An article by
Lateef Bamidele, Fola Alade & Toheeb Amuda
In a borderless and fast paced world, contracts between multiple parties are increasingly becoming popular as businesses and transactions are conducted and negotiated by independent, yet co-operating local and international parties on a daily basis. These transactions are common in manufacturing contracts, oil and gas contracts, facility arrangements, joint venture agreements and construction and engineering contracts. Thus, where parties refer their disputes in such contracts to arbitration or mediation, there is usually difficulty in agreeing mechanisms for appointment of the tribunal as well as situations of joinder or consolidation if the parties wish to avoid multiple proceedings to prevent potentially inconsistent results.
According to the 2020 ICC Dispute Resolution Statistics, of the 2,507 parties involved in cases filed in 2020, 48% were claimants and 52% were respondents. Approximately a third of the cases (31%) involved multiple parties, consisting of several respondents (51%), several claimants (31%), or several claimants and respondents (18%). As in previous years, the vast majority of multiparty cases (87%) involved three to five parties.1
Whilst it may however be difficult to envisage the disputes that may arise under any particular agreement, having consideration for the most likely types of disputes likely to occur under a multi-party contract is key for drafting a dispute resolution clause that will be most suitable for achieving a timely and cost-efficient resolution of a dispute for the parties.
In this article, we focus on two major Alternative Dispute Resolution (ADR) mechanisms, Arbitration and Mediation, and consider how a multi-party contract can present a complex dispute resolution scenario for parties and how the use of a well drafted dispute resolution clause can guide parties out of such complex situation. We will address the appointment of neutrals in multi-party contracts by considering the rules of international and domestic institutions and we will conclude with some guidance on how best to draft such dispute resolution clauses.
- WHAT ARE MULTI-PARTY CONTRACTS?
In answering this question, other similar questions are bound to arise such as multi-party disputes, multi-contract disputes, multi-party arbitration as well as multi contract arbitration. While the same strategy can be used to answer these questions, they are different concepts entirely which we shall seek to analyse below.
In arbitration and mediation, the phrase “multi-party” relates to the situation where there are more than two parties to a contract. In such situations, the key issue which arises is the need to ensure that each of the parties, regardless of their number, receive equal treatment in the formation of the tribunal and throughout the arbitration.2 This issue becomes critical during the enforcement of an award where the unsuccessful party may challenge the award on the ground of unfairness in the tribunal appointment process, as was the issue in Siemens AG/BKMI v Ducto Construction Company3 Which we will consider subsequently.
Multi-party contracts thus exist in varied forms depending on the type and nature of transactions in question, and disputes can arise therefrom in a variety of ways, for instance multi-party and single contract where multiple investors are party to a joint venture agreement, or a multi-contract scenario where a company enters into several agreements with contractors, banks and investors to finance a project as well as a multi-party and multi-contract relationship such as in a construction and engineering contract between a project owner and a contractor who then contracts with other sub-contractors.
The dispute arising from any of the above is regarded as multi-party or multi-contract disputes and where such disputes are referred to arbitration or mediation for settlement, then multi-party or multi-contract arbitration or mediation is established. The term multi-party is often used between the two, but this does not mean the term is limited to where only one contract is involved. Hence when such disputes become subjects of arbitration, people sometimes categorize the disputes into two major classes namely, bi-polar and multipolar proceedings.4
A bi-polar multi-party arbitration is similar to the traditional two-party arbitration, where thedisputing parties are organized into a claimant camp and a respondent camp. Each camp may haveclaims and counter-claims towards the other camp, but within each camp, all partieshave the same interests. These kinds of disputes are common in construction contracts where guarantors and contractors are often inone camp while the project owner is in the other camp, or in an oil and gas joint venture arrangement where some joint venture partners have carried the obligations of another partner and they are seeking to recover their investments from the carried partner.
