Av./Atty. Osman Ertürk Özel, LL.M.
The issue of non-signatories is a significant point of international arbitration. As one of the non-signatories, the Group of Companies Doctrine can be defined as companies which are the parts of an integrated economic group being bound by one another’s arbitration agreements in some circumstances. Despite the clear definition regarding the doctrine, it is probably the most misunderstood theory to bind parties that are not signatories of arbitration agreements.
To help understand the Group of Companies Doctrine better, different applications in different jurisdictions and criticisms about the doctrine must be evaluated. In light of all these evaluations, it is without doubt that the Group of Companies Doctrine is a necessary and important theory for the benefit of international arbitration. This can be proved through ‘single economic entity’ and ‘control’ factors in group of companies. Additionally, to clarify the significance of the doctrine, preventing the abuse of corporate structure issue and the application of the doctrine as lex mercatoria must be noted as important arguments.