The “Privy to Arbitration” Doctrine: The Withering of the Common-Law Privity of Contract Doctrine in Arbitration Law – Vol. 16 No. 3-4

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Author: Olagoke O. Olatawura*

Published: July 2007

Court Decisions
Third Parties in Arbitral Proceedings



Widening access to arbitration is for many reasons desirable. This section provides the framework and context of theoretical uphill challenges affecting calls for third-party rights and liabilities in arbitration as a result of the classical privity of contract doctrine.

A. Introduction

1. Conceptual Inquiries

How and why can it be said that a third party, i.e., a person who is not a signatory or direct creator of the arbitration clause or who did not perform the contract upon which a dispute is based, has a right or obligation to arbitrate or to have an award binding upon it? Is the absolute consent of a party to the arbitration agreement not needed or can an independent right of claim or defense be brought before arbitration proceedings? Is the claim of right or obligation compellable? What duty, power, or right does the arbitral tribunal have in these situations? In common-law jurisdictions, positive resolution of these and related questions involve a reappraisal of the application of the “privity of contract” doctrine.

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*BA (Hons), LLB, LLM, Dip. UK & European Copyright Law. Dip IP Licensing. Nuffield Commonwealth Fellow in Alternative Dispute Resolution (1995); Fellow of the University Institute of European Studies, Torino, Italy (1999); Research Scholar, UNIDROIT Rome (2001); Fellow Marx Planck Institute of International Private Law, Hamburg (2005); Solicitor and Advocate Supreme Court of Nigeria; of Goldmann Lagos, Transnational Lawyers, 14B Keffi, Ikoyi, Lagos, Nigeria; of Birkbeck College, University of London, United Kingdom.