On the other hand, a multi-polar arbitration proceeding involves a relationship between parties in a chain of contracts and is much more complex because parties usually have divergent interests against one another, such that it becomes difficult to group them into the claimants and respondents’ camps respectively. This means that parties in the same arbitration often have cross-claims against each other. It also includes cases where claims are raised against parties who are not party to a contract in relation to the same or similar subject-matter. The issue of joining such third-parties to an arbitration is known as “joinder” and is generally permitted provided that all parties (and the tribunal, where already appointed) agree.
While Arbitral institutions had been very reluctant to entertain multi-party arbitrations, experience has shown that it is generally desirable when parties seek to avoid conflicting decisions arising out of arbitration on the same subject matter. Hence, many of these institutions have sought to review their rules to ensure that mechanisms are put in place for hearing of multi-party dispute in a single arbitration proceeding.
- DISPUTE RESOLUTION CLAUSES IN MULTI-PARTY CONTRACTS: COMMON ISSUES OR CHALLENGES IN DRAFTING AND PROCEDURE.
Parties usually do not enter into contracts with dispute or its resolution as the key objective in their minds, this makes it difficult to anticipate the kind of dispute that may arise in the course of the relationship, and this becomes even more complicated where multi-party or multi-contract relationships are in question. Thus, a lot of contracts have been entered into without a clear and concise dispute resolution clause and has brought untold hardship on the parties when disputes eventually arose. This scenario therefore means that having a tailor-made dispute resolution clause in a multi-party contract is not only necessary for seamless dispute resolution process but also essential to avoid many negative implications attributed to a badly drafted dispute resolution clause.
In a multi-party arrangement, it is not uncommon for the parties to agree on arbitration clause which permit all related disputes arising between them to be heard together in one arbitration. Alternatively, the parties may agree to have the disputes heard in separate arbitration proceedings with the option to agree to consolidate those proceedings or to conduct concurrent hearings. If parties wish to allow consolidation where the rules they have selected do not contain the option, it needs to be drafted into the arbitration agreement.
Some of the challenges with drafting such arbitration clause are therefore related to clarity as to who to appoint the tribunal and who should have the power to determine whether a dispute is related to another. It is also advisable that arbitration or mediation clauses in multi-contract arrangement should be identical, or at least similar or compatible or better still execute an umbrella arbitration or mediation agreement whereby an overarching agreement provides an arbitration/mediation process for disputes arising out of such contracts. Whichever mode parties are adopting, the following are the various challenges that are bound to occur and which must be sufficiently dealt with if parties want to have a seamless dispute resolution process.
- COMPLEXITIES OR CHALLENGES IN MULTI-PARTY ARBITRATION.
- Appointment of the Tribunal.
When it comes to the constitution of the arbitral tribunal in a multi-party arbitration, maintaining each party’s right to procedural fairness and equal treatment is a difficult task. Providing each party an opportunity to appoint its own arbitrator does not usually work as it could lead to tribunal of impractical size and may present an avenue for unfair decision where the number of either the claimants or respondents is more than the other.Again, allowing each side to appoint one arbitrator irrespective of their number may also present challenges in situations where the parties may have clashing interests.5
In a multi-contract arbitration, there could also be practical problems with the appointment of the arbitral panel. Each of the agreements may have a different method provided for the number and appointment of the tribunal,6 and when a consolidation is ordered, there could be complications in deciding the number of arbitrators to be used and the method to be adopted in the appointment process. The fatal consequences of an imbalanced appointing mechanism are well depicted in the famous decision of the French Cour de Cassation in the case of Siemens AG/BKMI v Ducto Construction Company7
In this case, Ducto had commenced arbitration proceedings against Siemens and BKMI under the International chamber of Commerce (ICC) Arbitration Rules. Each of the two respondents wanted to choose its own arbitrator. This request was not granted by the ICC, which instead asked the two companies to jointly appoint an arbitrator. The respondents went ahead to make the joint appointment but later challenged the award of the ICC on the basis that they had not been given equal opportunities with the claimant in the appointment of the tribunal. The Cour de Cassation in France held in favour of the respondents, annulling the award on the ground of inequality in the appointment of the tribunal.
