1 Introduction

Over the long history of settling commercial disputes, international commercial arbitration has gradually become one of the most popular dispute resolution methods worldwide [1, p. 40, 41]. For contracting parties in international transactions, arbitration has significant advantages, such as the flexibility, efficiency, and confidentiality of the arbitral proceedings. Traditionally, international commercial arbitration has referred to the resolution of disputes between two parties over a single contract with an international element. The procedural mechanisms set out in arbitration laws and rules are designed on this premise. More recently, however, in the context of globalisation, the pattern of economics and trade has become more diversified and complex. Especially during the global challenges the world is facing, international arbitration has commenced the technology-based digital transformation, to satisfy the demand for efficient, flexible and cost-saving dispute resolution. Changes in international commercial arbitration have also become inevitable and natural results of this trend towards globalisation and digitalisation. In recent decades, the number of international commercial arbitration disputes involving multiple parties has increased significantly.

Multi-party arbitration usually refers to disputes which involve more than two parties bound by a multitude of contracts. However, in practice, multi-party arbitration is not limited to the case where the parties are already multiple at the time of the formation of the contract. The relationships between the parties are often intricate as well. In general, the situation of a multi-party arbitration can be divided, depending on its form and substance, into (1) the original contracting parties (signatory parties) and (2) the extension to non-signatories as additional parties to the original contract [2]. In terms of the form of the contract in dispute, signatory multi-party arbitration means that there are more than two parties who signed the original contract. There are three main types: (1) single contract with multiple parties; (2) horizontal contract with multiple parties; and (3) vertical contract with multiple parties. Non-signatory multi-party arbitration refers to the situation where a non-signatory party, i.e. a party who has not signed the original contract, acquires the status of a party to the arbitral proceedings, thus making a total of more than two parties in the arbitration.

According to data released by the International Chamber of Commerce (hereinafter referred to as ICC), around 33% of all new ICC arbitrations are multi-party arbitration cases [3]. In general, about 40% of arbitration cases worldwide involve more than two parties [4, p. 343]. Many leading arbitral institutes, e.g. ICC, LCIA and HKIAC, have adopted mechanisms for dealing with multi-party arbitration, which may enhance the efficiency of the arbitration process. In addition, more arbitration institutions are adopting technology-enabled methods such as online arbitration. However, many issues arise from this, such as the lack of legislation in international conventions and the challenges to traditional arbitration doctrines, which still need to be discussed and resolved.

Technology and digitalisation have had a substantial impact on international dispute resolution mechanisms, and this paper will examine the interaction between joinder mechanism and traditional theories and principles of arbitration in this context. It, therefore, consists of three main chapters. The first chapter analyses the parties’ consent, the privity of the arbitration agreement and the confidentiality of the arbitral process. It will be followed by the specific requirements for the initiation of the joinder and the challenges it may impose on traditional theories, especially with the trend towards digitalisation, by introducing the joinder provisions in the leading arbitration rules and the practice, such as the CJD v. CJE case. In the second chapter, this paper will discuss the response to the consent issue. Meanwhile, it also analyses the challenges and unique advantages of the joinder in light of the inevitable complexities. It will also explore the semiotic value of joinder by comparing the provisions of different arbitration institutions on joinder and conducting a terminological analysis on the “vague wordings”. And, in the end, one controversial question that whether the joinder is a trend in the digital age will be discussed.

2 Digitalisation and Concerns about Joinder

Transactions often involve multiple parties, thereby many multi-party arbitrations and/or disputes arise from different contractual relationshipsFootnote 1[5: p. 7]. Against this background, many of the leading international commercial arbitration institutions have included the joinder mechanism in their arbitration rules. However, some argue that joinder challenges fundamental principles of arbitration, such as the principle of party autonomy, especially in rules that do not explicitly provide for the threshold of a consensual test. Even though the joinder is triggered by fulfilling the requirements in the rules, some argue that the joining of a third party undermines the privity of the arbitral agreement and violates the principle of confidentiality. The digitalisation of the world has revolutionised international dispute resolution, giving rise to numerous new technology-based mechanisms. With this trend, the direction of development of the joinder mechanism also faces opportunities and challenges.

2.1 Effects of Technology and Digitalisation in Dispute Resolution Mechanisms

In recent years, technology-based dispute resolution mechanisms, such as virtual hearings, electronic evidence and smart contracts, have emerged as a means of facilitating international dispute resolution and are becoming increasingly popular. For example, online dispute resolution (ODR) allows parties, arbitrators, lawyers and other relevant parties from different parts of the world to participate, making dispute settlement more accessible and cost-effective. Particularly affected by the global challenge of the Covid-19 pandemic, domestic arbitration legislation in many jurisdictions and leading arbitration institutes have begun to make extensive use of online dispute resolution mechanisms.Footnote 2 Some countries have even invoked electronic technology in litigation proceedings, such as China’s Internet Courts in Hangzhou, Beijing and Guangzhou. An increasing number of international dispute resolution bodies now allow claims, counterclaims, evidence and other documents to be filed electronically, which not only speeds up the process, but also reduces the risk of lost or misplaced documentsFootnote 3[6]. Besides, blockchain technique is being explored to create the potential for secure, tamper-proof contractual agreements and transaction records. Smart contracts, which automatically enforce contract terms when specific conditions are met, can reduce the number of disputes arising from contract breaches [7].

