1. Introduction

The reality of complex international commercial transactions in today's expanding global market has given rise to complex arbitration. These complex transactions often result in multiparty arbitration, as well as arbitration involving multiple contracts. The often imperfect arbitration agreements that have been fashioned in an attempt to extend arbitral jurisdiction over these commercial transactions have resulted in complicated situations in which not all the relevant parties, or all the relevant contracts, were explicitly included in the arbitration agreement. These situations have given rise to a number of questions that arbitral tribunals, national courts and scholars have attempted to address. In response to these questions, the 'group of companies' and 'group of contracts' doctrines have developed. These doctrines have encountered varying levels of acceptance and application across national jurisdictions.

The proximity of both these doctrines to the issues often encountered in connection with complex international transactions may lead to confusion of the two and raises a number of questions. Are we in the same universe of complexity when we speak of multiparty arbitration and arbitrations involving multiple contracts? Are the 'group of companies' and 'group of contracts' doctrines necessary components of complex arbitration? Are these doctrines to be distinguished from or likened to one another given their, at least superficial, similarities?

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Setting aside the relative acceptance or rejection of either of these doctrines in various national jurisdictions1, this analysis aims to identify the basic differences and similarities behind the doctrines to better approach the questions raised. I will therefore consider these issues in the light of two opposing propositions. First, multiple parties and multiple contracts are two different subjects. Second, multiple parties and multiple contracts raise, in essence, the same issues. In conclusion, I will attempt to reconcile these seemingly incompatible propositions to achieve a more nuanced understanding of whether the 'group of companies' and 'group of contracts' doctrines are more likely to differ or overlap.

2. First proposition: the 'group of companies' doctrine and the 'group of contracts' doctrine are two different things

In order to consider where the 'group of companies' and 'group of contracts' doctrines diverge, this section addresses the following basic issues: (a) each doctrine raises different fundamental questions regarding its application; (b) the economic aspects of the situation do not carry the same importance under both doctrines; and (c) procedurally, the doctrines arise in different

scenarios.

a. Each doctrine raises different fundamental questions

In order to simplify matters and thus get to the essence of the two doctrines, it is necessary to isolate the two variables (i.e. contracts and parties) for each one. We will start with the 'group of companies' doctrine and assume that only one contract exists. With respect to the 'group of contracts' doctrine, we will assume a situation with multiple contracts entered into between the same parties.

The 'group of companies' doctrine concerns one contract and multiple parties, and necessarily concerns companies that all have a separate legal personality from the companies that are signatories of the contract2. The name 'group of companies' suggests that this doctrine only applies to companies. For this reason, among others, criticism has been directed at the usage of the term 'group of companies' in connection with this doctrine, for failing to adequately represent its scope. It has also been suggested that this term has led to an oversimplification of the doctrine by arbitral tribunals and courts, leading to shortcuts, when in fact deciding whether the doctrine applies in a given situation requires rigorous legal reasoning. 3

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Thus, it merits clarification that the 'group of companies' doctrine is not exclusive to companies and that it essentially involves the extension of arbitration clauses to parties that have not signed the agreement. under the 'group of companies' doctrine, the arbitration agreement may be extended to one or several non-signatories as claimants or respondents. Where companies are concerned, non-signatories might include a parent company, a subsidiary, a sister corporation or other affiliate within the group. Nonsignatories could also include individuals linked to the group of companies, such as a director, general manager, ceo, owner or majority shareholder. Finally, non-signatories may include a state or state entity. 4

Despite the questionable adequacy of the term 'group of companies' in describing this extension of the arbitration clause to non-signatories, this is the term that will be used in this article, taking into account the abovementioned caveats to its understood meaning. In addition to the advantage of brevity, this term presents an interesting linguistic partner for the 'group of contracts' doctrine: it is perhaps in part the phonetic similarity of the names of these doctrines that encourages their comParison.

When the application of the 'group of companies' doctrine is raised, the following question must be answered: does the arbitration agreement apply to certain non-signatories, or has a non-signatory consented to be bound by the arbitration agreement? The question of the intent behind an arbitration agreement must be answered by examining the parties' positions and actions. In other words, it is a subjective analysis in which the conduct of the nonsignatory plays a paramount role in determining whether or not it has agreed to be bound by the arbitration agreement.

In contrast to the 'group of companies' doctrine, the 'group of contracts' doctrine (taken in isolation, i.e. without complicating it with issues of multiple or different parties) concerns multiple related contracts that are not linked to the same arbitration agreement and which are entered into by the same parties. note, however, that when multiple related contracts contain identical arbitration clauses, it can be inferred (in the absence of evidence to the contrary) that the parties intended to submit disputes arising under more than one contract to a single arbitration.

A 'group of contracts' situation could arise in either a two-party or multiparty scenario, unlike a 'group of companies' scenario, which necessarily involves multiple parties. A two-party situation would necessarily involve more than one contract signed by those two parties. Multiparty situations concerning multiple contracts could include varying contractual scenarios, including horizontal contractual relationships in which one party signs different [Page13:] contracts with multiple parties, vertical contractual relationships in which each party signs two related contracts with two different parties and consortium relationships in which a number of companies all sign different contracts. 5

Application of the 'group of contracts' doctrine raises the following question: does the arbitration agreement cover disputes arising from contracts other than the one in which it is contained or those that specifically incorporate it? In other words, the test is an objective one. What subject matter did the parties consent to submit to arbitration according to the arbitration agreement? In other words, what is the objective scope of the arbitration agreement?

Thus, we see that the 'group of contracts' and 'group of companies' doctrines, when reduced to their essence, concern fundamentally different issues. The 'group of companies' doctrine concerns 'who' has given consent to be bound by the arbitration agreement, whereas the 'group of contracts' doctrine concerns 'what' subject matter the parties consented to submit to arbitration. These questions must also be answered by examining different criteria. Understanding who has given consent to arbitration requires an examination of the subjective intent of the parties concerned. determining what issues the parties have consented to submit to arbitration necessitates an examination of the objective meaning of the arbitration agreement and other relevant agreements as they were contracted. Thus, the application of the 'group of contracts' doctrine may require an inquiry into the intent of the parties, but this inquiry will focus on the objective scope of the arbitration agreement binding the parties, rather than on the parties' consent to be bound by the agreement.

b. Importance of economic considerations differs under each doctrine

As the 'group of companies' doctrine has matured, it has shed the economic considerations that initially formed an important foundation of its application. In contrast to this development, economic considerations remain at the heart of the 'group of contracts' doctrine.

i. Economic considerations have lost importance in the 'group of companies' doctrine

The notion that a group of companies formed a 'single economic reality' was an important underlying concept in determining the existence of intent for non-signatory companies within a group to be bound by an arbitration [Page14:] agreement. Indeed, in the seminal case of Dow Chemical Company v. Isover Saint Gobain6, the arbitral tribunal determined that it should take into account the existence of a single economic reality that formed the basis of a group of companies when determining jurisdiction.

The arbitral tribunal relied heavily on the parties' roles in various aspects of the contract to conclude that they were 'veritable parties' to the contracts or that they were 'principally concerned' by the disputes concerning the contracts:

"[B]y virtue of their role in the conclusion, performance or termination of the contracts containing said clauses, and in accordance with the mutual intention of all parties to the proceedings, [the parties] appear to have been veritable parties to these contracts or to have been principally concerned by them and the disputes to which they may give rise." <sup><a href="#footnote7">7</a></sup>

However, the existence of a 'single economic reality' was an important element in the reasoning of the tribunal. Thus, the arbitral tribunal in Dow Chemical stated that 'irrespective of the distinct juridical identity of each of its members, a group of companies constitutes one and the same economic reality [une réalité économique unique] of which the arbitral tribunal should

take account when it rules on its own jurisdiction'. 8

The decision of the arbitral tribunal in dow chemical, emphasizing the existence of a single economic relationship, was upheld by the Paris Cour d'appel. 9

In the first decisions concerning the 'group of companies' doctrine, this 'single economic reality' constituted a rather important element for the following reasons:

• At the time, under certain legal systems, the conditions of formal validity of the arbitration agreement were often more stringent: the agreement not only needed to be in writing but also had to be signed and sometimes notarized.

• consent, in itself, was not sufficient to recognize the existence and validity of an arbitration agreement.

• The validity of an arbitration agreement incorporated by reference was not universally accepted.

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Today, the importance of the existence of a single economic reality is attenuated in the 'group of companies' doctrine. This economic factor has diminished in importance as other indices of intention have come to the fore. Participation in the negotiation, conclusion, execution and resolution of an agreement, which was a significant consideration highlighted in dow chemical, has become more important, necessitating a more subjective analysis than that which is aimed at identifying a 'single economic reality' underlying the existence of a group of companies.

Participation in the contract serves to indicate that a non-signatory had knowledge of the existence and scope of the arbitration agreement and intended to be bound y it, which is the 'test' that was evidenced by the decision of the Paris Cour d'appel in the Jaguar case10. In this case, an English company, project XJ 220 ('project XJ'), offered to manufacture and sell to individual buyers a limited edition of a new Jaguar model, type XJ 220. A French individual ('Mr. X') entered into a contract with project XJ for the purchase of one of the vehicles. The contract was drafted in English, with a translation in French provided by Jaguar France, which participated in the execution of the contract but was not a party to the agreement.

The contract contained an arbitration clause providing for arbitration in england by a sole arbitrator appointed by the chairman of the law Society in london. After the first payment, Mr. X, who no longer wished to purchase the vehicle, refused to pay the remaining amount due and filed a claim against project XJ and v 2000, successor-in-interest to Jaguar France, before the Paris Tribunal de grande instance, seeking the annulment of the contract. Project XJ argued that the court lacked jurisdiction because of the arbitration clause. v 2000 raised the same defence, arguing that though it was a non-signatory, it was bound by the arbitration clause because of the participation of its predecessor-in-interest in the execution of the contract.

The Paris Tribunal de grande instance having retained jurisdiction over the case, project XJ and v 2000 lodged an appeal against the decision. The Paris cour d'appel reversed the lower court's decision, holding that the arbitral tribunal had exclusive jurisdiction over both project XJ and v 2000, since the latter, 'although not a signatory, had knowledge of the contract in dispute, which it decided to have translated, ad in particular of the existence of the arbitration clause it is seeking to benefit from'11. The Cour d'appel further held that:

"in international arbitration law, the effects of the arbitration clause extend to parties directly involved in the performance of the contract <page nr="16" /> provided that their respective situations and activities raise the presumption that they were aware of the existence and the scope of the arbitration clause, so that the arbitrator can consider all economic and legal aspects of the dispute."12

A similar line of reasoning was adopted by the French Cour de cassation in the more recent Alcatel case. In this case, Alcatel business Systems (ABS) and Alcatel Micro electronics (AME), French and belgian companies belonging to the Alcatel group, had entered into a collaborative business relationship. AME contracted with Amkor, a company incorporated in the united States, for the purchase of computer chips. Amkor in turn entered into a contract with a Korean manufacturer, Anam, for supply of the computer chips to AME. The contracts between AME and Amkor, and between Amkor and Anam, contained arbitration clauses, both referring disputes to the American Arbitration Association (AAA), but in different locations. 13

Anam delivered the goods to AMe, after two French subsidiaries of Amkor had certified that they complied with the contractual specifications. AME delivered the approved computer chips to ABS. Arguing that the chips were defective, AbS brought a claim for damages against Amkor, its two French subsidiaries and Anam before a French Tribunal de commerce. All of the named defendants to the action objected to the court's jurisdiction, invoking the arbitration clause contained in the contract between AME and Amkor, referring disputes to AAA arbitration in philadelphia. The Tribunal de commerce declined jurisdiction, and the Cour d'appel subsequently upheld this decision.

On appeal from the lower courts, the cour de cassation considered whether the French subsidiaries of Amkor could invoke the arbitration clause contained in the contract between AME and Amkor, despite the fact that they were not party to it. The court held that they could, stating:

"the effect of the international arbitration clause extends to the parties directly involved in the execution of the contract and the disputes that may arise from it; [therefore the French subsidiaries of Amkor] were entitled to invoke, against ABS […] the arbitration clause contained in the contract that tied their parent company to AME." 14

The Cour de cassation, in emphasizing that Amkor's subsidiaries had been involved in the execution of the contract, thus implicitly recognized that the subsidiaries had knowledge of the arbitration clause and intended to be bound by it. However, the Alcatel decision can also be interpreted as the [Page17:] beginning of a new stage in French case law on the 'group of companies' doctrine, with the absence of any explicit reference to the non-signatory's knowledge of the contract demonstrating the court's abandonment of the requirement that the non-signatory have knowledge of the arbitration clause. 15 In fact, the conduct of the non-signatory is such as to imply knowledge and, of course, consent.

In a very recent decision by the Paris Cour d'appel in the Pujol case, the court did not explicitly require knowledge of the arbitration agreement in order to extend it to a non-signatory16. In this case, an Italian company, Suba & unico, had entered into a contract with a related French company, Suba France, for the multiplication and delivery of seeds. The contract contained an arbitration clause and authorized Suba France to conclude different multiplication contracts with other producers of seeds in order to be able to meet the quantity requirements of Suba & unico under the main contract. Suba France therefore entered into a multiplication contract with pujol, a French company. This contract, which also contained an arbitration clause, provided that pujol would deliver the seeds to, and be paid by, Suba & unico. A dispute arose from the second contract, leading pujol to file a request for arbitration against both Suba France and Suba & unico.

The arbitral tribunal found that it had jurisdiction over both respondents, since the two companies belonged to a group of companies and Suba & unico participated in the execution of the contract between Suba France and pujol. The Suba companies brought a claim before the Paris Cour d'appel, seeking the annulment of the award, with Suba & unico notably arguing that it was not bound by the arbitration clause. The Cour d'appel rejected the claim, holding that:

"the arbitration clause contained in an international contract has a specific validity and efficiency, which calls for the extension of its applicability to the parties directly involved in the execution of the contract and the disputes that may arise from it." 17

On this sole basis, the Cour d'appel considered that Suba & unico was bound by the arbitration clause, even though it was not a party to the contract between Suba France and pujol. The court did not refer to the potential knowledge of Suba & unico of the existence of the arbitration clause. More importantly, it did not respond to Suba & unico's argument that no group of companies existed between itself and Suba France, thus demonstrating that participation in the execution of the contract was in itself sufficient to bind the non-signatory, regardless of any other consideration.

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Accordingly, if the Alcatel and Pujol trend is confirmed, the importance of 'economic considerations' (i.e. the existence of economic ties between the companies involved), which at one time served to infer knowledge of the existence and scope of the arbitration agreement, will disappear completely in favour of a purely 'conduct-oriented' analysis of the intention of the nonsignatories to be bound by the arbitration agreement.

ii. Economic considerations remain at the heart of a 'group of contracts' analysis

considerations about the economic aspects of a multi-contract situation remain at the heart of the 'group of contracts' doctrine. This is because there must be an economic tie that creates a link between the contracts. Without this economic link to bind the contracts together, there would be little reason to consider that they should share a common arbitration agreement. One

description of the underpinnings of the 'group of contracts' doctrine is particularly insightful in this regard:

"[C]ontractual relationships usually involve long-term economic operations comprising a large number of distinct, but interrelated, contracts. In many cases, the different kinds of agreements seem to give rise to an indivisible transaction, an economical and operational unit 'hidden' behind a multi-contract façade, that actually amounts to one fundamental relationship." 18

Of course, finding the existence of an economic link between the parties is only one part of the puzzle; there must also be intent and consent. French courts have thus far refused to extend the arbitration clause contained in one contract to the other contracts of the group for the sole reason that all contracts were part of a single economic operation. However, it is established

in French case law that the indivisibility of a group of contracts subject to a dispute may justify the extension of an arbitration clause contained in one contract to all contracts concerned. When inquiring into the divisibility of contracts, French courts frequently take into consideration the economic links between the contracts in dispute.

Thus, in some cases, the economic unity of the operation will serve as evidence of the indivisibility of the contracts (an objective analysis), which can in turn lead to the extension of the arbitration clause to other contracts of the group. In other cases, this economic unity will be interpreted as showing the intention of the parties (a subjective analysis) to extend the applicability of the arbitration clause to other contracts in addition to the one containing the arbitration clause. Sometimes, both analyses will be applied to

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the same contractual situation, thus reinforcing the important role played by economic considerations. 19 The decision of the Paris Cour d'appel of 23 november 1999 in the Glencore case is a good example of how economic aspects of multiple contracts are taken into account by French courts. 20 In this case, glencore grain Rotterdam bv ('glencore'), a dutch company, entered into a contract with Afric, a congolese company, for the sale of a shipload of rice. The contract contained a clause providing for arbitration in Paris, under French law. Before the delivery could take place, both companies agreed that glencore would take back the rice and reimburse Afric, as the latter was no longer in a position to receive the goods because of the ongoing war in congo. The companies entered into a second contract to this effect, which did not contain any dispute resolution clause.

Difficulties arose with the execution of the second contract, and Afric initiated arbitration proceedings. The arbitral tribunal considered that the two agreements amounted to one contractual relationship and that it therefore had jurisdiction over the dispute. The arbitral tribunal ordered glencore to proceed with the reimbursement and also awarded damages to Afric. Glencore filed for annulment of the award with the Paris Cour d'appel. The court rejected the application for annulment, holding as follows:

"[A]ssuming that they are independent from each other, two agreements concluded successively in a few weeks time and concerning the sale and the taking back between the same parties of the same merchandise have obviously constituted complementary or at least connected conventions; therefore, even though the exchange of telecopies that took place does not refer to the arbitration clause contained in the initial agreement, neither to any other form of resolution of potential disputes, it stems from the close economic linksexisting between the two phases of the operation, the second of which was only the continuation and consequence of the first one, that the implicit intention of the parties was necessarily to extend the effects of the arbitration clause to the whole set of disputes with inseparable components that may arise between them with respect to their situation." 21

Thus, in Glencore the fact that there was a 'close economic link' between the two agreements was a key factor in finding that the parties in fact intended the arbitration clause in the first agreement to apply to both agreements.

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In a more recent case, the French Cour de cassation followed a similar method of interpretation to extend the arbitration clause to another contract within a group of contracts. 22 In this case, the French company Uni-Kod entered into a contract with certain russian companies, including one called ouralkali, to create a joint venture, called Uni. The joint venture contract contained a clause providing for arbitration under the auspices of the court of Arbitration of the chamber of commerce of the russian Federation. Uni-Kod and ouralkali then entered into a second contract, according to which ouralkali was to provide Uni-Kod with the funds necessary to buy raw materials that would be used by Uni.

A dispute arose with respect to the second contract, which was settled by an arbitral award that ouralkali sought to enforce in France. Uni-Kod opposed the exequatur decision, arguing that the arbitration clause contained in the joint venture contract could not be extended to the second contract. The Paris Cour d'appel confirmed the exequatur judgment, and the cour de cassation subsequently upheld the decision, finding that the arbitration clause was legally separable from the main contract. With regard to the intended scope of the clause, the Cour de cassation held that:

"both contracts were inseparable with a view to ensuring the economic viability of the operation and that all disputes and differences that might arise from the joint venture contract or in relation to it had to be submitted to arbitration, including the supply contract, so that the arbitration clause was tacitly but necessarily included in the [second contract]." 23

These two French cases provide examples of how economic considerations have been taken into account to determine that two contracts between the same two parties formed a group of contracts (although it should be noted that in the case of Uni-Kod the first contract was also signed by multiple parties, including the two parties that were the only signatories of the second contract). Economic aspects are also important in situations in which two parties have signed a succession of contracts that do not necessarily involve the same transaction. In that case, it is the significant ongoing business relationship that ties together a succession of contracts, as well as the existence of a prior practice in that business relationship showing that the parties intended to include a particular arbitration clause in their usual agreements. 24

In situations involving multiple parties as well as multiple contracts, the economic link between the contracts necessarily becomes a key consideration [Page21:] in determining the existence of a group of contracts, as the existence of more than two parties eliminates the almost natural link that exists between the contracts when the same parties are the signatories of all of them.

c. Procedural aspects

Group of companies and group of contracts issues can also be distinguished on procedural grounds, as they arise in different procedural contexts and raise different procedural questions.

As explained above, the 'group of companies' doctrine concerns the inclusion of a non-signatory to the arbitration agreement as a party to the proceedings. The group of companies question is always a matter of jurisdiction, and thus often arises even before the constitution of the arbitral tribunal or at the beginning of the proceedings, such as in the request for arbitration or in the answer/counterclaim. This issue is to be distinguished from 'joinder', which in some national jurisdictions concerns the intervention of a non-party in the arbitral proceedings at the behest of the claimant or respondent. 25 The group of companies approach concerns the identification of parties to the arbitration, as either claimants or respondents, despite the fact that they have not signed the applicable arbitration agreement.

Under the 'group of companies' doctrine, there is often a single arbitration agreement that may apply to a single contract. In addition, there is generally only one set of arbitral proceedings. Finally, though courts may later review the decision, this jurisdictional question is for the arbitrator to decide, potentially in a partial award following a preliminary phase of the proceedings.

In contrast, the 'group of contracts' doctrine by definition concerns multiple contracts, thus raising the possibility of diverse clauses concerning jurisdiction. That is to say, there may be some contracts with arbitration agreements, others giving jurisdiction to national courts and yet others that contain no clauses concerning jurisdiction. This raises the possibility that multiple proceedings will be commenced in different forums. In any event, initial proceedings may be brought either before an arbitral tribunal or a national court. The 'group of contracts' doctrine is concerned with the question of whether disputes arising under these various contracts may be raised in a single arbitral proceeding. Here the issue, although it could be presented as an issue of jurisdiction, pertains rather to the consolidation of different proceedings, or case management. This situation raises complicated questions as to who has the power to make this determination. Indeed, insofar as groups of companies are concerned, no one seems to doubt that the arbitrator (subject to the control of the state courts in setting-aside or [Page22:] enforcement proceedings) has the power to rule on who is bound by the arbitration agreement. With respect to the consolidation of proceedings (a situation that arises more frequently in the case of groups of contracts than in the case of groups of companies), that power may be vested - sometimes even exclusively - in an arbitral institution or in state courts.

3. Second proposition: the 'group of companies' doctrine and the 'group of contracts' doctrine essentially raise the same issues

Though useful from a conceptual point of view, the sterilized presentation of the 'group of companies' and 'group of contracts' doctrines made under the first proposition, in which certain variables are intentionally isolated, does not reflect the reality and complexity of commercial relations and arbitrations today. It is therefore useful at this point to consider the second proposition, namely that the 'group of companies' and 'group of contracts' doctrines are

in fact comparable.

In actuality, the 'group of companies' and 'group of contracts' doctrines do share certain fundamental, common characteristics. These common characteristics include: (a) the convergence of multiple parties and multiple contracts in many cases; (b) the need for the consent of the parties; (c) the diminishing relevance of national laws; and (d) the solution to the issues raised by both doctrines.

a. Overlap of multiple parties and multiple contracts

Situations that involve multiple contracts can involve contracts that do not have identical parties. These situations, which involve both multiple contracts and multiple parties, may implicate various facets of group of companies and group of contracts analysis. In today's practice, it is rather common to find group of companies and group of contracts issues in a single case. The prominent case of Kis France v. Société Générale26 provides a good example of a case in which these two doctrines have intersected.

In this case, the French company Kis France entered into a commercial relationship with Société générale for the marketing of photography printing and development laboratory equipment manufactured by the former. The various agreements signed by the parties included the following: (a) a framework agreement between Kis France and Société générale acting on their own behalf and on behalf of their subsidiaries; (b) an agreement for implementation of the framework agreement between Sogelese corporation, a leasing subsidiary of Société générale, and Kis corporation (previously

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named Kis california), a subsidiary of Kis France; (c) a contract between Société générale, acting for itself and for its subsidiary, and Kis photo Industrie, acting on its own behalf and on behalf of its subsidiary Kis uSA; and (d) an addendum to the framework agreement signed between Société générale, acting in its own name and for its subsidiary Sogelese corporation, and by Kis France, also acting in its own name and for its subsidiary Kis Corporation.

The framework agreement contained an ICC arbitration clause to which express reference was made in the local agreements and the addenda. A dispute arose between the parties and arbitration was initiated by Société générale, Sogelese corporation and Sogelese pacifique (also a subsidiary of Société générale) against Kis France and Kis photo Industrie, jointly and severally, for monies allegedly owed to Sogelese corporation by Kis corporation under the framework agreement and two of the subsequent agreements. The arbitral tribunal considered that it had jurisdiction over all the claimants and respondents, as well as jurisdiction to decide all issues arising under the various agreements.

An action to set aside the arbitral tribunal's decision was filed with the Paris Cour d'appel, but the court confirmed the jurisdiction of the arbitral decision. The court held that, since the local agreements referred to the arbitration clause contained in the framework agreement and 'the parent companies played a dominant role vis-à-vis their subsidiaries, which were bound to abide

by the former's commercial and financial decisions', it could be assumed that the main agreement and subcontracts were inexorably linked, forming part of a unified contractual scheme, that allowed for the consolidation of the disputes into a single proceeding. The court's observation about the dominant role of the parent companies over their subsidiaries shows that it implemented aspects of the 'group of companies' doctrine when determining that the 'group of contracts' doctrine applied to tie together all the disputes.

Thus, Kis France provides a good example of the potential overlap between the 'group of companies' and 'group of contracts' doctrines. It has been argued that when the issue of a group of contracts is raised, 'the fact that the parties to the contracts may belong to a group is a priori irrelevant', though the commentary also acknowledged that 'it may in some cases help clarify or resolve the issues that arise from the existence of a group of contracts' 27. It has also been pointed out that the grounds for the arbitral decision in Kis France 'lay primarily in the contracts between the parties', and that 'it was not so much the existence of a group, but instead the intention of the parties - revealed in this case by the interrelated contracts - which justified the extension of the arbitration agreement'. 28

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Though the 'group of contracts' doctrine was undoubtedly central to the Kis France case, the group of companies aspect also played an important role. Importantly, the French Cour d'appel found that, given the subordination of the subsidiaries, it was not only possible to involve the parent companies in an arbitration of a dispute arising between the subsidiaries, but that the involvement of the parent companies was a necessary element of any arbitration brought: 'the arbitrators may decide the disputes concerning the execution of both the basic and local Agreement, but only upon the request of the two parent companies.'

b. Consent

Consent is the cornerstone on which the foundations of arbitration rest. Any court or arbitral tribunal seeking to apply either the 'group of companies' doctrine or the 'group of contracts' doctrine must establish that the parties consented to submit the disputes at issue to arbitration. Without consent, no amount of connections between multiple parties and multiple contracts would be sufficient to give an arbitral tribunal jurisdiction. It has thus been observed, in particular with regard to the 'group of contracts' doctrine, that:

"it is not simply because a number of contracts bind several partieswith a view to performance together of certain obligations thereunder that arbitration is available for all of them on the basis of one or more arbitration clauses binding only some of them. It is only where there exists a true common intention to abide by such an arbitration agreement that contractual 'consolidation' by agreement is possible."29

In other words, analyzing the issues raised by the 'group of companies' and 'group of contracts' doctrines serves the ultimate purpose of determining the intention of the parties. The essential underlying question in either doctrine must be: does an arbitration agreement exist that encompasses or links together all the parties and/or all the contracts? The primacy of the issue of consent was highlighted by the Paris Cour d'appel in Kis France, where it observed:

'The arbitrators' main consideration was that the parties intended by their agreements to carry out one economic operation by establishing a contractual unity, in which the subsidiaries would be very dependent on the parent companies, which retained the decision making power.' 30

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The emerging trend in French case law, as revealed in the Alcatel and Pujol cases discussed above, is that consent is the key element that permits all construction around the 'group of companies' or 'group of contracts' doctrines.

c. Diminishing relevance of national laws

The foregoing analysis shows that arbitrators and state courts alike resort to factual analysis rather than legal considerations when resolving group of companies and group of contracts issues. Consequently, the resolution of these issues does not necessarily depend on the applicable law.

Arbitral practice has evolved to allow the application of the 'group of companies' and 'group of contracts' doctrines in a rather homogenous way (at least by arbitral tribunals), not only because the analysis for both is based on the common intention of the parties and commercial practice, but more so because of: (1) the homogenization of national laws that recognize the importance of determining consent (beyond the form of the arbitration agreement); and (2) a general acceptance that an arbitration agreement may be incorporated by reference.

Furthermore, both doctrines rely on the universal principles of good faith, estoppel and apparent authority.

d. A common solution to situations requiring application of both doctrines

The root of problems necessitating the application of both doctrines often lies in the imperfections of the arbitration agreement, which may fail to adequately express the scope of issues falling under its purview or may not have been signed by all of the parties intending to be bound by it. The common solution for avoiding the problems that may arise under the 'group of companies' and 'group of contracts' doctrines is therefore to go back to the basics and devise adequate arbitration agreements when drafting contractual instruments implementing complex economic transactions.

The problems giving rise to application of the 'group of companies' and 'group of contracts' doctrines could be prevented by drafting an adequate global arbitration agreement that can then easily be referred to in other contracts. This global agreement could take the form of a stand-alone agreement or be part of an umbrella or framework agreement. of course, this solution is effective only to the extent that subsequent contracts clearly refer to the arbitration agreement and to the extent that all relevant parties sign [Page26:] contracts reflecting their consent to adhere to the arbitration agreement. Although such arbitration clauses remain relatively rare in practice, examples and model clauses have started circulating within the international arbitration community. 31

One interesting example is offered by Euro Disney's arbitration clause. 32 This standard arbitration clause, apparently inserted in the construction contracts concluded by Euro Disney, covers both bipartite and multipartite arbitrations, providing for settlement of all disputes by three arbitrators under the ICC arbitration rules. Concerning multiparty arbitration, the clause aims at preventing the most frequent issues from arising by addressing the various possibilities that could arise in connection with consent to arbitration and procedural issues, such as the appointment of arbitrators.

Regarding consent to arbitration, the main contractor expresses in advance its consent to the client joining third parties to the arbitration and its consent to be joined to arbitrations between the client and third parties, under a set of circumstances specified in the clause. Similarly, the client agrees to be joined to an arbitration arising between the main contractor and a designated subcontractor. The arbitration clause further specifies the contracts that may be considered part of a group of contracts and the entities that may become party to an arbitration arising out of these contracts.

The original mechanism set up in the clause for the appointment of arbitrators is noteworthy for what is clearly a thorough contemplation of the possibility of multiparty arbitration. It provides that when filing a request for arbitration and the answer to this request, the initial parties will refrain from nominating an arbitrator, thereby departing from the ICC rules. 33 If the arbitration remains bipartite, the parties will proceed to agree on a sole arbitrator or nominate their respective arbitrators. If the arbitration becomes multipartite within the time limits set for joining other parties, the mechanism provides that all parties will try to agree unanimously on the names of the co-arbitrators and the president of the arbitral tribunal. Failing such agreement, any party will be free to request the president of the Paris Tribunal de grande instance to appoint the arbitrators from a list of candidates prepared by the ICC.

Even in the absence of such a carefully crafted arbitration clause, it has been argued that 'one should not exaggerate the difficulties raised by resolving disputes pertaining to interdependent contracts' and that the problems caused by multiparty and multi-contract arbitrations are 'not always complex ones, and even if they are, more often than not an acceptable solution is found'. 34 This point is highlighted by the decision of the Swiss Tribunal

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Fédéral of 8 december 1999 in Arthur Andersen Business Unit (AABU) Member Firms v. Andersen Consulting Business Unit (ACBU) Member Firms, in which it found that, despite imperfections in the implementation of a revised arbitration agreement, the intention of the parties to adhere to the revised arbitration agreement was clear. 35

In the Andersen case, the Swiss Tribunal Fédéral held that an arbitration agreement among no fewer than 142 parties was valid and enforceable. The very complex and elaborate structure of the Arthur Andersen group was at the heart of the dispute in this case.

In 1999, the global entity Andersen Worldwide organization comprised Andersen Worldwide Société coopérative (AWSC), its partners, its member companies ('member firms') and other affiliated entities. AWSC was a cooperative incorporated under Swiss law, with the purpose of organizing a global services network among the member firms. Within AWSC, two separate commercial units coexisted: the Andersen consulting business unit (Acbu) and the Arthur Andersen business unit (AABU). Every member firm belonged to one of these two commercial units.

The member firms were interdependent national entities that had each entered into a contract with AWSC called the 'Member Firm Interfirm Agreement' (MFIA), so that the Andersen group could operate as a whole to provide their services globally to international clients. The MFIAs were essentially based on a standard contract approved by AWSC's partners. Each MFIA was concluded between the member firm (and/or its partners, shareholders, etc.) and AWSC, acting on its own behalf and on behalf of the other member firms. Under the standard MFIA, each member firm accepted that all the rights and obligations contained in the MFIA could be enforced by or against the other member firms and that the MFIAs could only be amended in writing through agreements signed by both parties.

Section 22 of the standard MFIA provided for the resolution of all disputes arising out of or relating to the MFIA through arbitration by a sole arbitrator. Generally, these arbitrations would take place in Geneva under the rules of the Concordat intercantonal sur l'arbitrage (CIA), with a Swiss court as the appointing authority, although the parties could agree to a seat outside Switzerland, where the arbitration would take place under the ICC arbitration rules. Section 22 of the standard MFIA was amended over time. Under the revised version of Section 22, any arbitration would take place under the ICC rules, with the ICC as the appointing authority, irrespective of the seat of the arbitration. However, only a handful of the individual MFIAs signed with member firms were actually amended to reflect the changes to the standard MFIA.

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In 1997, 44 member firms belonging to Acbu initiated an ICC arbitration in geneva against AWSc and 97 member firms of AAbu. Sixty-eight of the respondents challenged the jurisdiction of the sole arbitrator appointed by the ICC on the ground that most MFIAs contained older versions of Section 22 providing for arbitration under the cIA rules and/or appointment of the sole arbitrator by a Swiss court.

