Arbitration International, 2019, 35, 375–386

doi: 10.1093/arbint/aiz016
Advance Access Publication Date: 25 October 2019
Recent Development

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Binding non-signatories to arbitration
agreements—who are persons ‘claiming
through or under’ a party?
Vicky Priskich*

KE Y RE FE RE N CES

LEGISLATION:
• Arbitration Act 1996 (UK) ss 9, 58(1), 82(2)
• Australia: International Arbitration Act 1974 (Cth) ss 7(4), 8(1)
• Singapore: International Arbitration Act (CAP 143A) ss 6, 19B(1)
• Hong Kong: Arbitration Ordinance (CAP 609) s 73(1)(b)
CASES:
• Rinehart v Hancock Prospecting Pty Ltd (2019) 366 ALR 635; [2019] HCA
13
• Roussel-Uclaf v GC Searle & Co Ltd [1978] 1 Lloyd’s Rep 225
• City of London v Sancheti [2009] 1 Lloyd’s Rep 117
• Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA
[2016] 5 SLR 455; [2016] SGCA 53
• United States: JJ Ryan & Sons v Rhone Poulenc Textiles SA (1988) 863 F
2d 315.

TREATISES AND BOOKS:

• Gary Born, International Commercial Arbitration (2nd edn, Kluwer Law
International 2014).
• Stavros Brekoulakis, Third Parties in International Commercial Arbitration (Oxford
International Arbitration Series 2010).

* Dr Vicky Priskich is a Barrister and Arbitrator at the Victorian Bar, Australia and a Fellow of CIArb and
National Councillor of CIArb Australia. Email: v.priskich@vicbar.com.au

C The Author(s) 2019. Published by Oxford University Press on behalf of the London Court of International Arbitration.
V
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 375
376  Binding non-signatories to arbitration agreements

ABSTRACT
The International Arbitration Acts of the UK, Australia, Singapore, and Hong Kong

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recognize that third persons who are non-signatories to an arbitration agreement but
who are ‘claiming through or under’ a party to the arbitration agreement have the sta-
tus of a party.1 In the UK and Singapore that status means not only that court proceed-
ings involving such non-signatories may be stayed in favour of arbitration but it also
binds them to an award. In Hong Kong that status binds non-signatories to an award.
In Australia, that status affects whether court proceedings involving non-signatories are
stayed in favour of arbitration. A recent judgment by a majority of Australia’s highest
appeal court, the High Court of Australia, in Rinehart v Hancock Prospecting Pty Ltd 2
has taken a different approach to that prevailing in England as to the range of persons
who are capable of ‘claiming through or under’ a party to the arbitration agreement,
thereby significantly expanding the range of disputes involving non-signatories that
must be referred to arbitration.3 The issue has not arisen for determination before ap-
pellate courts in Singapore or Hong Kong. Rinehart therefore represents an important
development in common law jurisdictions, compelling arbitration between a signatory
and non-signatory to an arbitration agreement.

1. INTRODUCTION
It is common ground in England and Australia that the phrase ‘claiming through or
under’ in national arbitration legislation may include a non-signatory who relies
upon a right of a party to the arbitration agreement; for example, as an assignee of a
debt arising out of a contract containing an arbitration clause4 or as a trustee in bank-
ruptcy.5 In these scenarios the legal relationship between the non-signatory and the
party to the arbitration agreement establishes the basis upon which the non-
signatory, as a privy, can assert rights of the party.

It is also clear that by advancing a defence, a non-signatory may be ‘claiming

through or under’ a party to an arbitration agreement.6
The law of England confines the scope of non-signatories who are ‘claiming
through or under’ a party to an arbitration agreement to those that are privy to
the arbitration agreement.
A divergence has recently emerged between the law in England and Australia as
to the scope of persons who are ‘claiming through or under’ a party to the arbi-
tration agreement.