These platforms allow parties to initiate and conduct the dispute resolution process entirely online and more flexibly, thereby reducing the need for physical presence and enhancing the efficiency of international commercial dispute resolution. However, while digitalisation offers many advantages, it also poses challenges and concerns. For example, blockchain technology-based smart contracts could create potential challenges to the validity of contracts. These include issues related to, for instance, cybersecurity and data privacy, which require updating regulations to respond to the changing international dispute resolution landscape. In this context, it is important that arbitral institutions and interested parties take steps to address these challenges [7].

2.2 Is Joinder in Breach of Consent?

The parties’ consent to arbitrate is uniformly considered the cornerstone of international commercial arbitration, which has broad influence with regard to arbitration proceedings, such as the jurisdiction of the arbitral tribunal and the nomination of arbitratorsFootnote 4[1, p. 1406] [8]. Likewise, the parties’ consent represents a vital issue for the joinder of third persons in a pending arbitral proceeding [9, p. 33]. However, the consensual nature of arbitration is regarded as the main obstacle to joinder [10, p. 73].

In response to the principle of consent and the related issues that may arise, most leading arbitral rules have stipulated a consensual test in their joinder provisions, despite the differences in specific requirements.

2.2.1 Consent is Required

Parties’ consent is explicitly required by some arbitral rules, although the specific arrangements vary.

Some arbitral rules, such as the HKIAC Rules, require that all parties, including the additional party, shall expressly consent to the joinder. Particularly, Article 22.1 (x) of the LCIA Rules stipulates that the consent of the applicant party and the additional party to joinder shall be expressly written in the arbitral agreement. Other arbitral institutions, however, have different rules for consent. The consent of all parties, including the third party, is required under Article 7 of the SIAC Rules, but it does not stress an ‘express’ consent to joinder. In this case, whether the consent has reached the required threshold becomes an issue for arbitral tribunals to examine.

The 2021 ICC Arbitration Rules significantly modified the joinder provision. In the previous rules, a joinder must be made based on all parties’ consent. In the new version of Article 7(5) of the ICC Rules, by contrast, the tribunal may join a third party following a request from an existing party if the new party accepts the constitution of the tribunal and agrees to the terms of reference. In other words, a third party can be joined in the procedure even though one of the existing parties does not agree, which arguably lowers the threshold of parties’ consent for joinder [11].

However, the provisions of the abovementioned arbitral rules are notable for their common requirement that they all require the express consent of the third party to be joined in the arbitration. For example, in the CJD v CJE and CJF Case, the consent of the third party was a vital issue.Footnote 5 CJD, CJE and CJF were parties to a joint venture contract that contains an arbitration agreement under the LCIA Rules. CJD and CJE had a dispute under the contract in 2017, whereupon the latter initiated arbitration in 2018 against CJD. After the tribunal was constituted, CJD requested to join CJF as an additional party in the current arbitration proceedings. According to Article 22.1 of the LCIA Rules, when deciding whether to order a joinder after the constitution of the arbitral tribunal, the third party must expressly consent to it. In this case, however, CJD did not consent to the joinder, because of which the arbitral tribunal rejected the request for joinder. CJD then applied to the Singapore High Court to reverse or set aside the arbitral award, but the application was rejected by the court on the same grounds.

It is thus clear that, despite the different range of parties whose consent is required, under this model, the consent of third parties is respected and plays an important role in the request for joinder.

2.2.2 Consent Requirement is Not Mentioned

Contrary to the arbitral rules above, the model followed by some institutions does not explicitly require consent in the joinder provisions. For example, Article 18.1 of the CIETAC Rules does not require a separate consent element for specific parties in an arbitration, and simply provides that ‘a decision shall be made by CIETAC after the arbitral tribunal hears from all parties including the additional party if the arbitral tribunal considers the joinder necessary.’ Similarly, Article 6 (3) of the Swiss Rules 2021 states: ‘request for joinder shall be decided by the arbitral tribunal, after consulting with all of the parties, taking into account all relevant circumstances’ (emphasis added).

Neither of the rules above explicitly stipulates consent, but they both require a consultation with all parties, including the additional party. Nonetheless, the arbitral tribunal has the power to decide whether to allow a joinder based on its own considerations after consulting all parties. In such circumstances, is consent required under the arbitral rules? The following analysis will address various arguments related to this issue by taking Swiss Rules as an example.

2.2.3 Comparative Analysis of the Two Models

The specific requirements and thresholds of consent for a joinder vary from one arbitration rule to another, and the vague wording, in particular, has given rise to many disputes. Against this backdrop, the question of whether joinder is a breach of consent has been brought into the spotlight.

The arbitral rules mentioned above can be divided into two classes depending on whether consent is required. Each class has its advantages and disadvantages.

The first class, including ICC, HKIAC, LCIA and SIAC, explicitly requires the parties’ consent to a joinder. This model is more commonly adopted by the leading arbitral institutes, aiming at protecting the principle of consent and respecting party autonomy. Remarkably, some arbitral rules which adopted this model do not require all parties’ consent. For instance, only the consent of the requesting party and the additional party is required under Article 7 of the ICC Rules. Compared to those that require all parties’ consent, this consensual requirement has lowered the threshold for joining third parties in the pending proceedings and has made a balance between the principle of consent and the possibility of joinder in practice.

