Relevant circumstances for exercising the Tribunal’s discretion on joinder issues

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'Ch. 16 Multiparty and Multicontract Arbitration', in J. D. M. Lew, L. A. Misteli, et al., Comparative International Commercial Arbitration, p. 407-408, § 16-92.

16-92 A multiparty arbitration is desirable and should be ordered if:

•It serves procedural economy, i.e. it saves time and money.

•It reduces the risk of inconsistent awards.

•It is fair and equitable in order to facilitate fact-finding and the comprehensive presentation of legal and factual positions.

•It is appropriate for purposes of privacy and confidentiality.

•The parties involved can have equal influence on the composition of the tribunal or if the selection of arbitrators is left to an appointing authority.

'Part II: The Process of an Arbitration, Ch. 7: Complex Arbitration', in

J. M. Waincymer, Procedure and Evidence in International Arbitration, p. 575-576.

Given that there may be reasons for or against joinder or consolidation, it is preferable to give a Tribunal a discretion. In most cases any power to order consolidation is discretionary. Many matters could be considered in the exercise of the discretion including:

•the degree to which the second case can be linked to the connecting test within the first arbitration agreement. Stated another way, to what extent could the separate action have instead been brought as an element of the primary claim.

•the desire for efficiency and the avoidance of inconsistent results.

•the nature of the two disputes and whether efficiency would in fact be served by hearing them together (for example, if one dispute is much more complex than the other).

•whether the parties have provided for arbitration in different venues.

•whether the lex arbitri and/or the lex causae in the two matters differ.

•potential for irreconcilable decisions and delays.

•impact on relevant evidence, whether evidence part heard in the first case or admissibility from one to the other.

•If the applicant for joinder or consolidation has delayed unduly without just excuse, that alone might be grounds for denial, particularly if there would be some prejudice to another party.

Dorothee Schramm, 'Chapter 3, Part II: Commentary on the Swiss Rules, Article 4 [Consolidation and joinder]', in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner's Guide, p. 499-500, § 61-66.

1. (p. 499) Whether the third person is willing to participate. If the third person is unwilling to participate, the arbitral tribunal should consider (p. 500)whether an order against the party is possible at all and whether the fact that the third person had no say in the appointment of the arbitrators creates a risk that the award will be set aside or refused recognition and enforcement. ⁽⁷⁶⁾ No such problem arises if the arbitral tribunal, without rendering a binding order, merely invites the third person to participate by supporting the respondent.
2. Whether the requesting party has a legitimate interest in the third person's participation, for example whether the outcome of the arbitration affects rights and obligations between the requesting party and the third person. There may be other close links between the subject-matter of the arbitration and any claims by or against the third person. ⁽⁷⁸⁾ These links may give the requesting party a legitimate interest in the binding effect of the award against the third person and/or in the support by the third person.
3. Legitimate interests of the other party to the arbitration in having (or not having) the third person participate.
4. Risk that the future award will be set aside or be denied recognition and enforcement if the third person participates without the explicit consent of the other party.
5. Likelihood of separate arbitration proceedings with the third person in the event that the tribunal refuses the third person's participation, as well as the risk of conflicting decisions.
6. Procedural efficiency.

Supplementary conflicts check with regard to the participation of the third person.

Martin Platte, When Should an Arbitrator Join Cases? In Arbitration International Volume 18 Number 1, p. 78-79.

1. (p. 78) It saves time and money:

If the parties are different but the issues are the same a balance has to be struck between the 'overall' increase in efficiency and the individual parties' interests. From the viewpoint of any one of the parties the proceedings may well last a lot longer, and possibly its legal costs will increase since the proceedings are likely to be more complex.

1. (p. 78-79) Reduction of the risk of inconsistent awards.
2. (p. 79) Confidentiality:

Privacy and confidentiality of arbitral proceedings are two of the main advantages of arbitration as opposed to litigation. The parties are not required to reveal documents, evidence or other relevant facts to the outside world, which is especially important if the party to (be) join(ed) is a competitor. An arbitrator must not disregard this point!

1. Equal influence on the composition of the Tribunal.

Thus, an arbitrator should expressly agree, or (a) their right to equal treatment will not be violated and (b) the joinder will not only create more overall efficiency but also (all) the individual parties will benefit.96 As said, this will usually be the case in multi-contract (bi-party) arbitration, and/or when the facts of the case are the same while at the same time no confidentiality objections prevent joinder.

Fritz Nicklisch, 'Multi-Party Arbitration and Dispute Resolution in Major Industrial Projects', Journal of International Arbitration, p. 58-59, 69.

The following two conditions are today generally considered to be essential:

(p. 59) (i)all parties whose separate arbitration proceedings are to be consolidated into a multi-party proceeding must have contractually agreed to such a consolidation; and

(ii)all parties involved must have equal influence on the constitution of the arbitration tribunal.

(p. 69) Given the considerable time and expense involved in multi-party arbitration proceedings, each individual case will require careful consideration as to whether, in the various different proceedings, it is possible that factually divergent findings can, in fact, ensue. A necessary condition for this result is that the issues of fact and law in the various proceedings are the same. Only if the factual circumstances, contractual provisions and applicable law are identical does the aim of avoiding inconsistent findings make any sense.

Dongdoo Choi, Joinder in international commercial arbitration, Arbitration International, 2019, 35, p. 29.

Joinder mechanisms adopted by arbitral institutions, while varying in procedural detail, share two common legal themes—the consent to joinder and the equal participation right to the appointment process.

'Chapter 5: Dispute

Resolution', in Jürg Künzle, Multiple Contracts and Coordination in International Construction Projects: A Swiss Law Analysis, International Arbitration Law Library, Vol. 57, p. 190.

With regard to multi-party arbitration, relevant circumstances include whether or not the parties had to anticipate that there would be multi-party conflicts when entering into the arbitration agreement; whether all parties expected to benefit from the efficiency and cost-saving effect of multi-party proceedings or whether it was apparent that such proceedings would benefit only some of the parties while placing an additional burden on others; whether all parties had an interest in consistent results; and whether confidentiality concerns existed.

Domke, The Law and Practice of Commercial Arbitration (Mundelein 1968-1979), pp. 272-273.

The general rule is that a court may order consolidation of arbitration proceedings where the parties are not the same if the issues are substantially the same and if no substantial right is prejudiced. Thus, where two contracts containing broad arbitration clauses have different provisions as to the amount of goods and the price, but where the same witnesses would be called and the same testimony heard by the same persons in each proceeding, the two (or more) may be consolidated.

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