Originally from A Practical Guide to International Arbitration - Second Edition 

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Introduction 

Multi-party arbitration is arbitration that involves more than one party on either side of the dispute. The existence of multi-party arbitration is a natural byproduct of the nature of modern international commercial transactions, which often involve multiple parties and related contracts. Thus, disputes arising out of those arrangements tend to present interwoven issues, which lend themselves to unified dispute resolution. Tribunals faced with resolving such issues are guided by the foundational arbitration principles such as party autonomy, equality of treatment, and contractual privity.    

Increasingly, international arbitration disputes involve multiple parties. This is particularly the case in certain sectors, such as construction, where business arrangements often take the layered form of contracts and subcontracts.1   

1. Potential Advantages to Multi-Party Arbitration 

Arbitrating multi-party disputes in a single set of proceedings can have significant advantages over parallel proceedings. It can enhance the efficiency of the dispute resolution process, by giving one single tribunal an all-encompassing view of the case and enabling it to take into account all the issues and evidence at stake, as well as the interests of all the parties involved. Further, resolving the same questions in a single step can avoid the duplication of work and, thus, saves time and costs.  Finally, multi-party arbitration can serve the interests of consistency, as unifying proceedings for disputes arising out of the same facts facilitates uniformity and avoids contradictory awards. 

2. Potential Risks to Multi-Party Arbitration 

International arbitration proceedings were initially designed for two-party disputes, as arbitration is consensual in nature and privity of contract traditionally excludes non-contracting parties. Therefore, the multiplicity of actors involved in a dispute inevitably creates a tension between consent and efficiency, and parties may find it frustrating to navigate a dispute with a tribunal constantly trying to find a delicate balance in order to ensure that all parties receive equal treatment.