INTRODUCTION

Parties may have numerous reasons for pursuing claims in multiple forums. Sometimes multiple proceedings are necessary to obtain adequate remedies, for example, where essentially the same dispute concerns multiple contracts and/or multiple parties and all such contracts and/or parties are not subject to the same dispute settlement regime, or in the context of court proceedings, simply to ensure enforceable judgements in all relevant jurisdictions in the absence of effective global instruments for the recognition and enforcement of foreign judgements.

However, the pursuit of parallel or multiple proceedings may also be due to a party trying to take advantage of the general lack of means to compel coordination of claims in the decentralised and non-hierarchic field of international dispute settlement, typically for the purpose of maximising its chances of success. The pursuit of such parallel or multiple proceedings, although often undesirable from a general point of view, is understandable from the view point of the claimant, who naturally wishes to pursue all reasonable avenues. Indeed, to pursue all such avenues may be the obligation of legal counsel in relation to his client.

On the other hand, uncoordinated parallel or multiple proceedings generally create a number of problems for everyone involved, such as increased costs and risks of conflicting findings on matters of law and fact, and - in case parallel or multiple proceedings mean that the respondent must defend the same claim twice or several times - may also create clearly unreasonable[Page243:] effects for the respondent. Thus, while in some cases the unwelcome effects of parallel or multiple proceedings can be solved by different means of coordination (consolidation, stay of the proceedings, appointment of a joint tribunal, etc.), in other cases the unwelcome effects are not just a matter of coordination, but would go to the heart of procedural justice. In the latter case the question is whether public policy would require that the adjudicating body (be it a court or an arbitral tribunal) faced with such a situation take the actions that are appropriate in the circumstances of the case.

The most challenging issue is not to recognize the undesirability of parallel or multiple proceedings, but rather to find ways (if any) open to the arbitrators for dealing with problems generated by such parallel or multiple proceedings and which do not at the same time conflict with other fundamental principles of international commercial arbitration.

In the procedural laws of most jurisdictions there are well-developed rules available to the judge in order to deal with parallel and multiple proceedings. Such rules include the principles of lis pendens and res judicata, forum non conveniens, anti-suit injunctions, mandatory or discretionary stay of the proceedings awaiting the outcome of other proceedings which might have a binding, or persuasive, effect in subsequent proceedings, as well as mandatory and discretionary consolidation of proceedings having a close connection with each other.

The arbitration laws of most jurisdictions, however, typically do not give arbitrators the same tools as are available to judges; at least not with regard to international commercial arbitration. Nor are such issues ordinarily regulated by the arbitration rules of leading arbitration institutions. In this contribution, I shall briefly discuss what arbitrators may do, and perhaps should do, to remedy a situation where parallel or multiple proceedings risk causing great practical problems, or even be patently unjust, to one of the parties.

Part of the problem, however, is that any discussion regarding parallel or multiple arbitral proceedings must be based on a definition of when such parallel or multiple proceedings exist, or are deemed to exist. This inevitably

- at least initially - leads back to the principles of lis pendens and res judicata. Most lawyers have been brought up with the conception that the familiar principles of lis pendens and res judicata are the only tools available to the adjudicator for dealing with potentially conflicting parallel or multiple[Page244:] proceedings, and that the applicability of these principles presupposes the triple identity of parties, subject matter/grounds (causa petendi) and object/ relief (petitum) in the parallel or multiple proceedings.

These principles and their traditional application rest on a long legal tradition and have been refined through a substantial body of case law in most jurisdictions.

In reality, however, parallel or multiple proceedings in international commercial arbitration rarely involve exactly the same parties or exactly the same issues. Despite this inherent dilemma, commentators frequently take the view that there should be rules to remedy the problems caused by parallel or multiple proceedings, although, presumably, few arbitrators would be willing to take the extra step and break new ground by going beyond the traditional application of lis pendens and res judicata in a specific case with a view to avoiding the negative effects of parallel or multiple proceedings. One reason for this hesitancy is the risk of being subjected to applications for annulment or setting aside proceedings with respect to the arbitral award.

The particular problems created by potentially conflicting proceedings and awards beyond the reach of the traditional application of the principles of lis pendens and res judicata are illustrated by parallel claims under two or several BITs by different companies belonging to the same group of companies against the same respondent, a situation which will be discussed further below.

EXAMPLES OF PARALLEL OR MULTIPLE PROCEEDINGS

Before venturing further into the options open to arbitrators, let me outline, however briefly, a few examples where coordination and duplication problems frequently arise.

1. Investor-State arbitration

One situation where parallel or multiple proceedings may arise is in the field of investor-State arbitration1 where the investor has entered into a contract with a state entity of the host State, or the host State itself, containing a specific dispute resolution regime, and disputes between the investor and the host State simultaneously are pending under such contract and under a Bilateral Investment Treaty (BIT). 2[Page245:]

Parallel or multiple proceedings regarding the same investment may also arise under different BITs. The more than two thousand BITs which have been concluded as of today create, together with multilateral instruments such as the 1965 Washington Convention, the NAFTA and the Energy Charter Treaty, a particular legal framework intended to create an efficient international investment protection regime. Although such legal regime is based on numerous independent treaties and therefore is non-hierarchical in nature, separate claims based on different BITs may very well be strongly interrelated

- indeed overlapping - and thus have a potential for generating conflictingawards.

Such interrelation and potential for conflicting awards is sometimes explained by the usually broad definitions of investor and investment under BITs, in particular with regard to direct and indirect shareholdings in a local company of the host State. 3

Under municipal company law of most jurisdictions, a shareholder is not allowed (subject to carefully defined and limited exceptions) to bring a claim on behalf of the company in which he owns shares. This follows from the principle of separating the legal identity of shareholders from that of the company. 4 However, the effect of treaty provisions in BITs, extending treaty rights to investors of one of the contracting States owning shares in local companies of the host State, is that such foreign shareholders are usually allowed to bring a claim against the host State based on the damage suffered by the company in which they own shares. 5Thus, the inclusion of shareholdings in the definition of investment in a BIT would normally lift the corporate veil for the benefit of the shareholder.