However, the disadvantage of this model is reflected in some arbitral rules, e.g. the HKIAC Rules and the SIAC Rules. The joinder provision requires the consent of all parties including the additional party, which is very strict and conservative. The purpose of ‘strictness’ can be seen in the details of the provision. The HKIAC Rules prefer to use the ‘additional party’ rather than the ‘third party’ in the provision to narrow the scope of the joining party because the latter could have included non-signatory parties [12, p. 299, 300]. Meanwhile, Article 27.1 explicitly stipulates that the additional party should be prima facie bound by a relevant arbitration agreement. Theoretically, the joinder is not prevented if all parties expressly consent to it. However, the threshold, i.e. all parties’ consent, is too high to trigger a joinder in practice.

The arbitral rules in the second class only require consultation with all parties before making the decision, which is deemed to be controversial and has been criticised in terms of discretion and vague wording. One motivation of parties’ choice of arbitration is its non-official and private nature. The national courts have wide-ranging powers, granted by domestic legislation, to order a joinder of third parties joining an existing proceeding without the other parties’ consent. Unlike litigation, however, the discretion of arbitral tribunals is derived from arbitral rules and parties’ agreements. Thus, there is concern that the joinder under the second model may result in the quasi-judicialisation of international commercial arbitration.

Another issue is that different positions have arisen in terms of the threshold of consent for the joinder from the vague wording of this model, such as Article 6 of the Swiss Rules. As mentioned above, the parties’ consent to arbitrate is the basis of international commercial arbitration. Even though there is no explicit expression of ‘consent’ in the provision, it is still a vital element for a joinder [13, p. 16–40]. Some argue that Article 6 cannot be a substitute for the consent of either the parties to the arbitration or the third party by simply signing an arbitration clause opting for the Swiss Rules in the Agreement [14, p. 280]. If the consent of the parties were not required, the Swiss Rules would have explicitly stated so [15, p. 126]. Furthermore, the parties’ consent shall be deemed ‘a relevant circumstance’ under the provision, although there has no unified view been reached so far on whether the consent shall be ‘express’ or ‘implied’. Others, however, take the opposite view. They argue that consent is not a required element, as Article 6 of the Swiss Rules allows the arbitral tribunal to order the joinder of a third party even if the non-requesting party later objects to the joinderFootnote 6 [5, p. 333, 16, p. 413].

Each term is artificially given dynamic contextual meanings and values in the context of social activities and practice [17, p. 57, 58]. From the semiotic perspective, a vague wording of ‘when necessary’ or ‘relevant circumstances’ can be considered as an ‘intentional’ legislative technique. By leaving the term ‘relevant circumstances’ open to interpretation, the law can be applied to include a wide range of potential circumstances that may not have been anticipated by the legislator at the time the law was being drafted [18]. This leaves ample room and discretion for the legal professions and the courts to consider the unique facts and details of each case or to weigh up all the factors, the pros and cons, which is essential for achieving an impartial and fair outcome. At the same time, it is important to note that social values and norms are subject to change due to geo-cultural differences and the passage of time. A vague term like such allows for various interpretations, which enables the law to recontextualise or create new connotations in response to specific scenarios as well as socio-cultural developments, without the need for constant legislative revisions. It also allows courts to reinterpret the term in the light of changing social values and legal cultural contexts [19, p. 1074].

Despite the issues it may raise, this model is innovative and unique in the multi-party context [20]. Firstly, the arbitral tribunals are required to consult with all parties and take all relevant circumstances into consideration, which means that the tribunals are not arbitrary with wide-ranging discretion. Secondly, this model of joinder has lowered the threshold for joining third parties in existing arbitration, making the joinder more practical with its flexible and efficient features. Although this model has been criticised for being radical, in most opinions it is more in line with the meaning of the joinder mechanism and in this sense inspires new thinking about the future of multi-party arbitration mechanisms.

2.3 Connectivity Test: Comparative Study on Joinder and Consolidation

In addition to party’s consent, objective factors also need to be considered. The connectivity test, which sets a criterion of similarity between cases or parties, is another basic requirement of multi-party arbitration mechanisms under most arbitral rules. However, the standards concerning the ‘connectivity requirement’ differ substantially between joinder and consolidation among the leading arbitral institutions.

The connectivity requirements for consolidation are quite flexible and have been labelled in various ways, such as same parties, same arbitration agreement(s) and same transaction(s). For example, in the ICC Rules, if the claims are not made based on the same arbitration agreement(s), the arbitrations shall arise in connection with the same legal relationship between the same parties and have compatible arbitration clauses. Other arbitral rules also require there to be a compatible arbitration clause between the arbitrations, but the specific requirements are not all similar. Under LCIA Rules, consolidation is considered when the arbitrations are either between the same disputing parties or arising out of the same transaction or related transactions. HKIAC Rules require that there is a common question of law or fact arising from the arbitrations or that the rights to the relief claimed are in respect to, or arising from, the same transaction or series of transactions. Article 7 of the Swiss Rules does not require that the parties be the same but only stipulates that the arbitrators ‘take into account all relevant circumstances’, which has prima facie the most flexible and unclear connectivity requirements for consolidation.

Most arbitral rules have no connectivity requirement for the joinder because there are no second proceeding in parallel with the original arbitral proceeding. The only example is the HKIAC Rules, where a joinder shall be considered when the additional party is prima facie bound by the same arbitration agreement with the original parties. The ICC, LCIA and SCAI Rules differ from the HKIAC Rules in that they do not expressly require that the additional parties must be under the same arbitration agreement.

