
tribunal’s finding, based on the “group of companies” doctrine, that the
contract was intended to create rights on behalf of third parties.
The judgments are commented jointly in observations by Michael E
(1) Approved Judgment by the High Court of Justice Queens
Bench Division Commercial Court, on 4 February 2004, in
Case No.  Ewhc 2602 (Comm)
Permit of a third party to access the arbitration agreement.
Under the Contracts (Rights of Third Parties) Act 1999, (the “Third
Parties Act”), a third party to a contract under which one party has
promised to confer a benefit on that third party, may enforce that promise
direct against the promisor. When the contract contains an arbitration
clause, the third party shall for the purposes of the Arbitration Act 1999 be
treated as a party to the arbitration agreement as regards disputes between
the third party and the promisor.
Claimant: Nisshin Shipping Co Ltd
Respondent: Cleaves & Company Ltd and Others