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

a more favourable arbitration clause. The Tribunal rebuffed the argument by stating

that, “the access to arbitration does not fall within the scope of the MFN clause”.

they had approached only the arbitral tribunal, the investor would probably have lost

the possibility to later litigate in front of a national court.

In contrast, assuming that a State aimed to obtain an injunction limiting an

investor’s possibility to advance with arbitration against it, the national courts would

be willing, under some circumstances, to issue such a restriction. Having established

this precondition, one may look at the ICSID practice and analyze whether litigation

before such a respected centre for dispute resolution, in fact, did adopt a sustainable

approach when it came to fighting parallel proceedings. One of the seminal cases

elaborating on this issue is undoubtedly

SGS v. Pakistan.

Despite the fact that the

local court exercised its power in order to forestall an investor’s attempts to litigate

in front of an arbitral tribunal, the injunction failed because the Tribunal claimed

its responsibility to safeguard the investor’s right to access international litigation

in front of an independent tribunal formed in accordance with the arbitration

agreement, and declared itself to be the patron, “for the proper operation of both

the BIT and the ICSID Convention”.

Therefore, an injunction aiming to repudiate

the ICSID arbitral proceedings would seem to be irreconcilable with the obligation

stipulated under Article 26 of the Washington Convention, in which the parties to

the Convention undertake to give “consent to such arbitration to the exclusion of

any other remedy”.

Having discussed the possibility that an investor may intercede

with an injunction, an investor could attempt to persuade the Tribunal to proceed

with litigation without recognizing the issued measure.

Accordingly, all attempts of States would share the same destiny of being doomed

to failure due to the overriding principle of the precedence of international law over

national law.The precondition of this conclusion is based on the fact that international

law and principles anchored therein create a somewhat respected immunity from the

leverage derivable from local courts. This has the consequence that international law

takes precedence over national law applicable at the seat of arbitration which creates

a somewhat independent and detached position for international arbitration.

Austrian Airlines v. the Slovak Republic

, Final Award dated 9 October 2009, para. 140.

SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan

, Case No. ARB/01/13.

Procedural Order No. 2 of October 16, 2002, 18

ICSID Rev.

–

FILJ

293 (2003); 8 ICSID Rep. 388

(2005).

Article 26 of the Washington Convention, as an expression of the exclusion of any other methods

applicable to dispute resolution once ICSID litigation has been chosen, represents, in conjunction

with Article II of the New York Convention, a valuable tool against the potential threats of parallel

proceedings.

Some authors argue that the cases

Himpurna California Energy v. Republic of Indonesia

and

Salini

Construttori

S.P.A. v. The Federal Democratic Republic of Ethiopia

can be used to demonstrate the will

of the arbitral tribunals to create a neutral forum for dispute resolution given that the tribunals derive

their power to adjudicate a dispute from the arbitration clause and from the concurrence of will of

the parties expressed therein to resolve the dispute via a method other than the usual national judicial

procedure. Additionally, according to Garnett, such an approach is reminiscent of the ‘delocalized’