It is on the basis of this decision that several arbitral institutions decided to review their rules to address likely challenges that parties may be faced with when drafting their dispute resolution clauses in a multi-party contract. It is generally common for two or more parties in a multi-party arbitration to have aligned interests such as in bi-polar proceedings, where this is the case, the parties with a common interest may wish to team up and appoint an arbitrator. Where there is no clear-cut divide between the various parties, it may not be possible to break into “claimant” and “respondent” camps.
- Procedural Challenges.
In addition to the constitution of the arbitral tribunal, arbitral institutions and tribunals (where already appointed) are repeatedly confronted with other complexities which include but not limited to the following:
- Joinder – where during a dispute between two parties, either the claimant or the respondent wishes to add a third party to the proceedings in order to raise a claim against it;
- Consolidation – where the parties have already initiated parallel proceedings which they now wish to merge into one or where the parties had entered into numerous contracts and would like to settle disputes that arose out of different contracts in the same arbitral proceedings; and
- Third-Party Intervention – where a third party wants to intervene in an ongoing arbitration proceedings between two (or more) parties on its own initiative.
Parties usually do not envisage the occurrence of any of the foregoing issues when drafting their contracts, and where they occur, it becomes an issue which must not only be resolved, but must be sufficiently resolved to prevent any untoward consequences on the result of the arbitration process. The obligation of consent as well as timing for any of these is equally important as some arbitral institutions do not have provisions for them once the tribunal has been constituted.
The principle that every arbitration depends on the consent of the parties to it is fundamental and accepted all over the world. The nature of arbitration is such that it thrives on the consent of the parties to it for its validity.8 Establishing consent between two parties to a dispute as the basis for arbitration is quite straight forward but the same cannot be said of a dispute involving multiple parties or multiple contracts. Under such circumstances, parties may choose a series of arbitrations on the same dispute with a likelihood of inconsistent results.9
Therefore for a multi-party arbitration to be possible, all disputing parties must have agreed to it since this is the essence of the principle of party autonomy. This is very unlike the case in litigation, where parties can easily be joined in an action regardless of whether they agree to it or not. So, in the procedural challenges highlighted above, a consequential fall out issue is one relating to consent because any attempt to approve joinder of parties or order consolidation of disputes in an arbitration without the consent of the parties will open the result of such arbitration to various obstacles during enforcement proceedings.
- COMPLEXITIES OR CHALLENGES IN MULTI-PARTY MEDIATION PROCEEDINGS.
The sheer number of people involved in a multi-party mediation gives rise to a number of practical issues. First, is the need to ensure that all parties involved are represented, especially where the parties are in groups.
It is equally important to get a room large enough to comfortably accommodate all the parties, as much as can be reasonably accommodated. Sometimes, it can also be a challenge finding a date when all parties can attend with their chosen representatives. This problem can well arise before and during Mediation proceedings.
Getting all parties to agree to the mediators’ terms and the wording of a suitable mediation agreement can also pose a challenge. Oftentimes, due to these seemingly minor challenges, the parties will need more than one day.10 It can be helpful for the mediation days to be separated by two days to a week to give the disputants enough time to prepare for each day. It’s very unlikely that parties can have the proceedings day by day.
In addition, mediating with more than two parties can add a layer of confidentiality to the process. Some parties may require their discussions with certain other parties to remain confidential as between them and the co-mediators.11
- SIGNIFICANCE OF A CLEAR DISPUTE RESOLUTION CLAUSE AND SPECIFIC INSTITUTIONAL RULES IN A MULTI-PARTY CONTRACT.
Parties to a multi-party contract should consider, at an early stage in the drafting and negotiation of their contracts, how they want their future disputes resolved. In drafting a dispute resolution clause, parties must pay particular attention to the method by which the tribunal or mediator(s) is to be appointed.
