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ARBITRATION LAW
191
that they fulfill certain conditions
7
. On the other hand, it should not be
neglected that there are many ICC awards in which the extension was
rejected
8
.
An important award inwhich the extensionof the arbitration agreement
to group of companies was rendered was in the
Dow Chemical
arbitration
proceeding
9
. In this proceeding, the arbitrator decided that the group of
companies involved in the arbitration form a single economic entity, and
that all the companies in the group of companies intended to be bound by
the arbitration agreement. At this point, the elements such as the group of
companies’ acting as party to the agreement, the fact that the buyer had
dealings with the group and not the individual companies and that it took
an active role in the conclusion of the arbitration agreement have been
considered by the arbitrator. The Paris Court of Cassation rejected the
request of cancellation concerning said award. Consequently, the decision
on the extension was not considered grounds for cancellation by the
French courts. In parallel with this decision, it was recently asserted under
French law that international arbitration agreements shall be extended to
all disputes directly related to the performance of the agreement
10
.
Similarly, in the United States of America, in accordance with
the arbitration-friendly tendency which aims to sustain the validity
of arbitration agreements, it is deemed possible that the arbitration
agreement would be extended to the parent company within the same
group of companies
11
.
Conclusion
The extension of the arbitration agreement to companies within the
same group of companies is an issue subject to much debate in practice.
On one hand, the significant increase in the practice among groups of
7
ESEN
, p. 99.
8
Please see
ESEN
p. 116 and following pages.
9
Dow Chemical France v. ISOVER Saint Gobain ICC Award no. 4131/1982.
10
Pierre MAYER
, The Extension of the Arbitration Clause to Non-Signatories, the
Irreconcilable Positions of French and English Courts. Source:
http://www.auilr.org/pdf/27/27.4.7.pdf.
11
ESEN
, p. 106.