Furthermore, BITs often do not only extend locus standi to direct shareholders in the local company, but also to companies that own or control the direct shareholder through a chain of wholly owned or controlled subsidiaries. 6 This means that if an investor owns the shares in the local company through a chain of companies incorporated in different jurisdictions, which all have concluded BITs with the host State protecting indirect shareholding, each and every one of such companies would seem to be entitled to bring separate claims against the host State under their respective BIT invoking the same acts and omissions of the host State, as well as the same damage suffered by the local company in which the investment was made. [Page246:]

Thus, the extension of treaty protection to indirect shareholding - in combination with the lack of coordination as between different bilateral instruments

- creates an option for a group of companies to bring multiple claims throughdifferent companies in the group regarding the same investment and regarding what in reality are the same alleged wrongful acts of the host State. Such duplication of claims carries with it the risk of conflicting findings as to whether a violation of the host State's international obligations has occurred, and, in case several tribunals would find that such violation has occurred, also the risk of double, or even multiple, compensation to the claimant group of companies.

In the Lauder7 and CME8 cases a situation similar to the one described above was at hand. In the Lauder case the ultimate controlling shareholder in the group holding the investment in the Czech Republic initiated arbitration under one BIT. Subsequently, in the CME case, the group subsidiary directly holding the shares in the local company initiated separate arbitration proceedings under another BIT regarding exactly the same investment and based on exactly the same alleged acts and omissions of the host State. None of the arbitral tribunals declined jurisdiction in favour of the other tribunal and the two arbitrations resulted in completely contradictory findings as to whether there had been a violation of the host State's obligations under international law. 9

Although there are occasionally bona fide reasons to initiate parallel claims, it is clearly a problem of procedural fairness and legal security if a respondent has to arbitrate twice, or several times, with respect to the same subject matter with the risk of conflicting outcomes.

The risk of double compensation to the claimant could sometimes be dealt with at the quantum stage of a dispute, provided that the tribunal subsequently seized postpones its award on quantum until the first tribunal has issued its award. If the company holding the shares in the local company has been awarded damages such compensation should reasonably reduce the damage suffered by companies further up in the corporate chain holding the investment. The situation is more complicated, however, if the first award is in favour of a company at the top of the chain of companies holding the investment. Damages awarded one company in the group of companies do not automatically reduce the damage suffered by a company further down in the chain of companies holding the investment. Furthermore, the risk of[Page247:] conflicting findings as to the subject matter of the dispute can only be dealt with effectively, if the subsequent tribunal recognises the binding nature of the determination of such issues by the first tribunal, or at the least recognises the persuasive effect of such determination. 10

2. International commercial arbitration

Parallel or multiple proceedings occur also outside the field of investment arbitration.

In, for example, oil and gas drilling projects the employer frequently is responsible for the coordination of a large number of independent contractors that perform distinct, but strongly intertwined, parts of the project, all of whom work simultaneously towards the completion of the project. If a drilling incident occurs, the question of liability for such incident frequently involves more than one contractor. Since such contractors carry out their work under different contracts which typically do not contain a coordinated dispute settlement regime, a dispute regarding the liability for the incident must usually be resolved under several different contracts. If in fact there are several so-called horizontal parallel disputes under each contract, it is likely that all such disputes, at the very least, will share the same factual circumstances and evidence, a situation which carries with it an unnecessary duplication of the taking of evidence as well as the risk of conflicting decisions on factual matters. However, there is also a risk of conflicting decisions on legal issues. Needless to say, the various contractors have different responsibilities and liabilities, but, for example, issues such as causation and contributory negligence of the employer would be the same in each such dispute.

Another example of coordination problems in international commercial arbitrations is so-called vertical disputes, where, for example, an employer has sued a contractor for the faulty performance of one of the subcontractors and the contractor in turn has sued the subcontractor relying on the back-to-back liability of the subcontractor under the agreement with the contractor. In such a situation, it is of course of the utmost importance to the contractor not to be found liable to compensate the employer due to such faulty performance, while at the same time, but in another award, his claim against the subcontractor is rejected on the ground that the subcontractor had committed no fault. 11 Again we have an example of interrelated questions of both fact and law. [Page248:]

A similar need for vertical coordination may arise also in maritime law. This could be the case, for example, where the owner of a vessel initiates arbitral proceedings against the time charterers for damage to the vessel and the time charterers in turn sue the voyage charterers. Again, conflicting findings on legal as well as factual issues may occur. 12

Apart from the risk of conflicting findings in interrelated disputes there are, needless to say, also many practical reasons to avoid such duplication of proceedings, for example, to save costs by not having to present the same evidence over and over again in several proceedings.

WHAT ARE THE DUTIES OF THE ARBITRATORS AND WHAT OPTIONS ARE AVAILABLE TO THEM?

Many different questions arise in relation to the coordination of parallel or multiple arbitral proceedings. It is clear that in arbitration, just as in court proceedings, the connection between different proceedings may be stronger or weaker. In court proceedings, if the connection is sufficiently strong, i.e ., if the issues and the parties are the same, the court subsequently seized must usually dismiss the case, or stay the proceedings awaiting the outcome of the first proceeding, in compliance with the principle of lis pendens. Where the connection is weaker, but still relevant, consolidation of pending proceedings, or joinder of additional parties normally could achieve the desired degree of coordination. However, in the case of several court proceedings pending in different jurisdictions such coordination would effectively be limited to declining jurisdiction in favour of the foreign court first seized, or staying the proceedings awaiting the outcome of the first proceeding. In some jurisdictions anti-suit injunctions can also be ordered by courts to restrain a party from pursing parallel or multiple claims in different jurisdictions. 13

What means of coordination are available to the arbitrators? When (if ever) are the arbitrators obliged to decline jurisdiction due to parallel or multiple proceedings? Does the principle of lis pendens, or the principle of forum non conveniens, apply in international arbitration and international commercial arbitration? Should the arbitrators stay the proceedings pending the outcome of parallel or multiple proceedings? Can joinder or consolidation be ordered by the tribunal? These are some of the questions that I shall address in the following. [Page249:]

1. Duties of the arbitrators

Arbitrators owe their professional duties primarily to the parties to the arbitration agreement. Thus, the point of departure must be that, subject to requirements of international public policy, however defined, the arbitrators have no obligations, and are not entitled to, take measures in the interest of other persons than the parties to the arbitration in question, even if such measures clearly would promote a sensible solution - from a general point of view - to problems that may have arisen through parallel or multiple proceedings.

