The “Group of Companies Doctrine”- Where Is It Heading? – Vol. 17 No. 1

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Authors: Stephan Wilske*, Laurence Shore** and Jan-Michael Ahrens*

Published: October 2007



Contrary to litigation before state courts, arbitration is a private dispute resolution mechanism and has to be agreed upon by the parties. Where a person has not submitted to arbitration, either by means of an arbitration clause in a main contract or a separate arbitration agreement, he generally has a right to seek recourse before the state courts; in many countries, access to the courts is granted as a constitutional or human right. Accordingly, it comes as no surprise that the “extension” of arbitration agreements from a contractual party to third parties, e.g., to its affiliated companies or controlling shareholders, has become a crucial issue in arbitral practice. Can such third parties rely on the lack of consent to arbitration or may the need for effective dispute resolution justify sacrificing the strict requirement of (real) consent? If so, in which circumstances might this be warranted? Diverging arbitral awards and court decisions from various jurisdictions recently re-ignited this important debate. The present article will address these recent developments and seek to assess emerging trends.

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*Dr. Stephan Wilske, LL.M. (The University of Chicago), Maître en droit (Aix-en-Provence), MCIArb, member of the German and New York Bar, is a partner in the Stuttgart office of Gleiss Lutz.
**Dr. Laurence Shore, J.D. (Emory), Phd.D. (Johns Hopkins, History), solicitor of the Supreme Court of England and Wales and member of the Bar of the District of Columbia and Commonwealth of Virginia, is a partner in the London office of Herbert Smith LLP.
***Dr. Jan-Michael Ahrens, LL.M. (Geneva & Lausanne), member of the Bar of Berlin, Geneva and England & Wales, is a lawyer in the Geneva office of Lenz & Staehelin.