Multiparty arbitration refers to an arbitration involving more than one claimant, and/or more than one respondent. In the previous blog, we discussed filing multiple contracts in a single arbitration. The implications of multi-contract arbitration could also be applicable to multiparty arbitration. In this blog, we will touch on additional implications that specifically arise from multiparty arbitration.

There are three situations that could give rise to multiparty arbitration. To illustrate, a situation in a construction contract is used. First, there is a chain of subcontracts. This is where the owner enters into a construction contract with a main contractor. The main contractor then enters into subcontracts with various subcontractors on architecture, engineering, supplies, etc. These subcontractors may then subcontract to various sub-subcontractors. The second situation is when there is a separate contract. This happens when the owner, instead of entering into one contract, enters into separate contracts with different contractors and supplies directly. The third situation is when there is a joint contract where various contractors form a joint venture or consortium to enter into a contract with the owner. These situations are not limited to only construction but could also apply to any other industries. For instance, the owner sells condominiums or houses in a single building or Borey to various buyers. Such a situation could also give rise to multiparty arbitration when nonperformance on the part of the seller/owner affects all or more than one buyer.

There are a number of implications and difficulties that arise in this complex arbitration. First, party autonomy, arbitration is a consensual-based dispute resolution mechanism and could only operate with the parties’ consent.

• Parties’ consent could be first found in the arbitration agreement. This means that the existence of a dispute involving different parties requires a careful review of whether those disputing parties have consented to arbitration in their arbitration agreements.
• Second is arbitrator appointment. this is a fundamental right of parties in the arbitration. When a case involves more than two parties, how arbitrators are appointed and how to ensure that each party has equal rights in appointing the arbitrator.
• Third is costs. When different parties have different claims, how costs of arbitration are calculated and what proportion should each party bears?
• Fourth is confidentiality, arbitration is confidential in nature unless consented to by the parties. This is another implication in multiparty arbitration where different parties are involved in a single proceeding, a number of whom may not wish the other parties to know the existence of their disputes or information related to the case.
• Fifth is defined legal relationship. This is the main requirement in almost all national law on arbitration which is set as a pre-condition to arbitrate. A question arises whether the dispute of multiparty is from the same, similar, or connected defined legal relationship, absent of which could not resort to arbitration.
• Sixth is due process. This is a difficult task for the tribunal to ensure that each party is treated equally and fairly.
• Seventh is efficiency. This is another difficult task for the tribunal to ensure that arbitration is conducted in a cost-effective and timely manner. Simple but tricky issues could arise such as how a certain deadline could be counted when there are different parties receiving communication at different times.
• Eighth is related to awards whether single or separate awards are to be issued and how awards are implemented, recognized, and enforced.

Solutions to these implications and difficulties involve the parties, arbitral tribunal, arbitration institution, and the court. With respect to the arbitration agreement, arbitrator appointment, confidentiality, and connection of disputes are best solved by the agreement of the parties involved. Otherwise, depending on the applicable rules and national laws, any differences on these issues could be decided by the arbitral tribunal, arbitration institution, or court. The last resort is the court at the seat of arbitration. Many arbitration laws allow the court to help with arbitration but not intervene. For due process, treatment of the parties, the efficiency of the arbitral proceedings, and awards are required skillful arbitral tribunal and cooperation of the parties. Further, all of these issues are best addressed at the early stage of the arbitral proceedings and recorded in the term of reference, or the arbitral tribunal makes decisions on these in procedural order before proceeding to the next stage. This makes sure that the entire proceedings are well-organized, planned, and clear of such procedural issues.