1 Arbitration Act 1996 (UK) ss 9, 58(1), 82(2), International Arbitration Act 1974 (Cth) s 7(4), Singapore
International Arbitration Act (CAP 143A) ss 6, 19B(1), Hong Kong Arbitration Ordinance (CAP 609)
s 73(1)(b).
2 (2019) 366 ALR 635; [2019] HCA 13.
3 The High Court of Australia in Rinehart was considering Australian domestic arbitration legislation how-
ever, international arbitration legislation and domestic arbitration legislation in Australia use the identical
phrase ‘claiming through or under’.
4 The ‘Leage’ [1984] 2 Lloyds R 259, 262.
5 Piercy v Young (1879) 14 Ch D 200 cited in Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR
332, 341.
6 Tanning Research, ibid 342.
 Binding non-signatories to arbitration agreements  377

2 . A P P R O A C H E S I N C O M M O N L AW J U R I S D I C T I O N S
2.1 England

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In Roussel-Uclaf v GC Searle & Co Ltd,7 Graham J gave an extensive interpretation to
the phrase ‘claiming through or under’ in staying litigation commenced against a
company that was not party or privy to an arbitration agreement.
The non-signatory was a wholly owned subsidiary. Its parent company was a
signatory to an arbitration agreement. The wholly owned subsidiary claimed a
right to sell patented articles which it obtained from and had been ordered to sell
by its parent company. A stay of the litigation was granted in exercise of the court’s
inherent jurisdiction but Graham J also concluded that the subsidiary was ‘claiming
through or under’ the parent; if the parent company was entitled under the licence
agreement to sell the articles then so too was the subsidiary. There were common
matters in controversy that would determine the rights of both the parent and
the subsidiary.
Subsequently, the English Court of Appeal in City of London v Sancheti 8 held
that Roussel-Uclaf was wrongly decided and held that a ‘mere legal or commercial
connection is insufficient’.9 The Court of Appeal in Sancheti thereby effectively con-
fined the operation of the phrase ‘claiming through or under’ to third persons that
assert as a privy the rights of a signatory to an arbitration agreement.
The Court of Appeal could have distinguished Sancheti from Roussel-Uclaf on a
narrower basis. In Sancheti, a lessee complained that the lessor, the City of London,
had acted unfairly towards him as its tenant through racial discrimination and
the improper manipulation of rents. The lessee served a notice of disputes under a
bilateral investment treaty (BIT) on the Treasury Solicitor. The lessee also sought a
stay of court proceedings commenced by the City of London against the lessee for
outstanding sums owing following a rent review process.
It is difficult to see how the arbitration legislation applied in Sancheti. The legislation
gives a non-signatory to an arbitration agreement the status of a party when ‘claiming
through or under’ a party to the arbitration agreement. The City of London was not
by the court proceedings claiming through or under the UK Government in relation
to the BIT but under a lease it had with the lessee. By contrast, in Roussel-Uclaf, a
non-signatory was claiming through or under a party to the arbitration agreement.
The Court of Appeal in Sancheti observed that this was a basis for distinction
from Roussel-Uclaf,10 and went further taking the opportunity to reject that a mere le-
gal or commercial connection is sufficient for a non-signatory to be ‘claiming through
or under’ a party to an arbitration agreement.

2.2 Australia
In Rinehart, a majority of the High Court disagreed with the assessment by the
English Court of Appeal in Sancheti of Roussel-Uclaf. The High Court considered
that a preferable explanation for the outcome in Roussel-Uclaf was that ‘a licence

7 [1978] 1 Lloyd’s Rep 225.

