Assignee’s Right and Obligation to Arbitrate Under Civil Law and the Peruvian Long Arm Rule

Abstract

In civil law countries,1 the assignment of a contract changes the parties to the contract without resulting in novation. The assignee takes the position of the assignor but the original contract continues to exist, along with provisions relating to choice of law and jurisdiction. Therefore, in many civil law jurisdictions, an agreement to arbitrate contained in the assigned contract is binding on the assignee. This conclusion is supported by the rules on assignment of contract, which are now followed in most civil law jurisdictions and recently adopted in the new French Civil Code of 2016. Further, the Colombian Arbitration Statute of 2012 has an express rule regarding transfer of the arbitration clause in the event of assignment. Furthermore, Article 14 of the Peruvian Arbitration Law incorporates the principle whereby the arbitration clause applies to all the parties which have participated in any way in the performance of the obligations arising out of the contract in good faith. This is a “long-arm” provision covering the difficult cases of assignment.