No. II.2 - Agent acting on behalf of group of companies

A corporate entity acting on behalf of a group of corporate entities binds all entities that belong to the group.

This Principle has been developed by international arbitral tribunals as the so-called "group of companies doctrine" for cases in which a member of a corporate group, even though not a signature to an arbitration agreement concluded by another member of the corporate group, appeared in economic reality as the real party to the arbitration agreement and was therefore treated as such by these tribunals. While the Principle is disputed in the arbitration context because of the form requirement for arbitration agreements, e.g. under Art. 7 of the UNCITRAL Model Law on International Commercial Arbitration, it can be extended to contracts in general for which no such form requirement exists. However, its application must be limited to clear cases in which the involvement of the non-signatory in the performance of the contractual obligations is so evident and strong that the case comes close to one of apparent authority.

Please cite as: "Commentary to Trans-Lex Principle ,"
Arbitral Awards
ICC Award No. 2375, Clunet 1976, at 973 et seq.
ICC Award No. 4131, YCA 1984, at 131 et seq. (also published in: Clunet 1983, at 899 et seq.)
ICC Award No. 4532 (Dow Chemical), Rev.d.Arb. 1984, at 137 et seq.
ICC Award No. 5103, Clunet 1988, at 1206 et seq.
ICC Award No. 6673, Clunet 1992, at 992 et seq.
ICC Award No.1434, Clunet 1976, at 978 et seq.
Bucher, Andreas, Die neue internationale Schiedsgerichtsbarkeit in der Schweiz, Basel, Frankfurt a.M. 1989
Delaume, Georges, Law And Practice of Transnational Contracts, New York, London, Rome 1988
Derains, Yves, note to ICC Award No. 1434, Clunet 1976, at 982 et seq.
Derains, Yves, note to ICC Award No. 5103, Clunet 1988, at 1212 et seq.
Hascher, Dominique, note to ICC Award No. 6673, Clunet 1992, at 996 et seq.
Mustill, Michael, The New Lex Mercatoria: The First Twenty-five Years, Arb.Int'l 1988, at 86 et seq.
Contract Clauses
1. Agent to Bind Group of Companies
Loan Contract
Designation of Agent
X shall act as agent (the "Agent") for all Participating Lenders hereunder, as collateral agent for all Participating Lenders under the Security Agreement for purposes of any grant of collateral security being made by the Borrower in connection with this Agreement and as agent for the Participating Lenders under or in connection with any other Loan Document. Each Participating Lender irrevocably appoints the Agent as its agent and authorizes the Agent to take such actions on its behalf and to exercise such powers as are set forth for the Agent in the Security Agreement and as are delegated to the Agent by the Participating Lenders from time to time, together with such actions and powers as are reasonably incidental thereto. Each Participating Lender acknowledges that X will be acting as collateral agent under the Security Agreement in respect of all "Lenders" from time to time parties to this Agreement and all Persons from time to time holding the Senior Secured Convertible Notes or interests therein (the "Holders"), and that the collateral security being provided by the Borrower to such Lender and such Holders will be a single pool of assets and interests in property to be shared by such Lenders and such Holders as secured parties on a pari passu basis. Notwithstanding anything herein to the contrary, the provisions of this Section X shall apply at all times without regard to how many "Lenders" are party hereto at such time.
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