Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
International Arbitration
Consolidation and third parties
Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
United States

Answer ... The Federal Arbitration Act (FAA) does not address consolidation, but the issue is addressed by the rules of most arbitral institutions. For example, Rule 8 (Consolidation) of the International Centre for Dispute Resolution Arbitration Rules provides that:

[a]t the request of a party, the Administrator may appoint a consolidation arbitrator, who will have the power to consolidate two or more arbitrations pending under these Rules . . . into a single arbitration where: (a) the parties have agreed to consolidation; or (b) all of the claims and counterclaims in the arbitration are made under the same arbitration agreement; or (c) the claims, counterclaims, or setoffs in the arbitrations are made under more than one arbitration agreement; the arbitrations involve the same parties; the disputes in the arbitrations arise in connection with the same legal relationship; and the consolidation arbitrator finds the arbitration agreements to be compatible.

Some states allow courts to order consolidation of cases. Under California law, a party to an arbitration agreement:

may petition the court to consolidate separate arbitration proceedings, and the court may order consolidation of separate arbitration proceedings when: (1) Separate arbitration agreements or proceedings exist between the same parties;  or one party is a party to a separate arbitration agreement or proceeding with a third party;  and (2) The disputes arise from the same transactions or series of related transactions;  and (3) There is common issue or issues of law or fact creating the possibility of conflicting rulings by more than one arbitrator or panel of arbitrators. (Cal Code Civ Pro, § 1281.3).

For more information about this answer please contact: Jonathan Landy from Williams & Connolly
Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
United States

Answer ... No statute addresses this issue. The rules of most arbitral associations, however, address joinder. Article 7 of the International Chamber of Commerce Arbitration Rules, for example, provides that “no additional party may be joined after the appointment of any arbitrator, unless all parties, including the additional party, otherwise agree”.

For more information about this answer please contact: Jonathan Landy from Williams & Connolly
Does an arbitration agreement bind assignees or other third parties?
United States

Answer ... The fact that a party did not sign an arbitration agreement is not dispositive of the question of whether it is bound to such agreement. “[A] nonsignatory party may be bound to an arbitration agreement if so dictated by the ‘ordinary principles of contract and agency’” (Thomson-CSF, SA v Am Arbitration Ass’n, 64 F3d 773, 776 (2d Cir 1995)). Accordingly, traditional state law contract principles govern the applicability of an arbitration agreement to non-signatories. Courts have held that non-signatories may be bound to arbitration agreements under various theories, including:

  • incorporation by reference of the agreement to arbitrate into another contract;
  • assumption or assignment;
  • agency;
  • veil-piercing/alter ego;
  • third-party beneficiary; and
  • estoppel.

(Arthur Andersen LLP v Carlisle, 556 US 624 (2009) (arbitration agreements are enforceable by and against non-signatories, under state law contract principles); Color-Web, Inc v Mitsubishi Heavy Industries Printing & Packaging Machinery, Ltd, 2016 WL 6837156 (SDNY 21 November 2016) (applying estoppel to bind non-signatory plaintiffs and defendants to arbitration, including corporate parents, agent, and successor)).

Independent contractors, however, are not ‘agents’ that can be bound as non-signatories to an arbitration clause (Oudani v TF Final Mile, LLC, 876 F3d 31 (1st Cir 2017)).

For more information about this answer please contact: Jonathan Landy from Williams & Connolly
International Arbitration