8 [2009] 1 Lloyd’s Rep 117.
9 ibid [30]–[34].
10 ibid [34]–[35].
378  Binding non-signatories to arbitration agreements

agreement was central to the issues against both the parent company and subsidiary
and the position of the subsidiary depended on the entitlement of the parent com-

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pany under the licence agreement’.11
A majority of the High Court in Rinehart determined that that the phrase ‘claim-
ing through or under’ included assignees, not of the rights of a party to a contract
containing an arbitration clause, but of mining tenements that formed the subject
matter of disputes compromised in settlement deeds containing an arbitration
clause.
That is, although the assignors were parties to settlement deeds containing the ar-
bitration cause, the assignees were not a party or privy to it. Rather, the assignees be-
came subsequent owners of mining tenements. Title to the tenements had been a
matter of dispute that was settled by the parties to the settlement deeds, which con-
tained an arbitration clause.
The background to Rinehart was that disputes had arisen between a trustee and
beneficiaries under family trusts over a number of years. The parties settled their dis-
putes in various settlement deeds. The parties to those settlement deeds included
the trustee, beneficiaries, and the assignors of the mining tenements but not the
assignees; most of the assignments had not yet occurred at the time the settlement
deeds were signed.12 The purpose of the settlement deeds was to quell disputes as to
title concerning the mining tenements.13
Some of the beneficiaries of the family trust commenced court proceedings years
later against both the assignors and assignees of the mining tenements. Those benefi-
ciaries alleged that the assignees received the mining tenements with the knowledge
that the assignments were made in breach of trust and that the assignees thereby
held the tenements on a constructive trust. The beneficiaries were seeking vindica-
tion of their alleged beneficial interest in the mining tenements. The assignees con-
tested the claim on the basis that there were no breaches of trust or if there were
that the assignees could rely on the benefit of releases obtained under the settlement
deeds giving the assignors free and clear title to assign the mining tenements.14
In the appeal before the High Court, the argument focused mainly on one of the
settlement deeds entered into in August 2006 known as the ‘Hope Downs Deed’.
The assignees sought a stay of the court proceedings based on an arbitration
agreement contained in clause 20 of the Hope Downs Deed concerning ‘any dispute
under this deed’.15 The assignees were neither a party nor privy to the arbitration
agreement but alleged they were ‘claiming through or under’ a party to it.
The Hope Downs Deed contained releases and undertakings. Clause 6 contained
wide mutual releases from ‘Claims’ which were defined to include any claims for a

11 Rinehart (n 2) [76].
12 The relevant entities in the company group were—Assignors: Hancock Prospecting Pty Ltd (HPPL) and
Hancock Resources Limited (HRL); Assignees: Hope Downs Iron Ore Pty Ltd (HDIO), Roy Hill Iron
Ore Pty Ltd (RHIO) and Mulga Downs Iron Ore Pty Ltd (MDIO). Assignment of mining tenements
from HPPL to HDIO occurred on 11 September 1997, assignment of mining tenements from HPPL to
RHIO occurred on 16 November 2011, and assignment of the mining tenement from HRL to MDIO oc-
curred in February 2009; (2017) 257 FCR 442 [291]–[293].
13 Rinehart (n 2) [36].
14 ibid [58], [69] and [73].
15 See full text of clause 20; (2017) 257 FCR 310 [382].
 Binding non-signatories to arbitration agreements  379

breach of fiduciary duty with respect to actions taken prior to the Hope Downs
Deed.16 Clause 7 of the Hope Downs Deed contained various undertakings, includ-

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ing not challenging the rights of the assignors to the tenements.17
A key reason why the High Court concluded that the assignees of the mining
tenements were persons ‘claiming through or under’ a party to the arbitration agree-
ment was because the ‘parties to the arbitration agreement [agreed] that any dispute
as to [the]. . . beneficial title to the mining tenements would be determined by arbi-
tration’ and that a claimant who takes the benefits of an agreement must also accept
the burdens of the stipulated conditions of the agreement.18 Although there was no
privity of contract between the assignees and signatories to the arbitration agree-
ment, as successors in title, the assignees asserted free and clear title to the mining
tenements and relied upon releases given to the assignors under the Hope Downs
Deed.19
A majority of the High Court concluded that as the issue to be determined with
respect to the assignees was so intertwined with whether the assignors had clear and
free title to the tenements that the assignees should not be excluded from the arbitra-
tion agreement:20

