History & Modern Evolution of Transnational Commercial Law

Document-Id: 138550, Please cite as: "https://www.trans-lex.org/138550"

Title

Hanotiau, Bernard, Ohlrogge, Leonardo, 40th Year Anniversary of the Dow Chemical Award, in ASA Bulletin 40 (2022), at 300 et seq.

Table of Contents

40th Year Anniversary of the Dow Chemical Award

Content

40th Year Anniversary of the Dow Chemical Award

BERNARD HANOTIAU, LEONARDO OHLROGGE

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Futhermore, had the group of companies doctrine a consensual nature, it would only be an unnecessary term adding complexity to what is in fact the assessment of the parties' intent. Attaching any consensual requirement to the theory would render it meaningless. Consent is the fundamental and utmost further requirement in any case. If there is consent, there is jurisdiction so that no further requirements would be necessary. In other words, if there is express or implied consent, then the party will be a true party to the arbitration agreement without needing to resort to any theory. This does not only apply to cases where the companies are from the same group, but also where companies are completely dissociated from one another.12

The existence of a group of companies is therefore only a factual element that might indicate consent towards multi-party arbitration. It is certainly a factor to be taken into account when analysing the parties' intentions, but it is not a decisive element by itself.13 Consent remains the preponderant criterion.14

Even though one might be tempted to draw a formula from the findings of the Dow Chemical award and similar decisions, this is not recommended.15 In the end, the analysis of the parties' intent is a factual exercise. Consent or lack thereof is ascertained based on the factual circumstances of the case and evidence on the record. There is no shortcut that might simplify a rigorous analysis.16 As shown below, reliance on the group of companies doctrine has proved to be counterproductive. It adds an extra layer of complexity to what is at its core the analysis of consent.17 This is not necessary and only leads to confusion. Moreover, there is no need to refer to the group of companies doctrine, as non-signatory issues may and should be resolved by reliance on implied consent only.

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12This is another example of terminological inaccuracy regarding the concept of group companies. MANTILLA-SERRANO, Multiple Parties and multiple Contracts: Divergent Comparable Issues?, in HANOTIAU/SCHWARZ (eds.), Multiparty Arbitration, 2010, Kluw Law International, p. 12.
13DERAINS, Is there A Group of Companies Doctrine?, in HANOTIAU/SCHWARZ (eds.), Multiparty Arbitration, 2010, Kluwer Law International, p. 143.
14According to ZUBERBÜHLER, group of companies doctrine is often used as an umbrella term for all the non-signatory scenarios where the fact of a corporate relationship among signatory and non-signatory parties plays an important role. He further adds that decisions show that the finding of an (implied) consensus remains key in binding non-signatories to an arbitration clause (ZUBERBÜHLER, Non-Signatories and the Consensus to Arbitrate, in ASA Bulletin, 2008, Vol. 26, p. 25).
15See more in HANOTIAU, Complex Arbitrations: Multi-party, Multi-contract, Multi-issue — A comparative Study, 2nd ed., 2020, Kluwer Law International, para. 245.
16WILSKE/SHORE/AHRENS, The “Group of Companies Doctrine” — Where is it Heading?, in American Review of International Arbitration, Vol. 17, 2006(1), pp. 87-88.
17PCA Case No. 2011-09, Decision on Jurisdiction, 25.07.2012, Arbitrator Intelligence Materials, para. 331: “The Respondents insist that Mongolian law does not recognize the socalled ‘group of companies doctrine’. In this respect, the Tribunal observes that the Claimants do not rely on this doctrine. The Tribunal further notes that no clear submissions have been made as to the content of any such doctrine. In the Tribunal’s view, the mere existence of a group of companies cannot affect the scope of the arbitration clause. As stated above, the relevant inquiry is into the common intention of the Parties, as manifested through their conduct in the negotiation, performance, and termination of the contract”.

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