Furthermore, the powers of the arbitrators are derived from the arbitration agreement and the arbitration law of the place of arbitration. Thus, even if one were to assume that the arbitrators, as between the parties, were empowered to take certain measures to avoid, for example, the risk of conflicting findings between two or several proceedings, in the absence of support in the applicable arbitration law, the arbitrators cannot take measures involving persons who are not parties to the arbitration agreement.

Therefore, when discussing the options open to arbitrators and the duties of arbitrators to take measures to avoid undesirable effects of parallel or multiple proceedings one must always keep in mind these two limitations on the powers of arbitrators. On the other hand, one must also remember that owing their duties to the parties does not mean that, in the absence of an agreement between the parties, the arbitrators may not take independent decisions that in the view of the arbitrators benefit the proceedings. It is part of the arbitrators' professional duties to conduct the arbitral proceedings in such a manner it considers appropriate, 14 to uphold due process in the proceedings and to act judicially. 15 Or put differently:

"the fact that international arbitrators have a 'status' simply means that the contract from which their powers are derived cannot exclude the application of the fundamental principles which govern the resolution of disputes before any forum." 16

2. Consensual solutions

Since arbitrators owe their duties primarily to the parties, arbitrators should not take measures to remedy undesired effects of parallel or multiple proceedings on their own motion, i.e., without a request from one of the parties. The only possible exception is if such measures would be required by international public policy. [Page250:]

However, where the parties through motions or other actions have brought the problems caused by the parallel or multiple proceedings to the attention of the arbitrators, it is reasonable to expect the arbitrators to address the issue in one way or another. Needless to say, the starting point for the arbitrators when faced with such a situation must be to promote a consensual solution. Such a consensual solution could be limited to the parties in the proceeding pending before the arbitrators, but would frequently, to be effective, need to involve also parties to the parallel dispute or disputes.

The degree of activity that could be expected from the arbitrators to achieve a consensual solution will always depend on what appears appropriate in light of the circumstances of the individual case. Whether the arbitrators merely should request the parties to deal with the situation in the manner the parties deem fit and, failing such agreement, continue the proceedings as if the problems did not exist, or whether the arbitrators should try actively to encourage the parties to agree on a specific solution could be a delicate matter which requires quite a bit of experience and Fingerspitzgefühl from the side of the chairman, or sole arbitrator.

Frequently, one of the parties is more reluctant to accept any alternative to continuing the pending arbitration without any coordination with other proceedings. Therefore, the arbitrators must always be careful not to appear as if they are acting in the interest of one of the parties only. On the other hand, the principle of equal treatment must not prevent the arbitrators, when so requested, from presenting sensible solutions, even if it were to appear that one of the parties has more to gain from a particular solution.

3. Discretionary or mandatory decline of jurisdiction

The most far-reaching measure by a tribunal when dealing with a situation of parallel or multiple proceedings would be to decline jurisdiction.

Sometimes, however, rather than declining jurisdiction, the overlap between two proceedings could be resolved by delimiting the scope of the arbitration agreement. This is the case, for example, where the tribunal, faced with two potentially conflicting proceedings between the same, or essentially the same, parties, through an interpretation of the arbitration agreement delimits its jurisdiction to one part of the proceedings and leaves the remaining issues to the jurisdiction of the other tribunal. 17 This way of avoiding conflicting decisions in proceedings between the same parties under different arbitration[Page251:] agreements has the potential of solving some of the problems of parallel or multiple proceedings. This holds true with respect to the above-described investor-State arbitration example with potentially conflicting contract claims and treaty claims. This approach would not, however, protect the host State from multiple claims by claimants at different levels in the same group of companies as was the situation in the ITSLICSLauder16 and CME19 cases. In this situation, only a complete decline of jurisdiction in favour of the tribunal first seized, or a stay of the proceedings awaiting the outcome of the first proceedings, coupled with recognition of the binding nature of determinations of identical legal issues already made by the first tribunal, could have solved the problem.

The question thus arises whether a tribunal under certain circumstances may, or even should, decline jurisdiction. Such decline of jurisdiction could be based on general principles of law such as lis pendens or legal theories such as forum non conveniens.20 Application of any of these doctrines would mean that the tribunal, although empowered by the parties to decide their dispute through a valid and applicable arbitration agreement, declines jurisdiction because of the prior existence of identical or similar proceedings, or the existence of a more appropriate forum.

In the litigation context many States view lis pendens as a problem related to the recognition of foreign judgements. 21 Provided that the judgement of the court first seized is recognised, the local court subsequently seized with the same matter must acknowledge the lis pendens effect of the foreign proceedings. 22 On the other hand, where no treaty regarding recognition and enforcement of judgements exists, the problem of lis pendens does not arise, since the binding effect of a decision does not extend beyond the national borders, unless such recognition and enforcement is guaranteed based on the principle of reciprocity, or otherwise.