since the assignor and the claimant are bound by an arbitration agreement ap-
plicable to the claim of breach of trust, there is no good reason why this claim
should not be determined as between the claimant and the assignee in the
same way as it will be determined between the claimant and the assignor. To
exclude from the scope of the arbitration agreement binding on the assignor
matters between the other party to that agreement and the assignee would
give the arbitration agreement an uncertain operation. It would jeopardise
orderly arrangements, potentially lead to duplication of proceedings and po-
tentially increase uncertainty as to which matters of controversy are to be de-
termined by litigation and which by arbitration. And ultimately it would frus-
trate the evident purpose of the statutory definition.

2.3 Singapore
The appeal courts of Singapore have not been presented with a case where it was
necessary to decide between the narrower and wider interpretations of the phrase
‘claiming through or under’.
The only case that appears to have reached the Court of Appeal of Singapore re-
cently concerning the interpretation of ‘claiming through or under’ is Rals
International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA.21

16 Rinehart (n 2) [38]. See text of clause 6; (2017) 257 FCR 310 [373].
17 ibid. See text of clause 7 and definition of Hancock Group Interests in clause 1.1; (2017) 257 FCR 310
[377], [369], respectively.
18 Rinehart (n 2) [77].
19 ibid [79].
20 ibid [73].
21 [2016] 5 SLR 455.
380  Binding non-signatories to arbitration agreements

In Rals International, the question was whether an assignee of the bills of exchange
took along with the benefit of the bills of exchange the obligation to arbitrate dis-

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putes pursuant to an arbitration clause in the underlying supply contract. The supply
contract had led to the issue of the bills of exchange.22 The Singapore High Court
held that the assignee of the bills of exchange also took the obligation to arbitrate
and was therefore a party ‘claiming through or under’ the assignor.23 In the course of
his judgment, Vinodh Coomaraswamy J observed that Sancheti ‘rejected the very
wide meaning of the words “under or through” suggested in Roussel-Uclaf [b]ut
Sancheti does not tell us how much narrower than that the very wide meaning of
those words actually is’.24
It was unnecessary for the Court of Appeal to reach any firm conclusion about
those matters as there was no appeal against the finding of the judge on that issue.25
The Court of Appeal’s observations were generally supportive of the conclusion but
did not refer to Sancheti or Roussel-Uclaf.
About 10 years earlier the Singapore High Court in Yee Hong Pte Ltd v Tan,26
took a broad interpretation of the words ‘claiming through or under’ yielding an out-
come that is consistent with Rinehart.
In that case, a developer, Ho Bee Development Pte Ltd, entered into separate
contracts with a main contractor, Yee Hong Pte Ltd, and an architect, Andrew Tan,
respectively. Each contract contained an arbitration clause. However, there was no
arbitration agreement between the main contractor and the architect. The main con-
tractor commenced court proceedings against the architect, seeking damages for an
alleged breach of the architect’s duties in tort for wrongfully issuing a delay certificate
when the architect was aware of factors entitling the main contractor to extensions of
time. The architect joined the developer as a third party to the court proceedings.
The developer applied for a stay of the court proceedings and for the dispute to be
referred to arbitration.
The main contractor argued that a stay could only be ordered where the parties
had an arbitration agreement and there was no arbitration agreement between it and
the architect.
It is not clear from the judgment what the precise nature of the claims made in
the third party proceedings were other than the architect sought ‘an indemnity or
contribution through or under’ the developer, who had an arbitration agreement
with the main contractor.27