In Arbitration, typically, either the parties or an institution on their behalf would make a joint appointment of one arbitrator or, if there is to be a three-person tribunal, the parties would each appoint (or nominate) an arbitrator and those two arbitrators will then jointly appoint a third arbitrator. However, where this is not possible, recourse must be had to specific rules of relevant arbitral institution. In most countries, the codes of civil procedure for state court proceedings contain detailed provisions for dealing with and providing solutions for such situations. The State Court’s authority to join parties or to consolidate proceedings is based on the respective statutory provisions and derived from State power. In contrast thereto, arbitral tribunals are not vested with such powers. They derive the powers from the parties’ agreement to submit a dispute to arbitration. This contractual basis of arbitration poses limits to a tribunal’s power to order similar measures and can make it more difficult to deal with such issues.12 In order to arrest complexities when disputes arises in multi-party contracts, parties are at liberty to insert joinder and consolidation clauses in their contracts which sets out in clear details how such situation will be handled. We have set out an example of such clause below.
Where parties intend their disputes to be administered by an institution, the parties should also consult and familiarise themselves with how their preferred arbitral rules deal with procedural issues such as joinder (i.e. adding a party to existing proceedings), consolidation (i.e. joining multiple existing proceedings together) and intervention (i.e. a third party wishing to join an existing arbitral proceedings) at the time of drafting the contract, as well as at the outset, any potential dispute these issues may also present. If parties find themselves in a situation where a dispute has arisen under complex contracts which do not contain a specific multi-party friendly arbitration or mediation clause, they should carefully consider their options and the steps needed to be taken to ensure any joinder or consolidation of proceedings is possible and that the dispute is handled in a cost and time effective manner.
The rules of arbitral institutions such as the ICC Rules, LCIA Rules, AAA/ICDR Rules, HKIAC Rules and the SIAC Rules all contain identical provisions on the joinder of a party to an arbitration proceeding in a multi-party contract. The consensus of these institutions are (1) One of the parties needed to have made an application for joinder; (2) both the third party and the applicant party needed to have consented to the joinder in writing and (3) the parties must not have excluded tribunal’s power to join a third party.13 The Rules of the above institutions also provide for consolidation of separate proceedings whenever all claims are made under the same arbitration agreement.14 In Nigeria, Article 20(4) of the Lagos Court of Arbitration (LCA) Rules and Article 23(5) of the Lagos Chamber of Commerce International Arbitration Centre (LACIAC) Rules both provide for joinder of a third party in an Arbitration proceeding.
- APPOINTMENT OF NEUTRALS IN MULTI PARTY CONTRACTS.
As noted above, the appointment of neutrals in multi-party contracts is a crucial point of discussion. When not included or properly spelt out in the dispute resolution clause, the constitution of an arbitral tribunal or panel of mediators can be problematic due to the need to maintain each party’s right to procedural fairness and equal treatment.
Tribunal appointment procedures generally presume that parties on opposite sides of a claim align in their interests and can thus fall neatly into categories of “claimants” and “respondents,” with each “side” appointing or nominating a single co-arbitrator or sole arbitrator. Yet, the presumption betrays reality where parties that are ostensibly on the same side have disparate interests.15
Parties are at liberty to clearly set out the procedure to be followed in the case of simultaneous dispute process. In the case of a three-man panel, part of the dispute resolution clause in the contract could read that the Claimant as a group shall as much as possible agree on a single arbitrator and the Respondent shall also appoint a single arbitrator and the party appointed arbitrators shall appoint the presiding arbitrator. Additionally, the clause can read that where the parties are unable to agree, then the Tribunal shall be appointed by an institution such as the Regional Centre For International Commercial Arbitration – Lagos (RCICAL), London Court of International Arbitration (LCIA), Hong Kong International Arbitration Centre (HKIAC), Arbitration Institute of the Stockholm Chamber of Commerce (SCC), the Lagos Multi-Door Courthouse, the Lagos Court of Arbitration (LCA), the Judicial Arbitration and Mediation Services (JAMS) or on the application of a party to court.
