The battle between logical purity and commercial expedience: heralding limits to the 'twin agreement fiction'

Adrian Baron

November 2005

A paper based on the second prize winning entry in the Hudson Prize Competition 2004

If a contract includes arbitration provisions, does the arbitrator have power to determine issues relating to the status of that contract, either when entered into or in the light of later events? For reasons of practicality, most common law systems accept the 'twin agreement' fiction, which in some of these circumstances treats the arbitration provisions as a separate (or divisible contract), so enabling arbitration to go ahead even though the existence or survival of the main contract may be in issue.But
how widely should this fiction be applied? Adrian Baron considers the position in English, Australian and US law and argues for a return to basics.

The essence of an arbitration agreement - Extending the Heyman principle - Australian developments - The united States authorities - Conclusion.

The author:

Adrian Baron is General Counsel with John Holland Pty Ltd, constuction contractors, Australia.

Text: 18 pages

PDF file size: 92k