A Study On Legal Issues Of Joinder In Arbitration

As a form of multi-party arbitration,joinder is the product of the rapid development of modern commercial trade.Both arbitration legislations and institutional rules have adopted joinder rules to meet the needs of arbitration practice in recent years.Joinder in international commercial arbitration can be demonstrated as four core legal issues:(i)the scope of the eligible parties that can be joined;(ii)parties' consent in the joinder procedures;(iii)who to decide the joinder of the additional parties;(iv)protection of the joining additional party's right of equal treatment in the arbitrator nomination process.There are two main standards that define the scope of the eligible parties that can be joined in arbitration legislations and institutional rules:(i)prima facie,the joining additional parity is bound by the arbitration agreement giving rise to the arbitration(the “prima facie test” standard);(ii)the joining additional party is the other party of the same arbitration agreement giving rise to the arbitration(“same arbitration agreement” standard).The main difference of these two standards is whether to permit joining nonsignatories into the arbitration which reflects the controversial nature of joining nonsignatories as parties to arbitration,because there are different scales of acceptances to the theory of the extension of arbitration agreement in arbitration legislations and institutional rules.In addition,the joinder of non-signatories may conflict with the principle of voluntary arbitration and the traditional written form requirement of arbitration agreements.Joinder in arbitration usually requires parties' consent about the joinder.The current requirements adopted by legislations and institutional rules could be concluded into 3 modes:(i)consent of all the parties involved;(ii)consent of the requesting party and the joining additional party;(iii)upon one party's application with no consent required.In the absence of parties' consent,the arbitral proceedings are often hindered as the additional party will raise jurisdiction challenges to the arbitration institution,the arbitral tribunal or even the court,or it will not attend the trial.Even if the tribunal made the award,the award-creditor still face the risk that the award-debtor will raise its plea that there is no valid arbitration agreement exists which would case the refusal of recognition and enforcement of the arbitral award.Under the competence-competence principle of arbitral tribunal,the tribunal is the general decision-making body for joinder in arbitration.Some arbitration rules acquired the arbitration committee assumes the functions of the arbitral tribunal before the formation of the arbitral tribunal,and makes a preliminary decision on whether to join additional parties;the court may also review the arbitral tribunal's ruling on joinder and make a decision under certain circumstances.Court intervention conflicts the competence-competence principle of arbitral tribunal.But considering the particularity of adding non-signatories to participate in arbitration,the intervention of the court can constitute an exception to this principle.In a joinder procedure,arbitrators are usually appointed by party autonomy,the Court of arbitral institutions or the court in the seat of arbitration,or the members of the tribunal still remains the same as the joining additional party is presumed to waive the right to nominate arbitrators under certain arbitration rules which indicates that the party to be joined is at a disadvantage in the nomination process as it participates in arbitration only after the commence of the arbitral procedure.Although the principle of party autonomy is the foundation of international commercial arbitration,party autonomy under certain circumstances might be inconsistence with the principle of equal treatment,e.g.the arbitration agreement itself violates equal treatment or one party gets a privileged position in the nomination process when there is a joint nomination.Therefore,arbitral institutions and courts only appoint arbitrators in the absence of party autonomy.The presumption of waiver of right to nominate arbitrators applies only in situation when the joinder is requested after the constitution of an arbitral tribunal which to an extent deprives the joining additional party' right to nominate arbitrators and violates the principle of equal treatment.There are still blanks on joinder in Chinese arbitration law while the judicial interpretation issued by the Supreme Court of China limitedly recognized the theory of the extension of arbitration agreement.The current system of joinder in domestic arbitration rules all have some certain defects.In the context of the complex modern commercial relations,it is necessary to introduce the joinder rules in Chinese arbitration law,the provisions of which shall be much more general in order to provide general direction for the arbitration practice.For an instance,an exception to the principle of competence-competence as well as the principle of equal treatment in the arbitrator nomination process could be provided.The judicial interpretation should allow the theory of extension of arbitration agreement to apply in more circumstances.Detailed rule-making works about joinder could be left to arbitration institutions as long as there are effective reliefs when the joining parties' legal rights are being infringed.