Originally from American Review of International Arbitration - ARIA

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Whether the scope of an arbitration clause extends not only to signatories of the
arbitration agreement or underlying contract, but also to non-signatories, has become
a classic problem in international arbitration.1 This is attributable to the increasing
volume and complexity of commercial transactions, the proliferation of national and
international groups of companies and the fact that for financial, tax or other
commercial reasons, there is not always symmetry between the individuals or
companies that sign an agreement and those that perform it. Moreover, as this author
demonstrated in his 2010 Freshfields lecture,2 the fact that an individual or a
company has not signed an agreement through its duly appointed representative does
not mean a priori and per se that it is not a party to it or to the arbitration clause
contained therein. Indeed, in most legal systems, the conduct of an individual or
company’s representative may provide conclusive evidence that it has consented
to the relevant contract or at least to its arbitration clause. In many civil-law
systems this can even be proven by post-contractual conduct.
The issue arises not only in relation to individuals and groups of companies
but also in relation to states, in particular when a state entity is a signatory to an
agreement. In this respect, there has been some debate as to whether the issues of
extension to a state, on the one hand, and to a company, on the other, arise in the
same terms. According to Fouchard, Gaillard and Goldman,3 the answer is in the
affirmative, notwithstanding that in relation to states the issue may raise additional
problems such as immunity from jurisdiction. They submit that in both cases, it is
the intention of the parties that is the main criterion in determining the scope
rationae personae of an arbitration clause. Other authors, such as Professor Hans
Smit4 and Professor Roger Alford,5 have expressed doubts over the suitability of
applying the same reasoning to states as to groups of companies, for example by
application of the alter ego, agency or third-party beneficiary theories.