In addition, the joinder and consolidation differ in the rigour of their scrutiny criteria. Although the specific requirements are expressed differently in the various arbitral rules, the connectivity requirement of the consolidation is in nature a pure similarity test with specific parameters. In contrast, although the requirements of joinder may appear to be simple and loose, e.g. ‘take into account all relevant circumstances’, in some arbitral rules, the threshold is de facto more stringent than the connectivity test of consolidation in the specific decision process.

To summarise, the requirements for joinder are arguably vaguer and stricter compared to the connectivity test of the consolidation. Such strictness could, to an extent, prevent conflicts in terms of procedural and substantive legal elements in an existing arbitration. At the same time, it is a matter for discussion whether the requirements of joinder should be set out similarly to consolidation for those arbitral rules that currently adopt a vague wording.

2.4 Privity of Arbitration Agreement

A principle adopted by the leading arbitral rules is that arbitrations may only be conducted among parties who have agreed to solve their disputes by arbitration [1, p. 91–92]. This principle is a straightforward consequence of the doctrine of privity recognised by most jurisdictions worldwide.Footnote 7

The principle of privity is in fact a further underpinning of the principle of consent. There are criticisms that joinder, which breaks through the privity of the arbitration agreement, is a violation of the parties’ consent [21, p. 23]. It is argued that, in general, the arbitration agreement only binds the ‘signatory parties’. Parties do not intend to arbitrate with the whole universe, and they, therefore, enter into arbitration agreements with specific counterparties. The arbitration agreement is not only a consensual consequence of the dispute resolution method but also an arrangement of parties’ rights and obligations, which cannot be extended automatically to third parties. Otherwise, multi-party mechanisms, such as joinder, will infringe the consent of the contracting parties [22, p. 84–87].

Most leading arbitral rules do not strictly require privity to prevent the joining of third parties. For instance, some arbitral institutions, e.g. HKIAC, ICC and CIETAC, have stipulated a loose prima facie standard, which only requires the arbitration agreement to bind the additional party at first sight.Footnote 8 Moreover, modern commercial transactions, particularly in an international context, have become extremely complicated, requiring the involvement of several parties in the execution of large-scale projects. Thus, although the contracts may be entered by the group as one single party, its subsidiaries, affiliates, directors or shareholders are also required to be involved due to the complex structure of many multinational groups.

Nonetheless, third parties are regarded as ‘outsiders’ under strict privity in international commercial arbitration, even though they may have a legal or property interest in the dispute. An ‘outsider’ is commonly regarded as an individual who is not involved with or accepted as a member of a particular group or organisationFootnote 9, while this concept in the discussions on joinder mechanism is shaped by the confidential, relative and other characteristics of arbitration. The discourse around ‘outsiders’, i.e. the third parties, usually revolves around the stigma that they lack the necessary consent to participate in arbitration as a direct contractual relationship with the parties to the arbitration agreement is missing. However, an increasing number of leading arbitration institutions as mentioned above often incorporate rules and guidelines for third-party accession. Consequently, the rules and practices of these institutions constitute a new ‘discourse’ of third parties and thereby justifying joinder mechanism [18, 23].

In such a case, if third parties are prevented from joining the arbitration by a strict privity requirement, it may cause errors in identifying facts and thus jeopardise the rights of both the original parties and third parties involved. In short, strict privity may lead to unfavourable results if non-signatory parties are excluded from participating in the arbitration proceedings.

Therefore, the privity issue should not be overstated in terms of the application of a joinder.

2.5 Confidentiality of the Arbitration

Confidentiality has also been adopted by many leading arbitral rules and has been commonly recognised as a principle of arbitration. International commercial arbitration is preferred by most international businesses, compared with litigation, because of its confidential or at least private nature [24, p. 25–35, 25]. It is argued that the joinder mechanism, which joins an additional party in the existing arbitral proceeding, may violate the obligation of confidentiality, particularly in intellectual property cases or when competitors are involved [26]. A party joined to the pending proceedings would have access to all procedural files. It might gain access to confidential information, for which the existing parties may bear the risks of infringements of confidentiality [13, p. 408]. Especially with the digital transformation, new methods such as online arbitration and electronic agreements have increased concerns about cybersecurity. For these concerns, discussions about whether to make online hearings should be based on a signed confidentiality agreement binding on all attendees, and a careful choice of the online platform.

Confidentiality is not a strict and rigid principle, however. As in domestic law, the attitude toward and treatment of confidentiality varies in different arbitral rules. Some arbitral institutions do not adopt express provisions on confidentiality. Those which have expressly regulated confidentiality, such as ICC and SCAI, take different stances. Many arbitral rules have required general obligations of confidentiality to satisfy the expectations of commercial entities. Some arbitral rules, however, impose only limited obligations of confidentiality on the parties and the institution. The difference among these provisions has reflected the different value judgements and choices of the arbitral institutions. For example, the ICC Rules place greater emphasis on confidentiality obligations in striving to achieve a balance between confidentiality and efficiency. However, the Swiss Rules prefer to give the arbitral tribunal more discretionary flexibility and boost arbitral efficiency, which may violate the confidentiality of parties.