22 The seller, Oltremare SRL, agreed to deliver equipment designed to shell and process raw cashew nuts
and to accept payment by bills of exchange in the form of promissory notes. Oltremare SRL assigned the
bills of exchange to another entity at a discount from their face value.
23 [2016] 1 SLR 79 [124]–[125] per Vinodh Coomaraswamy J. However, it was ultimately found that the
arbitration agreement did not encompass disputes arising out of the bills of exchange; ibid [208], [221]–
[222], [235].
24 ibid [66].
25 Rals International (n 21) [52]–[56].
26 [2005] 4 SLR(R) 398; [2005] SGHC 163.
27 ibid [26].
 Binding non-signatories to arbitration agreements  381

The arbitration agreement at clause 37(1) of the contract between the developer
and main contractor was in very wide terms,28 encompassing claims in tort and any

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direction or instruction or certificate of the architect:

Any dispute between the [developer] and the [main contractor] as to any
matter arising under or out of or in connection with this Contract or under or
out of or in connection with the carrying out of the Works and whether in
contract or tort, or as to any direction or instruction or certificate of the
Architect or as to the contents of or granting or refusal or reasons for any
such direction, instruction or certificate shall be referred to the arbitration and
final decision of a person to be agreed by the parties or, failing agreement
within 28 days of either party by or on behalf of the President or Vice-
President for the time being of the SIA or, failing such appointment within
the 28 days of receipt of such written request, such person as may be
appointed by the Courts.

The court proceedings between the architect and the developer would cover
common issues in dispute between the main contractor and the developer relating
to extensions of time and whether the delay certificate was properly issued. It was
possible that a judge could reach inconsistent findings with the arbitrator.29 The
court proceedings were stayed. These reasons are very similar to those given in
Rinehart.

3. IM PL ICATI ON S OF R I N E H A R T
The majority judgment in Rinehart is significant. It is a judgment by the highest
appeal court in Australia and extends the binding nature of arbitration agreements
to non-signatories through the interpretation of arbitration legislation. The outcome
in Rinehart promotes efficiency by avoiding duplication of proceedings and different
findings before different tribunals.
It is in marked divergence to the approach taken in England. The different inter-
pretation and analysis given to Roussel-Uclaf by the High Court in Rinehart raises a
prospect that an appeal court in England may be asked to revisit the approach taken
in Sancheti.
The majority judgment in Rinehart also raises questions as to where the line is
to be drawn in binding third persons that are not signatories to an arbitration
agreement. The majority of the High Court would not be drawn further, citing the
‘common law imperative of incremental development of the law on a case by case ba-
sis’ in view of the fact that the parties’ submissions did not address complex issues of
arbitral consent and privity and how different jurisdictions had approached issues of
third-party claims.30

28 ibid.
29 ibid [20], [27].
30 Rinehart (n 2) [78].
382  Binding non-signatories to arbitration agreements

3.1 Consensual and non-consensual contract law theories

The potential scope and meaning of the statutory phrase ‘claiming through or under’

