DR.

RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY,

LUCKNOW
(2023-2024)
INTERNATIONAL COMMERCIAL ARBITRATION
Multi Contracts and Single Arbitration Conundrum in International Commercial Arbitration: The
Challenges of Parallel Arbitral Proceedings

SUBMITTED BY: SUBMITTED TO:

Priyanshi Bhageria PROF. PRASENJIT KUNDU
B.A. LL.B. (HONS.) ASSISTANT PROFESSOR
ROLL NO.: 200101101

2
 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere thanks
to all of them.
I am highly indebted to my teacher Prasenjit kundu, for his guidance and constant supervision as
well as for providing necessary information regarding the project & also for his support in
completing the project.
I would like to express my gratitude towards my parents & members of Dr. Ram Manohar Lohiya
National Law University, Lucknow for their co-operation and encouragement which helped me
in completion of this project.
I would like to express my special gratitude and thanks to the seniors for giving me such attention
and time.
My thanks and appreciations also go to my colleagues in developing the project and people who
have willingly helped me out with their abilities.
Thank You!

3
 TABLE OF CONTENTS

RESEARCH METHODOLOGY ......................................................................................................... 4

INDEX OF AUTHORITIES ............................................................................................................... 6

INTRODUCTION ............................................................................................................................ 9

WHAT IS CONSOLIDATION? ....................................................................................................... 11

CONSOLIDATION IN ARBITRATION: ALLOWED OR NOT? ............................................................. 12

CONSOLIDATION IN DOMESTIC LEGAL SYSTEM ......................................................................... 13

HOW COURTS IN INDIA TRIED TO BALANCE CONSOLIDATION? ................................................. 17

CHANGES HAPPENING INTERNATIONALLY ................................................................................ 20

HOW CLOSE TO THE INDIA POSITION? ....................................................................................... 24

CONCLUDING REMARKS ............................................................................................................ 25

4
 RESEARCH METHODOLOGY

Subject: International Commercial Arbitration

TITLE: Multi Contracts and Single Arbitration Conundrum in International

Commercial Arbitration: The Challenges of Parallel Arbitral Proceedings

The research methodology followed for the purpose of completion of this project is Doctrinal

in nature. Primarily, secondary sources of information in terms of commentaries and treatises,

books and articles will be looked at in order to gain a holistic view of the topic.

Aims & Objectives

This project aims to undertake a comprehensive and in-depth critical analysis of the position

of consolidation of arbitral proceedings in the field of international commercial arbitration,

especially in the light of the recently delivered judgement by the British High Court.

Sources of Data

Following sources of data have been used in this project:

1. Books

2. Articles & Research Papers

3. Case Laws

Methods of Writing

The method of writing in the course of this project is primarily analytical.

Mode of Citation

The author has followed mode of citation as per Harvard Bluebook (20th Edition) throughout

the course of this project.

Statement of Problem

The paper examines the approach by various courts of various countries to consolidate

arbitral proceedings. It also examines the challenges of parallel proceedings.

Research Questions

5
1. What is consolidation of arbitral proceedings?

2. Whether a claimant must commence separate arbitrations, serve more than one

notice or issue more than one request for arbitration in respect of each contractand

whether that means that the claims will be conducted separately?

3. What is the position when a single notice purports to commence arbitration in respect

of two separate contracts?

4. Is that notice valid or can the arbitral award be successfully challenged on the grounds

that, because separate notices should have been served, the arbitral tribunal lacked

substantive jurisdiction (section 67 of the UK Arbitration Act, 1996)?

6
 INDEX OF AUTHORITIES

Cases

Ameet Lal Chand v Rishabh Enterprises .................................................................................. 15

Anwar v. Fairfield Greenwich Ltd ........................................................................................... 12

BP Exploration Libya Ltd v. ExxonMobil Libya Ltd................................................................ 12

Chloro Control (I) P. Ltd. v Severn Trent Water Purification Inc. & Ors ............................... 14

Compania Espanola de Petroleos, SA v. Nereus Shipping SA................................................. 12

Connecticut General Life Ins Co v. Sun Life Assurance Co of Canada................................... 12

Duro Felguera SA v Gangavaram Port Limited ...................................................................... 14

Global Infonet Distribution Pvt vs Lenovo (India) Private Limited......................................... 15

Guidant LLC v. Swiss Re International SE and Another ................................................... 13, 19

LLC Agronefteprodukt v Ameropa AG....................................................................................... 8

Matter of East Coast Services, Inc (Silverite Const Co, Inc) ................................................... 13

