ИСТИНА

Modern business international transactions are multiparty complicated and large-scale projects. Such transactions are usually composed of several bilateral contracts which contain bilateral dispute resolution arrangements. According to the principle of parties autonomy dispute arising between two persons bound by an arbitration agreement in connection with a multiparty project will be resolved by arbitration exclusively between these two parties. Other parties cannot participate in the resolution of the dispute through arbitration, even if they have played an active role in the actual project. Notwithstanding any legitimate interest they might have in the outcome of the dispute, these parties will remain third parties both to the arbitration proceedings and an arbitral award. Their interests are not taken into consideration and left unprotected. Arbitration proceedings unlike litigation do not bear any kind of intervention or joinder, which is explained by the contractual nature of arbitration. Thus, binding power of an arbitral award extends only over parties of an arbitration agreement. Meanwhile an arbitral award can affect interests of third parties. How these parties can defend their interests in arbitration proceedings and during recognition and enforcement proceedings in national courts? There are two ways of resolving such problem in state court litigation. The first one is compulsory participation of any third party with any legitimate interest in litigation by means of intervention, joinder of parties, and consolidation of cases. A court ex officio has to gather all parties that can have any legitimate interest in resolving dispute. If judgment effects any interest of a party that is not involved the judgement should be reversed in appellate court. The second way is also the solution against parallel proceedings. This way is to harmonize the outcome of parallel proceedings by principle of lis pendens and res judicata. The paper examines the binding and res judicata effect of the arbitral award through Russian and international experience of defending of interests of third parties in international arbitration.