At the ICC Institute’s Annual Meeting in 2009, the Institute for the first time considered the subject of so-called "class arbitration," but on a limited basis in the context of its examination that year of the broader topic of multiparty arbitration. At the time, "class arbitration" had received the apparent blessing of a divided United States Supreme Court in the case of Green Tree Financial Corp. v Bazzle, 1and this prompted widespread speculation about the possible expansion of class arbitration outside the boundaries of the United States.

But then, in 2010, in the case of Stolt-Nielsen S.A. v AnimalFeeds International Corp.,2the US Supreme Court dealt the first of a series of setbacks to the use of class arbitration. While the Supreme Court left parties free to agree to class arbitration, a majority of the Supreme Court concluded that "class action arbitration changes the nature of arbitration." Thus, class arbitrations would be allowed to proceed only where the parties agreed expressly to such a process. It was widely expected within the United States that class arbitration as a phenomenon would gradually wither away.

Nevertheless, Professor S.I. Strong, a speaker on this subject at the Institute’s 2009 conference and again in 2015, commented, after the Solt-Nielsen decision was issued, that it was "by no means clear that the procedure [of class action arbitration or procedures like it] will either fade from use or remain limited to the United States." 3

Writing six years ago, Professor Strong postulated that there were "at least three good reasons for thinking that the device [of class arbitration] will expand beyond US borders in one form or another in the not so distant future," 4even though the use of arbitration for the resolution of classes of claims or groups of claims of comparable size was then (and still is) virtually unknown outside the US.

First, she observed that the global legal community was "facing an unprecedented amount of interest in issues involving large-scale group injuries."

Second, she noted that class arbitration was "no longer limited to domestic US disputes," and she referred to different types of international class arbitrations that had already been brought, including, most notably, the international arbitration initiated by 195,000 Italian bondholders against Argentina in 2007. 5

Third, as she further indicated "courts, commentators and legislatures in a variety of different jurisdictions have already begun to discuss the merits of allowing some form of class arbitration to develop within their borders."

Six years later, the ICC Institute considered that it was timely to review these postulates, in the light not only of the experience gained in the United States and in international investment cases since the Institute’s 2009 Annual Meeting, but also specific developments in relation to certain types of group actions in Spain and Germany.

SO WHAT HAVE WE LEARNED?

Broadly speaking, we have been left to conclude that, while the arbitration of "large-scale disputes" (of a class, group or other collective nature) garners mixed reviews and still has an uncertain future, it is unlikely to disappear. As we were told by the U.S. speakers, class arbitration has continued to thrive in the United States, notwithstanding an increasingly inhospitable legal environment and opposition from large corporations that have chosen arbitration as a dispute resolution mechanism for the very purpose of avoiding exposure in the U.S. courts to actions for class-wide relief. Meanwhile, interest outside the United States in various forms of collective recourse, albeit in limited, specific circumstances, has continued to develop, in the absence of existing judicial mechanisms such as those available in the United States. Thus, this conference and the discussions that transpired have generally been a testament to the prescience of Professor Strong six years ago.

From the discussions that occurred, it can reasonably further be concluded that the future of class and group arbitration is likely to be shaped by the answers to three broad questions.

First, are there certain categories of claims in respect of which collective redress is desirable? The answer to this question would appear to be uncontroversial: certainly, this is the case, in particular where no other mechanism exists for the cost-effective resolution of such claims or for their resolution with comparable efficiency. As one of the speakers noted in relation to the Argentine bond cases brought before ICSID, efficiency and access to justice militated in favor of trying to find a way to make a collective process work in those cases, failing which the claimants could be deprived of an effective mechanism for enforcing their substantive rights.

Second, where collective redress is desirable, does arbitration have a role to play in providing appropriate such redress? This requires the consideration of any possible advantages (or disadvantages) of arbitration in this regard, and, as to this, our conference provided no definitive answers. However, in a cross-border context, arbitration will, at a minimum, generally offer the advantages, as it does in respect of other matters, of (i) a neutral forum and (ii) the protections of treaties such as the New York and Washington Conventions, not to mention the usual procedural flexibility.

Third, where arbitration is perceived as preferable to judicial recourse, how can it be made to work fairly and effectively in a class or group claim setting? As we learned from our international investment arbitration panel, two concerns are fundamental in this regard: first, ensuring that the consent of all those participating or represented is obtained (either on an opt-in or opt-out basis) and second, ensuring that due process is respected. Lurking in the background of such proceedings there will always be a legitimate concern about their potential for procedural abuses, although the fairness and reasonability of the procedures adopted will need to be weighed against the benefit of broader access to justice that such proceedings are likely to confer.

In this regard, the experience of class arbitration in the United States and of mass or group claims in the international investment arbitration arena, together with new experiences in Germany, Spain or elsewhere, will continue to inform our views on this topic. As this conference has demonstrated, we still have much to learn from each other in respect of an area of arbitration practice that will continue to develop and evolve in the future.

1
539 U.S. 444 (2003).

2
130 S. Ct. 1758 (2010).

3
Strong, SI, "Class Arbitration Outside the United States : Reading the Tea Leaves," Multiparty Arbitration , eds. Hanotiau and Schwartz (ICC 2010), 183.

4
Id.

5
Beccara v Argentine Republic, ICSID case no. ARB/07/5.