Maxum Foundations, Inc v. Salus Corp ................................................................................... 12

Olympus Superstructure Pvt Ltd v Meena Vijay Khetan & ors................................................ 13

Parker v. Dimension Service Corporation ............................................................................... 13

Philadelphia Reinsurance Corp v. Employers Ins of Wausau ................................................. 12

PR Shah Shares and Stock Brokers Private Limited v BHH Securities Private Limited and

Others ................................................................................................................................... 14

Priscapian Development Corporation v. BG International Ltd............................................... 12

Protective Life Ins Corp v. Lincoln Nat’l Life Ins Corp ........................................................... 12

Rolls-Royce Indus Power Inc v. Zurn EPC Services Inc.......................................................... 12

Sociedad Anonima De Navegacion Petrolera v. CIA De Petroleos De Chile SA .................... 12

Steward M Muller Construction Co v. Clement Ferdinand & Co ........................................... 12

UK v. Boeing ............................................................................................................................ 12

7
United India Insurance Co. Limited v Hyundai Engineering and Construction Co Ltd & Ors

. ............................................................................................................................................ 15

Western Oil Sands Inc v. Allianz Insurance Co of Canada ..................................................... 12

Statutes

Arbitration Act, SNB 1992....................................................................................................... 11

Civil Practice Law & Rules, Article 75.................................................................................... 12

Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10

June 1958 ............................................................................................................................. 10

English Arbitration Act 1996 ..................................................................................................... 9

International Commercial Arbitration Act, REA 2000 ............................................................ 11

International Commercial Arbitration Act, RSBC 1996 .......................................................... 11

International Commercial Arbitration Act, SO 2017 ............................................................... 11

International Commercial Arbitration Act, SS 1988-89 .......................................................... 11

New York Consolidated Laws 2012 ........................................................................................ 12

Other Authorities

Angus M Gunn, ‘Stays of Canadian Court Proceedings in Favour of International Commercial

Arbitration: Recent Trends’, ADR Institute of Canada........................................................ 10

James Reiman and Megan Smith Richardson, ‘Consolidation and Joinder in Arbitration’ (24

April 2019) ........................................................................................................................... 13

Organisation for Economic Co-operation and Development [OECD], Investment Division,

Consolidation of Claims: A Promising Avenue for Investment Arbitration?, International

Investment Perspectives (Paris: OECD Publishing, 2006) .................................................. 11

Pappas, Vasilis, Rojas, Romeo and Keshava, Gita, When Consolidation Fails: The Challenges

of Parallel Arbitral Proceedings, Global Arbitration Review ............................................... 9

Treatises

8
Gary B Born, International Commercial Arbitration, Vol. 2 (The Netherlands: Kluwer Law

International, 2009) at 2068 ................................................................................................... 8

Kinnear, M. and Mavromati, C., Chapter 15: Consolidation of Cases at ICSID, in Neil

Kaplan and Michael J. Moser (eds), Jurisdiction, Admissibility and Choice of Law in

International Arbitration: Liber Amicorum Michael Pryles, Kluwer Law International,2018

................................................................................................................................................ 9

Lawrence E Thacker, ‘Arbitration procedures and practice in Canada: Overview’ (2013),

Thomson Reuters ................................................................................................................... 8

9
 INTRODUCTION

Arbitral users often face the situation of what to do where there are disputes between the same

parties arising under multiple agreements. A question often posed is whether a claimant must

commence separate arbitrations, serve more than one notice or issue more than one request for

arbitration in respect of each contract and whether that means that the claims will be conducted

separately. Parallel proceedings are often inevitable on projects in which several interrelated

agreements are awarded to subcontractors and are exacerbated when the parties are unable to

join a third party to an arbitration.1 Although the challenge of parallel or multiple proceedings

can arise in all industries, it is even more pronounced and frequently encountered in the energy

industry because of the frequency of multi-party and multi-contracttransactions – particularly

in complex construction projects and joint venture agreements2 and the potential for

overlapping claims arising under state contracts and investment treaties.

What is the position, however, when a single notice purports to commence arbitration in respect

of two separate contracts? Is that notice valid or can the arbitral award be successfully

challenged on the grounds that, because separate notices should have been served, the arbitral

tribunal lacked substantive jurisdiction (section 67 of the UK Arbitration Act, 1996)? These

issues came before Sir William Blair (sitting as a High Court judge) in LLC Agronefteprodukt

v Ameropa AG3.

