STEP 4: Consolidation and joinder - related contracts/related parties

The PPP Contract will be part of a wider "network of agreements" between various parties. The Private Partner may, for example, enter into a PPP Contract with the Contracting Authority regarding the underlying facility, but all cash flows may be governed by a separate agreement between an off-taker and the Private Partner61. When this is the case, the Private Partner may require that all the related Project Agreements contain a similar dispute resolution provision, together with consolidation and joinder language whereby all parties to the related contracts agree to submit disputes to the same arbitral tribunal, under the same rules. For greater efficiency, it is recommended that all agreements contain similar dispute resolution clauses under which there is pre-agreement to consolidation of related disputes and the joinder of related parties to any arbitration62. However, the same principle does not always apply with regard to many agreements concluded with sub-contractors, as disputes arising under those contracts can be the sole responsibility of the Private Partner and it may be appropriate to keep the dispute processes separate. This will avoid the Contracting Authority getting dragged into expensive and time consuming peripheral disputes. On the other hand, there may be areas of overlap, e.g. where the counterparty to a Project Agreement is claiming on the basis of a provision that has been passed down from the PPP Contract, participation in a consolidated dispute resolution process may be desirable and so limited joinder arrangements may be appropriate. Any assessment of the need for joinder provisions is likely to be fact dependent. See Section 8.3, Sample Drafting 8, Clause (20).

Generally, consolidation and joinder is less of a concern with jurisdiction clauses where courts often will order consolidation of proceedings before it (and the Parties often can otherwise apply to the relevant courts for removal/transfer from one jurisdiction to another) or the joinder of parties under local procedural rules or inherent jurisdiction.

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61 Other examples include government support agreements and direct agreements.

62 The ICC Rules provide some assistance in this regard in any event: see Articles 7-10.