Parallel proceedings in international arbitration Day 2

1. Arbitration Academy Special course Session 2012 Prof. Gabrielle Kaufmann-Kohler Parallel proceedings in international arbitrationDay 2

2. Outline of today’s class • Res judicataand lis pendens 1.1 Res judicata • Concept • Requirements 1.2 Lis pendens • Concept and requirements • Consolidation 2.1 Concept: Consolidation of proceedingsdistinguishedfromagregation of claims 2.2 Requirements 2.3 Illustration: Canfor v. USA 2.4 Limitations and assessment

3. 1.1 Res judicata 1.1.1 Concept • A dispute cannotbeadjudicatedtwice • General principle of law • Art. III NYC: « Eachcontracting state shallrecognize arbitral awards as binding […] ». • Issue preclusion / estoppel v. claim preclusion

4. Requirements • bars re-adjudicationprovidedthereis triple identity: • identity of facts • identity of cause of action • identity of parties

5. 1.2 Lis pendens 1.2.1 Concept and requirements • Corollary of res judicatawhenbothproceedingsstillpending • Sameidentity tests

6. Defensebefore courts in Europe « 1. Whereproceedingsinvolving the same cause of action and between the same parties are brought in the courts of differentMember States, any court otherthan the court first seisedshall of itsown motion stayitsproceedingsuntilsuch time as the jurisdiction of the court first seisedisestablished. 2. Where the jurisdiction of the court first seisedisestablished, any court otherthan the court first seisedshalldeclinejurisdictionin favour of that court. » (Art. 27 Council Regulation (EC) N° 44/2001 [Brussels Regulation]) • Implies courts / tribunals of competentjurisdiction

7. 1.2.2 Applicability in arbitration? • Only one arbitral tribunal of competent jurisdiction • E.g. “It [the arbitral tribunal] shall decide on its jurisdiction notwithstanding an action on the same matter between the same parties already pending before a state court or another arbitral tribunal, unless there are serious reasons to stay the proceedings.” (Art. 186(1)(bis) Swiss PILA) • Assessment

8. 2.3Related action / Connexitydefense / forum non conveniens • Before courts in Europe « 1. Whererelated actions are pending in the courts of differentMember States, anycourt otherthan the court first seisedmaystayitsproceedings. 2. Wherethese actions are pendingat first instance, any court otherthan the court first seisedmayalso, on the application of one of the parties, declinejurisdictionif the court first seised has jurisdiction over the actions in question and itslawpermits the consolidation thereof.

9. 3. For the purposes of this Article, actions are deemed to berelatedwheretheyalsosocloselyconnectedthatitisexpedient to hear and determinethemtogether to avoid the risk of irreconcilablejudgmentsresultingfromseparateproceedings. » (Art. 28 Brussels RegulationI) • Applicability in arbitration? • Assessment

10. Consolidation 2.1 Concept • Consolidation of two / severalpendingproceedingsinto one • As opposed to claims underdifferent instruments (e.g. twocontracts) brought in one arbitration – broad dispute resolution clause and compatibility of dispute settlementsystems

11. 2.2 Requirements – Commercial arbitration Article 10 ICC Rules 2012: Consolidation of Arbitrations a) the Court may, at the request of a party, consolidatetwo or more arbitrations pendingunder the Rulesinto a single arbitration, where the parties have agreed to consolidation; or b) all of the claims in the arbitrations are made under the same arbitration agreement; or • where the claims in the arbitrations are made under more than one arbitration agreement, the arbitrations are between the same parties, the disputes in the arbitrations arise in connectionwith the samelegalrelationship, and the Court finds the arbitration agreements to be compatible. […]

12. Article 4 SRIA 2012 : Consolidation and joinder 1. Where a Notice of Arbitration is submitted between parties already involved in other arbitral proceedings pending under these Rules, the Court may decide, after consulting with the parties and any confirmed arbitrator in all proceedings, that the new case shall be consolidated with the pending arbitral proceedings. The Court may proceed in the same way where a Notice of Arbitration is submitted between parties that are not identical to the parties in the pending arbitral proceedings. When rendering its decision, the Court shall take into account all relevant circumstances, including the links between the cases and the progress already made in the pending arbitral proceedings. Where the Court decides to consolidate the new case with the pending arbitral proceedings, the parties to all proceedings shall be deemed to have waived their right to designate an arbitrator, and the Court may revoke the appointment and confirmation of arbitrators and apply the provisions of Section II (Composition of the Arbitral Tribunal). […]

13. 2.2 Requirements - Investment arbitration Article 1126(2) NAFTA « Where a Tribunal established under this Article is satisfied that claims have been submitted to arbitration under Article 1120 that have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims, and after hearing the disputing parties, by order (a) assume jurisdiction over, and hear and determine together, all or part of the claims; or (b) assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others. »

14. 2.3 An illustration: Canfor v. USA • Facts • Issue • Outcome

15. 2.4 Limitations? Assessment?

16. The End