The England and Wales High Court (‘EWHC’) case of LLC Agronefteprodukt v. Ameropa

AG4 sets the context for the discussion, by laying down the substantive effectiveness of a notice

of arbitration commencing a single arbitration in respect of two separate claims under two

contracts i.e., consolidation of arbitral proceedings.

1
Lawrence E Thacker, ‘Arbitration procedures and practice in Canada: Overview’ (2013), Thomson Reuters.
2
Gary B Born, International Commercial Arbitration, Vol. 2 (The Netherlands: Kluwer Law International,
2009) at 2068.
3
[2021] EWHC 3474 (Comm).
4
[2021] EWHC 3474 (Comm)

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The authors note that the approach to consolidate parallel arbitration proceedings remains

controversial and varies by jurisdiction, and even between courts in the same jurisdiction. In

LLC Agronefteprodukt v. Ameropa AG5, the English High Court dismissed a challenge under

Section 67 of the English Arbitration Act 1996 (‘the English Act’) to an arbitration award on

the grounds of lack of jurisdiction. The main issue in dispute concerned theeffectiveness of the

Notice of Arbitration, and whether it illegitimately purported to commence a single arbitration

in respect of two separate claims under two contracts. The judgment is a valuable

demonstration of the English Court’s commercial, substance-focused approach, and serves as

a reminder of the potential consequences of procedural missteps.

In the light of the 2021 EWHC judgment, the question arises, how to read this judgment, as a

judgment concerning the issue of interpretation of notice or as another case accepting

consolidation of arbitral proceedings?

5
[2021] EWHC 3474 (Comm).

11
 WHAT IS CONSOLIDATION?

Consolidation refers to the ability to combine multiple arbitral proceedings, initially

commenced separately often against the same respondent, into a single proceeding.6

Consolidation addresses two goals: first, alleviating the time, costs, and other inefficiencies

of multiple and/or parallel proceedings as well as avoiding procedural harassment, andsecond,

avoiding inconsistent decisions.7 This procedural tool is commonly used in international

commercial arbitration.8

Consolidation differs from joinder, which allows a third-party to join an existing arbitration

proceedings, and multi-party claims or mass claims, which allow two or more claimants initiate

a single proceeding against the same respondent by jointly filing a single request for arbitration.

6
Kinnear, M. and Mavromati, C., Chapter 15: Consolidation of Cases at ICSID, in Neil Kaplan and Michael J.
Moser (eds), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael
Pryles, Kluwer Law International, 2018, Section 15.02.
7
Pappas, Vasilis, Rojas, Romeo and Keshava, Gita, When Consolidation Fails: The Challenges of Parallel
Arbitral Proceedings, Global Arbitration Review (10 November 2020).
8
Pappas, Vasilis, Rojas, Romeo and Keshava, Gita, When Consolidation Fails: The Challenges of Parallel
Arbitral Proceedings, Global Arbitration Review (10 November 2020).

12
 CONSOLIDATION IN ARBITRATION: ALLOWED OR NOT?

Under the UNCITRAL Model Law and the New York Convention, when faced with parallel

court and arbitration proceedings between the same parties under the same arbitration

agreement, courts are directed to avoid parallel proceedings by staying the matter before it and

refer the parties to arbitration. Nevertheless, both are silent on what courts are directed to do in

circumstances when there are parallel court and arbitration proceedings relating to the same

facts, law and issues arising under separate agreements.

Giving due regards to the challenges of parallel proceedings, domestic as well as arbitration

institutions approach consolidation to identify guidance that they can provide with respect to

drafting agreements.

13
 CONSOLIDATION IN DOMESTIC LEGAL SYSTEM

As a result of the United Nations Commission on International Trade Law’s Model Law on

International Commercial Arbitration (the UNCITRAL Model Law)9 and the Convention on

the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention),10

most countries have a generally uniform approach to addressing parallel court and arbitration

proceedings between the same parties under the same arbitration agreement. Nevertheless, both

are silent on what courts are directed to do in circumstances when there are parallel court and

arbitration proceedings relating to the same facts, law and issues arising under separate

agreements.

