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AND NEVER THE TWAIN SHALL MEET: PARALLEL ARBITRAL AND COURT PROCEEDINGS…
Given the particular character of investment protection, one has to take into
account that the approach towards the classical test of parties’ commonality, causes
of action and requested relief has to be applied in a modified manner. Commonality
of parties is seen when arbitrations are initiated by the same investor(s), including
those of the same constructive identity as evidenced by a control test or other
means.12 One might effortlessly apprehend that, whilst an individual’s nationality
is easily established by the respective law, the question of the definition of corporate
nationalities in investment arbitration has generated a substantial mass of case law.
Therefore, it would be advisable to reconsider whether the BITs or other investment
treaties should not assess the question as to whether or not entities are so intertwined
and similar as to be seen, and indeed regarded, as a single subject.13 When it comes
to the cause of action a specific measure adopted by a State can result in the breach
of several BITs at the same time. This one action attributable to the State could
subsequently trigger the actions of the investors. As to relief, it is discernible that
investors seek primarily monetary relief which should compensate the damage caused
by the inference with their rights.
One important feature is that parallel proceedings may arise entirely within one
state’s domestic law, or involve the legal systems of more than one state, or they can
involve proceedings at public international law, or even involve proceedings at both
public international law and domestic law. They may also take the form of proceedings
adjudicated by judges, arbitrators or both. With such a multitude of options and
variations, parallel litigation can arise in many forms and ways. 14 In investment
arbitration, an investor’s consent to arbitrate is expressed when the investor brings
a claim against the host state. The scope of investment treaty arbitration jurisdiction
is thus primarily limited by the nationality of the investor (which must match a treaty
party state of the investment treaty cited in the claim), the definition of investor and/
or investment and the treaty’s particular enumerated grounds for the initiation of an
12 Ibid, p. 532.
13 On the nationality of investors, see: Ch. Schreuer, “Nationality of Investors: Legitimate Restrictions vs.
Business Interests”, available at:
pdf; accessed: 5 February 2013.
14 Parallel proceedings may arise in at least twelve different scenarios, as listed in the chart expressing
the types of parallel proceeding scenarios in R. F. Hansen, supra note 10, p. 530. Each and every
scenario poses a distinct challenge to the adjudicators, since there can be uniform litigation (such as
parallel litigation within one state, parallel litigation in jurisdictions in different countries, parallel
litigation at multiple international tribunals, and parallel litigation at domestic and international law
levels. Uniform arbitration can be the case if parallel arbitrations are seated within one state, or seats
in different countries, or if there are (treaty or contract based) investment arbitrations with or without
a diversity of applicable law. The last four are concluded by simultaneous litigation and arbitration
within one state or different countries, by parallel investment arbitration and international litigation,
and parallel investment treaty arbitration and domestic litigation (or vice versa). For the chart and
an analysis of individual scenarios which pose distinct challenges to the adjudicators faced with such
proceedings, as well as to lawmakers seeking to provide guidance to adjudicators, see R.F. Hansen,
supra note 10, p. 530.