Binding a Non-Signatory to an Arbitration Agreement under Chinese and Swiss Laws (II)

December 17, 2021 | BY

Susan Mok

Luka Groselj of Schellenberg Wittmer and Runyang Liu of Zhong Lun Law Firm provide practical guidance on contract drafting and performance to overcome possible non-signatory issues and how to navigate the current laws and court decisions when encountering such an issue

Summary

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  • It is crucial for parties bringing an arbitration against a non-signatory to anticipate which law the arbitral tribunal will apply to this issue and what consequences this choice of law entails.
  • When drafting the dispute resolution clause or arbitration clause, choose carefully not only the governing law, but also the seat of arbitration.
  • As the privity of contract is a main principle for binding signatories to an arbitration, and both PRC and Swiss courts/arbitral tribunals tend to limit the extension of arbitration agreement, parties should practice due care during the contract drafting process.

1 .   Risks of bringing an arbitration against a non-signatory

1.1  Non-signatory will challenge the jurisdiction of the tribunal before and during the arbitration proceeding

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