At present, it appears that only the Netherlands, Hong Kong and Colombia provide for court-

ordered consolidation of arbitrations without the consent of all parties. In the Netherlands, the

court can order consolidation of arbitrations if all arbitrations have their seats in the

Netherlands and the parties have not opted out of the provision of the Netherlands’ arbitration

law that permits the consolidation. In Hong Kong, the court’s power to consolidate arbitrations

without consent of all parties only applies to domestic arbitrations, but international parties

may opt in to the domestic regime. Finally, in Colombia, a 1989 decree on arbitration renders

invalid an arbitration agreement between two parties that will affect any non-party to the

arbitration agreement who refuses to be joined. In such cases, the arbitration proceedings are

joined with any related court proceedings.11

The situation in Canada is mixed. The international arbitration legislation in the provinces of

Ontario and British Columbia allows the courts to order consolidation only if ‘all parties to

9
Angus M Gunn, ‘Stays of Canadian Court Proceedings in Favour of International Commercial Arbitration:
Recent Trends’, ADR Institute of Canada, at https://adric.ca/adr-perspectives/stays-of-canadian-court-
proceedings-in-favour-of-international commercial-arbitration-recent-trends.
10
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (the
New York Convention).
11
Organisation for Economic Co-operation and Development [OECD], Investment Division, Consolidation of
Claims: A Promising Avenue for Investment Arbitration?, International Investment Perspectives (Paris: OECD
Publishing, 2006) at 229.

14
two or more arbitral proceedings have agreed to consolidate those proceedings’. Thus, it

appears that absent consent of all parties to all arbitrations that are proposed to be consolidated,

courts may not order consolidation in those jurisdictions.12 However, the legislation in other

provinces, including Alberta, Saskatchewan and Manitoba, allows courts to consolidate

international arbitral proceedings ‘on the application of the parties’.13 Althoughthis language

is ambiguous, some courts have held that it allows courts in those jurisdictions to order

consolidation on the application of a single party (i.e., not all parties to all arbitrations that are

being consolidated must consent to consolidation being ordered).14 Whilethis potentially allows

those courts more leeway to order consolidation, and thereby avoid therisks of parallel arbitral

proceedings, the outcome of such an application is uncertain. For instance, in 2004, the Alberta

Court of Queen’s Bench held that the consent of all the parties was required to consolidate the

arbitral proceedings at issue.15 However, in 2016, the same court in Priscapian Development

Corporation v. BG International Ltd16 held that it had the power to order consolidation of

parallel proceedings without the consent of all the parties to both arbitrations as a result of its

supervisory jurisdiction over international arbitrations seated in Alberta.

The approach to consolidation in the United States differs at state level, but also at federal level.

Given the silence of the Federal Arbitration Act (FAA), requests for consolidation mustbe

based on the language of the parties’ arbitration agreement. Most federal courts have supported

the position that consolidation requires an express provision in the contract, and

12
International Commercial Arbitration Act, SO 2017, c. 2, Sched 5, Article 8; International Commercial
Arbitration Act, RSBC 1996, c. 233, Article 27.01.
13
International Commercial Arbitration Act, REA 2000, c. I-5, Article 8; International Commercial Arbitration
Act, CCSM c. C151, Article 8; International Commercial Arbitration Act, SS 1988-89, c. I-10.2, Article 7.
14
See, e.g., Arbitration Act, RSBC 1996, c. 55, s. 21; Arbitration Act, RSA 2000, c. A-43, s. 8(4); Arbitration
Act, SS 1992, c. A-24.1, s. 9(4); Arbitration Act, 1991, SO 1991, c. 17, s. 8(4); Arbitration Act, SNB 1992, c.
A-10, s. 8(4).
15
Western Oil Sands Inc v. Allianz Insurance Co of Canada, 2004 ABQB 79.
16
Priscapian Development Corp v. BG International Ltd, 2016 ABQB 611.

15
thus the consent of all the parties.17 There are a number of cases in which federal courts

interpreted the FAA liberally to give it the power to consolidate arbitral proceedings without

the consent of parties, if it involved the same questions of law and fact.18 However, it seems

that this position has been overruled subsequently and that consent of the parties is now

required for federal courts to consolidate arbitral proceedings.19 Nevertheless, there remains

uncertainty as to how federal courts interpret the existence of consent of the parties.20

The same uncertainty exists at state level. For instance, in New York, there is no consolidation

provision in its arbitration legislation,21 yet courts have alluded to their power to consolidate

absent the parties’ consent.22 Consolidation has also been denied in New York when ‘two

proceedings differ technically and procedurally’ and would go against the parties’

agreements.23 To add to the uncertainty, a state court in Ohio confirmed in Parker v.

Dimension Service Corporation24 that arbitrators have the power – at least in that state – to

consolidate multiple arbitrations brought by six different claimants against the same respondent

for purposes of discovery and motions practice without unanimous consent of the parties

because the separate agreements under which the disputes arose were identical.

