There are numerous instances in which third parties are required to participate in arbitration proceedings. The interaction between arbitration and third parties poses challenges that are complex because of the intrinsically contractual nature of arbitration. In France, article 1165 of the Civil Code provides that agreements are effective only between the parties and cannot harm others; they can benefit them only in particular cases. The arbitration clause, like any contract, has a relative effect and therefore cannot produce effects outside parties. The principle of the relative effect of arbitration agreements is sometimes regarded as one of the greatest weaknesses of this method for settling disputes. It is also argued that the intervention of third parties in arbitration undermines a fundamental principle of the matter, namely the confidentiality of arbitration proceeding.
The arbitration practice has therefore developed specific rules to address the delicate issue of arbitration and third parties, which can occur at three different stages: the extension and/or transmission of the arbitration agreement to third parties; the participation of third parties in the arbitration process, be it as a result of a joinder or in the process of evidence gathering; and the effect of the arbitral award on third parties and their recourses against that award.