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may be illuminated by consensual contract theories such as agency, assumption, as-
signment, and non-consensual contract theories such as estoppel and alter ego.31
Underpinning the approach of the English Court of Appeal in Sancheti is a con-
sensual contract law theory.32 This approach was preferred by Edelman J who dis-
sented in Rinehart; a third person is ‘claiming through or under’ a party in the sense
that the person relies upon or resists a right of the party to the arbitration agreement,
not its own right.33 In taking this approach Edelman J emphasized a fundamental
principle that arbitration is a matter of contract.34
The majority judgment in Rinehart has taken the meaning of ‘claiming through or
under’ beyond consensual contract law theories. The approach shares features with
arbitral estoppel theory recognized by the US courts.35 The US courts have acknowl-
edged that the estoppel inquiry is fact-specific and depends on a careful analysis of
the factual circumstances.36 A careful analysis is required to avoid straying too far
from the foundational underpinning of arbitration as a consensual process.37
The analysis in Rinehart was fact-specific, the majority referring to the releases
and undertakings given in the Hope Downs Deed and its purpose and that there was
commonality in the central issue to be decided. Although the Hope Downs Deed did
not confer the benefit of releases directly upon the assignees it did so indirectly, the
assignees relied upon the releases given to the assignors under the Hope Downs
Deed as part of their defence to free and clear title to the tenements. The arbitration
agreement was expressed to cover any dispute under the deed.
It is these elements of the factual analysis that share features with the doctrine of
arbitral estoppel developed by the US courts. The estoppel operating in the factual
context of Rinehart is one of implied consent of the signatories binding them to arbi-
tration with a non-signatory who has relied upon some aspect of the commercial
contract and wishes to submit to arbitration. That situation lies further away from
the consensual foundation for arbitration compared with a situation where a signa-
tory seeks to enforce the arbitration agreement against a non-signatory clamant that
is relying on some aspect of the underlying commercial contract; the non-signatory
claimant cannot have it both ways—elect to take the benefit of some aspects of the
contract but not the burden of it in another aspect, ie arbitration.38
In a situation like Rinehart, whether the signatories should be taken as having con-
sented to arbitrate the dispute with the non-signatory depends upon the breadth of
the arbitration agreement and the tight relatedness of the parties and the

31 See Gary Born, International Commercial Arbitration (2nd edn, Kluwer Law International 2014) §10.02.
32 Stavros Brekoulakis, Third Parties in International Commercial Arbitration (Oxford International
Arbitration Series 2010) [3.45].
33 Rinehart (n 2) [88].
34 ibid [85].
35 Brekoulakis (n 32) [4.14]–[4.31].
36 Born (n 31) §10.01, 1414–15; Brekoulakis (n 32) [4.05].
37 Born, ibid, §10.03, 1486.
38 Brekoulakis (n 32) [4.10]–[4.11].
 Binding non-signatories to arbitration agreements  383

controversy. This approach is illustrated by the US cases such as JJ Ryan & Sons v
Rhone Poulenc Textiles SA.39

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In Ryan & Sons, Ryan was a distributor of products manufactured by Rhone. The
products were supplied to Ryan under exclusive distribution contracts entered into
with four corporate affiliates of Rhone. The exclusive distribution contracts con-
tained arbitration clauses. Rhone was not a signatory to the exclusive distribution
contracts. Ryan commenced court proceedings against Rhone and its four affiliated
companies. Rhone and its four affiliates moved to refer the dispute to arbitration as
Ryan alleged claims that were subject to the arbitration clauses contained in each of
the exclusive distribution contracts. Although not a party to the arbitration agree-
ment, Rhone was willing to submit to arbitration. Ryan contended, however, that as
it has no contractual relations with Rhone, its claims against Rhone should not be re-
ferred to arbitration.
The United States Court of Appeals, Fourth Circuit, stated:40

When the charges against a parent company and its subsidiary are based on
the same facts and are inherently inseparable, a court may refer claims against
the parent to arbitration even though the parent is not formally a party to the
arbitration agreement. . .. If the parent corporation was forced to try the case,
the arbitration proceedings would be rendered meaningless and the federal
policy in favor of arbitration effectively thwarted.

The majority in Rinehart is careful not to approve directly or indirectly US juris-

prudence on arbitral estoppel. For example, although the majority in Rinehart cites a
previous High Court judgment in Tanning Research Laboratories Inc v O’Brien in rela-
tion to some aspects, it did not cite the following passage:41

the phrase ‘through or under a party’ or its equivalent has been construed to
apply to, inter alios . . . a company being a parent of a subsidiary company
which is party to an arbitration agreement when claims are brought against
both companies based on the same facts: JJ Ryan & Sons v Rhone Poulenc
Textile, SA. [emphasis added]

Flint Ink NZ Ltd v Hutamaki Australia Pty Ltd 42 was a case referred to by counsel
in argument before the High Court as one of the justices of the Court of Appeal in
Flint Ink NZ Ltd v Hutamaki Australia Pty Ltd cited with approval JJ Ryan & Sons v
Rhone Poulenc Textile SA. It is significant that Flint Ink NZ Ltd v Hutamaki Australia
Pty Ltd and JJ Ryan & Sons v Rhone Poulenc Textile SA were not cited by the majority
in Rinehart when interpreting the phrase ‘claiming through or under’.43

39 (1988) 863 F 2d 315.

