Introduction

The Singapore International Arbitration Centre (‘SIAC’) has recently proposed a Cross-Institution Consolidation Protocol (the ‘Proposal’) which aims at improving arbitration’s potential for efficient resolution of complex international disputes, and mitigating the growing dissatisfaction of users. The increasing costs and duration of arbitrations have led users to think of arbitration as ‘offshore litigation’. Arbitration is no longer the most effective dispute resolution method, which is one that provides speed and flexibility, but also affords certainty and opportunity for the parties to effectively present their cases. Instead, in circumstances where related arbitrations are heard separately, parties are doomed to duplicate their efforts and to resolve their related disputes in different proceedings, under different institutional rules, before different tribunals, thus running the risk of receiving contradictory awards. The Proposal purports to address these weaknesses.

Similar issues arise in investor-state arbitrations. Past cases demonstrate the disadvantages of having related claims decided in different fora. Inconsistent and unpredictable outcomes, arising out of such situations, are some of the reasons why new free-trade agreements introduce an ‘investment court’ scheme, which many view as the beginning of the end of investor-state arbitration.

The idea of regulating consolidation goes back to the very beginnings of the International Centre for Settlement of Investment Disputes (ICSID). The drafters of the ICSID Convention considered ‘multiparty proceedings … although it was not extensively discussed’.³ In 1969, ‘at the Third Annual Meeting of the ICSID Administrative Council … the Secretary-General … discussed the Secretariat’s intention to develop rules for multiparty procedures’, albeit with no further action.⁴ In early 2000s, arbitration enthusiasts were anew discussing an ‘ICSID Consolidation Facility’, which would enable consolidation of related non-ICSID and ICSID proceedings and ‘be available to be opted into by interested parties’.⁵ The idea was mooted in 2004/2005.⁶ The project of creating a consolidation facility was also discussed in 2006 at the Geneva Colloquium, and rules on consolidation formed part of the failed OECD Multilateral Agreement on Investment (‘MAI’).⁷ In the meantime, the North American Free Trade Agreement (‘NAFTA’), as well as the WTO Dispute Settlement Understanding have included provisions on consolidation.

Perhaps, at the time, relevant actors viewed ICSID and UNCITRAL as ‘less goal-oriented’, in the sense that they had no ‘specific public agenda’ to promote, like NAFTA and the WTO.⁸ Considering the increasing complaints of lack of legitimacy in investor-state arbitrations, this negative stance towards consolidation should probably change. Moreover, related cases that are brought under different treaties and distinct arbitration rules are becoming frequent. Recently, a London-listed oil and gas company ‘JKX’ brought an Energy Charter Treaty (‘ECT’) claim before the Stockholm Chamber of Commerce and an ICSID claim under the Ukraine-Netherlands BIT. The company’s affiliates also commenced UNCITRAL proceedings. Although the case materials are not public, reports say that all three were consolidated, most likely on the basis of parties’ agreement.⁹ Additionally, in Lao Holdings v. Lao People’s Democratic Republic, parties ‘agreed that the same tribunal would hear both an ICSID arbitration and a parallel ad hoc arbitration that would run in tandem’.¹⁰ And while these cases show that proceedings can be coordinated if parties so agree, a consolidation facility would be indispensible in many other situations when they refuse to consolidate despite all conditions for resolving their disputes together being met.

Given all of the above, it may be timely to revisit the idea of a consolidation facility/protocol in investment arbitration. Relevant actors could look to SIAC’s Proposal for inspiration.

In order to consider the viability and necessity of a SIAC-like Proposal in the realm of investor-state arbitration, one must first assess whether SIAC’s Proposal is a useful and efficient initiative on its own (I). After reviewing the need for creating a SIAC-like consolidation protocol in investment arbitration (II) and available consolidation provisions in different legal instruments (III), this article will examine the aspects of a potential protocol in investment arbitration(IV).

I. SIAC’s Proposal on Cross-Institution Consolidation Protocol

When business deals often encompass several transactions among different actors from across the globe, having a mechanism that would enable all disputes to be resolved in one proceeding is incredibly helpful. While virtually all arbitral institutions allow consolidation of related disputes, none of them consider the possibility of consolidating their proceedings with arbitrations conducted under the rules of a different institution. This is not merely a perceived weakness of arbitration, but an actual barrier to its further development.

SIAC’s Proposal masterfully bridges the gap left by other institutional rules, creating a framework for effective resolution of multi-party and multi-contract disputes.

[The Proposal] sets out a standalone mechanism for addressing the timing of consolidation applications, the appropriate decision-maker … and the applicable criteria to determine when arbitral proceedings are sufficiently related to warrant cross-institution consolidation.¹²

It envisages that a ‘joint committee appointed from members of the Courts or Boards of the concerned arbitral institutions’ would decide on applications for consolidation.¹³ While the Proposal does not provide a fixed standard for consolidation nor sets a cut-off for filing an application, it highlights the different approaches that various institutions follow, and elaborates on the factors that they ought to consider when negotiating the Cross-Institution Consolidation Protocol.¹⁴ Once the joint committee decides to consolidate, the dispute would be subject to the rules of just one institution. The Proposal assesses several criteria which could be used in determining which rules prevail (e.g. number of cases, aggregate value of disputes, time of commencement of arbitrations, subject matter of the dispute, and parties’ nationality or domicile).¹⁵

The Proposal’s value is best assessed by comparing it to existing mechanisms for tackling multi-party and multi-contract situations. Furthermore, analysis of the Proposal’s solutions alone demonstrates the benefits that this novelty would bring to disputing parties. Although certain suggestions might maximize the Proposal’s effectiveness, SIAC’s idea undoubtedly brings the long-awaited progress to international commercial arbitration.

A. The effectiveness of SIAC’s Proposal assessed in light of existing mechanisms for tackling multi-party and multi-contract situations

Desirability of consolidation should not be determined in the abstract; rather it ought to be considered in light of its alternatives¹⁶ . By the same token, the effectiveness of SIAC’s Proposal is most evident when substitute approaches are examined, since no other mechanism achieves the goals of efficiency and consistency quite so completely as cross-institution consolidation would.

Stay of proceedings

The primary reason for a stay of proceedings is to achieve coordination.¹⁷ Additionally, a stay of one proceeding gives the tribunal in the second arbitration at least some insight into the solution reached in the first set of proceedings.¹⁸

While staying one arbitration for the duration of arbitral proceedings conducted under different institutional rules may seem like a good solution to the problem of inconsistent awards, certain concerns limit its effectiveness.