If the same principle were to be applied in the field of international commercial arbitration, the almost global recognition of arbitral awards brought about by the New York Convention could - at least arguably - support the application of the principle of lis pendens by an arbitral tribunal faced with a jurisdictional challenge based on the fact that prior proceedings regarding the same matter, between the same parties, are pending before another arbitral tribunal. If one were to accept this idea, the recognition of arbitral awards brought about by[Page252:] the New York Convention would thus suspend or limit the effect of an otherwise valid arbitration agreement. There are, however, a number of problems with this approach. First, the New York Convention is addressed to state courts, not arbitral tribunals, and thus does not create any obligation, nor authority, for arbitral tribunals to decline jurisdiction or stay proceedings relying on lis pendens. Furthermore, since recognition and enforcement under the New York Convention are subject to court review, although on narrowly defined procedural grounds, there could be no automatic cross-border lis pendens arising out of arbitral proceedings.

Another approach would be to argue that considerations of international public policy require an arbitral tribunal to uphold cross-border lis pendens, or any other theory (such as forum non conveniens) that would require the tribunal to decline jurisdiction or stay the proceedings where the continuation of proceedings would cause great injustice to the defendant. 24 Although it is mainly the task of national courts to uphold public policy, the generally held view is that arbitrators should not act in a manner that contradicts international public policy. 25

The principle of lis pendens is a fundamental principle of procedural fairness and justice which is normally considered to form part of procedural public policy in most legal systems. 26 Accepting this view, arbitrators would thus be obliged to recognise limitations on their own jurisdiction brought about by the operation of international public policy. 27

However, where parallel proceedings are unacceptable because of the great injustice they cause the respondents, it is irrelevant from a public policy point of view on which legal ground the tribunal subsequently seized declines jurisdiction, or stays the proceedings. Consequently, the principle of lis pendens is only one potential ground for declining jurisdiction. The same result could be obtained also by applying other doctrines such as forum non conveniens, or abuse of rights, on the assumption that they form part of international public policy.

However, assuming that such principles would form part of international public policy would not automatically solve all the problems created by parallel or multiple proceedings, since, as discussed above, most instances of parallel or multiple proceedings in international arbitration would fall outside the reach of the traditional application of such principles. [Page253:]

4. Consolidation and joinder

In situations where all the different tribunals are equally appropriate, or where the claimants have legitimate interests to pursue all the different proceedings, arbitrators would typically have no ground for declining jurisdiction. In such situations joinder of additional parties to an existing dispute or consolidation of separate proceedings would generally appear as the most efficient way of coordinating parallel or multiple proceedings. 28

Joinder and consolidation in court litigation are highly efficient means to avoid duplicative and costly court proceedings which could also lead to inconsistent findings of fact and law. However, the principle of party autonomy in arbitration limits the powers of the arbitrators to allow one of the parties to join a third party to the proceedings, unless such joinder is agreed to by both the other party and the third party in question. Similarly, consolidation requires the consent of all parties to the proceedings who are to be consolidated, since all parties are not bound by the same arbitration agreement. 29 Thus, even though it would appear reasonable to assume that it is part of the arbitrators' duty to act judicially to order a joinder or consolidation in case the party that does not consent to such joinder or consolidation does not have any justified reasons not to accept it, the contractual limitations of the arbitrators' powers clearly restrict their possibility to do so. 30

Despite the lack of coercive powers of arbitrators to order joinder or consolidation, it must be stressed that from a general point of view joinder or consolidation could be very efficient means of coordinating parallel or multiple proceedings, for example, where two or several disputes are based on essentially the same legal ground, or where it otherwise would be beneficial for the determination of the facts in the respective proceedings. Another situation where joinder or consolidation could be useful, is where a party, in the event that an award is entered against him, wishes to present a claim for damages or a similar claim against a third party. Thus, it would seem that many of the coordination problems of parallel or multiple proceedings in the above-described examples of vertical disputes, such as in the client-contractor-subcontractor example or the shipowner-time charterer-voyage charterer example, and horizontal disputes involving one claimant and multiple respondents, such as the drilling project example, could be eliminated through joinder or consolidation. 31[Page254:]

Therefore, if the potential problem of parallel or multiple proceedings is raised before arbitrators in situations like the ones referred to above, it would be reasonable, with reference to the arbitrators' duty to act judicially, to expect arbitrators to explore the possibilities of the parties reaching an agreement on consolidation, or other ways to facilitate a solution. This could be done, for example, by proposing a 'coordination conference' where all parties involved in the different proceedings, as well as the arbitrators, would meet to identify common issues and the manner of their determination. Such conference, which presupposes the agreement of all involved, if chaired by an experienced arbitrator, might increase the possibilities of the parties reaching an agreement on a total or partial consolidation, or some less far-reaching form of coordination by highlighting potential risks associated with a continuation of the different proceedings without any such coordination. Also the psychological pressure usually generated by such a conference - as opposed to traditional correspondence with the parties - might make it harder for a party, who is refusing any form of coordination, to persist in such refusal.

As indicated above, however, the principle of party autonomy prevents a tribunal from ordering a non-cooperative party to take part in such conference. Furthermore, unless agreed otherwise by both parties, any contacts with persons who are parties to the other proceedings would have to be taken by the parties themselves and not the arbitrators. Also, it goes without saying that there can be no informal contacts between the arbitrators in the different proceedings.

One issue that requires special attention from the arbitrators, assuming that the parties agree to joinder or consolidation, is whether the arbitrators, in support of their jurisdiction, should require the execution of a new written arbitration agreement by all the parties with a view to avoiding potential difficulties with enforcement of the award in jurisdictions upholding formal requirements with regard to the written form and signature of the arbitration agreement. Another question is whether the tribunal should issue one award involving all parties, or separate awards for each sub-dispute in order to avoid that challenges to the award by one party affect the resolution of the dispute in its entirety. 32[Page255:]

5. Stay of the proceedings

A measure by the tribunal that does not involve any third parties to the arbitration is to stay the proceedings, awaiting the outcome of a related proceeding dealing with the same or similar legal issue, or the outcome of which would have persuasive effect in the proceedings.

Another option could be a limited adjournment of the proceedings to enable, without consolidation, a joint final hearing in the different proceedings or final hearings immediately following each other, so as to make the taking of evidence as efficient as possible.

