For years, arbitral rules were devised for only two parties. The ICC Court of Arbitration was created in 1923, and no provisions regarding arbitration involving more than two parties were introduced in the ICC Rules of Arbitration prior to 1998. Which does not mean that during the preceding 75 years, the ICC Court never dealt with arbitration procedures involving more than two parties. They were seen as exceptions that did not deserve to be specifically addressed by the ICC rules. Some ad hoc solutions were found by adapting the existing rules to problems that the presence of several parties generated.

This slow evolution is fully understandable. The paradigm of an arbitration procedure is a procedure with two parties or two homogeneous groups of parties. The existence of one or several additional independent parties has disruptive effects. It starts with drafting the arbitration clause. It requires a lot of creativity to devise contractual mechanisms that allow all contracting parties to intervene in case a procedure is initiated by one of them against only one other. Then come the problems of constituting an arbitral tribunal, of dealing with cross claims, with requests for disclosure and the use of the same documents directed to parties in different procedural positions, etc. 1To address all those issues in standard rules of arbitration is a challenge.

With class and group actions, the usual complication of multiparty and multi-contract arbitration is often exacerbated. For instance, how to establish the jurisdiction of arbitrators in a class action procedure where the majority of the parties are signatories of different contracts, with possibly different arbitration clauses and are not even aware of the existence of the procedure? It is a difficulty among many others.

Thus, one may legitimately wonder why to endeavour having recourse to arbitration in resolving disputes for which this institution is not naturally adapted? Would it not be simpler to leave the State courts to deal with class actions and group actions? Organizing class or group arbitration proceedings faces many hurdles. What are the merits of arbitration that would justify crossing them? Maybe there is none. Is ‘class arbitration is a worst-of-all-worlds Frankenstein’s monster’ as the US Chamber of Commerce once described it? 2But in that case, it would be hard to understand efforts made throughout the word to make class or group arbitration possible. The fact that 180,000 Italian creditors sued Argentina in ICSID on the basis of the BIT between Argentina and Italia is very telling. 3

Class Action procedures, as developed in the United States Court system and more recently in Canada, are almost nonexistent in Europe. The European Commission has advocated collective redress as an important means of accessing justice, but class actions have found little enthusiasm in the Member States. Class arbitration seems to raise even more hostility, as it is at odds with some basic principles of arbitration.

As already mentioned, one of them is consent, as without consent there is no arbitration. Even if an arbitration clause provides for the possible introduction of class action arbitration before an arbitral tribunal, this resolves only the problem of consent to arbitration in case of a collective dispute. The issue of the consent to be involved in a specific dispute remains unanswered. Opt-in processes may be a solution.

Lack of confidentiality is sometimes presented as another difficulty to accepting class arbitration. 4Indeed, arbitration is, in principle, a confidential process, and such a principle of confidentiality is seen as one of the main reasons that parties choose arbitration, at least in domestic arbitration. For instance, the principle of confidentiality in arbitration is recalled in article 1464 (4) of the French Code of Civil Procedure, which states that in domestic arbitration the procedure is submitted to the principal of confidentiality unless the parties have agreed otherwise. To the contrary, a class action procedure would necessarily be public, and lawyers have motivation to constitute as wide a class as possible, as they have an interest in raising public awareness on the case as an element of publicity. Here again, an opt-in process would resolve the difficulty, as the party voluntarily entering into class arbitration would implicitly waive any right to confidentiality.

Moreover, it should not be forgotten that the hurdles are not of a procedural nature. No class action arbitration can be exercised through arbitration unless it is established that the subject matter of the dispute is arbitrable (jurisdiction ratione materiae). In several jurisdictions, disputes involving consumers or employees may not be submitted to arbitration, while consumers and labor disputes are the main field of class arbitration in the United States. But it is also true that specific statutes were introduced in some countries to favor consumer protection through arbitration, such as the 2008 Spanish Consumer Arbitration System Statute.

This Dossier of the Institute discusses those complex issues on a comparative law basis. It does so scientifically, by introducing indispensable distinctions among mass actions, in order to avoid confusion between group actions, collective actions and class actions. Each category raises different problems. In group actions, individual claims are merged together on a consensual basis but each individual holder of a claim remains a party. This configuration does not raise insuperable problems to arbitration. Collective actions are also arbitration compatible, as only one representative is acting on behalf of the members of a specific group, with members sharing the same interest. In class actions, members of a class are considered to be party to proceedings at the end of an opt-in or an opt-out process started by a self-designated representative. Here, adaption to the arbitration basics is really problematic.

This book presents the work of the 2015 Annual Meeting of the Institute, under the guidance of Bernard Hanotiau, a prominent member of the Council of the Institute and Eric Schwartz, one of its Vice Presidents. Without their deep knowledge of the subject and their impressive efforts, it would not have been possible to gather so many specialists to produce such an impressive result.

1
See Multiparty arbitration, Dossier VII of the ICC Institute of World Business Law ICC Product No. 701E, 2010 Edition.

2
Chamber of Commerce of the United States of America’s amicus curiae in Marriott Ownership Resorts, Inc. v Sterman, No. 15-10627 at 9 (11th Cir. Apr. 1, 2015).

3
Abaclat and others v Argentine Republic, ICSID case no. ARB/07/5.

4
Maximin de Fontmichel, « Arbitrage et actions de groupe — les leçons Nord-Américaines », Rev. Arb., Vol.2008/4, pp. 644-645.