First, the mechanism of stay is surrounded by an aura of uncertainty. While legal scholars usually consider the power to order a stay as a matter of ‘inherent jurisdiction or case management’,¹⁹ as part of tribunal’s ‘general procedural authority over the arbitral process’²⁰ or its ‘general duty to act judicially’,²¹ no rule of international law requires one arbitral tribunal to defer to another. Rather, one tribunal, ‘in the interest of international judicial order … in its discretion and as a matter of comity’, may stay its proceeding pending the decision of the other tribunal.²² Furthermore, no exact criteria for ordering a stay exist. Whereas some deem that a tribunal may order a stay whenever it is not prohibited from doing so,²³ others support a stay only in exceptional circumstances.²⁴ In the words of one tribunal in an ICC case, ‘the circumstances justifying a stay may well be unusual’.²⁵

Second, suspending one set of proceedings does not necessarily contribute to quicker dispute resolution. For a party who is involved only in the stayed arbitration, this mechanism may be inconvenient, as it delays the outcome and, potentially, constrains its business activities for the unforeseeable period of time.

Consequently, while a stay may compete with cross-institution consolidation when it comes to reducing the risk of inconsistent outcomes, it loses in the race to efficiency.

Concurrent hearings and/or appointment of same persons to different arbitral tribunals

Concurrent hearings presuppose that different arbitral tribunals hear the same evidence in two or more arbitrations.²⁶ This type of concurrent hearings is generally not used in practice as they provide only limited advantages.²⁷ The effectiveness of this option, though, may be increased by having the same persons appointed to these tribunals. Harmonising arbitrations in this manner would not only ease the organisation of hearings, as the arbitrators are aware of their and the parties’ availabilities and schedules, but might also decrease the risk of inconsistent findings.²⁸

Nonetheless, the option of having the same arbitral tribunals conducting concurrent hearings of separate cases does not quite achieve the goals that SIAC’s Proposal fulfils. Holding concurrent hearings does not negate the fact that parties’ efforts may be duplicated. Additionally, the participation of only one and the same arbitrator in parallel proceedings, where the other arbitrators are different is problematic, since ‘the said arbitrator has access to documents or has knowledge of facts which are not shared with the whole arbitral tribunal’.²⁹ Having identical tribunals may address this concern. However, I wonder how likely is it. However, practically speaking, it is doubtful whether parties that are not involved in both disputes would appoint the same person. Finally, having identical arbitrators on two different panels does not guarantee consistent results.³⁰ This is because the tribunal may only decide on the basis of submissions and evidence presented to it in each dispute, and these may vary. Hence, it is not impossible that the same people sitting on arbitral panels in two separate cases reach distinct results.

Court-ordered consolidation

Courts in few jurisdictions may order consolidation or concurrent hearings in the absence of agreement by the parties.³¹ For example, Article 1046(1) of the Dutch Code of Civil Procedure, in the absence of the parties’ contrary agreement, allows the provisional relief judge of the district court of Amsterdam, upon request, ‘to order consolidation of arbitral proceedings pending in the Netherlands with other arbitral proceedings pending in the Netherlands’.³² Similarly, the Hong Kong Arbitration Ordinance empowers the Court of First Instance of the High Court to order consolidation when it appears that ‘(a) a common question of law or fact arises in both or all of them; (b) that the rights to relief claimed in those arbitral proceedings are in respect of or arise out of the same transaction or series of transactions; or (c) for any other reason it is desirable to make an order under this section’.³³ Lastly, certain States in the United States envisage the same option,³⁴ justifying the approach with efficiency and judicial economy.³⁵

Court-compelled consolidation could potentially provide recourse to parties seeking to consolidate their disputes, since neither legislator requires that the disputes are conducted under identical institutional rules. However, apart from being available in a limited number of jurisdictions, this option is unworkable for several reasons. First, even if one assumes that courts would consolidate disputes that are subject to distinct arbitration rules, it is unclear how the consolidated proceeding would unfold thereafter and which arbitration rules would apply to the consolidated proceedings. Furthermore, effective dispute resolution should ‘afford parties the opportunity to keep away from public knowledge such parts of their disputes or related facts that discretion may require to be so excluded’.³⁶ Inviting national courts to decide upon consolidation applications would inevitably deprive the parties of confidentiality.

B. The extent to which SIAC’s Proposal contributes to effective resolution of multi-party and multi-contract disputes

Complex arbitrations that concern multiple parties and/or contracts, and particularly those situations that involve disputes arising under related contracts that are subject to distinct arbitration rules, give rise to numerous questions. Since institutional rules offer no guidance on how to approach these cases, one may argue that all questions are ‘always best resolved by agreement between the parties’.³⁷ Unfortunately, parties tend to pay little attention to arbitration clauses, let alone to any details concerning consolidation of potential disputes, when negotiating their contracts.³⁸ Moreover, once the dispute has arisen, the parties’ interests are polarized and the chances of agreeing on consolidation are slim.³⁹ Without significant level of cooperation in cases ‘[w]here the contracts contain arbitration agreements that differ fundamentally’, parties will be unable to agree on consolidation.

SIAC’s Proposal addresses precisely this issue. Once the parties choose the rules of institutions that have agreed to the Cross-Institution Consolidation Protocol, they have effectively incorporated it into their contract. This approach contributes to efficiency, since no time is spent negotiating an agreement to consolidate neither when drafting the contract, nor once the disputes arise.

Moreover, the Proposal also saves time once the proceedings are consolidated, as parties need not duplicate their efforts in separate arbitrations. The Proposal, thus, allows for speedy resolution of related disputes that no other mechanism offers, as discussed in the preceding section, while eliminating the risk of inconsistent outcomes.

Whereas some critics question whether SIAC should have encompassed ad hoc arbitrations, this in no way decreases the Proposal’s effectiveness as recent data indicates that 86% of awards are rendered in institutional arbitrations, rather than through ad hoc arbitrations.⁴⁰

C. Suggestions to maximise effectiveness of SIAC’s Proposal

Requirement of identity of parties

The Proposal requires leading institutions ‘to reach agreement on the specific grounds for consolidation in the consolidation protocol, including on whether there should be a requirement for an identity of the parties’.⁴¹ Foregoing the requirement of identity of parties would certainly expand the range of cases that could be consolidated. Apart from speeding up the resolution of parties’ disputes, this option would also improve the overall efficiency of arbitration, thus tackling one of the main hurdles that it is currently facing.⁴²

Timing of the application

SIAC rightly acknowledges that various institutional rules differ regarding the timing of consolidation applications.⁴³ While some rules allow consolidation even after the arbitrators had been appointed in one or all disputes and others do not, the Proposal appears to leave this question open for further discussion among the representatives of leading arbitral institutions.

If consolidation is allowed after tribunals had been appointed in the cases that are sought to be consolidated, the cost-efficiency of the Proposal is jeopardised as one (set of) arbitrator(s) is superfluous.

The dismissed (set of) arbitrator(s) would undoubtedly require certain compensation.⁴⁴ Furthermore, any evidence that had already been presented would likely need to be re-introduced before the ‘new’ tribunal. Collection of evidence and repetition of other procedural steps would also certainly increase costs.⁴⁵

Although SIAC Arbitration Rules allow consolidation after the appointment of any arbitrators, in order to maximise the effectiveness of the Proposal, consolidation should occur prior to this moment.