The consensus of major arbitration institutions around the world is that primarily, the group of claimants or respondents shall jointly designate an arbitrator. Only in case such a consensus cannot be reached shall the institution step in and appoint all members of the arbitral tribunal without regard to any party’s designation and shall designate one of them to act as the presiding arbitrator. If the dispute was meant to be decided by a sole arbitrator, all parties were to agree on an arbitrator, otherwise, the arbitrator was also appointed by the Institution.16
For instance, Article 8 of the LCIA Rules provides that: “Where the Arbitration Agreement entitles each party howsoever to nominate an arbitrator, the parties to the dispute number more than two and such parties have not all agreed in writing that the disputant parties represent collectively two separate “sides” for the formation of the Arbitral Tribunal (as Claimants on one side and Respondents on the other side, each side nominating a single arbitrator), the LCIA Court shall appoint the Arbitral Tribunal without regard to any party’s entitlement or nomination”
In other words, the LCIA Court was to appoint the whole tribunal unless the parties had come to an agreement that fulfilled the requirements stipulated in Art. 8
Article 11 of the Lagos Court of Arbitration (LCA) Rules and Article 13 of the LACIAC Rules both provide for the appointment of arbitrators by multiple parties and also share similar wordings to that of those of other international arbitration institutions. Under Article 7 & 7(3) of the Nigerian Arbitration and Conciliation Act, the parties may specify in the arbitration agreement the procedure to be followed in appointing an arbitrator. Where, under an appointment procedure agreed upon by the parties, a party fails to act as required under the procedure or the parties or two arbitrators are unable to reach agreement as required under the procedure or third party, including an institution, fails to perform any duty imposed on it under the procedure, any party may request the court to take the necessary measure, unless the appointment procedure agreed upon by the parties provides other means for securing the appointment. In this wise, the Court is also at liberty to appoint the three members of the Tribunal and designate one as the Presiding Arbitrator.
In Nigeria, usually most Mediation cases are court-referred, or all parties may submit themselves to Mediation by making an application to a recognized ADR/Mediation Institution such as the Multi-door Court House in the state, or a recognized ADR Institutions like the Lagos Court of Arbitration. These institutions usually have rules on the constitution or choice of Mediators.
- HOW TO TACKLE CHALLENGES IN A MULTI-PARTY CONTRACT AS A MEDIATOR.
- Co-mediation: More often than not, co-mediation allows mediators to combine their collective experience and help the parties in multi-party disputes. To make the best use of the agreed time, co-mediators are likely to need to work together as well as apart, meeting up at appropriate moments to pool ideas and strategies. If one mediator has trouble getting a message across to or obtaining a decision from one of the parties, there may be a benefit in the other mediator stepping in to speak to that party with a fresh approach to breaking the deadlock.
- Making the best use of the pre-mediation period to enlighten parties about the Mediation process, so that getting their cooperation will not be difficult.17
- CHOOSING THE RIGHT MEDIATOR.
Managing mediation with a large number of parties, is certainly a challenge to any mediator in a multi-party mediation. The more people there are, the more likely it also is that a mediator must manage diverse personal dynamics, high emotions as well as cultural issues. It is important that a mediator experienced in handling multi-party cases be selected or generally, a very experienced Mediator. He or she should not be overwhelmed by the multiplicity of parties, counsel, issues, or negotiating strategies. The mediator must be able to get and keep control of the process. In fact, Co-Mediators or a team of mediators may be needed in certain multi-party settings to better facilitate the separate groups.18
Specifically, in selecting the right Mediator, regard must be had to his level of cultural intelligence, especially when relating with multi-party disputes involving parties from different cultural backgrounds. A Mediator in a Multi-Party dispute must have mastery of coordination and cooperation especially with large groups of people. He/She must be able to bring the parties together, keep all their attention, and get them to cooperate with each other in coming up with a unique solution to their issues.
- SAMPLE DISPUTE RESOLUTION CLAUSE.
- Notification. A Party who desires to submit a Dispute for resolution shall commence the Dispute resolution process by providing the other parties to the Dispute written notice of the Dispute (“Notice of Dispute”). The Notice of Dispute shall identify the parties to the Dispute and contain a brief statement of the nature of the Dispute and the relief requested. The submission of a Notice of Dispute shall toll any applicable statutes of limitation related to the Dispute, pending the conclusion or abandonment of the Dispute resolution proceedings.
- Negotiation: Parties shall endeavour to resolve the dispute through their internal mechanisms. Where parties are not able to resolve their dispute through negotiation within 30 days from the Notice of Dispute, such dispute shall be referred to Mediation or Conciliation.
