Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 2 - Apr/May/Jun 2021
 

Does an Arbitration Agreement Bind the Undisclosed Principal to a Contract?

In June 2020, the Beijing No. 4 Intermediate People's Court ("Court") granted a landmark civil ruling which dismissed the application to set aside an arbitral award issued by the China International Economic and Trade Arbitration Commission (CIETAC). The Court held that in the situation of an undisclosed agency, the arbitration agreement in a contract that is signed by the agent shall bind the undisclosed principal to the contract. It is one of the few cases where a Chinese court has extended the effect of the arbitration agreement to a party who does not sign the underlying contract. It shows that the doctrine of privity of contract can be "overridden" in special circumstances, e.g. undisclosed agency. 


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Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.

 

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