II. The need (if any) for a SIAC-like proposal in the realm of investor-state arbitration

In investment arbitration, no mechanism for consolidating disputes brought under different procedural rules exists. This is unfortunate, since the same governmental measure may often give rise to numerous claims by closely related or even independent parties.⁴⁶ Conducting such proceedings separately creates the risk of conflicting outcomes and double-recovery,⁴⁷ especially when formally separate entities commence proceedings regarding the same investment.⁴⁸ The lack of an adequate mechanism also leads to the surely unwelcome duplication of efforts and waste of resources.⁴⁹ Consolidation of multiple proceedings, especially ones ‘where essentially the same evidence will be presented’,⁵⁰ is likely to address these concerns. Since existing mechanisms come short both in terms of achieving efficiency and avoiding contradictory results, investor-state dispute settlement could benefit from a SIAC-like Protocol. This section will discuss the considerations of efficiency and consistency (A), the inadequacy of existing procedural mechanisms (B), and the consolidation provisions in investment treaties (C).

A. Considerations of efficiency and consistency

During its relatively short existence, investor-state arbitration has produced an array of inconsistent decisions in related proceedings, thus giving substance to the frequent criticism of this type of dispute settlement. The growing number of unsatisfied investors, the ‘spaghetti bowl‘ of international investment agreements,⁵¹ and various procedural rules under which the disputes are conducted, make this outcome hardly surprising.

The most notable examples are the cases that CME Czech Republic B.V. v Czech Republic (‘CME’) and its owner, Robert Lauder, commenced against the Czech Republic in early 2000s. Although the claims were brought under different BITs, before distinct tribunals, the Arbitration Rules of the United Nations Commission on International Trade Law (‘UNCITRAL Rules’) applied in both cases and the Lauder v Czech Republic (‘Lauder’) arbitration ‘in substance dealt with the same dispute that is the object of [the CME] proceedings’.⁵² While the claimant attempted to consolidate or at least otherwise coordinate the two proceedings, the respondent State refused such proposals.⁵³ The tribunal in Lauder acknowledged that ‘[t]here might exist the possibility of contradictory findings of this Arbitral Tribunal and the one set up to examine the claims of CME against the Czech Republic under the Dutch-Czech Bilateral Investment Treaty’.⁵⁴ Indeed, the Tribunal in CME found expropriation, breaches of the fair and equitable treatment (‘FET’) and full protection and security (‘FPS’) standards and held the Czech Republic liable for arbitrary, unreasonable and discriminatory measures, awarding to the Claimant USD 270 million in damages. Conversely, the Tribunal in Lauder only found that the respondent ‘breached its obligations not to subject the investment to discriminatory and arbitrary measures’,⁵⁵ and denied all claims for damages.⁵⁶

A similar situation occurred in Burlington Resources Inc. v. Republic of Ecuador (‘Burlington’). Burlington wanted to consolidate (or at least coordinate) its proceeding with those of its Consortium partner, Perenco, against Ecuador. The underlying reason was that, in the arbitration filed by Perenco, Ecuador had ‘raised counterclaims essentially resting upon the same facts and legal arguments’ as those before the Tribunal in Burlington.⁵⁷ In Burlington, Ecuador opposed consolidation of the counterclaim proceedings because, although it acknowledged that ‘the two arbitrations were "parallel", it disagreed that they were "nearly identical"’.⁵⁸ Despite Burlington’s desire to reduce the risk of contradictory decisions, no consolidation occurred because the respondent State maintained its opposition to consolidation and stated that it was ‘too late’ for a coordination between the two tribunals’.⁵⁹

The stumbling block in CME/ Lauder, and Burlington was the respondents’ refusal to consolidate or otherwise coordinate proceedings. Moreover, Mr Lauder could have chosen to submit his claims under the ICSID Rules, as this was an option under the US-Czech Republic BIT,⁶⁰ which would have made consolidation stricto sensu impossible in any event. Apart from addressing situations of related disputes that proceed under different rules, a SIAC-like Proposal would also seek to eliminate a respondent State’s ability to sabotage efficient dispute resolution, as in CME/ Lauder and Burlington.

Another occasion where a consolidation protocol could have been necessary involves claims by French investors Suez and Vivendi, Spanish entity AGBAR and a British company AWG against Argentina. While the Argentina-France BIT and Argentina-Spain BIT called for the application of ICSID Rules, the Argentina-United Kingdom BIT provided for UNCITRAL Rules. Argentina did not consent to the extension of ICSID’s jurisdiction to AWG. However, unlike the Czech Republic in CME and Lauder, it agreed to have identical tribunals. Appointing same individuals eased the coordination of two proceedings.

Since the parties pleaded ICSID case No…. jointly with the UNCITRAL case, and filed joint memorials relating thereto and since the facts and the legal questions in both cases are virtually identical, the Tribunal had determined that it is appropriate to issue a single Decision on Jurisdiction covering both cases.⁶¹

The tribunal proceeded in the same way for the Final Award.⁶² Had Argentina insisted on having different tribunals, these two proceedings could have very well generated opposite outcomes.

The situation was different in Camuzzi v. Argentina and Sempra v. Argentina. Although the situation was similar to that of Suez and AWG (identical tribunals, same facts, different BITs), separate decisions on jurisdiction were rendered.⁶³ While the decisions were were simultaneous and similar, this very well might not have been the case.⁶⁴

Recently, a wave of Energy Charter Treaty (‘ECT’) claims hit Western Europe, making it the most sued region at ICSID in 2015 and 2016.⁶⁵ Reforms to solar energy subsidy regimes have led to 30 cases against Spain,⁶⁶ nine against Italy,⁶⁷ and seven against the Czech Republic.⁶⁸ Some of these disputes have been consolidated, but many are conducted separately.⁶⁹ The few awards and interim decisions that have been issued to date demonstrate the danger that separately conducted proceedings can cause. While the respondent received two favorable awards,⁷⁰ it has reportedly suffered a defeat in the third dispute.⁷¹

The above-mentioned examples are far from exceptional and parallel proceedings are bound to exist in a ‘world with different sovereignties, uncoordinated politically or, even less, judicially’.⁷² They demonstrate that investors ‘may well have a strategic interest in adjudicating a dispute in more than one forum’.⁷³ It is, thus, imperative to distinguish ‘between situations where multiple proceedings are "necessary to obtain adequate remedies" and those cases where an investor tries ‘to take advantage of the general lack of means to compel coordination of claims … for the purpose of maximizing its chances of success" in a manner that seems ‘undesirable from a general point of view’.⁷⁴ Respondent States, also, may prefer not to keep all eggs in the same basket. This, however, opens the door to uncertainty and undermines the already fragile legitimacy of investor-state arbitration. Considering the public attributes of these controversies, and the impact these disputes can have on states,⁷⁵ all efforts should be made to avoid the dissipation of resources and contradictory outcomes.

