Final Arbitral Award rendered in 2000 in case 108/1997 - SAR 2001 - 1
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(1) Law applicable to the obligation to arbitrate.
(2) Whether, because of its conduct, a parent company is considered party
to an arbitration agreement concluded by its subsidiary.
(3) Liability for arbitration costs in a parallel arbitration.
(1) The law applicable to the agreement to arbitrate is the law to which the
agreement has the strongest connecting factors. The place of arbitration is
considered a strong connecting factor.
(2) Under the Swedish contractual principle of “theory of trust”, where a
parent company holds itself out as the party managing and implementing a
contract between one of its subsidiaries and a third party, by means of
renegotiating such contract and making payments thereunder, the third party
is entitled to trust its impression that the parent company has entered as a party
into the same contract.
Where a parent company’s conduct must be considered to constitute
acceptance of the entire contract, it includes the agreement to arbitrate any
dispute with the third party.
(3) The parent company is not held liable for the arbitration costs incurred
by its subsidiary in a parallel arbitration against the third party.
Claimant: X (United States)
Respondent: Z (Russian Federation)
Subsidiary of the Respondent: Y (Russian Federation)
Place of arbitration:
Nationality of arbitrators: