Arbitration clauses are inserted in contracts which may have a very long lifetime in front of them. There is nothing to guarantee that when the dispute arises, the parties' situation will still be identical to the way it was when they signed the contract.

There is a great temptation for a claimant to say that although he personally did not sign the clause, the rights of the signatory of the arbitration clause have devolved on him and that accordingly he can invoke the clause with a view to bringing an arbitration against the other parties.

In parallel, the defendant may well allege that he was not the person that agreed to the clause, thus that the clause cannot be asserted against him and on these grounds, he may block the proceedings invoked against him.

The International Court of Arbitration is faced with two contradictory realities: arbitration being a contractual exception to the national courts' normal jurisdiction, the ICC Court cannot organise an arbitration involving a party who has not agreed to the arbitration clause; on the other hand, the ICC Court is simply an administrative agency without any judicial authority.

The combination of these two requirements led to the drafting of Article 8(3) of the ICC Rules of Conciliation and Arbitration which provides:

Should one of the parties raise one or more pleas concerning the existence or validity of the agreement to arbitrate, and should the Court be satisfied of the prima facie existence of such an agreement, the Court may, without prejudice to the admissibility or merits of the plea or pleas, decide that the arbitration shall proceed. In such a case any decision as to the arbitrator's jurisdiction shall be taken by the arbitrator himself.

Hence the logic underpinning the Court's decisions is simple: whenever there is a possibility that a party may be bound by the arbitration clause, the Court decides that the arbitration will proceed, leaving it to the arbitrator to decide whether or not he has jurisdiction to decide the case concerning the party in question. In other words, in its role as the institution administering the arbitration, the Court cannot act as a substitute for the arbitrators who alone have the power to take decisions regarding the settlement of the dispute. Otherwise, the Court would not be respecting the parties' rights, because it would not be providing guarantees of an equitable process: it has neither the jurisdiction nor the means to do so, since it has no power to conduct hearings complying with the rules of due process and carry out the necessary investigatory measures before taking a decision. It is neither judge nor arbitrator; its role is confined to drawing conclusions from outward appearance and organising an arbitral procedure which will have to decide on the basis of the evidence.

I. Changes in the identity or legal capacity of a party

In applying the foregoing criteria, the Court has decided that arbitration should take place, even in cases of changes to the name or modifications to the capacity of one of the signatories of the arbitration clause, where it is asserted that these prevent the party concerned from validly taking part in the arbitration. The same line has been followed when it has been alleged that according to the applicable law, a judicial procedure - such as insolvency proceedings, for instance - preclude an arbitration procedure from taking place. And, naturally, a change of government or of the supervisory authority does not have any impact on the arbitration clause. The following cases are examples of this:

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• The defendant reserved the right to assert that the Request for Arbitration was inadmissible on the ground of changes in the claimant company's name.

• A state that had signed an arbitration clause alleged that the Court had no jurisdiction since the contract had been signed by a Government that had been deposed by a military coup d'état.

• The defendant maintained that the arbitration could not take place, because it did not qualify as a merchant (commerçant) on the one hand, and on the other hand, it was bankrupt.

• The defendants alleged that the Request for Arbitration had not been submitted correctly, because the conditions laid down by the law of the Dutch Antilles had not been complied with. They also disputed the claimant's very existence and alleged that the arbitration was suspended automatically because of bankruptcy proceedings against one of the defendants.

II. Assignment

By virtue of Article 8(3) of the Rules, arbitration has taken place in cases where one of the parties is the assignee of the rights of the person who signed the original contract. The question as to whether such a party may rely on the arbitration clause or whether such a clause can be invoked against it will be a matter for the arbitrator to decide. The cases listed below are examples of the many instances where the ICC International Court of Arbitration followed this line:

• The defendant disputed the claimant's right to bring proceedings as assignee of the rights and obligations of the contract containing the arbitration clause.

• Defendant 2, to whom defendant l's activities had been transferred, did not agree that it was bound by the arbitration clause inserted in the contract which had been signed by defendant 1 alone.

• The defendant took the view that claimant had no right to instigate proceedings since it had transferred its rights to claimant 2.

• The defendant disputed the arbitral tribunal's jurisdiction because the claimant had not signed the second contract on which the claims were also based, and the claimant's response was that it and the original signatory of the contract had merged.

• The original contracting party had been put into judicial receivership and had then been taken over by a group which, in its turn, had been assigned to the claimant.

• The defendant disputed that the claimants, who were successors of the company that had signed the original contract, had any right to bring proceedings, and added an allegation that the dispute did not fail within the context of the arbitration clause.

• The defendant asserted that its only title to the name was its right to use it as a trade name, and that the party that had signed the contract had changed its former corporate name (now used as the defendant's trade name) to a different name, and accordingly the said signatory should not be a party to the procedure.

• The assets of the original contracting party had been transferred and sold to defendant which was managed and represented by defendant 2, and both defendants were opposed to the arbitration taking place.

• The defendant alleged that the claimant was a different person from the one with which it had concluded the contract containing the arbitration clause. The claimant alleged that it was the successor to the rights and obligations of the initial signatory of the contract.

III. Succession, merger, absorption, subrogation

From the Court's standpoint, it is of little importance whether the parties' succession in title stems from a contractual agreement, a statutory provision or a decision by a public authority. In the cases set out below the matter was referred to the arbitrator:

• The defendant disputed the standing of claimant 2, which had succeeded claimant 1 subsequent to a government decree.

• Following the partial privatisation of defendant 1, its successor, defendant 2, stated that it was not bound to the claimant by any contract.