The principle of consent, the doctrine of privity and the timing requirement of joinder mentioned in the next section are interlinked to the obligation of confidentiality. Even though there are differences in the stringency of the requirements and criteria of each arbitral rule, the examination of whether the requirements for joinder are met guarantees, in a certain sense, the necessity and reasonableness of third-party participation, thus preventing the infringement of the confidentiality of existing parties. Moreover, expectations of confidentiality are hard to justify if the possibility of multi-party arbitrations is agreed upon or is reflected in the arbitration agreement [5].

In multi-party proceedings, the weight of the confidentiality factor depends to a large extent on the content of the contract between the parties and the choice of arbitration rules. Thus, if there are concerns about confidentiality, a confidentiality clause can be drafted in the agreement in advance, e.g. ‘the information and disputes shall be confidential to any third party’, to reduce the risk of disclosure. Therefore, it cannot be assumed that the application of a joinder shall be automatically excluded by the principle of confidentiality.

2.6 Timing Requirements

When it comes to the practical procedure of a joinder, another common element is the timing requirement. Different institutions have different timing arrangements and decision-making processes for a joinder.

Under the ICC Rules, the request for joinder shall be submitted to the secretariat according to Article 7(1). The additional party can be joined by the ICC, provided the requirements for the content of the request are satisfied. But Article 7(5) states that any request for joinder made after the confirmation or appointment of an arbitrator shall be decided by the arbitral tribunal once constituted. The requirements for a joinder, as analysed above, are different and stricter compared with the request made before the constitution of the tribunal.

The SIAC Rules and the HKIAC Rules have mostly the same timing arrangements, but they are different from the ICC Rules. A request for a joinder can be allowed both before and after the confirmation of arbitrators based on all parties’ consent. Article 7.1 stipulates that SIAC has the power to examine and determine a joinder, but the power is executed by the arbitral tribunal after its constitution pursuant to Article 7.8. The CIETAC Rules are different from the leading arbitral institutions mentioned above. Article 18.1 explicitly regulates that a joinder can be decided by CIETAC both before and after the constitution of the arbitral tribunal. The rules grant CIETAC the most significant power among the leading institutions in terms of its joinder mechanism.

Although there are differences in the rules of arbitral institutions, they generally follow a common pattern in the joinder mechanism. Before and after the constitution of the tribunal, most rules provide that the joinder is decided by the institution and arbitral tribunals respectively. In addition, there are generally more requirements to be met for a joinder after the tribunal has been constituted. This difference in requirements stems from two main causes. First, the nature of the joinder order made by two different subjects is different. The order and decision made by arbitral institutions before the confirmation of the tribunal are purely administrative [12, p. 311]. Once the tribunal has been constituted, however, it officially enters into substantive arbitral proceedings. The requirements for joinder are more careful and stringent from this point onwards.

Second, the effects of the orders are different in the two stages. Where a joinder is requested before the confirmation of the arbitral tribunal, all parties are deemed to have waived their right to nominate arbitrators, ensuring that all parties are treated equally.Footnote 10

The principle of equal treatment originated from the famous Dutco case.Footnote 11 Siemens AG (hereinafter referred to as ‘Siemens’), BKMI Industrieanlagen GmbH (hereinafter referred to as ‘BKMI’) and Dutco Construction Co. (hereinafter referred to as ‘Ducto’) entered a construction contract containing an ICC model arbitration clause. The dispute arose and was brought to arbitration, but the parties disagreed on the nomination of an arbitrator. According to the 1988 ICC Rules, if the parties could not agree on the nomination of arbitrators, the arbitral institution would arrange on their behalf. Dutco was then allowed to appoint an arbitrator alone, but Siemens and BKMI were required to nominate an arbitrator jointly. Siemens and BKMI were unable to reach an agreement on the joint nomination as they had independent commercial status and different interests in the case, thereby arguing that all contractual parties shall be treated equally in terms of nominating arbitrators. Ultimately, the Supreme Court of France ruled that ‘granting the parties the equal right to appoint an arbitrator is an aspect of French public order’. The Dutco Case exemplifies the challenges and difficulties posed by the nomination of arbitrators in multi-party arbitration to the traditional bi-polar arbitration system. However, with the development of international commercial arbitration, some effective methods have been widely used in practice to partially solve this problem, such as the abovementioned waiver arrangement.

The institution may also revoke any existing appointment or appointments and appoint the entire tribunal itself. The purpose of this system, which is administrative in nature, is to promote efficiency and procedural fairness and to advance the arbitration process where appropriate [9, p. 6]. However, the complexity of the situation after the constitution of the arbitral tribunal requires that more factors shall be taken into consideration when deciding a joinder. For example, Article 7(5) of the ICC Rules requires that ‘in deciding on such a Request for Joinder, the arbitral tribunal shall take into account all relevant circumstances’ (emphasis added).

From the perspective of procedural issues, stricter requirements are required for the stability of arbitral proceedings already initiated. In terms of substantive considerations, however, the stricter requirements are designed to avoid potential problems in the following proceedings. For instance, additional parties may challenge the constitution of the tribunal. Unlike the rule of waiver to the right of nomination before the constitution of the tribunal, the additional party is usually not allowed to participate in the designation of arbitrators. To avoid the impact of such issues on the arbitration process and the award, the threshold of joinder is higher after the constitution of the tribunal. Therefore, the earlier the joinder is filed, the likelier it is to succeed.

3 Responses: A Value Balance

Although the joinder mechanism may bring challenges to traditional arbitration doctrines and principles, the burdens arising from joinder should not be exaggerated. This chapter will present possible solutions in response to the abovementioned principles and concerns and then analyse the advantages of the joinder mechanism.

