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investment claim (
eg.
alleged breach of the fair and equitable standard to be accorded
to investors).
15
The majority of investment arbitrations are not publicly announced, making the
extent to which parallel proceedings may be occurring difficult to ascertain from the
perspective of an outside observer. It should be noted, however, that the BITs offer
protection not only to direct investments made by the nationals of BIT States but
also extend to indirect investments made by enterprises which could be under the
control of nationals coming from a non-BIT party. The share capital of a company
established in the host State as a necessary vehicle for investment may be divided
up amongst many minority shareholders of different nationalities, which does not
exclude the eventual possibility for the host State to face various simultaneous claims,
under different BITs, regarding the same State measures.
16
Therefore, the broadly
fashioned definition of an investor qualified to assert his claims in investment
arbitration is one of the most frequent causes actuating parallelism.
As emphasized in this section of the paper, parallel proceedings, within the area
of investment arbitration, are regarded as, “multiple legal proceedings concerning
one state’s alleged breach of a particular investment law obligation with respect
to the same investor or investors”.
17
With reference to the nature of international
investment, the broad notion of the term “investor” and the complexity of investment
and contractual obligations taken up by the States, it needs to be emphasized that
parallel proceedings can emerge without any substantial difficulty in cases involving
dealings between investors and States.
3. Making Use of Parallel Litigation in Investment Arbitration
When analyzing parallelism in investment arbitration, one of the crucial
questions has to be: who has (or who can) have an interest in the frustration of any
pending proceedings by triggering parallel litigation? The various scenarios in which
parallel litigation may arise can be motivated by a number of incentives, which range
from the possibility to “extend” the dispute into another forum to the possibility
of seeking remedial measures. As will be presented later on in this section, parallel
proceedings are sought by the parties when:
• they aim to gain a certain advantage which can be used subsequently in
the first proceedings (such as additional access to information or defence
strategies);
15
R. F. Hansen,
supra
note 10, p. 527.
16
B.M. Cremades, I. Madalena,
supra
note 3, p. 2. It is necessary to note that the Tribunal in
CMS
v Argentina
is often cited for its decision concerning the non-controlling minority shareholders’ right
to bring a claim. In this case the Tribunal took a pioneer approach based on recognition of the rights
of minority shareholders rights since their investment qualifies as an “investment” for the purposes of
protection offered to investors through the ICSID Convention and BITs. See
CMS Gas Transmission
Company and The Republic of Argentina
, Case No. ARB/01/8, (42 ILM 788), Decision of the Tribunal
on Objections to Jurisdiction, 17 July 2003.
17
R. F. Hansen,
supra
note 10, p. 532.