- Mediation/Conciliation: If the Dispute cannot be settled by direct negotiations within thirty days of initiation of the resolution process, either Party may initiate mediation by giving notice to the other Party. Mediation shall be attended by an individual(s) representing each Party with decision-making authority and the proceeding shall take place in a specified location.
- The parties will cooperate with one another in selecting a mediator from a list of neutrals and in scheduling the mediation proceedings. The parties agree that they will participate in the mediation in good faith and that they will share equally in its costs.
- In the absence of a joint nomination of a Mediator or Mediators by the parties, the parties shall submit the dispute to [Name Institution] who shall appoint the Mediator.
- Upon agreement of all of the parties, the parties may nominate more than one Mediator or request the Institution to appoint more than one Mediator. In appropriate circumstances, the Institution may propose to the parties that there be more than one Mediator. The parties will cooperate with the institution in selecting a mediator/mediators from its Panel of neutrals and in scheduling the mediation proceedings. The Mediation shall be governed by the Rules of the Institution.
- Arbitration. Any Dispute not finally resolved by mediation set forth above…… shall be resolved through final and binding arbitration, it being the intention of the Parties that this is a broad form arbitration agreement designed to encompass all possible Disputes, including Disputes about the arbitrability of a Dispute.
- Rules. The arbitration shall be conducted under the arbitration rules of [name of institution] (the “Rules”). Parties should pay particular attention to ensure that the institution’s rules cater for joinder, consolidation and intervention of a third party.
- Number of Arbitrators. The arbitration shall be conducted by three arbitrators, unless all parties to the Dispute agree to a sole arbitrator within thirty (30) Days after the commencement of the arbitration. For greater certainty, for purposes of this Article, the commencement of the arbitration means the date on which the claimant’s request or demand for, or notice of, arbitration is received by the other parties to the Dispute.
Method of Appointment – Party Oriented
- Method of Appointment of the Arbitrators.
- If the arbitration is to be conducted by a sole arbitrator, then the arbitrator will be jointly selected by the parties to the Dispute within thirty (30) Days after the commencement of the arbitration. If the arbitration is to be conducted by three arbitrators and there are only two parties to the Dispute, then each party to the Dispute shall appoint one arbitrator within thirty (30) Days of the commencement of the arbitration, and the two arbitrators so appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute.
- If the arbitration is to be conducted by three arbitrators and there are multiple parties to the Dispute, all claimants shall jointly appoint one arbitrator and all respondents shall jointly appoint one arbitrator within thirty (30) Days after the commencement of the arbitration, and the two arbitrators so appointed shall select the presiding arbitrator thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute.
- In any of the scenario above where either the claimant(s) or respondent(s) fail to make an appointment of an arbitrator or if the party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then President of the [name of institution] shall appoint the necessary arbitrators.
Method of Appointment – Institution Oriented
- Method of Appointment of the Arbitrators.
- The arbitration shall be conducted by [one or three] arbitrators, in accordance with [identify institutional rules] in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties.
- In the case of three arbitrators, if all parties to this arbitration agree that the alignment of parties as claimants and respondents in notice of Dispute is correct, or if no party objects to such alignment within 15 Days of the commencement of the arbitration, then each side shall nominate one arbitrator within 30 Days of the alignment of parties. The two arbitrators so nominated shall nominate the third arbitrator within [30 days] after the nomination of the later-nominated of these two arbitrators. The third arbitrator shall act as chairman of the tribunal. If any of the three arbitrators is not nominated within the time prescribed above, then [name of the administering institution or appointing authority] shall appoint that arbitrator.
- If any one of the parties to this arbitration objects in writing to the alignment of parties in the request for arbitration within 15 Days of the commencement of the arbitration, and if the parties do not agree within 15 days thereafter on an alignment of the parties into two sides each of which shall appoint an arbitrator, then [name of the administering institution or appointing authority] shall appoint all three arbitrators.