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• The defendant state maintained that it was not the legal successor to obligations contracted by a public authority of a state that it had absorbed through a merger and that had signed the contract; the defendant held that the contract in question was void because the authorities of the state taken over no longer had the power to enter into contracts at the date the transaction was concluded. It also held that the public sector corporate entity, responsible for winding up the economy of the state taken over, and belonging to the acquiring state, had not ratified the contract.

• The defendant disputed claimant 2's involvement in the procedure following a legal subrogation, alleging that there was no contractual link with it.

• Defendant 2, a government, was joined in the arbitration because defendant 1's assets and liabilities had been transferred to it on the basis of a decree signed by the government in question.

• An insolvency court had allotted all the assets and contracts of the signatory of the contract containing the arbitration clause to the defendant.

• The claimant took the view that, as it had paid out damages, it was validly subrogated in the rights of the signatory of the contract, including the arbitration clause. The defendant alleged that this subrogation was void, since the contract contained a clause specifying that any assignment of the contractual rights had to be agreed by the other party.

• The defendant (seller) disputed the involvement of claimant 2, which as an insurer subrogated in claimant 1 (the buyer)'s rights had not signed the arbitration agreement.

• The defendant disputed the admissibility of the Request for Arbitration on the pretext that the claimant was not a party to the contract containing the arbitration clause, but solely an assignee of the claims owed against defendant. The defendant was apparently opposed to novation of this kind and would have terminated the contract in any case.

The fact that the company that signed the contract takes the view that it is no longer bound by the contract further to contractual or statutory changes does not prevent Article 8(3) from being applied:

• Defendant I considered that the Request for Arbitration should have been brought against the company that had succeeded it after the German Democratic Republic ceased to exist.

• Defendant 1 claimed that its being implicated in the arbitration was improper, since the contract containing the arbitration clause had been assigned to defendant 2 with the agreement of the claimant.

• The defendant maintained that the contract containing the arbitration clause had been cancelled for lack of performance and that it had no contractual link with the claimant who was the assignee of the contract.

Arbitrations have also been brought in cases where the alleged links between the parties were such that they led to the appearance that the arbitration may well be applicable, as can be noted from the following cases, where the Court decided to follow the provisions of Article 8(3):

• Defendant 3 alleged that, although it was a subsidiary of defendant 1, it had never been a party to the contract. Defendant 2 stated that it had not been named as a party in the contract containing the arbitration clause and that, although the contract described it as defendant 1's agent, it was neither a subsidiary nor under the latter's control. The contract does refer to defendant 2 as defendant 1's agent authorised to carry out certain functions and it provides that it could be assigned to subsidiaries.

Even in cases where it is maintained that the contract containing the arbitration clause is void, or that the clause is no longer applicable, the Court has decided that the arbitrator should decide on such exceptions to his jurisdiction. Thus, arbitrations were organised in the circumstances described as follows:

• The defendant maintained that the contract containing the arbitration clause was void, as a means of objecting to the commencement of the procedure. In fact the contract signed by the initial party, which had subsequently been taken over by the defendant, had apparently been cancelled by a subsequent agreement signed between the defendant and the claimant. The claimant alleged that it had neither the intention nor the power to terminate the initial contract when it signed the new agreement.

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• The defendant raised the issue that the contract containing the arbitration clause had been replaced by another contract which contained no arbitration agreement.

IV. Lack of effectiveness of the arbitration clause in relation to certain parties

On the other hand, the arbitration clause cannot be applicable to anyone who prima facie has not signed it, especially in cases where there are other types of difficulties preventing arbitration, like immunity from jurisdiction for instance. As a result of this, the Court decided not to apply Article 8(3) in the following cases:

• A government that had decided to transfer the assets of the signatory of the contract to sixteen newly created companies was not bound to the claimant by any contractual link.

• The signatories of the original contract had assigned it to the claimant and defendant 1. Hence an arbitration was organised for them. However, there was no evidence that such links existed between the claimant and defendants 2 and 3, who were members of the same group of companies as defendant 1. The Court accordingly decided not to apply Article 8(3) to defendants 2 and 3.

• Defendant 1, a wholly state-owned company, was the sole signatory of the contract with the claimant. Defendant 2 - also a state-owned company - was the only purchaser of defendant 1's production. Both the companies in question had common management. Defendant 1 had been wound up by government decree and its assets and liabilities assigned to defendants 3 'and 4. Defendant 1's dollar-denominated bonds had been transferred to defendant 5, the government itself. But the government decree had provided that any problems relating to defendant l's bonds should be settled by a special authority which alone had jurisdiction for this purpose. The Court applied Article 8(3) to defendants 1 to 4, but held that prima facie no arbitration clause existed with regard to defendant 5, since the government claimed immunity from jurisdiction owing to the fact that it had not signed the arbitration clause.

As we have seen, the International Court of Arbitration takes a very broad approach in applying Article 8(3) of its Rules. It considers that, once it has ascertained that an arbitration clause exists in a given contractual relationship, it cannot act as a substitute for the arbitrators with a view to determining the scope of the clause in question. In a good many of the cases referred to above, it would be likely that the arbitral tribunal appointed would decide in favour of the parties who challenged its jurisdiction. However, the arbitrators will reach their decision once they have heard the parties, on the basis of their interpretation of the arbitration clause and taking into consideration the facts that they deem to have been duly established. The ICC Court, on the other hand, quite rightly refuses to play this judicial role, but confines itself to its specific, limited, powers as an arbitration administrative body.