It could be argued that an order to stay, where this is justified by the circumstances of the case, is part of the procedural powers conferred upon the arbitrators and is in accord with their general duty to act judicially. For example, in many jurisdictions such a stay may (but must not) be ordered where the jurisdiction of the tribunal is subject to court review. 33 Although the example with court review of the arbitrators' jurisdiction is not analogous to parallel or multiple arbitral proceedings, the discretion of the tribunal to stay the proceedings pending the determination of issues of great importance to the resolution of the dispute between the parties seems to have been recognised by some jurisdictions. Therefore, the argument could perhaps be made that such a stay should also be at the discretion of the tribunal when a continuation of the proceedings would create a risk of conflicting decisions on the same issues of fact or law.

A stay of the proceedings could undoubtedly be a very efficient way of coordinating parallel or multiple proceedings, in particular in the different examples of vertical disputes referred to above, i.e., the employer-contractor-subcontractor example and the shipowner-time charterer-voyage charterer example. In these cases, the subsequent proceedings between the contractor and subcontractor, or the time charterer and voyage charterer, would simply disappear, were the claim of the employer, or the ship owner, in the primary proceedings to be denied.

However, no matter how efficient such a stay of the proceedings might be, it is important not to overlook that one of the duties of the arbitrators in relation to the parties is to adjudicate the dispute in a speedy manner, and of course within any award period that may have been agreed. Since the[Page256:] resolution of the parallel disputes could take considerable time, a stay ordered by the tribunal against the will of one of the parties could be seen as depriving such party of its right to have its case heard in a speedy manner, which in turn could lead to the setting a side of the award. 34 This is particularly so if such party is not a party to any of the other proceedings.

It must also be underlined that even if one were to accept that the tribunal has the power, under certain circumstances, to stay the proceedings awaiting the outcome of other proceedings, such a stay would be meaningful only to the extent that documents relied on in the first proceedings would be made available in the subsequent proceedings. This raises several questions. First, the principle of confidentiality might, at least in some jurisdictions, bar the party that is a party to both proceedings from disclosing the documents relied on in the first proceedings. Second, if such documents nevertheless are disclosed, the implications of such disclosure for the right of the respondent in the second proceeding to present its case must be taken into account. Such party might feel that important issues have already been decided in the prior proceedings where he did not take part and that therefore it is unlikely that the tribunal will consider his arguments and evidence, in sufficient detail, which - if correct - would violate due process. This obviously constitutes a dilemma, since the very reason for staying the proceedings in the first place is to achieve coordination. It also highlights the difficulty with non-consensual coordination of parallel or multiple proceedings.

6. Other means of coordination

Another possibility to deal with parallel or multiple proceedings is to coordinate the resolution of such proceedings without consolidation and joinder.

This can be done, for example, by appointing the same arbitrators for all the related disputes, or appointing the same chairman for all the related disputes. The appointment of a joint tribunal would (hopefully) prevent conflicting findings of law and fact in any of the examples of parallel or multiple proceedings mentioned above, both the investor-State arbitration examples and the international commercial arbitration examples. 35

The appointment of a joint tribunal is usually suggested by the parties before an arbitral tribunal has been appointed in any of the proceedings. However, should a related dispute arise subsequent to the formation of the first tribunal, [Page257:] the parties to the parallel dispute must involve the arbitrators in determining whether it would be appropriate that the subsequent tribunal consist of the same members.

If the issue of appointing the same arbitrators for a second tribunal or several subsequent tribunals is raised before a tribunal that already has been appointed, it is advisable that such tribunal propose a coordination conference to sort out potential problems with such joint appointment and to ensure that all parties involved have the same opinion as to the degree of coordination expected to be achieved by such joint appointment. Through such a conference the arbitrators would be able to clarify their mandate with respect to the different disputes and the coordination of such disputes. By ensuring that there is a common understanding among all parties as to the meaning of such coordination, the arbitrators would also typically have eliminated any ground for setting aside a resulting award.

The appointment of a joint tribunal in two or several related arbitrations would also, as indicated above, facilitate other measures to coordinate the proceedings. The most far-reaching coordination, without formally consolidating the proceedings, would be to hold joint hearings or to hold parts of the hearings jointly to avoid expensive duplication of the presentation of identical evidence. A less far-reaching form of coordination would be to hold such hearings separately, but immediately following each other. The degree of coordination of hearings and the extent to which documents are to be exchanged between the different proceedings, and the status of such documents in the respective proceedings, are typical issues that should be put on the table at an early stage. 36

In every case of coordination involving an exchange of documents between the different proceedings, it is important that the arbitrators safeguard the right of all parties to be heard. In particular, the arbitrators must ensure that the right of any party who is not party to all proceedings to be heard is not violated by measures taken in proceedings in which such party does not take part, but which could affect also the proceedings in which such party does take part. If this is not done there is a risk that the award could be set aside on the basis of violation of due process and public policy. Again, this underlines the importance of the arbitrators being active in promoting consensual solutions and a common understanding among all parties involved as to the precise meaning and effect of such solutions. [Page258:]

7. Anti-suit injunctions

Anti-suit injunctions constitute orders, originally found in common law countries, whereby a court - which retains its jurisdiction, or anticipates to do so, and which seeks to protect that jurisdiction or, more generally, the jurisdiction of the forum it deems to be the most appropriate - requests a party to refrain from bringing a claim before the courts of another State, or before an arbitral tribunal.

The powers of an arbitral tribunal to order anti-suit injunctions are not uncontroversial. However, assuming for the sake of argument that arbitrators do, as a matter of principle, have the power to order anti-suit injunctions, it is debatable whether arbitrators should be able to issue such an injunction against one of the parties to the arbitration in order to restrain such party from initiating another arbitration which could generate risks of conflicting decisions with respect to the same issues of law and fact. To order anti-suit injunctions in any of the examples of parallel and multiple proceedings in international commercial arbitration outlined above (i.e., the drilling project, the employer-contractor-subcontractor example or the shipowner-time charterer-voyage charterer example) would in my view take the use of anti-suit injunctions too far, since in all these examples, the subsequent tribunal does not lack jurisdiction, and is not less appropriate than the tribunals first seized, and none of the proceedings is superfluous. In court proceedings these situations normally would be dealt with by consolidation or joinder and not by preventing one of the proceedings by way of anti-suit injunctions.