3.1 Consent to Joinder

As mentioned above, parties’ consent is the cornerstone for parties to the arbitration and the issue of consensual requirement has been one of the main concerns about the application of the joinder mechanism. Such consent to arbitrate is usually expressed explicitly by signing the written agreement as a contractual party. In practice, however, the arbitration agreement will not expressly deal with issues of the joinder in most cases and the parties’ consent to joinder can be implied in the agreement and relevant conducts [27, p. 269, 28, p. 38].

The latest versions of most leading arbitral rules, as discussed above, have required the express consent of the relevant parties when deciding whether to allow joinder. However, some arbitral rules do not include the express consent test in their joinder provisions. In this case, the implied consent can be provided by the mere reference to an institutional rule that provides for a joinder mechanism, which can be applied to examine whether the original parties have consented [1, p. 152].

For example, some argue that the initial parties are deemed to have consented to the joinder of third parties if they signed an arbitration agreement opting for the Swiss Rules without excluding the joinder provision [29, p. 484]. Based on the different statuses of the third party in a multi-party dispute, there are three specific situations:

Scenario 1: The third party is a signatory party to the arbitration agreement, then, as stated above, its signature represents consent to the joinder. 2. The third party is a non-signatory party to the arbitration agreement, where two further scenarios arise: (1) One of the parties to the original arbitration has agreed to the application of the Swiss Rules and the third party has expressly indicated its consent to join the existing proceeding. Even though it is not an original party, the arbitral tribunal has the right to join the third party to the existing arbitration proceedings in response to commercial reality. (2) The third party has not expressly consented, in which case the implied consent can be inferred from its relevant conducts, such as the active performance of a contract. The arbitral tribunal will often find implied consent based on the conduct if the non-signatory party is substantially involved in all stages of the contract [5, p. 36]. It is important to note that implied consent focuses on the true intentions of parties. Then the conduct to be judged must have a substantial connection with the implied consent to arbitration and not be occasional participation or a simple act of delivery or purchase [30, p. 118, 119]. Under certain circumstances, implied consent can also be seen by analysing a related contract [1, p. 1543]. For example, in the C v D1, D2 and D3 case,Footnote 12 the Commercial Court held that the arbitral tribunal has the power to join a third party to arbitration without the consent of the parties where multiple linked agreements are involved. The Court held that the tribunal was entitled to join the third party pursuant to the ‘one-stop jurisdiction’ rule established in the Fiona Trust case.Footnote 13 In this case, Claimant C had entered into the PSC with D1 and D3, but this agreement was subsequently superseded by the SPA, which covered the claims and demands under the PSC. Coupled with the fact that D3 was a subsidiary of D2, D3 should be found to have given implied consent to join the LCIA arbitration.

Besides, some other types of conduct can also implicitly contain the consent of the non-signatory party, such as an invocation of an arbitration agreement.

Implied consent of parties is a method to deal with the issue of consensual requirements when deciding the request for a joinder. There are also several doctrines to identify the real party/ies to the arbitration agreement, such as the group of companies doctrine [31, p. 279–290], derived from the implied consent. However, it is not automatically applicable in jurisdictions other than French law unless they have explicitly adopted it [32, p. 6]. Hence, the group of companies’ doctrine should be cautiously applied.

3.2 Is Joinder a Trend in the Digital Age?

With the above analysis, an interesting question arises in the context of multi-party arbitration: is the joinder mechanism a trend under the digital transformation?

3.2.1 A Balance: Challenges and Advantages of the Joinder Mechanism

Arbitration and litigation are both resolution mechanisms for civil and commercial disputes, and there are many theories and institutional designs that have common origins. As analysed above, international commercial arbitration also follows the basic principles of party autonomy and contractual privity. And the joinder, a dispute resolution mechanism for resolving multi-party disputes, is seen as bringing obstacles and challenges to traditional arbitration principles. However, arbitration should not lose its unique advantages by imitating litigation, nor should it stick to traditional doctrines and remain stagnant.

Flexibility and efficiency are key elements of international commercial arbitration, especially in the context of digital transformation. The concept of ‘efficiency’, in the context of globalisation and neoliberalism, is closely linked to broader economic, political and social values. Particularly against the background of globalisation, the quest for greater market, social and labour efficiency, levels of global governance and technological progress has led to the value of ‘efficiency’ also being recognised as a crucial factor in international dispute settlement.

Arbitration has generally been faster and more efficient than litigation in international contexts, which is a reason why arbitration is a popular dispute resolution method. This perception of efficiency exists because the arbitrators can start to work immediately after nomination and the arbitral awards are final and binding, with no possibility of appeal [28, p. 3]. As mentioned above, arbitration is often preferred by business parties as a method of resolving disputes, mainly because of its efficiency. However, the complexity of arbitration increases the time required to resolve arbitral issues. In addition, international arbitration has usually been more cost-consuming than litigation, especially in complex arbitration circumstances [1, p. 85].

The joinder mechanism has been designed to be a powerful tool for mobilising efficiency value by joining third parties in a pending arbitration rather than taking several parallel proceedings in multi-party arbitration. But this mechanism also raises a question worthy of discussion, i.e. whether multi-party proceedings, such as joinder, are more efficient and cost-saving than several simpler parallel proceedings.