B. The inadequacy of existing procedural mechanisms

Lis pendens

Multiple arbitrations may be averted by arguing lis alibi pendens, which refers to a ‘situation in which parallel proceedings, involving the same parties and the same cause of action, are continuing in two different [fora] at the same time’.⁷⁶ The effectiveness of the principle in cases of parallel investor-state arbitrations, however, is questionable.

• First, the relevance of lis pendens in international arbitration is debatable. The principle is generally not considered to be part of customary international law,⁷⁷ and commentators opine that the concept is irrelevant to international arbitration because ‘there is no coherent and single international legal system and because the jurisdiction of arbitral tribunals has a consensual basis and is not provided by law as is the case for municipal courts’.⁷⁸ The Tribunal in SPP v. Egypt reasoned:

When the jurisdictions of two unrelated and independent tribunals extend to the same dispute, there is no rule of international law which prevents either tribunal from exercising its jurisdiction.⁷⁹

• Second, the applicability of lis pendens is limited.⁸⁰ The principle provides no remedy in cases of related disputes. Rather, it applies only when the requirement of ‘triple identity’ is satisfied.⁸¹ The Tribunal in Benvenuti & Bonfant v. Congo held that ‘there could only be a case of lis pendens where there was identity of the parties, object and cause of action in the proceedings pending before both tribunals’.⁸² The Tribunal in Lauder likewise refused to apply lis alibi pendens as ‘all the other court and arbitration proceedings involve different parties and different causes of action’.⁸³
• Additionally, the temporal scope of the principle is limited, as it only applies when proceedings are pending simultaneously.⁸⁴

Res judicata

Res judicata, like lis pendens, requires identity, i.e. ‘the "same" dispute, identical parties, the same subject matter and the same cause of action’.⁸⁵ And, like lis pendens, res judicata has its limitations.

Although res judicata is recognised as a ‘general principle of law in the meaning of Article 38(1)(c) of the Statute of the ICJ’,⁸⁶ its application has been sporadic,⁸⁷ and different views emerge as to the ‘identity’ requirements. For example, some tribunals opined ‘that the decisive test for determining whether two claims involve the same issues is legal and not factual’.⁸⁸ Conversely, some commentators view this distinction as artificial, preferring rather to consider ‘the underlying nature of the dispute and not its formal classification’.⁸⁹ The latter view would actually be helpful in situations that involve different treaties/rules, since disputes would be ‘considered a single identical dispute based on the same grounds when claims … relat[e] to the same factual background and invok[e] essentially the same legal theory’.⁹⁰ Nonetheless, this lack of uniformity in interpretation cannot be disregarded.

In the exemplary case for consolidation, CME , the Tribunal refused to apply res judicata, finding that ‘[b]ecause the two bilateral investment treaties create rights that are not in all respects exactly the same, different claims are necessarily formulated the two bilateral investment treaties create rights that are not in all respects exactly the same, different claims are necessarily formulated’.⁹¹

Similarly, in Desert Line v. Yemen, the tribunal declined to find res judicata, concluding that ‘although the economic essence of the claims in both the local and these international arbitral proceedings is [the same], Yemeni Arbitration and the present arbitral proceedings were brought pursuant to fundamentally different causes of action’.⁹²

Finally, testament to the fact that res judicata is unsuitable in situations of parallel disputes in general, and especially ones that are conducted under different procedural rules, is ICSID Tribunal’s refusal in SPP v. Egypt It to adopt findings of fact reached in an earlier ICC arbitration. The arbitrators held that the ICSID Rules required tribunals to make their own findings of fact.⁹³

The principle of comity

While disagreement as to whether provisions of the ICSID Convention or ICSID Arbitration Rules envisage unilateral suspension of arbitral proceedings,⁹⁴ it is undisputed that ‘in the interest of international judicial order, either of the tribunals in its discretion and as a matter of comity, decides to stay the exercise of its jurisdiction pending a decision by the other tribunal’.⁹⁵ The principle of comity is, thus, well-established in international law and it often serves as a basis for tribunals’ discretion to stay proceedings until related proceedings conclude.⁹⁶

Unlike lis pendens, no specific requirements for a stay of proceedings exist.⁹⁷ A stay is generally granted when parallel proceedings are sufficiently linked and similar.⁹⁸ While certain criteria do guide tribunals, arbitrators generally have a broad discretion in this regard.⁹⁹ This situation is troublesome, as different tribunals may have distinct criteria.¹⁰⁰ Thus, even if some objective criteria might weight in favour of staying proceedings (like duplication of costs and efforts), tribunals may refuse to make such an order if it would, for example, harm the other party.¹⁰¹ All of the above opens the door to a wave of inconsistencies.

Prohibition of abuse of process

The principle of prohibition of abuse of process is recognised in public international law and may be understood as ‘preventing ‘the use of procedural instruments or rights … for purposes that are alien to those for which the procedural rights were established’.¹⁰² Although this principle could potentially prevent investors from re-litigating same issues in multiple fora, tribunals tend to reject this argument when raised by respondents.¹⁰³

• In the Lauder case, the tribunal found no abuse of process in the multiplicity of proceedings that Mr Lauder and the entities he controls had commenced. The Tribunal held:

[T]he Arbitral Tribunal is the only forum with jurisdiction to hear Mr. Lauder’s claims based on the Treaty. The existence of numerous parallel proceedings does in no way affect the Arbitral Tribunal’s authority and effectiveness, and does not undermine the Parties’ rights.¹⁰⁴

• Similarly, a different tribunal found that the fact that ‘both investors [brought] deliberately separate and uncoordinated claims’, as argued by the respondent, did not constitute an abuse of process. It held that ‘to the extent that each investor considers that it has been harmed by a measure implemented by the respondent, it is their right under the BIT for each of them to assert their own claim’.¹⁰⁵ The fact that the respondent refused any type of coordination contributed to the Tribunal’s decision to reject the abuse of process argument.¹⁰⁶

Considering the above, the impact of the principle of abuse of process seems to be fairly limited, which is why commentators advise against its application in cases of simultaneously pending proceedings.¹⁰⁷

III. Consolidation in investor-state arbitration

Since consolidation is a relatively recent concept in investment arbitration,¹⁰⁸ rules and treaties which address this mechanism are fairly rare.¹⁰⁹ The first multilateral agreement which included rules on consolidation was the North American Free Trade Agreement (‘NAFTA’).¹¹⁰ Since then, investment chapters of certain free trade agreements, like the EU-Canada Comprehensive Economic and Trade Agreement (‘CETA’), the Transatlantic Trade and Investment Partnership (‘TTIP’) and the EU-Singapore Investment Protection Agreement (‘EU-Singapore IPA’), as well as certain BITs have included provisions on consolidation. Yet, some of the most commonly used rules, like the ICSID Rules, the ICSID Additional Facility Rules and the UNCITRAL Rules omit consolidation.¹¹¹

