LK Law LLP
2 Contributions by LK Law LLP Experts
PRACTICE NOTES
Contract (Right of Third Parties) Act 1999 and arbitration
This Practice Note examines the effect of the Contract (Right of Third Parties) Act 1999 (C(RTP)A 1999) on arbitration, in particular, and more generally, with emphasis on the settled rule that only signatories to an arbitration agreement can be bound, take part in the proceedings, and be subject to any arbitral award. It also addresses the conditional benefit principle. The Note surveys the leading authorities Nisshin Shipping Co Ltd v Cleaves and Fortress Value Recovery Fund v Blue Sky Special Opportunities Fund. The subject is also described as privity of contract in international arbitration, the interaction between C(RTP)A 1999 and arbitration, and third parties and arbitration. Under English common law, the orthodox privity doctrine provides, broadly, that only those party to a contract have rights under it and only those parties bear
Arbitration
CHECKLISTS
This Checklist
To be read together with the Practice Note entitled Arbitration and the Contracts (Rights of Third Parties) Act 1999. It highlights key matters to assess when deciding whether arbitration clauses within contracts also bind a third party under the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999):
Does the relevant contract expressly disapply the C(RTP)A? Many commercial agreements expressly exclude the C(RTP)A 1999
Is the contract expressly subject to English law? If English law does not govern, then the C(RTP)A 1999 may not apply to the contract
If the contract is not governed by English law, but the arbitration clause is, the C(RTP)A 1999 may nevertheless apply to the arbitration agreement (see eg AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC)
Also, check the date of the contract...
Arbitration
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