In a partial award, the sole arbitrator found that he had jurisdiction over all parties to the dispute, considering that only the 1994 (revised) version of the arbitration clause was in force. The respondents who had disputed the arbitrator's jurisdiction challenged the award before the Swiss Tribunal Fédéral, which upheld the arbitrator's decision. The court held that these member firms were bound by the latest version of the standard MFIA arbitration clause even though the MFIAs they had signed did not contain the same version. because AWSc entered into the various MFIAs on its own behalf and on behalf of the other member firms, the fact that the new version of the standard MFIA was included in only one MFIA was enough to make it binding on all other member firms. Furthermore, this interpretation was in line with the intention of AWSc's partners in 1994 when they formally approved the changes to the standard MFIA, including a revised arbitration clause.

The Tribunal Fédéral concluded: 'All things considered, it is difficult to understand why the claimants criticize the sensible solution of giving a sole arbitrator responsibility for resolving this multiparty conflict.' 36

The Andersen case thus illustrates a number of points. First, it is possible to draft effective arbitration clauses suitable for even the most complex multiparty situations. of course, Andersen also shows that in drafting and implementing such clauses, the possibility for future revisions should always be taken into account. In this respect, when the arbitration clause is to apply to a multiplicity of contracts, it might be wise to proceed by way of reference to a stand-alone arbitration agreement, rather than actually inserting the clause itself in every contract. on the other hand, the Andersen case also shows that even if the implementation of such a clause is not executed perfectly, arbitral tribunals and national courts can still uphold the manifest intention behind such a global arbitration clause.

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4. Conclusion

Following this analysis, it is apparent that there are grounds for arguing that the 'group of companies' and 'group of contracts' doctrines are either divergent or comparable. Though they cannot be said to be identical, it is clear that the similarities between the two are more than superficial. The answer that this analysis points to, when considering the results of each proposition, is that the 'group of companies' doctrine and the 'group of contracts' doctrine are two different subjects, but they essentially raise the same fundamental issues.

Both the 'group of companies' doctrine and the 'group of contracts' doctrine will likely continue to arise in the context of complex international transactions, although the proliferation of complex arbitrations may encourage parties to draft their arbitration clauses with these issues in mind.

However, if arbitral tribunals and courts alike opt for an analysis that concentrates only on the conduct and intention of the parties, one may legitimately wonder whether the interest in and importance of the 'group of companies' and 'group of contracts' doctrines are still justified. Maybe these doctrines have already passed their time and, as some commentators on the Pujol and Alcatel cases have suggested with respect to the 'group of companies' doctrine 37, perhaps these doctrines have become 'obsolete'.

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1
Since the 'group of companies' doctrine originated under French law, and French law has also explored the 'group of contracts' doctrine, this article focuses mainly on French arbitration and case law examples. As noted, the relative acceptance of either the 'group of companies' doctrine or the 'group of contracts' doctrine is outside the scope of this article. For an overview of the reception of the 'group of companies' doctrine in various jurisdictions, see Gary Born, International Commercial Arbitration (Kluwer, 2009) p. 1174 et seq.; Stephan Wilske, Laurence Shore and Jan-Michael Ahrens, 'The "group of companies doctrine" - Where Is It Heading?', The American Review of International Arbitration 17 (2006) p. 73 at p. 78 et seq.; Noah Rubins, 'group of companies doctrine and the new york convention', Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (cameron May, 2008) p. 455 et seq. For a thorough review of case law relating to the 'group of companies' and 'group of contracts' doctrines, see Bernard Hanotiau, Complex Arbitrations: Multiparty, Multicontract, Multi-issue and Class Actions (Kluwer, 2005).

2
Emmanuel Gaillard and John Savage (eds.), Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer, 1999) at para. 500.

3
See Bernard Hanotiau, 'non-signatories in International Arbitration: lessons from Thirty years of case law', International Arbitration 2006: Back to Basics? (Kluwer, 2007) p. 343; Hanotiau, supra note 1, at pp. 49-50.

4
For a detailed description of the group of companies scenarios with which courts and arbitral tribunals have been confronted, see Hanotiau, supra note 1, at pp. 54-55.

5
For examples of group of contracts scenarios, see Hanotiau, supra note 1, at pp. 101-104.

6
In Dow Chemical, various companies within the Dow Chemical group brought an arbitration claim against Isover Saint Gobain, though not all of the Dow Chemical companies were signatories to the contracts containing the relevant arbitration clause. See Interim Award of 23 September 1982 in ICC case no. 4131, Isover-Saint-Gobain v. Dow Chemical France. See the original French version in revue de l'Arbitrage (1984) p. 137. For the English version, see Sigvard Jarvin and Yves Derains, Collection of ICC Arbitral Awards 1974-1985 (ICC publishing/Kluwer, 1994) p. 146.

7
See Jarvin and Derains, supra note 6, at p. 151. See also born, supra note 1, at pp. 1168-1169 (citing this passage).

8
Ibid.

9
Societe Isover-Saint-Gobain v. Societe Dow Chem. France, Paris cour d'appel, 21 october 1983. See the original French version in revue de l'Arbitrage (1984) p. 98, and the commentary by André Chapelle. See also Born, supra note 1, at p. 1169.

10
Société V 2000 v. Société Project XJ 220 ITD et autre, Paris Cour d'appel, 7 december 1994. See the original French version in revue de l'Arbitrage (1996) p. 245, and the commentary by charles Jarrosson.

11
Ibid., at p. 250 : '[…] bien qu'elle n'en soit pas signataire, elle a eu connaissance de la convention litigieuse qu'elle a pris l'initiative de faire traduire et notamment de l'existence de la clause compromissoire dont elle revendique elle-même le bénéfice.'