In the United Kingdom, it is generally accepted that consolidation of parallel proceedings is

not possible without the parties’ consent according to the Arbitration Act 1996, Section 23.25

17
Protective Life Ins Corp v. Lincoln Nat’l Life Ins Corp, 873 F (2d) 281, 282 (11th Cir 1989).
18
Compania Espanola de Petroleos, SA v. Nereus Shipping SA, 527 F (2d) 966 (2d Cir 1975). See also Sociedad
Anonima De Navegacion Petrolera v. CIA De Petroleos De Chile SA, 634 F Supp 805, 809.
19
UK v. Boeing, 998 F(2d) 68, 72 (2d Cir 1993); Philadelphia Reinsurance Corp v. Employers Ins of Wausau,
61 Fed Appx 816 (3rd Cir 2003) at footnote 3; BP Exploration Libya Ltd v. ExxonMobil Libya Ltd, 689 F(3d) 481
(5th Cir 2012); Anwar v. Fairfield Greenwich Ltd, 728 F Supp (2d) 372 (SDNY 2010) at 476; Rolls-Royce Indus
Power Inc v. Zurn EPC Services Inc, 2001 WL 1397881 at 4.
20
Connecticut General Life Ins Co v. Sun Life Assurance Co of Canada, 210 F (3d) 771 (7th Cir 2000) at 774;
Rolls-Royce Indus Power Inc v. Zurn EPC Services Inc, 2001 WL 1397881 at 4; Maxum Foundations, Inc v. Salus
Corp, 817 F (2d) 1086, 1087 (4th Cir 1987).
21
New York Consolidated Laws 2012, Civil Practice Law & Rules, Article 75 (§§ 7501 to 7514).
22
Steward M Muller Construction Co v. Clement Ferdinand & Co, 36 AD (2d) 814 (1971).
23
Matter of East Coast Services, Inc (Silverite Const Co, Inc), 623 NYS (2d) 1020, 1022 (NY Sup Ct 1995).
24
Parker v. Dimension Serv Corp., 2018-Ohio-5248 (Ct App 2018); James Reiman and Megan Smith
Richardson, ‘Consolidation and Joinder in Arbitration’ (24 April 2019), American Bar Association, at
https://www.americanbar.org/groups/litigation/committees/alternative-dispute-
resolution/practice/2019/consolidation-and-joinder-in-arbitration.
25
English Arbitration Act 1996, c 23, Section 35.

16
To cite but one example, in Guidant LLC v. Swiss Re International SE and Another,26 the

court was confronted with a case in which two arbitrations were commenced under insurance

policies with the same arbitration clause and addressed the question of consolidation without

the parties’ consent. The court acknowledged the desirability of efficiency and consistency of

results, but emphasised that in arbitration, ‘party choice, privacy and confidentiality are

relevant and important’. Ultimately, the court found that neither the courts nor an arbitral

tribunal has the power under the UK Arbitration Act to consolidate two arbitral proceedings

absent the parties’ consent.

26
[2016] EWHC 1201 (Comm).

17
 HOW COURTS IN INDIA TRIED TO BALANCE CONSOLIDATION?

The approach to consolidating parallel arbitrations varies by jurisdiction and even between

courts in the same jurisdiction. The situation in India is mixed and approach to consolidation

differs at court level. The Supreme Court in the case of Olympus Superstructure Pvt Ltd v

Meena Vijay Khetan & ors27 allowed consolidation of arbitrations and held that an arbitrator

is well within his authority to decide under original as well as subsequent agreements.

Similarly, the Supreme Court, in the case of PR Shah Shares and Stock Brokers Private

Limited v BHH Securities Private Limited and Others28, interpreted liberally to give it power

to consolidate arbitral proceedings if it involved the same question of facts and lawand

original contract allows it. This case broadened the scope of consolidation allowing non-

signatories to have their claims decided under a single consolidated proceeding. PR Shah29 is

more explicit although it was rendered in the context of institutional arbitration.

To cite another, in Chloro Control (I) P. Ltd. v Severn Trent Water Purification Inc. & Ors30,

the court was confronted with another case of consolidation. The Apex Court, following

precedents, acknowledged the desirability of efficiency and dealt with group of companies’

doctrine. The Apex court held that non-signatories to an arbitration agreementbut being part

of the same group of companies as parties to that agreement could be held bound by arbitration.