In the alternative, the agreement may provide for the immediate selection of all three arbitrators by the institution:
- If there are more than two parties to an arbitration, there shall be three arbitrators, who shall be appointed by [name of the administering institution or appointing authority].
- Any party serving a notice of Dispute shall send a copy of the notice to every other party. Any party named as a respondent to a claim first set forth in the notice may join any other party as a party to the arbitration to afford that party an opportunity to defend against the claim or to assert against that party a claim that is substantially related to the claim set forth in the notice. Any party that is not already a party to the arbitration may intervene as a party to the arbitration to defend against a claim first set forth in the notice or to assert against any other party a claim that is substantially related to the claim set forth in the notice.
- Such joinder or intervention shall be made within 30 Days from the receipt of the relevant notice by a written notice specifying the joinder or intervention and setting forth the new claim or defence asserted. If any party so requests within 30 days after receipt of the notice of joinder or intervention, the tribunal shall decide whether the joinder or intervention is admissible under the terms of this clause and whether and to what extent any related arbitration proceedings between contracting parties shall be discontinued in the interest of efficiency. The tribunal’s decision shall be binding.
- For the avoidance of doubt, the term “claim” as used in this clause includes any claim, counterclaim, cross-claim, and any claim by or against a joined or intervening party. Any joined or intervening party shall be bound by any award rendered by the arbitral tribunal even if such party chooses not to participate in the arbitration proceedings.
- If the Parties initiate multiple arbitration proceedings, the subject matters of which are related by common questions of law or fact and that could result in conflicting awards or obligations, then all such proceedings may be consolidated into a single arbitral proceeding.
- In the case of a consolidated proceeding, the arbitrators in the consolidated proceeding shall be the members of the arbitral tribunal that was first filed pursuant to [name of primary agreement]; OR
- In the case of a consolidated proceeding, the arbitrators in the consolidated proceeding shall be the arbitral tribunal that was appointed for the first-filed of the consolidated proceedings pursuant to any one of this agreement or [name of related agreements]; OR
- In the case of a consolidated proceeding, the arbitrators in the consolidated proceeding shall be appointed by the [name of the institution] at the request of one of the disputing parties.
- Seat of Arbitration. Unless otherwise agreed by all parties to the Dispute, the seat of arbitration shall be ___________________.
- Language. The arbitration proceedings shall be conducted in English language and the arbitrator(s) shall be fluent in English language.
- Venue: The hearing shall be conducted in person at ………………… However, the Arbitral Tribunal may decide after due consultation with the parties to conduct the hearing by video conferencing, telephone or any other agreed means of communication.
- Entry of Judgment. The award of the arbitral tribunal shall be final and binding. Judgment on the award of the arbitral tribunal may be entered and enforced by any court of competent jurisdiction.
(A) The Parties waive irrevocably their right to any form of appeal, review or recourse to any court or other judicial authority, to the extent that such waiver may be validly made.
(B) Except for proceedings to preserve Property pending determination by the arbitrator(s) or to enforce an award, the mandatory exclusive venue for any judicial proceeding permitted in this Contract is the courts of competent jurisdiction in (specify jurisdiction). The Parties consent to the jurisdiction of these courts and waive any defenses they have regarding jurisdiction.
(C) Proceedings to enforce judgment entered on an award may be brought in any court having jurisdiction over the Person or assets of the non-prevailing Party. The prevailing Party may seek, in any court having jurisdiction, judicial recognition of the award, or order of enforcement or any other order or decree that is necessary to give full effect to the award.
- Governing Law: This Agreement shall be governed and construed according to the laws of the Federal Republic of Nigeria or (the respective jurisdiction). Parties to this Agreement shall comply with these laws.
As businesses and partnerships continue to grow worldwide, we will witness more and more multi-party contracts in various sectors such as energy, insurance, technology and construction amongst others, executed between parties. In this article we have described multi-party contracts and the attendant disputes, we have also proffered solutions to the complexities that may arise from a deficient dispute resolution clause as well as the appointment of neutrals in multi-party contracts. Adopting recommendations in this article affords parties a safeguard against future complexities in resolving disputes arising from multi-party contracts or at least, reducing the complexities to a barest minimum.
