Navigating Third-Party Rights in Arbitration: Detailed Analysis of the Contracts (Rights of Third Parties) Act 1999 and Arbitration Act 1996

Copyright © 2025 LexisNexis
Published by a LexisNexis Arbitration expert
Practice notes

Navigating Third-Party Rights in Arbitration: Detailed Analysis of the Contracts (Rights of Third Parties) Act 1999 and Arbitration Act 1996

Copyright © 2025 LexisNexis

Published by a LexisNexis Arbitration expert

Practice notes

Arbitration and the Contracts (Rights of Third Parties) Act 1999

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Under English common law, the established rules on privity of contract dictate that, broadly speaking, only parties to the contract have rights under it and only parties to the contract have liabilities under it. As an arbitration agreement is a contract, it follows that, at common law, only the parties to the arbitration agreement can be bound by it or can be entitled to invoke it.

The Contracts (Rights of third parties) Act 1999

The Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999) creates an exception to the general rule of privity of contract that only those who are party to a contract can enforce rights under it. Under C(RTP)A 1999, s 1(1), a person who is not a party to the contract (a ‘third party’) may enforce a term of the contract if:

  1. •

    the contract expressly provides that they may, or

  2. •

    if the term purports to confer a benefit upon them.

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Jurisdiction(s):
United Kingdom
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Key definition:
Arbitration definition
What does Arbitration mean?

Generally, a private form of final and binding dispute resolution by an appointed arbitral tribunal acting in a quasi-judicial manner. Arbitration is, generally, founded on party agreement (the arbitration agreement), and regulated and enforced by national courts.

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