The situation is slightly different in the investor-State arbitration example of multiple claims by several companies of the same group of companies against the host State regarding the same investment. In this case a subsequently initiated arbitration would in fact re-litigate the dispute which is the subject of the first arbitration (i.e., a lis pendens situation). Therefore, it could be argued that in this situation the tribunal subsequently seized is clearly not the appropriate tribunal, or even that it lacks jurisdiction to re-determine the substance of the dispute, since the respondent should not need to accept several claims against it based on what in fact is one single alleged violation of its obligations under international law. However, since the claimant in the subsequent proceedings formally will be a different legal entity, the tribunal in the first proceedings presumably would not have the power to order an injunction against an entity which is not formally a party to the[Page259:] arbitration agreement. Consequently, anti-suit injunctions would not solve the problems created by parallel or multiple proceedings beyond the traditional application of the principles of lis pendens and res judicata.

INTERNATIONAL PUBLIC POLICY

As discussed above, a great deal - in terms of coordination of parallel and multiple proceedings - can be achieved with the parties' consent and cooperation.

In fact, as things stand today, consensual solutions seem to be the only certain method of avoiding the negative consequences of parallel or multiple proceedings. In many, perhaps even most, cases, however, it is not possible to obtain the approval and co-operation of all parties concerned. In such cases the question remains whether arbitrators are under an obligation to decline jurisdiction with a view to avoiding parallel or multiple proceedings.

From my perspective, the only possibility for an arbitral tribunal to decline jurisdiction, despite the existence of a valid and applicable arbitration agreement, is if such decline of jurisdiction is required by international public policy.

Furthermore, even if such a rule of international public policy does exist, which is not a given, surely such rule would not mandate a decline of jurisdiction in all cases of parallel or multiple proceedings. The identification of such a rule (if any) is therefore complicated by the difficulties in defining under what circumstances parallel or multiple proceedings violate international public policy.

There are undoubtedly situations in which considerations of procedural justice and international public policy would require the arbitrator to decline jurisdiction. Presumably, few arbitrators would hesitate to decline jurisdiction if they were faced with a classic case of lis pendens or res judicata, i.e., triple identity of parties, subject matter/grounds (causa petendi) and object/relief (petitum). The situation is different, however, in other cases of parallel or multiple proceedings where the parties or the issues are not the same, which indeed seems to be the more common scenario in international commercial arbitration, and in particular in investor-State arbitration. Decline of jurisdiction despite the existence of a valid and applicable arbitration[Page260:] agreement in cases that fall outside the scope of the traditional application of the principles of lis pendens and res judicata would require a widening of the public policy concept.

One example of such a broader approach to international public policy in relation to parallel or multiple proceedings is the reasoning of the ICSID tribunal in Banro American Resources Inc v. Democratic Republic of Congo. In this case the ICSID tribunal did not allow the claimant group of companies to avail itself of diplomatic protection exercised by the Canadian government with respect to the Canadian parent company, at the same time as an American subsidiary commenced ICSID arbitration proceedings regarding the same incident. The tribunal therefore declined jurisdiction to hear the request by the American subsidiary. The tribunal found that the problem before it involved considerations of international law and international public policy and stated that it 'cannot allow the requirements of nationality imposed by the Washington Convention to be neutralized by investors who are seeking to avail themselves, depending on their own interests at a given point in time, simultaneously or successively, of both diplomatic protection and ICSID arbitration, by playing on the fact that one of the companies in the group does not have the nationality of a Contracting State party to the Convention, and can therefore benefit from diplomatic protection by its home State, while another subsidiary of the group possesses the nationality of a Contracting State to the Convention and therefore has standing before an ICSID tribunal.'

Under the 1965 Washington Convention a contracting State is not permitted to extend diplomatic protection to one of its nationals. In the view of the tribunal in the Banro case, such obligation is equally applicable to the investor. Thus, under the circumstances of the case, the ICSID tribunal treated the Banro Group as one entity with the view to upholding the integrity of the requirements relating to nationality under the 1965 Washington Convention and the general aim of ICSID arbitration, as understood by the tribunal to foreclose 'the investor from using a plurality of channels'.

However, it is important to note that the Canadian parent - having the nationality of a non-contracting State and consequently no standing before an ICSID tribunal after the dispute had arisen -, transferred the investment to the American subsidiary having such standing, a measure which made it possible for the Banro Group to avail itself of both diplomatic protection and ICSID arbitration. [Page261:]

The circumstances of the Banro case feature elements of forum shopping and perhaps even procedural abuse. It cannot be assumed that the outcome would have been the same if for example two BIT claims had been brought under separate BITs by two companies in the same group of companies as was the case in the CME and Lauder cases. 38

Thus, as indicated above, situations will always occur in which the particular circumstances of the case may mandate a decline of jurisdiction. I do not believe, however, that there is general support today for an unqualified rule of international public policy, which obliges and empowers an arbitrator faced with a situation of parallel or multiple proceedings to decline jurisdiction on that basis alone. I believe this view is shared by a large number of arbitration lawyers. 39

On the other hand it should not be denied that international public policy, or transnational public policy, 40 are concepts which are not -and should not - be static, but are rather in constant change and development to reflect changes in values in the legal, social and economic spheres of the international community. 41 It must also be stressed, however, that arbitrators, although expected to uphold international public policy, are not the main guardians of public policy and not primarily responsible for its development. 42 Unless arbitrators can base their decision on widespread national rules and regulations, international instruments or rules developed by private organizations, as has been the case, for example, in the development of international public policy with respect to corruption and money laundering, 43 it might be too far-reaching to require arbitrators, acting on the basis of a valid and applicable arbitration agreement, to take the lead in the development of international public policy in this respect. 44

CONCLUDING REMARKS

At this stage of development of international arbitration law, I believe that we must, unfortunately, conclude that there are no easy answers, no easy solutions to the problems created by parallel and multiple proceedings. Proceeding from the consensual nature of arbitration, we do know, however, that the consent of the parties will solve most problems. Failing such consent, the situation is much more uncertain. It is possible that arbitrators may, in certain circumstances, rely on international public policy to avoid the negative consequences of parallel and multiple proceedings. [Page262:]

These are important and difficult issues. My hope is that the International Chamber of Commerce will take the lead in initiating the necessary research and study, and once again be the trailblazer in the development of intertional arbitration.