The following paragraphs give a brief overview of existing provisions on consolidation under NAFTA, several BITs, CETA, TTIP and the EU-Singapore IPA, and the Investment Arbitration Rules of the China International Economic and Trade Arbitration Commission (‘CIETAC IA Rules’).¹¹² CETA, TTIP and the EU-Singapore IPA reflect the current trend that aims to change current investor-State dispute settlement. Although CETA, TTIP and the EU-Singapore IPA have not yet come into force,¹¹³ their provisions on consolidation ought to be addressed not only because these agreements purport to change current investor-state dispute settlement, but also because they will soon replace exiting BITs between their contracting parties.¹¹⁴

While some provisions on consolidation in the below-mentioned legal instruments are more elaborate than others, covering issues like confidentiality, additional claims that are sought to be consolidated subsequent to consolidation, they generally follow a similar pattern:

• Generally, any disputing party may request consolidation.
• All rules envisage a consolidation tribunal which assumes jurisdiction over consolidated claims and has the power to stay other arbitral proceedings.
• The criteria for consolidating claims vary little.
• The UNCITRAL Rules seem to be the default; consolidation proceedings are governed by them either because the rules expressly so provide, or because the parties failed to agree otherwise.

One interesting distinction, however, seems to be the appointment procedure of the consolidation tribunal.

NAFTA

Article 1126, which is ‘probably the most sophisticated prototype of an investment arbitration consolidation provision’,¹¹⁵ entitles the tribunal to consolidate claims which ‘have a question of law or fact in common … in the interests of fair and efficient resolution of the claims’.¹¹⁶ Although Canada’s original proposal entitled only a State Party to request consolidation,¹¹⁷ the final text of the provision gives that right to any ‘disputing party’.¹¹⁸ Yet, neither party may appoint an arbitrator, or agree on the President.¹¹⁹ Rather, the Secretary-General of ICSID, within 60 days of receipt of the request, establishes a ‘Consolidation Tribunal’ which decides on the consolidation request.¹²⁰ This tribunal, composed of arbitrators from the NAFTA roster,¹²¹ assumes jurisdiction over all or part of the claims, and the ‘previously constituted tribunal loses jurisdiction to the extent of that assumed by the consolidation tribunal’.¹²² Although a claim under NAFTA may be submitted under the ICSID Convention, the ICSID Additional Facility Rules or the UNCITRAL Rules,¹²³ the consolidated arbitration is conducted under the UNCITRAL Rules.¹²⁴ The order of the consolidation tribunal is final.¹²⁵

To date, two consolidation tribunals have interpreted Article 1126, reaching opposite conclusions just a few months apart, whereas in Canfor Corp. v. USA it was granted.

• In Corn Products International, Inc. v. United Mexican States consolidation was denied. The Consolidation Tribunal stated that ‘[i]n order to issue an order of consolidation, it must first be “satisfied” that the claims have “a question of law or fact in common” ’, and if they do, that ‘the interests of fair and efficient resolution of the claims’ call for consolidation.¹²⁶ Only if both conditions are fulfilled would the Tribunal consolidate. While the first requirement was met,¹²⁷ the Tribunal did not find consolidation to be ‘fair or efficient’ for the following reasons: i) the ‘direct and major competition between the claimants’ would have required ‘complex confidentiality measures’, which would have made consolidation ‘extremely difficult’;¹²⁸ ii) the consolidation tribunal took note of the parties’ preferences;¹²⁹ and iii) the Tribunal concluded that ‘the risk of unfairness to Mexico from inconsistent awards resulting from separate proceedings cannot outweigh the unfairness to the claimants’.¹³⁰
• Conversely, in Canfor Corp. v. USA, the Tribunal dismissed the relevance of confidentiality concerns and parties’ preferences,¹³¹ and highlighted the importance of avoiding conflicting decisions.¹³²

Authorities disagree as to whether Article 1126 of NAFTA is mandatory¹³³ or discretionary;¹³⁴ the author is inclined to say the latter. Different tribunals should not have such drastically opposite interpretations of the same provision. Moreover, two other points to consider when creating a consolidation protocol are:

1. the fact that the impact of Article 1126 ‘is limited in that [it] only allow[s] the consolidation of proceedings initiated under the same treaty’;¹³⁵ and
2. the negotiations on NAFTA amendments, which include adopting CETA’s / TTIP’s ‘investment court‘ approach.¹³⁶

While Article 1126 has, indeed, been an ‘unusual and innovative’ provision¹³⁷ and may serve as inspiration, it ought to be adapted to the modern needs of investor-state arbitration.

Australia-Mexico BIT, the Czech Republic-Mexico BIT and the US Model BIT

Although Article 1126 of NAFTA may have inspired the drafters of subsequent treaties to include provisions on consolidation, it was not blindly copied. The three BITs discussed here all provide for the establishment of a consolidation tribunal and the application of the UNCITRAL Rules.

• The Czech Republic-Mexico BIT,¹³⁸ unlike NAFTA, provides no guidance as to the manner in which a tribunal of consolidation is to be formed, nor the time within which it needs to decide. It also omits to specify the party that may request consolidation. This is probably because, unlike Article 1126 of NAFTA, consolidation is mandatory. Article 13(2) of the BIT states that ‘[p]roceedings will be consolidated: (a) when two or more investors in relation with the same investment submit a claim to arbitration under this Agreement; or (b) when two or more claims are submitted to arbitration arising from common legal and factual issues’.¹³⁹ The tribunal however, refrains from consolidation if ‘it determines that the interests of any party to the dispute are seriously harmed’.¹⁴⁰
• The consolidation provision in the Australia-Mexico BIT¹⁴¹ differs from that of NAFTA as it allows the ‘Contracting Party’, meaning the responding State, to request consolidation. Article 15 of the Australia-Mexico BIT envisages a possibility of consolidation when common legal or factual issues exist.¹⁴² Additionally, it clarifies that the Secretary-General of ICSID would appoint the members of the tribunal,¹⁴³ and that such a tribunal ‘shall assume jurisdiction over all or part of the disputes’, whereas ‘the other arbitral proceedings shall be stayed or adjourned … if … to do so would best serve the interest of fair and efficient resolution’.¹⁴⁴ Interestingly, Article 15 of the Australia-Mexico BIT addresses a point that NAFTA does not; it empowers the tribunal to decide ‘whether to assume jurisdiction over all or part of a dispute falling within the scope of this Article which is submitted to arbitration after the initiation of consolidation proceedings’.¹⁴⁵
• The US Model BIT¹⁴⁶ enables ‘any disputing party’ to request consolidation in accordance with the agreement of all the disputing parties sought to be covered by the order when ‘the claims have a question of law or fact in common and arise out of the same events or circumstances’.¹⁴⁷ The request is submitted to Secretary-General of ICSID. A consolidation tribunal will be established, unless the Secretary-General deems the request to be manifestly unfounded.¹⁴⁸ Unlike NAFTA, where the Secretary-General appoints the entire consolidation tribunal, under the US Model BIT the Secretary-General chooses only the presiding arbitrator. Only if the respondent or claimants fail to appoint an arbitrator within 60 days after the Secretary-General receives a consolidation request, shall the Secretary-General appoint the missing arbitrator(s).¹⁴⁹

