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Singapore High Court Requires Third Party’s Express Written Consent to be joined to Arbitration under LCIA Rules 2014
Singapore High Court Requires Third Party’s Express Written Consent to be joined to Arbitration under LCIA Rules 2014
The Singapore High Court, in CJD v CJE [2021] SGHC 61, handed down a significant ruling on the notion of "forced joinder" on March 19, 2021. A forced joinder occurs when a third party agrees to be included as a party to an ongoing arbitration case at the request of one of the arbitrators, over the other arbitrator's objections. As a result, despite what the word implies, a compelled joinder does not imply that a third party is being forced to participate in arbitration against its will. Various institutional norms, notably Article 22.1(viii) of the London Court of International Arbitration Rules 2014 (“LCIA Rules 2014”), which was the subject of the Singapore High Court's judgment, allow for compelled joinders.
The major question in the judgment was whether a third party had consented to be joined to any later arbitration proceedings between any of the other parties to the arbitration agreement since it was a party to an underlying multi-party contract and arbitration agreement. In conclusion, the Singapore High Court ruled:
- First, just because the third party was a party to the underlying contract and so to the arbitration agreement did not mean it agreed to be joined.
- Second, in addition to the foregoing, while it is possible to draft an arbitration agreement in aspects that clearly and explicitly specify that a third person (by being a party to the contract and the arbitration agreement contained therein) also implies its consent to being joined as a third party in any arbitral reference between any of the other parties to the arbitration agreement, any such clause must show unequivocal written approval to the potential of such joinder.
There is currently scant legal authority on the different compelled joinder clauses found in various institutional regulations, and the Singapore High Court's judgment gives valuable advice on how they may be construed by national courts. The decision highlights the importance of assent in international arbitration and acts as an effective reminder to parties to multi-party contracts to consider whether it may be advantageous to have the time to fill another party to any particular arbitration reference that may arise at the time of contract formation. If this is the case, they should include their unambiguous, written approval in the contract.
Implications
The judgment of the Singapore High Court has numerous major consequences for arbitration practitioners in Singapore and beyond, notably in other common law countries where the ruling may be particularly influential. The case provides important information for how comparable regulations may be construed by other judicial bodies, as there are relatively few court opinions on the interpretation of provisions allowing for compelled joinder.
(This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.)
- The Singapore High Court, in CJD v CJE [2021] SGHC 61, handed down a significant ruling on the notion of
- First, just because the third party was a party to the underlying contract and so to the arbitration agreement did not mean it agreed to be joined.
- The judgment of the Singapore High Court has numerous major consequences for arbitration practitioners in Singapore and
