Etching the Borders of Arbitration Agreement: the Group of Companies Doctrine in International Commercial Arbitration under the U.S. and Turkish Law

Abstract

In  the  21st  Century,  the  commerce  is  not confined  to the  boundaries  of  any single-nation  state.  Hence,  we  have  been  witness  to  the  transactions  and  disputes involving  multiple  parties  and  legal  systems.  Assuming  that  you  are  an  in-house counsel  in  an  MNE.  Do  you  ever  wonder  whether  the  parent  or  sister  companies' counsel  or  the  opposing  counsel  may  make  contact  with  you  about  the  arbitral proceedings  that  your  client  has  never  agreed  on  in  the  first  place?  Is  it  possible whether  the  non-signatory  parties  are  bound  by  or  benefit  from  the  arbitration agreement, and what could be the possible legal grounds given the doctrine of privity of contract? This article discusses one of these grounds, the group of companies doctrine, in  the  context  of  Turkish  and  US  legal  systems  comparatively  and  explores  its applicability in light of precedents.