CETA, TTIP and the EU-Singapore IPA

All three treaties contain elaborate rules on consolidation. However, prior to addressing consolidation provisions of CETA,¹⁵⁰ TTIP¹⁵¹ and the EU-Singapore Investment Protection Agreement (‘IPA’),¹⁵² it is worthwhile briefly commenting on the dispute settlement mechanisms that these treaties create. The fact that these legal instruments envisage a new scheme for settling investor-state controversies might strongly influence the viability and utility of any SIAC-like Proposal in investor-state arbitration.

Driven by the ever-growing criticisms of investor-state arbitration, the drafters of CETA, TTIP and the EU-Singapore IPA have provided for ‘investment courts’.¹⁵³ All three treaties envisage a Tribunal (called the ‘Tribunal of First Instance’ under TTIP and the EU-Singapore IPA),¹⁵⁴ as well as an Appeal Tribunal.¹⁵⁵ The Tribunal of First Instance is composed of 15 members under CETA and TTIP,¹⁵⁶ and six members under the EU-Singapore IPA.¹⁵⁷ Under CETA and TTIP, five arbitrators are nationals of an EU Member State, five are nationals of Canada/USA and five are nationals of a third country.¹⁵⁸ The EU-Singapore IPA uses a somewhat different formulation. It provides that the EU Party nominates two Tribunal members, and two are nominated by Singapore.¹⁵⁹ The EU Party and Singapore jointly nominate the remaining two members, who may not be nationals of either Singapore or any EU Member State.¹⁶⁰ All cases, however, are heard by panels of three arbitrators.¹⁶¹ Investors may choose to bring claims under the ICSID Convention and Rules, ICSID Additional Facility Rules, the UNCITRAL Rules or any other rules upon which the disputing parties agree.¹⁶²

Under CETA, a disputing party or disputing parties jointly may request consolidation if two or more claims have ‘a question of law or fact in common and arise out of the same events or circumstances’.¹⁶³ The consolidating division of the Tribunal, which the President of the Tribunal constitutes, will order consolidation if it is satisfied that, apart from having a common legal/factual question and arising out of the same events/circumstances, ‘consolidation would best serve the interests of fair and efficient resolution of the claim including the interest of consistency of awards’ (emphasis added).¹⁶⁴

Since, like under NAFTA, investors may choose from a variety of arbitration rules, a question arises as to which rules would govern the consolidated proceedings if claims for which a consolidation order is sought have been submitted under different rules. Article 1126 of NAFTA does not address this issue expressly; it merely states that the consolidation tribunal will conduct the proceedings in accordance with the UNCITRAL Rules. Unlike NAFTA, CETA specifies that, in situations where claims have been submitted under different rules, the investors may collectively agree on one set of rules or, absent agreement within 30 days from the date the President of the Tribunal received the request, UNCITRAL Rules shall apply.¹⁶⁵

A further point worth addressing is that additional claims, that had not been consolidated, may be consolidated upon a written request to the Tribunal and after consulting the disputing parties, if (1) all conditions for consolidation are met, and (2) ‘such a request would not unduly burden or unfairly prejudice the disputing parties or unduly disrupt the proceedings’.¹⁶⁶

Lastly, Article 8.43(14) addresses the concerns that the Claimants in Corn Products expressed regarding confidentiality of protected information, which ultimately prevented consolidation. Some of the measures that a consolidating division of the Tribunal is entitled to take is to order that the documents be submitted in redacted form, or to hold parts of the hearing in private.

The consolidation provisions of TTIP and the EU-Singapore IPA largely resemble that of CETA. The major distinction is that under TTIP the party that may request consolidation is the respondent.¹⁶⁷

The CIETAC Investment Arbitration Rules

Following the entry into force of SIAC Investment Arbitration Rules (‘SIAC IA Rules’), CIETAC has created its own set of International Investment Arbitration Rules (‘CIETAC IA Rules’). Unlike the SIAC IA Rules, the CIETAC ones provide for consolidation in Article 31.

The provision resembles the above-mentioned treaty rules, the main difference being that CIETAC fulfils the role of the Secretary-General of ICSID. ‘Any party’ may request consolidation where two or more disputes involve ‘common questions of law or fact and such disputes arise out of the same events or circumstances’.¹⁶⁸ The request is submitted to the CIETAC Investment Dispute Settlement Center or the CIETAC Hong Kong Arbitration Center.¹⁶⁹ If CIETAC finds the request to be justified, it will constitute an arbitral tribunal within 30 days from the date of its receipt. This tribunal ‘may, in the interest of fair and efficient resolution of the disputes, and after consultation with the parties to the arbitrations, decide to consolidate arbitrations’.¹⁷⁰ Proceedings of the original arbitral tribunal can be stayed upon application of a party.¹⁷¹

IV. Aspects of a potential consolidation protocol

Form of a potential protocol

A practical question that needs to be resolved concerns the form that a protocol on consolidation may take.¹⁷² SIAC’s Proposal envisages that arbitral institutions would amend their rules to incorporate the consolidation protocol.¹⁷³ In the context of investor-state arbitration, this approach would entail amending existing BITs and free trade agreements. Although there had been suggestions in the past to compile ‘special rules on a consolidation facility’ which the ‘states could opt into … by way of provisions inserted in investment laws and treaties’,¹⁷⁴ this option would probably be unpopular. Not only would it be extremely inefficient and difficult to attempt amending nearly 3,000 international investment agreements,¹⁷⁵ but the efforts might also prove futile. Once treaties like CETA, TTIP and EU-Singapore IPA come into force, existing BITs will cease to have any effect, and so would the provisions on consolidation, if included therein. Perhaps, provisions on consolidation could be included in the treaties that will replace BITs. While less time consuming, this option would likewise fail to contribute to uniformity in investor-state arbitration. CETA, TTIP and EU-Singapore IPA are all at different stages of adoption and it is no longer possible to include additional clauses in some of them.