The effectiveness of joinder in terms of improving efficiency and saving cost varies depending on the circumstances of the cases. The joining of third parties may prima facie make the arbitration process lengthy because the parties and arbitrators in the multi-party arbitration have more work to do. At the same time, joinder may result in cost-savings for some parties, while increasing costs for others.

Notably, joinder also has semiotic values beyond its legal functions. The incorporation of the joinder mechanism into arbitration rules and agreements represents a recognition of the complexity of international commercial transactions - multiple parties may have interrelated relationships and interests. At the same time, it symbolises the adaptability and flexibility of arbitration as a dispute resolution mechanism and demonstrates the ability of arbitration to deal effectively with complex multi-party disputes.

Overall, the complexity of multi-party arbitration may result in longer processes such as the submission of materials and review of evidence. One advantage of joinder is that it can reduce the cumbersome administrative and legal work involved in complex arbitration cases, thereby saving costs and time, and making the arbitration process more efficient in general [33, p. 496].

In addition to its role in improving procedural efficiency and reducing costs in complex arbitration cases, the joinder mechanism also has the value of preserving the justice of arbitration.

The arbitral awards are presumed to be an authoritative determination of disputes and are granted the force of res judicata [34, p. 16]. Like court decisions, arbitral awards are not considered to be always free from errors. Inconsistent awards do not frequently occur. When they do happen, however, they will raise doubts about the reliability of the arbitration and the authority of the arbitral awards. However, two irreconcilable awards on the same factual or legal issues would likely be deemed as exposing a flaw in the whole legal system. Multi-party arbitration mechanisms such as joinder are beneficial in reducing errors in factual findings in arbitral proceedings [35, p. 137]. In complex multilateral disputes, it is important that arbitrators fully understand the rights and obligations of the parties under the relevant contracts. Joinder allows all related parties in the arbitration to present their claims and evidence, enabling the arbitral tribunal to have a more comprehensive and detailed understanding of the facts in the case.

More importantly, inconsistent awards may frustrate the parties’ expectations of submitting their dispute to arbitration because their award conflicts with another arbitral award or national court decision, rendering that arbitral award unenforceable. The joinder mechanism, which allows third parties to join the pending arbitration process, helps to avoid erroneous factual findings and contradictory arbitral awards in multi-party arbitrations, thus protecting all parties’ rights and the justice and reliability of the arbitration. As analysed above, the exclusion of ‘outsiders’ from the arbitration process may, in certain circumstances, lead to unfair results. The notion of fairness can be used to justify the inclusion of third parties, particularly where their rights or interests are directly affected by the dispute. Allowing third parties to join could be a way of streamlining the process by avoiding duplication of proceedings and achieving a more comprehensive settlement.

From the point of view of value balance, arbitral justice and procedural efficiency are values to be pursued in international commercial arbitration. Therefore, the joinder mechanism will play a unique role in complex multi-party dispute resolutions in the digital age.

3.2.2 Development of the Arbitral Rules

Historically, most institutional rules did not provide for a joinder mechanism, and most arbitration agreements did not deal with the issue of multi-party disputes. Only in certain circumstances might arbitration agreements deal with multi-party arbitration in an expressly drafted joinder clause. Since the beginning of this century, many arbitral institutions, e.g. UNCITRAL, ICC, SIAC, LCIA, SCAI and HKIAC, have revised their rules to adopt provisions dealing with multi-party arbitration [36, p. 479]. Although many arbitration rules still have not introduced multi-party dispute resolution mechanisms, most leading arbitration institutions have specifically adopted multi-party arbitration mechanisms, such as joinder, intervention and consolidation. Likewise, many jurisdictions have not expressly adopted multi-party arbitration mechanisms in their domestic arbitration legislation, such as France, Switzerland, and China, etc., but those issues are gaining more attention and are addressed in ways other than statutory methods [1, p. 2679, 2770]. These dispute resolution mechanisms are among the most innovative institutional creations of the past half-century.

The changes in the design of the joinder mechanism, as seen in the revisions to their rules made by the various arbitration institutions, show the following characteristics.

Firstly, in recent years, the rules of multilateral arbitration mechanisms such as joinder have been a focus of several representative arbitral institutions in revising the content of their rules. For example, the joinder provisions in the HKIAC Rules were revised in the 2018 edition, and the ICC and SCAI Rules modified their joinder mechanism in 2021.

Secondly, the revisions to the joinder mechanism in these arbitration rules are mainly aimed at the specific requirements for its application. The ICC Rules officially adopted the joinder mechanism in 2012 and substantially revised the provisions in the 2021 version. In the previous version, Article 7(1) expressly required all parties’ consent to allow a third party to join the existing proceedings after the constitution of the arbitral tribunal. Under such a provision, the clause practically did not allow the joining of third parties after the nomination of arbitrators, as it was very difficult to meet this consensual criterion [37, p. 37–42]. Under Article 7(5) of the ICC Rules, however, only the consent of the requesting party and the additional party is required, thereby lowering the consensual threshold, and promoting procedural efficiency for a joinder [38].

Likewise, the HKIAC rules revised the joinder mechanism and expanded the scope of joinder by allowing a third party to join when all parties consented. Previously, in the 2013 rules, joinder was allowed by the determination of the arbitral tribunal only if the third party was prima facie bound by an arbitral agreement giving rise to the pending arbitration.