40 ibid 320–21.
41 Tanning Research (n 5) 341–42.
42 (2014) 44 VR 64.
43 Flint Ink NZ Ltd v Hutamaki Australia Pty Ltd was cited in Rinehart but only in relation to a procedural
matter; Rinehart (n 2) [71].
384  Binding non-signatories to arbitration agreements

The result is that Rinehart is a significant but cautious step. The analysis of the
majority corresponds with aspects of the ‘intertwined version of arbitral estoppel’ ap-

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plied by the US courts,44 although no reference is made to that doctrine.

3.2 Will awards bind non-participating third persons

‘claiming through or under’ a party?
The International Arbitration Acts and Ordinance of the UK, Singapore, and Hong
Kong expressly state that an award between the parties to an arbitration agreement is
‘final and binding’ on the parties to the arbitration agreement and persons ‘claiming
through or under’ them.45
A question that arises is whether such provisions have the effect that if a third per-
son ‘claiming through or under’ a party to the arbitration agreement were not joined
to the arbitration proceedings, would the award nonetheless automatically bind the
third person? If so, does that justify a narrower interpretation of the phrase ‘claiming
through or under’?
The answer to both questions is no. In England, section 58(1) of the Arbitration
Act 1996 (UK) has been held not to affect general law principles as to whether judg-
ments or awards are to be treated as final and binding in a future dispute.46 Those
general law principles are:
• Only determinations necessary to the decision and fundamental to it are
binding.47
• Principles of res judicata and issue estoppel apply between the parties to the
original proceedings or their privies.48
• It is normally unfair to hold a privy who has not had the opportunity to fully
participate in the proceedings to be bound. In the context of an arbitration
award, it will be rarer for third persons to be subject to estoppel as the per-
son will normally have no opportunity to intervene due to the confidential
nature of arbitration.49

This has the consequence that although the Arbitration Act 1996 (UK) expressly
recognizes that arbitral awards bind not only the parties to the arbitration agreement
but those ‘claiming through or under’ a party, the effect of the provision is not as strict
as would first appear. A third person that has not been joined to the arbitral proceed-
ings and afforded natural justice is unlikely to be bound by the arbitral award.
The result is the same in Australia. Section 8(1) of the International Arbitration
Act 1974 (Cth) states that an award binds ‘the parties to the award’.50 A non-

44 See Brekoulakis (n 32) [4.14]–[4.31].

45 Arbitration Act 1996 (UK) s 58(1), Singapore International Arbitration Act (CAP 143A) s 19B(1),
Hong Kong Arbitration Ordinance (CAP 609) s 73(1)(b).
46 The Lincoln National Like Insurance Co [2004] EWCA Civ 1660 [38].
47 ibid [41]–[46].
48 ibid [53].
49 Golden Ocean Group Ltd v Humpuss Intermoda Transportasi Tbk Ltd [2013] EWHC 1240 (Comm)
[31]–[33].
50 s 8(1) provides: ‘Subject to this Part, a foreign award is binding by virtue of this Act for all purposes on
the parties to the award.’
 Binding non-signatories to arbitration agreements  385

signatory ‘claiming through or under’ a party to the arbitration agreement must be a

party to the award for it to be final and binding under section 8(1). This is different

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from the UK, Singapore, and Hong Kong which states that non-signatories ‘claiming
through or under’ a party to the arbitration agreement are bound by the award, but
ultimately of the same effect.