- International Chamber of Commerce (ICC) Dispute Resolution Statistics 2020, Available at https://iccwbo.org/publication/icc-dispute-resolution-statistics-2020/ , Accessed on 7th August, 2021
- Ioannis Alexopoulos and Ryan Cable, Arbitrating Multi-Party And Multi-Contract Disputes, LexisNexis Butterworths Journal of International Banking and Financial Law, November 2018.
- XVII YBCA 140 (1993)
- Multi-Party And Multicontract Arbitration Mechanisms In International Commercial Arbitration: A study on institutional rules of consolidation, joinder, and intervention from a Finnish perspective, Masters’ Thesis by Klas Laitinen, p 10.
- Torsten Lörcher and Jennifer Wolf, Working Paper on Multi-Party and Multi-Contract Disputes in International Arbitration, pg.2.
- Redfern, A., Hunter, M., Law and Practice of International Commercial Arbitration (4th Ed.) (Sweet & Maxwell).
- XVII YBCA 140 (1993)
- Gerasimtchuk, E., Multi-party Arbitration
- The Problem Of Arbitration And Multi-Party/Multi-Contract Disputes: Is Court-Ordered Consolidation An Adequate Response? Nana Adjoa Hackman
- Multi-Party Disputes and Co-Mediation, Rosemary Jackson QC & Elizabeth Repper, Practical Law Construction Blog, Available at http://constructionblog.practicallaw.com/multi-party-disputes-and-co-mediation/
- See: A Conversation on the Challenges of Mediation Practice, Kimberlee Kovach, Jeffrey Krivis, Judith Meyer, Larry Watson, Mediate.com, March 2020, Available at: https://www.mediate.com/articles/krivis-challenges.cfm or 4 Common Problems and Challenges for Mediators, Vanessa Rose, Pollack Peacebuilding Systems, April 2, 2021, Available at: https://www.google.com/amp/s/pollackpeacebuilding.com/blog/common-problems-and-challenges-for-mediators/amp/
- Working Paper on Multi-Party and Multi-Contract Disputes in International Arbitration prepared by Torsten Lörcher and Jennifer Wolf
- See Article 7, ICC Rules of Arbitration 2021, Article 22.1 (x) LCIA Arbitration Rules 2020, Article 8, AAA/ICDR Arbitration Rules 2021, Article 27, HKIAC Arbitration Rules 2018, Rule 7, SIAC Arbitration Rules 2016.
- See Article 10, ICC Rules of Arbitration 2021, Article 22A, LCIA Arbitration Rules 2020, Article 9, AAA/ICDR Arbitration Rules 2021, Article 28, HKIAC Arbitration Rules 2018, Rule 8, SIAC Arbitration Rules, 2016.
- Managing Multiplicity In Multi-Party And Multi-Contract Arbitrations,Gary Born & Dharshini Prasad, Expert Guides, 2020 Available at https://www.expertguides.com/articles/managing-multiplicity-in-multi-party-and-multi-contract-arbitrations/ARIKLLSH Accessed on 1st August, 2021.
- See Article 12 (6,7,8 &9), ICC Rules of Arbitration 2021, Article 8, LCIA Arbitration Rules 2020, Article M-4 of the International Mediation Rules and Article 13 of the International Arbitration Rules of the AAA/ICDR Arbitration Rules 2021, Article 8.2, HKIAC Arbitration Rules 2018, Rule 12, SIAC Arbitration Rules, 2016.
- See: International Multiparty Mediation: Prospects for a Coordinated Effort, Siniša Vukovi, Wiley Online Library, 09 July 2019 Available at: https://onlinelibrary.wiley.com/doi/full/10.1111/1758-5899.12698 or What is a Multiparty Negotiation? Program on Negotiation, Harvard Law School, Available at https://www.google.com/amp/s/www.pon.harvard.edu/tag/multiparty-negotiation/%3famp
- Mediating Complex Multi-Party Cases, Massachusetts Dispute Resolution Services Available at: https://www.mdrs.com/mediating-complex-multi-party-cases/