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Arbitration Agreement Third Party

Arbitration Agreement Third Party

In March 2015, Kabab-Ji filed an arbitration application against KFG. In particular, KFG has failed to meet its FDA development obligations and has acquired, without Kabab-Ji`s approval, expertise in developing its own restaurants. The court handed down its sentence in September 2017 by upgoing Kabab-Ji`s complaints against KFG and sentencing Kabab-Ji to pay more than $7 million a day to Kabab-Ji, plus interest. Most national arbitration legislation does not create third-party membership mechanisms, as is the case with the MODEL UNCTN law (unlike the CNUDCI Arbitration Regulation, which applies to ad hoc arbitrations). However, there are certain exceptions, such as Portuguese law, Dutch law, the Belgian judicial code and Italian law, which explicitly regulates the composition of third parties in arbitration proceedings. The parties disagreed on the law applicable to the arbitration agreement. On the one hand, KFG argued that the court ”should have applied English law to the arbitration agreement and therefore would have found that it was not competent for KFG” [paragraph 14]. On the other hand, Kabab-Ji supported the court`s decision to apply French law, the right of the seat, to interpret the arbitration agreement. The Paris Court of Appeal upheld Kabab-Ji`s arguments, upholding the Tribunal`s conclusion that French law is under the arbitration agreement. The FDA was governed according to the laws of England. It contained a compromise clause, the icc arbitrator.

The parties agreed that the seat of arbitration would be Paris, but did not mention the law applicable to the arbitration agreement. Tomlinson LJ distinguished the situation in which a third party sues (instead of defending a claim) to obtain a contractual benefit (for example. B compensation). In this case, Article 8, paragraph 1, would be used to engage the third party in arbitration proceedings. The French judge then assessed KFG`s role in the FDA`s performance and concluded that ”… the Court of Arbitration found, rightly and without the need to make a decision on the transfer of the compromise clause from the AHFC to the KFG, that this clause expands to engage KFG.” [paragraph 47] As early as 1988, the Paris Court of Appeal recognized that a third party could be bound by a compromise clause if he was involved in the performance of the contract and that he could be considered aware of the existence and scope of the arbitration clause (Paris Court of Appeal, November 30, 1988, Sté Korsnas Marma/).

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