This judgement delivered legitimacy to the consolidation of arbitrations arising from

consequential agreements. Therefore, non-signatories to the initial contract can be referred to

the same arbitration as they are related parties and such contracts depend on mutual execution

of performance.

However, it seems that this position has been overruled subsequently and weightage has been

given to implied consent of parties to consolidate arbitral proceedings. The decision of the
27
(1999) 5 SCC 651.
28
(2012) 1 SCC 594.
29
(2012) 1 SCC 594.
30
2013 (1) SCC 641.

18
apex court in Duro Felguera SA v Gangavaram Port Limited31 clarified that there cannot be

a single arbitration reference for disputes arising out of different agreements, even if they are

interlinked to a single transaction. This means that in case of separate Arbitration clauses

arising out of a single transaction cannot be referred to a single tribunal and the concept of

composite reference fails. To lighten up this uncertainty, the Court overruled the law laid down

in Duro Felguera32 and followed ‘substance over form’ of the main agreement’s arbitration

clause in its subsequent cases33, empowering the arbitrators to adjudicate oninterdependent

matters.

To add to this series, the Supreme Court supported Chloro Control (I) P. Ltd. v Severn Trent

Water Purification Inc. & Ors34 principle in the case of Ameet Lal Chand v Rishabh

Enterprises35 and fostered the concept of single economic transaction. The Supreme Court had

referred parties to separate but related agreements to arbitration, notwithstanding the fact that

one agreement did not even has an arbitration clause. The rationale in this case was that all the

agreements related to a single economic project viz. commissioning of a solar power plant.

Likewise, the concept of single economic transaction has again affirmed by the Apex Court in

Cheran Propertiees Limited vs Kasturi and Sons Limited.36

In Indian jurisdiction, the prevailing view is that multiple arbitration proceedings can be

consolidated provided initial and subsequent agreements are interdependent and of composite

nature.37 In India, the courts also exercised the power to consolidate arbitrations without the

consent as in the case of Global Infonet Distribution Pvt vs Lenovo (India) Private Limited.38

In this case, the court’s reliance is misplaced in the context of Chloro Control (I)

31
(2017) 9 SCC 729.
32
(2017) 9 SCC 729.
33
United India Insurance Co. Limited v Hyundai Engineering and Construction Co Ltd & Ors (Civil Appeal no
8146 of 2018)
34
2013 (1) SCC 641.
35
(2018) 15 SCC 678.
36
(2018) 16 SCC 413.
37
2013 (1) SCC 641.
38
CS (COMM) 658/2017.

19
P. Ltd. v Severn Trent Water Purification Inc. & Ors39. The underlying principles behind

consolidation of arbitration proceedings are set out in Ameet Lalchand v Rishabh

Enterprises40 and PR Shah41 and the High Court’s reasoning would have been a better basis if

these two judgements had been referred to. Nevertheless, the High Court’s judgment in Global

Infonet42 is noteworthy as it demonstrates that even in the context of ad-hoc arbitration

proceedings, Indian Courts may consolidate arbitration proceedings in appropriate

circumstances.

Indian position is effectively varied in various courts’ opinion including of Supreme Court and

High Court. On one hand, the court ruled in the favour of composite reference to the arbitration

as in the case of Chloro control43, on the other hand, the court has effectively overruled its own

position in Duro Felguera44. Then again, the position was supported by a single judge bench

in Ameet Lalchand v Rishabh Enterprises45. In order to have clarity over the current situation

in law, the background of judgements shows India to be a preacher of consolidation and joinder

of parties. This is further easily drawn from the Gemini judgement in line with Chloro Control

(I) P. Ltd. v Severn Trent Water Purification Inc. & Ors46where the Court took a step

ahead and enforced a foreign award against foreign signatory. Concluding the overall

observation from the decisions discussed above, the law relating to consolidation stands

confusing in Indian jurisdiction. This is a point of criticism and debate though.

39
2013 (1) SCC 641.
40
(2018) 15 SCC 678.
41
(2012) 1 SCC 594.
42
CS(COMM) 658/2017.
43
2013 (1) SCC 641.
44
(2017) 9 SCC 729.
45
(2018) 15 SCC 678.
46
2013 (1) SCC 641.