I am much indebted to Nils Eliasson, Associate of Mannheimer Swartling, for his most valuable assistance in preparing this contribution.[Page263:]

1
For a comprehensive account of overlapping and duplicated claims in investor-State arbitration see e.g., Bernardo M. Cremades and David J.A. Cairns, 'The Brave New World of Global Arbitration', 3 Journal of World Investment (2002) at pp.189-192.

2
See e.g., SGS Société Générale de Surveillance v. The Islamic Republic of Pakistan, ICSID Case No. ARB/01/13 and SGS Société Générale de Surveillancev. Republic of the Philippines, ICSID Case No. ARB/02/6.

3
The United States of America Model BIT provides in Art.1(1) that: '(f)or the purposes of this Treaty, (a) 'investment' means every kind of investment in the territory of one party owned or controlled directly or indirectly by nationals or companies of the other party, such as equity, debt, and service and investment contracts; and includes: … a company or shares of stock or other interests in a company or interests in the assets thereof.'

4
This is also the traditional rule under customary international law as regards diplomatic protection, which was confirmed by the International Court of Justice in the well-known case concerning The Barcelona Traction Light and Power Company Ltd (Belgium v. Spain) (Second Phase), I.C.J. Reports 3 (1970) ('Barcelona Traction'). The question that arose in this case was whether diplomatic protection could be extended to the shareholders of a company that had suffered damage due to acts directed at the company. The question was answered in the negative with the comment that 'in the present state of the law, the protection of shareholders requires that recourse be had to treaty stipulations or special agreements directly conducted between the private investor and the State in which the investment is placed. … Indeed, whether in the form of multilateral or bilateral treaties between States, or in that of agreements between States and companies, there has since the Second World War been considerable development in the protection of foreign investments. The instruments in question contain provisions as to jurisdiction and procedure in case of disputes concerning the treatment of investing companies by the States in which they invest capital.'

5
See for example AAPLv. the Republic of Sri Lanka, Final Award of 27 June 1990, Case No. ARB/87/3.

6
The BIT between the Kingdom of Sweden and the Russian Federation provides in Art.1(1) that: '(t)he term 'investment' shall mean any kind of asset, invested by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with its legislation, and shall include in particular, though not exclusively:… shares, stocks, bonds and other forms of participation in a company or enterprise… The term 'investment' shall also mean an investment made by an investor of one Contracting Party in the territory of the other Contracting Party indirectly through a legal person of a third State.'

7
Lauderv. Czech Republic, Final Award of September 3, 2001.

8
CMEv. Czech Republic, Partial Award of September 13, 2001.

9
The award in the CME case, which was the later of the two awards, held the Czech Republic liable for breaches of its obligations under international law, while the award in the Lauder case held that no such breaches had occurred.

10
The award in the CMEcase was subject to setting aside proceedings before a Swedish court of appeal, inter alia, on the grounds that the tribunal had failed to recognize the principles of lis pendensand res judicata. The Swedish court, which upheld the award, although not excluding the applicability of principles of lis pendens and res judicata between arbitral proceedings under different BITs, found the principles not to be applicable in the circumstances of the case - Judgment of the Svea Court of Appeal, Case No. T 8735-01 (a translation into English of the judgement is published in 2 Stockholm Arbitration Report (2003) at p.167 ff.).

11
See for example Abu Dhabi Gas Liquefaction Co. Ltdv. Eastern Bechtel Corp., Yearbook International Commercial Arbitration, Vol. IX (1984).

12
These problems are illustrated by the Vimeira cases - see for example V. V. Veeder, 'Multiparty disputes: Consolidation under English Law', Arbitration International (1986)at p.310.

13
The European Court of Justice has recently ruled on the compatibility of anti-suit injunctions with the Brussels Convention: Erich Gasser GmbHv. MISAT(Case No. C-116/02); Turner v. Grovit and others (Case No. C-159/02)).

14
See e.g.,Art.15 of the UNCITRAL Arbitration Rules, Art.19 of the UNCITRAL Model Law.

15
A. Redfern and M. Hunter, Law and Practice of International Commercial Arbitration (1999) at p.257.

16
Fouchard, Guillard, Goldman, on International Commercial Arbitration (1999) at p.600-601.

17
See SGS Société Générale de Surveillance v. The Islamic Republic of Pakistan, ICSID Case No. ARB/01/13 in which case the ICSID tribunal delimited its jurisdiction to claims under the BIT to breaches of international obligations and left claims based on alleged breaches of an agreement entered into directly between the investor and the host State that did not also constitute breaches of the BIT to the determination by the tribunal formed under the contract. Cf. the similar situation of potentially conflicting court proceedings under an exclusive jurisdiction clause in a contract between the host State and the investor and proceedings brought by the investor against the host State under a BIT as exemplified by the January 29, 2004 interim decision in SGS Société Générale de Surveillance v. Republic of the Philippines, ICSID Case No. ARB/02/6.

18
Lauder v. Czech Republic, Final Award of September 3, 2001.

19
CMEv. Czech Republic, Partial Award of September 13, 2001.

20
As to the application of forum non conveniensin parallel litigation in several jurisdictions see, e.g., Institut de Droit International, Resolution on the principles for determining when the use of the doctrine of forum non conveniens and anti-suit injunctions is appropriate, Session de Bruges (2003).