3.3 Binding non-signatories to a New York Convention award

Typically the joinder of third persons to arbitration proceedings is achieved by ex-
press consent of the parties to the arbitration agreement. Article 22.1(viii) of the
London Court of International Arbitration Rules (LCIA Rules) expressly empowers
an arbitral tribunal to allow a third person to join the proceedings if the third person
and the applicant party consent. This may occur after the arbitral proceedings have
commenced. By adopting those institutional rules the signatories to the arbitration
agreement agree to non-signatories being joined to the arbitration proceedings on
that basis. The LCIA Rules provide greater flexibility as to third persons who may be
joined as most Institutional rules require the agreement of all parties to the arbitra-
tion agreement.
If a third person is not joined by arbitration institutional rules but is given the sta-
tus of a party as a person ‘claiming through or under’ a party to the arbitration agree-
ment, is an award binding under the New York Convention?
Article II of the New York Convention on the Recognition and Enforcement of
Foreign Awards (New York Convention) requires parties to make a written arbitra-
tion agreement. The question is whether the absence of a written arbitration agree-
ment between a non-signatory and the parties to the arbitration agreement means
that an award is unenforceable in relation to the non-signatory.
Gary Born has observed that such matters are raised infrequently.51 Born con-
cludes, based on the limited number of cases that have considered this question, that
the form requirements of the New York Convention and national arbitral legislation
apply only to the initial agreement to arbitrate and not to the legal bases for subject-
ing persons to arbitration who are not signatories to the arbitration agreement.52
Another question is how can an arbitral tribunal have jurisdiction to make an
award binding upon a non-signatory absent the consent of all the parties to the arbi-
tration agreement? As observed earlier, national arbitration legislation in the UK,
Singapore, and Hong Kong states that an award made by the arbitral tribunal is final
and binding on the parties and on ‘any persons claiming through or under them’.53
There is no equivalent provision in the Australian International Arbitration Act. A
non-signatory claimant in arbitral proceedings will be bound by an award pursuant
to section 8(1) of the International Arbitration Act 1974 (Cth), but the tribunal
must still have jurisdiction over a non-signatory. This may lead to the development
of a doctrine of arbitral estoppel in tandem with the interpretation of the statutory

51 Born (n 31) §10.04.

52 ibid.
53 Arbitration Act 1996 (UK) ss 58(1), 82(2), Singapore International Arbitration Act (CAP 143A)
s 19B(1), Hong Kong Arbitration Ordinance (CAP 609) s 73(1)(b).
386  Binding non-signatories to arbitration agreements

meaning of ‘claiming through or under’.54 Estoppel in other contexts, such as res judi-
cata, are considered substantive rights, not a matter of procedural law.55

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4. CONCLUSION
A significant divergence has emerged between the law in England and Australia re-
garding the interpretation of the phrase ‘claiming through or under’ and the extent
to which non-signatories are given the status of a party to an arbitration agreement.
An appellate court in England may be asked to reconsider the issue in light of
Rinehart. There has been no determination of this issue at an appellate level in
Singapore or Hong Kong.
The approach by the majority of the High Court of Australia in Rinehart shares
similarities with arbitral estoppel theory recognized by the US courts. The majority
of the High Court avoided, however, any reference to US jurisprudence in support
of its reasoning and refrained from giving an indication of the more general legal
principles underpinning its analysis.
Whether Rinehart signals an affirmation of US arbitral estoppel theory remains an
open question. The majority judges in Rinehart were conscious of the importance of
arbitral consent, as no doubt will courts in future cases.

54 In the sense of international standards rather than applying choice of law analysis which may be difficult
for the reasons given by Born (n 31) §10.02[K], 1477.
55 Associated Electric and Gas Insurance Services Ltd v European Reinsurance [2003] UKPC 11, [15]; Virgin
Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160, [25], [42]; The Royal Bank of Scotland NV v
TT International Ltd [2015] SGCA 50, [102].