20
 CHANGES HAPPENING INTERNATIONALLY

As a result of the United Nations Commission on International Trade Law’s Model Law on

International Commercial Arbitration (the UNCITRAL Model Law) and the Convention on the

Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), most

countries have a generally uniform approach to addressing parallel court and arbitration

proceedings between the same parties under the same arbitration agreement.47 Nevertheless,

both are silent on what courts are directed to do in circumstances when there are parallel court

and arbitration proceedings relating to the same facts, law and issues arising under separate

agreements.48 In some jurisdictions, the prevailing view is that multiple arbitration proceedings

can only be consolidated with the consent of all parties to each of the arbitration proceedings.49

In other jurisdictions, the prevailing view is that multiple arbitrations can be consolidated on

the order of a court, and without the consent of all the parties.

The recent development came up in December 2021 from British High Court as following:

(i) Facts

The Claimant is LLC Agronefteprodukt (‘Sellers/Claimant’), a Russian company that was the

Sellers of the goods concerned and the respondent in the arbitration. Defendant, Ameropa AG

(‘Buyers/Respondent’), is a Swiss company that was the Buyers of the goods and the claimant

in the arbitration. The goods in question were Russian Milling Wheat.

The Claimant brought the challenge (under Section 67 of the English Act) before the Court on

the grounds of lack of jurisdiction against an adjudication made by the GAFTA Board of

Appeal as well as to the award of the GAFTA First Tier Tribunal made on 13 March 2020. The

original contracts of sale entered between the claimants and the Respondents provided an

47
Pappas, Vasilis, Rojas, Romeo and Keshava, Gita, When Consolidation Fails: The Challenges of Parallel
Arbitral Proceedings, Global Arbitration Review (10 November 2020).
48
Pappas, Vasilis, Rojas, Romeo and Keshava, Gita, When Consolidation Fails: The Challenges of Parallel
Arbitral Proceedings, Global Arbitration Review (10 November 2020).
49
Western Oil Sands Inc v. Allianz Insurance Co of Canada, 2004 ABQB 79; Priscapian Development Corp v.
BG International Ltd, 2016 ABQB 611.

21
arbitration clause, making London the arbitration seat if any dispute arise. The dispute arose

under both the contracts and the Buyers proceeded with a Notice of Arbitration, intimating

the Sellers about the initiation of Arbitration proceedings. The highlight of the notice was the

last paragraph that stated:

“On a separate note, we wonder if, for efficiency and economy, you would accept the two

contracts/disputes be adjudicated under a single arbitration and by the same Tribunal.”

When the Sellers did not reply, the Buyers requested GAFTA for the appointment of an

arbitrator on behalf of the Sellers, to which GAFTA obliged. The Sellers requested the

Buyers to enter into a negotiation, and entered in another "Washout Agreement" with them

for the settlement of the dispute; failing which the proceedings before the Arbitration

Tribunal would continue. As the "Washout Agreement" failed to settle the dispute due to

non-payment of settlement amount by the Sellers, the Buyers terminated the Washout

Agreement and continued with the Arbitration. The Sellers objected to the initiation of

arbitration proceedings by GAFTA, as where there should have been two separate

proceedings in respect to each contract, the Buyers instead initiated a consolidated arbitration

proceeding for the disputes arising out of both the contracts, without the consent of the

Sellers.

The first Tier GAFTA rejected the Sellers' claim citing the reason that the Sellers waived

their right to object by remaining silent when they received the Notice of Arbitration suggesting

that the Buyers might proceed with a single consolidated proceeding in theinterest of efficiency

and economy. The appellate body upheld it; further holding that by the time the Sellers brought

their objection, the Buyers had already appointed Arbitrators and relied on the Washout

Agreement to assert that the Sellers had accepted single arbitration.

The Buyers argued that when the parties entered into the Washout Agreement, they had a

common understanding upon which the Buyers relied. The Sellers nowhere suggested that

22
they consider the Notice of Arbitration invalid and both the parties expressly agreed to the

resumption of original arbitration proceedings if the sum of settlement was not paid.

The Sellers responds that they did not accept, ratify or validate the commencement of a single

arbitration under the two contracts by way of the Washout Agreement. They assert that their

acceptance of the Agreement did not amount to providing consent to the commencement of a

single arbitration under both contracts. That Agreement merely suspended the invalidly

commenced arbitration and was unrelated to the effectiveness of the Notice. The Sellers were

not obliged to respond to the Notice of Arbitration within a certain time limit, their sole

obligation about challenging the jurisdiction of the First Tier Tribunal being to object to taking

their first step to contest the merits of the Buyers’ claim, which they did.