12
Ibid. See also Gaillard and Savage, supra note 2, at para. 499 (citing this passage and providing the translation used here).

13
Société Alcatel Business Systems (AbS) et al. v. Société Amkor technology et al., cour de cassation, 27 March 2007, pourvoi n° 04-20842. See the original French version in Revue de l'Arbitrage (2007) p. 785, and the commentary by Jalal el-Ahdab. See also the commentary by cécile legros in Journal du Droit International 'Clunet' (2007) p. 968.

14
Société Alcatel Business Systems (ABS), supra note 13, at p. 787 : '[…] l'effet de la clause d'arbitrage international s'étend aux parties directement impliquées dans l'exécution du contrat et les litiges qui peuvent en résulter; […] ces sociétés étaient en droit de se prévaloir, à l'égard de la société AbS […] de la clause d'arbitrage stipulée au contrat liant leur société mère à la société AMe.'

15
See Jérôme Barbet, 'extension des effets de la clause compromissoire à des parties non signataires du contrat: les juridictions françaises persistent… et signent', Petites affiches 159/160 (2009) p. 10 at p. 18. See also Christophe Seraglini, Société Alcatel Business Systems (ABS), commentary in La semaine juridique - Edition générale I 168 (lexisnexis Jurisclasseur, 2007) p. 19 at p. 20.

16
Sociétés Suba France et Suba & unico v. Société pujol, Paris cour d'appel, 7 May 2009. See the original French version in Petites affiches 159/160 (2009) p. 10.

17
Ibid., at p. 12 : 'la clause compromissoire insérée dans un contrat international a une validité et une efficacité propres qui commandent d'en étendre l'application aux parties directement impliquées dans l'exécution du contrat et dans les litiges qui peuvent en résulter.'

18
Philippe Leboulanger, 'Multi-contract Arbitration', Journal of International Arbitration 13/4 (1996) p. 43 at p. 46.

19
See Eric Loquin, 'différences et convergences dans le régime de la transmission et de l'extension de la clause compromissoire devant les juridictions françaises', Gazette du Palais 157 (2002) p. 7, in particular paras. 25 to 45.

20
Société Glencore Grain Rotterdam bv v. Société Afric, Paris cour d'appel, 23 november 1999. See the original French version in Revue de l'Arbitrage (2000) p. 501, and the commentary by Xiao-Ying Li-Kotovtchikhine.

21
Ibid., at p. 503-504 (emphasis added): '[…] à les supposer même juridiquement indépendants l'un de l'autre, les accords successivement conclus à quelques semaines d'intervalle […], qui concernaient la vente et la «reprise» entre les mêmes parties d'une meme marchandise ont constitué à l'évidence des conventions complémentaires ou à tout le moins connexes; que dès lors et même si l'échange de téléfax intervenus […] ne fait pas référence à la clause compromissoire figurant dans l'accord initial ni d'ailleurs à aucune autre forme de règlement des litiges éventuels, il se déduit des liens économiques étroits existant entre les deux phases de l'opération dont la seconde […] n'était que la suite et la conséquence de la première, que la volonté implicite des parties a été nécessairement d'étendre les effets de la clause compromissoire à l'ensemble du contentieux aux composantes indissociables, pouvant survenir entre elles à propos de leur exécution.'

22
Société Uni-Kod v. Société Ouralkali, cour de cassation, 30 March 2004, pourvoi n° 01-14311. See the original French version in Revue de l'Arbitrage (2005) p. 959, and the commentary by Christophe Seraglini. For the English version, see Yearbook of Commercial Arbitration, vol. 30 (Kluwer, 2005) p. 1200.

23
Ibid., at p. 960 (emphasis added) : '[…] les deux contrats étant indissociables en vue d'assurer la viabilité économique de l'opération et […] la soumission à l'arbitrage concernait tous les litiges et divergences pouvant naître du contrat de coopération ou en liaison avec celuici, comme l'était le contrat de fourniture, de sorte que la clause compromissoire était tacitement mais nécessairement incluse dans le [second contrat].'

24
See Gaillard and Savage, supra note 2, at para. 523.

25
See Hanotiau, supra note 3, at p. 346.

26
Kis France v. Société Générale, Paris cour d'appel, 31 october 1989. See the original French version in revue de l'Arbitrage (1992) p. 90, and the commentaries by laurent Aynès and Daniel cohen. For the English version, see yearbook of commercial Arbitration, vol. 16 (Kluwer, 1991) p. 145.

27
Hanotiau, supra note 3, at p. 342 (citing Kis France).

28
Gaillard and Savage, supra note 2, at para. 506.

29
Jean-Louis Delvolvé, Jean Rouche and Gerald Pointon, French Arbitration law and practice (Kluwer, 2003) p. 72.

30
Kis France v. Société Générale, supra note 26, at pp. 148-149.

31
See Hanotiau, supra note 1, at para. 226, and the selection of multiparty arbitration clauses provided in Appendix 2, p. 313.

32
Ibid., at Appendix 2, p. 321.

33
At the time, under the ICC rules then in place (the 1988 version), no provision for designation of arbitrators in a multiparty setting existed (such a provision was inserted as Article 10 in the 1998 revision of the ICC rules).

34
Hanotiau, supra note 1, at para. 225.

35
Arthur Andersen Business Unit (AABU) Member Firms v. Andersen Consulting Business Unit (ACBU) Member Firms, Swiss Tribunal Fédéral, 8 december 1999. See the original French version in ASA bulletin 18/3 (2000) p. 546. For the English version, see The American Review of International Arbitration 10 (1999) p. 559.

36
Ibid., at p. 557 : 'Au demeurant, on ne comprend guère pourquoi les recourants critiquent la solution judicieuse consistant à charger un arbitre unique de démêler un conflit multipartite.'

37
See Barbet, supra note 15, at p. 21.