Kluwer: Privity of Interest: When Can Arbitral Awards Bind Third Parties in Australia?

In common law legal systems, the doctrine of “privity of interest” is a narrow exception to the general rule that only parties to an arbitration are bound by the award. If it can be established that a third party shares the same “legal interest” as a party to a prior proceeding, that third party will be bound by the decision. The traditional test is whether the third party can claim “through or under” the party to the prior proceeding. If the answer is “yes”, there is what is called a “privity of interest”.