A more realistic solution would be to create a Protocol to which interested States could accede. Similar to what was suggested in relation to earlier proposals for creating a unified investment framework, ICSID Member States could take the lead in negotiations, with others joining later.¹⁷⁶

Some might criticise this approach as being time-consuming, both in terms of negotiating/drafting and gaining wide-spread recognition. Admittedly, the New York Convention took sixty years to gain traction with 159 countries.¹⁷⁷ Some might also refer to the ‘ill-fated Multilateral Agreement on Investment (‘MAI’), negotiated in the 1990s among OECD Members’,¹⁷⁸ which contained express provisions for consolidation of related arbitrations. While these endeavours either took decades to become virtually universally accepted, or never materialized, this need not fetter new initiatives. As S. Constain noted ‘the growing discontent with the current system … the growing convergence towards certain disciplines in investment protection, as well as the proliferation of bilateral and regional trade and economic cooperation agreements’ have provided fertile soil for renewed efforts.¹⁷⁹

Numerous time-consuming suits with contradictory outcomes have demonstrated the downsides of not having a single, updated and consistent framework.¹⁸⁰

Scope of application

As aptly stated by Professor Schreuer, ‘[e]xceptionally, claims arising from the same overall transaction between the same parties but subject to several jurisdictional instruments may call for consolidation’. ¹⁸¹ A SIAC-like Protocol would primarily address these unique situations, i.e. where claims have been brought under (a) the same treaty but different procedural rules, and (b) different treaties and different procedural rules. The scenario of different treaties and same procedural rules need not be addressed, as there is no need to reconcile distinct rules on consolidation and it is already happening in practice. A SIAC-like Protocol would, nonetheless, serve as a useful guide to tribunals that are conducting proceedings under arbitration rules which omit consolidation provisions.

The consolidation protocol would apply to all cases which concern States that have adopted it. Although authorities warn that when ‘the arbitration clauses are different or refer to different institutional rules … it cannot be assumed that there is an advance agreement to consolidate’,¹⁸² the Protocol would resolve this problem. As was stated by the Tribunal in Canfor:

In investment arbitration based on a treaty containing a consolidation provision, the consent given to treaty arbitration is deemed to include consent to consolidation.¹⁸³

Similarly, a State’s consent to the Protocol would entail its application in all disputes in which that State is involved. This, certainly, does not mean that cases will be automatically consolidated; rather, a party wishing to consolidate several proceedings would need to submit a justified request.

The consolidation process

While existing provisions on consolidation provide for different solutions, the prevailing trend seems to be to allow any disputing party to submit a request for consolidation. While case law shows that investors are more likely to wish to consolidate, examples to the contrary exist,¹⁸⁴ and states should not be deprived of this opportunity.

Criteria for consolidation that are found in numerous treaties do not differ drastically, hence it is likely that a consensus on common requirements would easily be reached. Among the mentioned rules, CETA’s elaborate provision on consolidation seems to both reflect the prevailing views on consolidation, and to remedy some deficiencies that have emerged from the practice of NAFTA tribunals. Rules of other treaties, however, likewise address certain concerns that have been raised in the past. I would, therefore, propose the following two-tier test:

1. the person/entity to whom a request (e.g. Secretary-General of ICSID) is submitted must not find it to be manifestly unfounded; ¹⁸⁵ and
2. the consolidation tribunal must deem that i) claims have a question of law or fact in common; ii) claims arise out of the same events or circumstances, and iii) consolidation would best serve the interests of fair and efficient resolution of the claims, including the interest of consistency of awards.¹⁸⁶

The first step will allow a neutral party to review the request prior to launching the whole consolidation procedure. Considering that consolidation tribunals might take a few months to render a decision,¹⁸⁷ only justified requests should pass to the second stage. Therefore, the first step purports to filter unmeritorious requests for consolidation, thus saving time and cost.

The second step encompasses two conditions which appear in most examined treaties and rules. Although many provisions refer to ‘fair and efficient resolution of the claims’,¹⁸⁸ it may be worthwhile looking to the newer treaties, which specifically include the ‘interest of consistency of awards’.¹⁸⁹ Absent this specification, tribunals might consider this factor, as the consolidation tribunal did in Canfor, or diminish its relevance, as the consolidation tribunal in Corn Products. Commentators have criticised the arbitrators’ stance in Canfor, arguing that ‘[h]ad the systemic interest of promoting uniformity of decisions been intended to be a key criterion, the drafters could readily have provided for it’. Considering that inconsistency is frequently mentioned as a downside of arbitration, a consolidation protocol in investment arbitration should highlight its importance.

Other factors which would fall under the ‘fair and efficient resolution’ are the number of disputes that are sought to be consolidated, the parties’ relationship, and the stages in which the disputes are. If the parties are corporate affiliates or have a common shareholding, it is ‘more likely that grounds for consolidation will be strong’.¹⁹¹ Yet, if the disparities in the stages of different proceedings are great, consolidation would seem unfair.¹⁹²

While SIAC’s Proposal considers the relevance of the number of disputes, it does so for the purposes of determining which institution’s rules should apply to the consolidated arbitration. Here, rather, the number of disputes would be relevant when deciding in favour or against consolidation:¹⁹³ ‘The larger the number of claims, the greater the burden on the respondent in defending against these claims’.¹⁹⁴ Although financial inequality is generally not considered as an element of the parties’ equality,¹⁹⁵ for the purposes of consolidation, it cannot be overlooked.

Critics of consolidation often raise confidentiality concerns, because ‘a joined party may have access to protected information, such as business secrets to which it would not otherwise have been privy’.¹⁹⁶ While two NAFTA tribunals had diverging views on this issue,¹⁹⁷ this discussion has been put to rest. First, because as stated in Canfor ‘exceptional cases where confidentiality would defeat efficiency of process or would infringe the principle of due process …are not likely often to occur’’¹⁹⁸ Second, any confidentiality risk may be avoided through a variety of measures, like submission of redacted versions of documents containing confidential or protected information and holding parts of the hearing in private.¹⁹⁹ In any event, and as put by A. Diamond, ‘the factor of confidentiality is a reason why the power should always be exercised with caution; it is no reason for objecting altogether to a proposed and much needed reform’.²⁰⁰

In some cases, however, confidentiality concerns arise in a different context. In Cairn, the Respondent raised the issue, since the same counsel represented the Claimants in two separate proceedings. According to the Respondent, it was ‘ludicrous to suggest that two Parties linked by an indemnity provision which may lead to litigation … are not sharing information’.²⁰¹ Although attempts at ‘quasi-consolidation’ failed,²⁰² it is evident how confidentiality could factor in a decision on consolidation. Considering the wide variety of situations in which these concerns may arise, I would refrain from saying that confidentiality is a factor that must be considered, or, conversely, that is irrelevant. Rather, issues of confidentiality should be taken into account whenever they cannot be addressed by tribunal’s above-mentioned measures.

