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    Dow Chemical France vs. Isover Saint Gobain France

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    Alljun Serenado
    The tribunal ruled that both Dow Chemicals (USA) and Dow Chemicals (France) were parties to the original contracts between Dow subsidiaries and Isover Saint Gobain, despite the parent companies not being direct signatories. The tribunal stated that a group of companies constitutes a single economic reality, and here the parent company exercised absolute control over its subsidiaries involved in the contracts. Thus, the arbitration clauses accepted by some subsidiaries should also bind the parent companies that were effectively parties to the contracts through their role in conclusion, performance, and termination.

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    Dow Chemical France vs. Isover Saint Gobain France

    Uploaded by

    Alljun Serenado
    603 views1 page
    The tribunal ruled that both Dow Chemicals (USA) and Dow Chemicals (France) were parties to the original contracts between Dow subsidiaries and Isover Saint Gobain, despite the parent companies not being direct signatories. The tribunal stated that a group of companies constitutes a single economic reality, and here the parent company exercised absolute control over its subsidiaries involved in the contracts. Thus, the arbitration clauses accepted by some subsidiaries should also bind the parent companies that were effectively parties to the contracts through their role in conclusion, performance, and termination.

    Original Title

    DOW CHEMICAL FRANCE VS. ISOVER SAINT GOBAIN FRANCE

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    The tribunal ruled that both Dow Chemicals (USA) and Dow Chemicals (France) were parties to the original contracts between Dow subsidiaries and Isover Saint Gobain, despite the parent companies not being direct signatories. The tribunal stated that a group of companies constitutes a single economic reality, and here the parent company exercised absolute control over its subsidiaries involved in the contracts. Thus, the arbitration clauses accepted by some subsidiaries should also bind the parent companies that were effectively parties to the contracts through their role in conclusion, performance, and termination.

    Copyright:

    © All Rights Reserved
    Download as ODT, PDF, TXT or read online from Scribd
    Download as odt, pdf, or txt
    603 views1 page

    Dow Chemical France vs. Isover Saint Gobain France

    Uploaded by

    Alljun Serenado
    The tribunal ruled that both Dow Chemicals (USA) and Dow Chemicals (France) were parties to the original contracts between Dow subsidiaries and Isover Saint Gobain, despite the parent companies not being direct signatories. The tribunal stated that a group of companies constitutes a single economic reality, and here the parent company exercised absolute control over its subsidiaries involved in the contracts. Thus, the arbitration clauses accepted by some subsidiaries should also bind the parent companies that were effectively parties to the contracts through their role in conclusion, performance, and termination.

    Copyright:

    © All Rights Reserved
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    DOW CHEMICAL FRANCE VS.

    ISOVER SAINT GOBAIN


    (Interim Award of September 23, 1982 in No. 4131)

    FACTS:
    Different subsidiaries of the Dow Chemicals Company had undertaken to supply and deliver thermal isolation
    equipment to Isover Saint Gobain. These distribution rights were never transferred to the parent company nor
    was the parent company a signatory to these contracts. Both contracts contained French governing law clauses
    and arbitration clauses providing for application of the ICC Rules of Arbitration.

    The contracts also provided that, at the seller's option, deliveries of the relevant products could be effected by
    any subsidiaries of The Dow Chemical Company. These products were indeed delivered by such subsidiaries
    even if Isover Saint Gobain had no direct agreement with them, let alone an agreement to arbitrate.

    One of the products (“Roofmate”) turned out to be problematic, and Isover Saint Gobain attempted to sue
    several subsidiaries of the Dow Chemical group including the parent company. The French Court of Appeal
    rejected jurisdiction, referring Isover Saint Gobain to arbitration. Dow Chemicals now argues that the tribunal
    has no jurisdiction over the parent company because the latter was never a signatory to the contract.

    RULING:
    The arbitral Tribunal stated that upon its proper construction, both Dow Chemicals (USA) and Dow Chemicals
    (France) were parties to the original contract.

    Notwithstanding the irrespective of the distinct juridical identity of each of its members, a group of companies
    constitutes one and the same economic reality (une realité économique unique) of which the arbitral tribunal
    should take account when it rules on its own jurisdiction subject to Article 13 (1955 version) or Article 8 (1975
    version) of the ICC Rules .

    Here, it is indisputable — and in fact not disputed that the parent company has and exercises absolute control
    over its subsidiaries which have either signed the relevant contracts or, effectively and individually participated
    in their conclusion, their performance, and their termination.

    Thus, the arbitration clause expressly accepted by certain of the companies of the group should bind the other
    companies which, by virtue of their role in the conclusion, performance, or termination of the contracts
    containing said clauses, and in accordance with the mutual intention of all parties to the proceedings, appear to
    have been veritable parties to these contracts or to have been principally concerned by them and the disputes to
    which they may give rise.

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