(ii) Brief Legal History of the Case

In the United Kingdom, it is generally accepted that consolidation of parallel proceedings is

not possible without the parties' consent according to Section 23 of the Arbitration Act. To cite

but one example, in Guidant LLC v. Swiss Re International SE and Another50, the court

addressed the question of consolidation without the parties' consent. The court acknowledged

the desirability of efficiency and consistency of results but emphasized that in arbitration, 'party

choice, privacy, and confidentiality are relevant and important. Ultimately, the court found that

neither the courts nor an arbitral tribunal have the power under the UK Arbitration Act to

consolidate two arbitral proceedings absent the parties’ consent.

(iii) Main Legal Issue

The main legal issue at hand is whether a notice of arbitration purported to commence a single

arbitration in respect of two claims under two different contracts.

(iv) Judgment of the EWHC

50
[2016] EWHC 1201 (Comm).

23
The EWHC rejects the challenge to jurisdiction brought by the Sellers under Section 67 of

the English Act. Sir William Blair states that the interpretation of the Notice makes clear that

it initiates arbitral proceedings concerning both contracts. Furthermore, the Sellers waived their

right to object when they entered into the Washout Agreement, as both the parties consented

to the same with the implicit common understanding that the arbitral proceedings initiated

before that were proper.

24
 HOW CLOSE TO THE INDIA POSITION?

The take-away is that while EWHC dismisses the above-discussed jurisdictional challenge, the

Court appears to support the reasoning of Guidant LLC v Swiss Re International SE and

Another51 halfway. The English High Court seems to dilute the element of the consent of the

parties while giving more preference to the substance of the notice of arbitration underSection

14(4) of the English Act.

Now, how close is the British position to the Indian position? The authors note that the Indian

position effectively varies in several landmark judgments. Indian courts have taken a different

position from the English position while diluting the element of the consent of the parties and

allowing enforcement of arbitration agreements even against non-signatories to anarbitration

agreement as done in the case of Chloro Control (I) P. Ltd. v Severn Trent Water Purification

Inc. & Ors52. This judgment provided legitimacy to the consolidation of arbitrations arising

from consequential agreements and laid down the doctrine of a single economic transaction.

As established, consent of the parties is the fundamental principle ofthe arbitration. In

consonance, the Court in the case of Duro Felguera53 rendered a dissentingjudgment to the

case of Choro Control and gave weight to the element of the consent of the parties. Again, in

Ameet Lalchand Shah and Others v Rishabh Enterprises and Another 54, the Apex Court

walked away from the consent element and delivered a judgment in line with Chloro Control55.

How the Indian court diverted their position shows a diversion in the British position as well.

51
[2016] EWHC 1201 (Comm).
52
2013 (1) SCC 641.
53
(2017) 9 SCC 729.
54
(2018) 15 SCC 678.
55
2013 (1) SCC 641.

25
 CONCLUDING REMARKS

In the light of above discussion, this piece tries to ignite a debate on the issue of consolidation

of arbitration proceedings. In the authors’ opinion, the EWHC judgement in LLC

Agronefteprodukt v Ameropa AG56 can be read in both ways: accepting consolidation of

arbitration proceedings as well as commencement of arbitral proceedings through a single

notice (subject to intention of the parties). Although the notice referred to ‘arbitration’ in the

singular (providing useful commentary on the principles governing the construction of notices),

the final paragraph, which invited the respondent to consider consolidating the two disputes

into one arbitration, was more important and made no sense unless the notice was commencing

two arbitrations (accepting consolidation of arbitrations). Affirming that notice was effective

to commence two arbitrations for the two disputes and the Tribunal hadjurisdiction, certainly,

a development. The judge’s approach on the rectification issue is to be welcomed because it

holds parties to their agreement to resolve disputes through arbitration, thereby upholding the

principle of party autonomy which underpins the institution of arbitration.

To conclude, the authors state that the EWHC judgment shows an interesting commercial

approach of the court in the interpretation of notices commencing arbitration proceedings. It

is a great illustration of how very procedural points can turn into a headache for parties later

on. No doubt, closer to the Indian position but it remains a question as to how to read the

judgment of EWHC, as a judgment concerning the issue of interpretation of notice or accepting

the practice of consolidation of arbitral proceedings? In India, taking altogether cases such as

Chloro Control57, Duro Felguera58, and Ameet Lalchand59, cases in favor of consolidation of

arbitration proceedings between same parties under different contracts raises

56
[2021] EWHC 3474 (Comm).
57
2013 (1) SCC 641.
58
(2017) 9 SCC 729.
59
(2018) 15 SCC 678.

26
less issue than cases in favour of bringing even non-signatories without their consent. The

striking balance between consolidation and consent of the parties remains in question.

27