Thirdly, the modifications to the joinder provisions in most leading arbitral rules are characterised by concretisation, refinement, and flexibility. Taking the revision of the Swiss Rules as an example, the rules have not changed significantly in terms of the threshold for a joinder compared to the previous version, and they still maintain their status as one of the most flexible and loose standards. The main differences between these two versions, however, are as follows. In the 2012 Swiss Rules, Article 4 contained the requirements for both joinder and consolidation mechanism. The wording of the previous joinder provision was simple and vague: ‘where one or more third persons request to participate…… the arbitral tribunal shall decide…… after consulting with all of the parties…… taking into account all relevant circumstances.’ In the revised 2021 Swiss Rules, however, Article 6 has replaced the previous Article 4, which now contains new provisions regarding crossclaims, joinder, and the intervention of parties.

In terms of the timing issue, Article 4(2) of the 2012 Swiss Rules, which was already an avant-garde mechanism at the time of its adoption, focused almost exclusively on the arbitral tribunal and its power to decide a request for joinder by one or more third parties. In the 2021 Swiss Rules, Article 6 specifically distinguishes the procedural requirements for joinder requests made before and after the constitution of the arbitral tribunal. The purpose of this new amendment is to simplify administrative and legal procedures and increase efficiency at the beginning of a case. Article 6(4) then considers the possibility for third persons to participate in the proceedings ‘in a capacity other than as an additional party’, allowing the tribunal to ‘decide whether to allow such participation and in what manner’. This new provision on the role of third parties also has practical implications for the definition of third parties in international commercial arbitration, a matter on which there is no unified opinion so far.

In general, the revisions of the joinder mechanism mainly focus on consensual requirements, the eligibility of parties to initiate a joinder and the procedural requirements, which has lowered the threshold for joinder and has made the proceedings more flexible and efficient in complex arbitration.

3.3 Future of International Business

The globalisation of business has led to complex contractual relationships, which often involve commercial disputes between more than two parties bound by a series of contracts. The often-intricate relationships between contracting parties and the complex internal structures of corporations have led to multilateral and divergent interests being frequently involved in commercial activities and international commercial arbitration. It is therefore an inevitable trend that the number of multi-party arbitration cases in international commercial arbitration is on the rise. The increase in multi-party disputes will lead to a greater demand for multilateral dispute resolution mechanisms, such as the joinder. At the same time, the challenges of the global crisis have led to the adoption of technology-enabled techniques and tools for international commercial arbitration, such as online arbitration, in order to ensure parties’ access to justice and the proper conduct of proceedings. This digital transformation has in turn reinforced the expectations and demands for cost-saving, efficiency and flexibility in dispute resolution.

In summary, the number of arbitration rules that have adopted joinder shows that the joinder mechanism is being given greater attention and importance. The unique advantages of joinder in terms of improving procedural efficiency, saving costs, and promoting justice of arbitral awards play an important role in dealing with the growing number of complex multi-party disputes in the digital transformation context. Joinder can therefore be seen as a growing trend in the future.

4 Conclusion

This paper has examined the role of multi-party dispute resolutions, focusing on the joinder mechanism. In recent years, patterns of business, corporate structures and forms of commercial disputes have become more diverse and complex in the context of globalisation. It has been shown that an increasing number of international commercial arbitration cases involve multiple parties due to those new features. The trend of digitalisation has brought about significant changes to international dispute settlement by incorporating technology-based techniques and mechanisms such as online arbitration. Against this backdrop, this paper has analysed the effects of digitalisation and whether the joinder is a trend in the digital age.

As mentioned in the paper, the basic principles, such as the principle of parties’ consent, the privity of the arbitration agreement and confidentiality, still play a fundamental role in international commercial arbitration. Thus, the joinder does in a way challenge and impact the doctrines and principles under traditional bipolar arbitration.

Since the beginning of the 21st century, the rules of most leading arbitral institutions have adopted the joinder and other multi-party arbitration mechanisms. In general, this paper argues that arbitral rules such as the HKIAC Rules are arguably stricter on the threshold for joinder in practice, while the other camp, such as the Swiss Rules, has more flexible and loose provisions. However, the ICC Rules are in a relatively balanced middle ground. This paper provides a comparative analysis of the core elements of the joinder mechanism in international commercial arbitration, including the criteria for consent, confidentiality, timing requirements, etc., by referring to leading cases such as Dutco case and CJD case. Despite the fact that the provisions vary among the rules of different arbitration institutions, the commonality is that the wording of the specific requirements for joinder is characterised by ambiguity. This paper therefore has interpreted these terms from a legal semiotics perspective and concludes that this legislative feature has enabled the joinder mechanism to remain relatively stable and dynamic in the face of the challenges posed by changing societal values and continuously evolving technology. In general, the trend of modifications to the joinder has been towards greater flexibility and practicability to accommodate the increasing number of complex multilateral disputes by simplifying the arbitral procedures.

Based on the demands of international dispute resolution in the digital age and the features of the joinder mechanism, the joinder has unique advantages in multilateral dispute resolution, such as reducing factual errors, avoiding inconsistent arbitral awards, as well as enhancing arbitral efficiency and reducing costs. In particular, it is important to note that, as analysed above, the seek for the value of efficiency in this context has given the joinder not only the multiparty dispute resolution function of the mechanism itself, but also its value in the semiotic sense of demonstrating its ‘capacity’. Finally, by comparing those advantages of joinder with the possible obstacles and challenges it may bring, it is concluded that joinder is a growing trend under digital transformation.