How to extend an arbitration clause contained in a contract between two parties to a parent company?

A company party to a distribution agreement wishes to rely on an arbitration clause contained in the agreement against the parent company of its counterpart.

The extension of an arbitration clause in a group of companies

A company under contract with the subsidiary of a major foreign group wishes to seek the liability of the parent company and rely on the arbitration clause contained in the contract.

Our client's challenge

Extending the arbitration clause contained in a contract to the parent company of its counterpart

A company has entered into a distribution agreement containing an arbitration clause with the subsidiary of a chemical industry group for the supply of certain products in France. Further to a disagreement, it wishes to introduce an arbitral proceeding against its counterpart. However, as the latter only a limited activity, it wishes to act against the group, which is more solvent.


The company wishes to examine the possibility to extend the arbitration clause contained in the distribution agreement to the parent company to bind it to the arbitration.

Our way

Advising and supporting our client in extending the arbitration clause to a third-party

Despite the contractual nature of arbitration, French law recognizes the transmission, circulation and extension of arbitration clauses, notably in group of contracts or in complex operations. Case law also allows the extension of arbitration clauses in group of companies.


In order to extend an arbitration clause to a non-signatory company, the arbitral tribunal will look to the intent of the parties, which can manifest itself implicitly, through the knowledge of this clause and the direct implication of the non-signatory company to the contractual relationship.


In this case, it will be necessary to demonstrate that the parent company had knowledge of the content of the distribution agreement, and notably of the arbitration clause, and of its implication in the business relationship in order to convince the arbitral tribunal that it has jurisdiction with regard to the third-party parent company.

Related Clients' stories

How to obtain documents held by an opposing party in arbitration proceedings?

A client wishes to obtain documents held by the opposing party in the course of a document production phase, in application of the IBA rules on the Taking of Evidence. Thus, it requires assistance in managing this phase.
Read Story

Why should parties resort to mediation?

Mediation is particularly relevant when parties want to preserve their commercial or contractual relationship. Indeed, the mediator helps them find a common solution without excessively favoring one party over the other and which is satisfactory for both. In the present case, mediation allows the contract to be performed and avoids a lengthy and costly litigation, or even having to find a new contractor to finish the project.
Read Story

How to draft an efficient arbitration clause?

A company seeks to include a model arbitration agreement in its suite of contracts to ensure efficient settlement of its potential disputes.
Read Story