21
J. J. Fawcett (Edn.), Declining Jurisdiction in Private International Law (1994).

22
This is expressly recognised, inter alia, in the Lugano Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters (Art.21), the Brussels Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters (Art.21) and the Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters (Art.27).

23
As stated by an ICSID tribunal, when faced with the prospect of parallel domestic proceedings (involving a breach of contract) and arbitral proceedings (involving possible breach of a treaty): "[W]hen both legal actions have a legal basis derived from the same measures, they can no longer continue simultaneously in light of the imminent risk that the Claimant may obtain the double benefit in its claim for damages." Waste Management Inc v. United Mexican States, ICSID Case No. ARB(AF)/98/2.

24
The principle of lis pendens and its corollary principle of res judicata, both based on the notion of the 'end of litigation' achieved via the res judicata of a final judgement or award and emphasized in the Latin maxim of ne bis in idem or non bis in idem, which protect defendants from having to defend themselves twice in the same matter goes to the heart of procedural justice. Furthermore, lis pendensand res judicataare often considered to constitute fundamental procedural principles recognised by international law (see for example B. Cheng, General Principles of Law as Applied by International Courts and Tribunals (1987)) as well as the national procedural laws of most countries. The fundamental nature of these principles is evidenced also by the fact that they generally are considered to constitute general principles of law recognized by civilized nations within the legal sources of international law (see, e.g.,Sir H. Lauterpacht, The Development of International Law by the International Court (1958)).

25
Cf. A. Redfern and M. Hunter, Law and Practice of International Commercial Arbitration (1999)at p.280-281.

26
Decision of 14 May 2001 by the Swiss Supreme Court, Fomento de Construcciones y Contratas S.A. (Spain) v. Colon Container Terminal S.A. (Panama), published in ASA Bulletin (3/2001) at p.555.

27
As stated by Professor Lowe: 'In as much as justice demands that like cases be treated alike, inconsistent decisions violate the parties' rights to justice. Any legal system which institutionalises the possibility of injustice in this way deserves careful scrutiny, for judicial inconsistency threatens the Rule of Law itself. […] What I do suggest is that inconsistent findings by different tribunals on the same facts deprive the law of its predictability and hence of its ability to provide effective guidance; and hence, they threaten to undermine one aspect of the Rule of Law', V. Lowe, 'Res judicata and the Rule of Law in International Arbitration', 8 African Journal of International and Comparative Law (1996)at p.48.

28
For a discussion of joinder and consolidation in the context of the UNCITRAL framework see I. Dore, Theory and Practice of Multiparty Commercial Arbitration (1990) at pp.40ff.

29
See e.g., A. Redfern and M. Hunter, Law and Practice of International Commercial Arbitration (1999) at pp.177ff.

30
Certain jurisdictions, for example, Hong Kong and the Netherlands, have introduced possibilities of court, ordered consolidation, see e.g., G. Born, International Commercial Arbitration (2001) at pp.672ff.

31
However in other cases, such as the investment arbitration example of a chain of multiple claimants, joinder or consolidation would not solve the dilemma of the host State subjected to such multiple claims regarding the same investment. In this case the host State usually has good reasons to maintain the position that only one entity in the claimant group of companies should be allowed to bring the claim. Joinder or consolidation would in fact contradict the position of the respondent, since any acceptance of such joinder or consolidation would in fact legitimise the duplication of claims by the claimant group of companies.

32
V. V. Veeder, 'Multi-party disputes: Consolidation under English law', Arbitration International (1986)at p.315-316.

33
See for example Art.16 of the UNCITRAL Model Law on International Commercial Arbitration.

34
Cf. A. Redfern and M. Hunter, Law and Practice of International Commercial Arbitration (1999)at p.256.

35
However, in the example of multiple BIT claims by companies at different levels in a group of companies controlling the investment, it might be impossible for the host State to agree to such a joint tribunal since that would be tantamount to accepting the right to bring multiple claims.

36
It goes without saying that the holding of joint hearings or the exchange of documents, although facilitated by the existence of a joint tribunal, could take place also if the respective tribunals consist of different arbitrators.

37
ICSID Case No. ARB/98/7, Award on Jurisdiction, 1 September 2000.

38
In these cases the respective tribunals did not consider themselves required to decline jurisdiction by any rule of international public policy.

39
For a recent survey of procedural and substantive international public policy see e.g., A. Sheppard, Report on Public Policy as a Bar to Enforcement of International Arbitral Awards, Report prepared for the International Law Association Conference, London, 2000.

40
See e.g., P. Lalive, 'Transnational (or Truly International) Public Policy and International Arbitration', in P. Sanders (Edn.), 'Comparative Arbitration Practice and Public Policy in Arbitration', ICCA Congress Series (1987) at p.286ff.

41
The development of standards of international public policy with regard to corruption, money laundering and fraud are good examples of such development of international public policy to reflect the policy developments of the international community and the international business community, see e.g., Bernardo M. Cremades and David J.A. Cairns, 'Transnational Public Policy in International Arbitral Decision-making: The Cases of Bribery, Money Laundering and Fraud', in K. Karsten and A. Berkeley (Edn.), Money Laundering, Corruption and Fraud (2003).

42
P. Mayer, 'Mandatory Rules of Law in International Arbitration', in Arbitration International (1986) at p.285-286.

43
Bernardo M. Cremades and David J.A. Cairns, 'Transnational Public Policy in International Arbitral Decision-making: The Cases of Bribery, Money Laundering and Fraud', in K. Karsten and A. Berkeley (Edn.), Money Laundering, Corruption and Fraud (2003) at pp.67-78.

44
A slightly more active role of the arbitrator in the development of public policy is advocated by Bernardo M. Cremades and David J.A. Cairns, see Bernardo M. Cremades and David J.A.Cairns, 'The Brave New World of Global Arbitration', 3 Journal of World Investment (2002) at pp.205-208.