CYIL 2014

369

AND NEVER THE TWAIN SHALL MEET: PARALLEL ARBITRAL AND COURT PROCEEDINGS…

• there is a need for one (or both) of the parties to seek new forums after the

first set of proceedings are considered to be “exhausted or frustrated”;

• the party pursues “remedial proceedings” or “precautionary proceedings”

(such as proceedings at the seat of arbitration or proceedings before national

courts of the host State).

Turning back to the defining elements, one cannot label this phenomenon as

an accidental and uncommon event (in the manner of a departure from a rule or a

dismissible auxiliary occurrence); and, thus, the situations where parties can expect

parallel litigation may be described as follows:

• The existence of a BIT and BIT-interlocked or independent contracts containing

a variety of arbitration clauses which were concluded under one main umbrella

legal relationship (BIT litigation and contract litigation are interlinked and

often tend to be the source of parallel proceedings when investors commence

proceedings dealing with BIT breaches before arbitral tribunals and court

proceedings before national courts);

• When a party does not deem the final award to be sufficient, or the final

award does not encompass all of the questions raised in the course of the

proceedings;

• Other forums come across as more suitable for the litigation and give the

investor or the host States the opportunity to fend off the course of the

proceedings which were initiated first by opening a new set of proceedings.

In investment arbitration it is not uncommon to come across cases where

investors make use of parallel proceedings in order to obtain additional information

from the host States in order to ease their burden of proof in cases adjudicated

before other bodies. These “speculators” elicit the State to use valuable information

in its defence which subsequently poses the investor in an advantaged position.

Although a lot of attention has been paid to investors and their attempts to assert

claims in parallel proceedings, one cannot disregard the fact that States too might

take advantage of the existence of pending parallel proceedings. Firstly, the State

can reconsider its defence presented in the first set of proceedings and learn from

the shortcomings which occurred in the course of the earlier litigation. States can

also often look for opportunities to shift proceedings to their advantage and how to

further the protection of their interests, which often may interfere with an investor’s

rights. This situation has resulted in a host State displaying an interest in seeking

means that would re-establish any lost balance and provide remedial relief, even if the

parallel proceedings were initiated by an investor aiming to claim an infringement of

rights that was committed by the host State.

B.M. Cremades, I. Madalena,

supra

note 3, p. 15.

One of the crucial aspects of every litigation is the consistency of arguments. When dealing with

parallel proceedings the parties aim for a consistent and persuasive argumentation to be presented to

the adjudicators. Even if dealing with “speculators” States often endeavour to follow the consistent line

of their defence strategy. Every variation and deviation from the concerted line of argumentation can

have a crucial impact on the outcome of the dispute.