Decision-maker

SIAC’s Protocol provides that a joint committee, appointed from members of the Courts or Board of the concerned arbitral institutions, decides on applications for consolidation. Once consolidation is ordered, only one institution administers the proceeding under its rules, and an arbitral tribunal continues with the arbitration. The situation in investment arbitration is similar in that there is a separate ‘body’ (consolidation tribunal or consolidating division of the tribunal), distinct from arbitral tribunals, that decides on consolidation. This consolidation tribunal is generally appointed either by the Secretary-General of ICSID alone, or jointly with the parties.

The difference between SIAC’s Protocol and existing rules on consolidation in investment arbitration, however, is that a consolidation tribunal, should it decide to consolidate, assumes jurisdiction over the dispute. Considering that the role of the consolidation tribunal is larger than that of a joint committee, a ‘consolidation tribunal’ should be envisaged in a potential protocol. In light of the concern that too much power might be concentrated in the hands of the Secretary-General of ICSID (e.g. under NAFTA),²⁰³ the US Model BIT’s approach where the Secretary-General of ICSID only chooses the presiding arbitrator should be preferred.

The upside to having the parties participate in the appointment of the consolidation tribunal is that it would gain more legitimacy. Additionally, it would minimise the concerns that some have regarding appointments by Secretary-General.²⁰⁴

The problem, however, with this approach is that claimants from different countries would need to agree on one arbitrator. Alternatively, if the consolidation tribunal is expanded in order to accommodate the rule of some treaties that parties may appoint arbitrators who are nationals of the same country as them, then e.g. two claimants could appoint two arbitrators, and the Respondent could appoint another two arbitrators, whereas the Secretary-General of ICSID would choose the president. A limit to this expansion, however, must exist, because proceedings could easily become neither cost- nor time-efficient.

It is questionable who would compose the consolidation tribunal in situations when claims that are sought to be consolidated are brought under (a) CETA, TTIP and EU-Singapore IPA and (b) CETA and, e.g. Canada-Russia BIT. As already mentioned, these treaties establish their own ‘investment court’ mechanism. It would likely displease the proponents of the ‘investment court’ system if claims that are brought under CETA were ultimately decided by all-so-criticised arbitration panels.

To have an impact in investor-state arbitration, a potential consolidation protocol would clearly need to provide a solution that is acceptable across the board. However, it also ought to take into account the particularities of emerging mechanisms.

Rules applicable to the consolidated proceeding

All treaties examined above allow investors to choose from a variety of procedural rules when filing a claim. Most of them, however, do not address the situation of having two disputes brought under the same treaty, but different rules. They merely state that the consolidation tribunal applies the UNCITRAL Rules. Some instruments, like CETA and the EU-Singapore IPA envisage the application of the UNCITRAL Rules only if the parties could not agree.²⁰⁵

The first factor for determining the rules under which the consolidated proceeding will be conducted should, in my view, be the agreement of the parties. Should the parties fail to choose one set of rules, the consolidation protocol could either (a) provide for the UNCITRAL Rules or, (b) mirroring the approach of the SIAC Proposal, could envisage certain criteria on the basis of which the consolidation tribunal would opt for particular rules. Option (a) is probably more acceptable, since the UNCITRAL Rules are neutral and do not purport to advance the agenda nor increase the caseload of any particular arbitral institution. Option (b), on the other hand, is problematic.

First, it is hard to imagine which criteria would be acceptable; half of the criteria that the SIAC Proposal envisages (subject matter, jurisdiction, nationality/domicile of the parties)²⁰⁶ are unsuitable for the investment arbitration setting. Even if certain guidelines existed, it is possible that the rules chosen could not apply to the claims of all parties (e.g. in case of the ICSID Convention and Rules).

Whether a certain set of rules, e.g. the ICSID Convention and Rules, has primacy over the others is a question that option (b) may give rise to. Referring to Article 26 of the ICSID Convention, Professor Toope concluded that ‘once ICSID arbitration is commenced ‘resort to alternative, even subsequently agreed upon, arbitral adjudication is excluded as in any attempt to involve municipal jurisdiction’.²⁰⁷ Assuming that the different criteria from the protocol pointed to the UNCITRAL Rules, Professor Toope’s interpretation of Article 26 may preclude their application. If so, would ICSID Convention and Rules then apply even to non-ICSID claims? In the past, states have refused to extend ICSID jurisdiction to non-ICSID cases,²⁰⁸ and understandably so. The distinctive feature of ICSID arbitration is that ‘monetary obligations arising from ICSID awards must be recognized and enforced in all Contracting States as if they were final judgments of the local courts’.²⁰⁹

Concerns a potential protocol would raise

One of the goals that SIAC’s Proposal seeks to achieve is to avoid inconsistent decisions. While decisions in commercial arbitration are mostly confidential and, thus, the problem of inconsistent awards is acute, in investment arbitration decisions are usually public. Considering that tribunals will generally be aware of decisions rendered in related proceedings (unless they are unpublished), the question arises as to what is the added value of the consolidation facility.

Furthermore, SIAC’s Proposal purports to make dispute resolution more efficient. In investment arbitration, however, it is doubtful whether consolidated proceedings would achieve this goal.

Apart from certain conceptual difficulties that may arise, it remains to be decided how a protocol would co-habit with the new investment treaties between the EU, Canada, USA and Singapore. For example, Art. 8.18(5) CETA says that ‘[a] Tribunal constituted under this Section shall not decide claims that fall outside of the scope of this Article’. Would this article preclude consolidation of non-CETA claims? Would the fact that it is the EU, and not the investor, who determines the identity of the Respondent under Art. 8.21 CETA,²¹⁰ affect the chances of consolidation? These, and many more questions, would require serious discussion among all relevant actors.

Conclusion

Not that long ago, there were very few rules that dealt with joinder, consolidation and third-party intervention. Scholars argued that institutions should not provide for consolidation in their rules as that would be ‘a radical departure from the accepted practice of arbitration’. ‘An institution that adopts this practice’, they thought ‘may undermine its appeal to parties that would otherwise wish to designate it to conduct the arbitration’.

The predominant trend of including rules on consolidation among arbitral institutions and their growing caseloads demonstrate that those fears were unfounded. As Mr Hanotiau points out, ‘one should not exaggerate the difficulties raised by resolving disputes pertaining to interdependent contracts … The problems they create are not always complex ones, and even if they are, more often than not an acceptable solution is found’. In international commercial arbitration, SIAC’s Proposal is that solution.

In the realm of investor-state arbitration, a similar initiative would likewise be welcome. Admittedly, a SIAC-like Proposal might not necessarily improve the speed of dispute resolution significantly, since ‘consolidated proceedings are bound to last longer than a separate arbitration’.²¹⁵ However, it would purport to remedy the problem of inconsistent outcomes by providing guidelines for consolidating related disputes that are subject to distinct rules.

Nonetheless, although desirable, a SIAC-like Proposal in investor-state arbitration might face too many bumps on the road to acceptance. Unless all relevant actors cooperate in creating this Protocol and bringing it into life, the flaws of the present ISDS system might have to be addressed through some other vehicles.