With regard to multicontract arbitration, the CEPANI Arbitration Rules (“the Rules”) contain a specific provision (Article 10).
Article 10(1) allows the parties to pursue claims arising out of different contracts or in connection with more than one contract in one single arbitration.
This can occur for example when parties decide to conclude different contracts with a related subject matter (part of one single economic transaction) or when one contract is the result of another, etc. In case of dispute, problems can arise when not all the contracts contain an arbitration agreement or have conflicting clauses on jurisdiction, or when the arbitration agreements seem incompatible (different time limits to render the award, different provisions on arbitration costs, different majority rules, a different place of arbitration or number of arbitrators, etc.).
Article 10(1) sets two conditions to be fulfilled in order to (automatically) allow one single arbitration procedure: (1) the parties must agree to apply the CEPANI arbitration rules; and (2) all the parties agree to have their claims decided within a single set of proceedings.
If these conditions are met, the CEPANI Secretariat – depending on the outcome of the prima facie test (Article 6 of the Rules) – will allow one single arbitration. Note that it is not necessary that all contracts contain a CEPANI arbitration clause. It is sufficient that at least one contract refers to the Rules.
Problems can occur when one party refuses to have the claims decided within a single arbitration proceeding. In such a case, the CEPANI Secretariat will not be able to decide the issue and will refer the matter to the arbitral tribunal (Article 12 of the Rules).
In case a dispute should arise on the matter and in order to fully understand Article 10(1), the Rules contain a few [Green Flag – Red Flag] presumptions, in Articles 10(2) and 10(3).
Article 10(2) covers the situation where different contracts are drafted in different languages or where they refer to different Rules of law. According to Article 10(2), in such cases, this would not automatically mean that the claims cannot be decided in one single arbitration.
Article 10(3) covers the situation where the parties conclude different contracts with regard to different transactions which are not related to one another (there is no single economic transaction). If this is the case, the presumption is that the claims should not be decided in one single arbitration.
In its decision, the tribunal can use the presumptions of Articles 10(2) and (3), but the parties are obviously free to exchange their views and can submit additional elements in order to convince the tribunal in one way or the other.
See also, Dirk De Meulemeester and Herman Verbist, Arbitrage in de Praktijk, Bruylant, Brussel, 2013, 78-81.
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Dear Sir,
For the avoidance of doubt, could you clarify at what point an arbitral tribunal would engage in evaluation of a multicontract arbitration’s validity? Would this be a sort of proto-jurisdictional issue, settled at the procedural order stage?
Otherwise, would parties be required to fully submit on jurisdiction, only to face the possibility of having their disputes split? It seems that the latter outcome would be an affront to the principles of procedural economy, expediency and efficiency underlying the new iteration of the CEPANI Arbitration Rules.
Yours faithfully,
Horace Fasttrack
Advocate at the Court
Ah, Counsel for the Claimant.
Good question, sir.
Dear Mootie (apparently)
A tribunal would at all times try to settle the issue at the outset, but of course that would depend on the parties thus answering your remark on “procedural economy”). If it cannot be settled in e.g. the terms of reference, the tribunal could bifurcate, meaning invite the parties to file first on jurisdiction and – once settled – to file on the merits (depending on the outcome of course). If it would seem that the issue on jurisdiction is to closely connected to the merits, bifurcation would not be a good option.
Bear in mind that some counsel would argue that the issue does not regard jurisdiction, but is rather a matter of admissibility. To learn more on that, see e.g. J. PAULSSON, “Jurisdiction and admissibility” in Global reflections on international law, commerce and dispute resolution. Liber amicorum in honour of Robert Briner, ICC publishing, 2005, 601; K. HIGHET, dissenting opinion in I.C.S.I.D. case “ARB(AF)/00/3”: “Waste management” versus “United Mexican states”, paragraph 58.
Dirk De Meulemeester
Dear Sir,
I would like to clarify one issue. How should the parties consent to a single arbitration? Is it possible to have the claims heard within a single set of proceedings if the parties did not give explicit consent thereto?
Yours faithfully,
Sandra Brewster
Dear Sir,
Why do you say that “Article 10(3) covers the situation where the parties conclude different contracts with regard to different transactions which are not related to one another”, where Article 10(3) actually refers to “Arbitration agreements concerning matters that are not related to one another”?
Don’t you make any distinction between the contracts and the arbitration agreements themselves ?
Don’t you think that Article 10(3) should not apply when two different contracts are governed by the same arbitration agreement?
Yours faithfully,
Mary