Context over consent – Addressing the Status of Non-Signatories in International Commercial Arbitration
Repo, Olli (2016-08-31)
Context over consent – Addressing the Status of Non-Signatories in International Commercial Arbitration
Repo, Olli
(31.08.2016)
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Turun yliopisto
Kuvaus
Siirretty Doriasta
Tiivistelmä
Globalized commerce and its characteristically complex production and supply chains have shaped the way the concept of contracting is perceived today. It is no longer appropriate to view commercial contracts as singular, exclusive, and private acts between two sovereign participants. Modern business operations form much more intricate contractual phenomena, multilateral contractual chains or networks that, when observed together, constitute entire contractual complexes, which allow the contracting entities to pursue their own, often intertwined interests most efficiently.
The interrelation of interests renders these contractual creatures extremely volatile. The dependence on a successful performance of not only one's own contractual counterparty, but also on the performance of extra-contractual participants – a subcontractor, an execution assistant, or other related third party – is emphasized. When disputes arise, commercial conflicts, neither, can be viewed as singular, exclusive and private anomalies in a relationship between two sovereign participants. Instead, a disturbance in one relationship may cause ripple effects that penetrate the entire contractual complex. Multi-party arrangements transform into multi-party conflicts.
Arbitration has steadily grown in significance as the principal system of commercial dispute resolution. With the number of multi-party disputes constantly growing, the status of non-signatory third parties in the proceedings exerts pressure on the institution of international arbitration to evolve to satisfy the needs of its core audience. Central to the discussion is the dichotomy between market realities of globalized business on one hand, and the consensual nature of arbitration on the other.
This thesis addresses the status of non-signatories in international commercial arbitration, providing an analytical summary of (i) the formation and limits of the contemporary legal framework for international commercial arbitration, (ii) the choice-of-law issues encountered in non-signatory situations, and (iii) the practical legal constructions employed to address the status of non-signatories, including a possibility for a hybrid non-signatory theory.
The conclusion of the thesis is that a universal approach to the non-signatory issue does not come in a form of transnationalist application of supra-national rules (at times referred to as the new lex mercatoria). Instead, the contemporary approach to non-signatory issues is one of transnational territorialism, i.e. application of internationally harmonized legislative framework in conjunction with pertinent national legislation.
The interrelation of interests renders these contractual creatures extremely volatile. The dependence on a successful performance of not only one's own contractual counterparty, but also on the performance of extra-contractual participants – a subcontractor, an execution assistant, or other related third party – is emphasized. When disputes arise, commercial conflicts, neither, can be viewed as singular, exclusive and private anomalies in a relationship between two sovereign participants. Instead, a disturbance in one relationship may cause ripple effects that penetrate the entire contractual complex. Multi-party arrangements transform into multi-party conflicts.
Arbitration has steadily grown in significance as the principal system of commercial dispute resolution. With the number of multi-party disputes constantly growing, the status of non-signatory third parties in the proceedings exerts pressure on the institution of international arbitration to evolve to satisfy the needs of its core audience. Central to the discussion is the dichotomy between market realities of globalized business on one hand, and the consensual nature of arbitration on the other.
This thesis addresses the status of non-signatories in international commercial arbitration, providing an analytical summary of (i) the formation and limits of the contemporary legal framework for international commercial arbitration, (ii) the choice-of-law issues encountered in non-signatory situations, and (iii) the practical legal constructions employed to address the status of non-signatories, including a possibility for a hybrid non-signatory theory.
The conclusion of the thesis is that a universal approach to the non-signatory issue does not come in a form of transnationalist application of supra-national rules (at times referred to as the new lex mercatoria). Instead, the contemporary approach to non-signatory issues is one of transnational territorialism, i.e. application of internationally harmonized legislative framework in conjunction with pertinent national legislation.