CYIL 2014

380

ZUZANA JAHODNÍKOVÁ

–

MILOŠ OLÍK

CYIL 5 ȍ2014Ȏ

As has been argued, inside investment arbitration there is a lack of a

lis pendens

concept which would take into account the corporate nationalities of investors

and would therefore protect States from facing parallel arbitrations commenced by

subjects sharing a genuine link to one investment. One of the textbook examples

of how parallel litigation can be detrimental to States in investment arbitration has

been the awards issued in the

Lauder

and

CME Czech Republic B.V.

arbitrations

The cardinal issue which arose out of two different BITs concluded by the Czech

Republic was represented by two proceedings held in parallel against the same

state and relating to the same subject matter. The symbolic bone of contention was

licences tendered to broadcasters and interference with broadcasting rights granted

by the Czech authorities in the early 90’s.

The applicable licence was granted to the CET 21 company, which was controlled

by the CME Company CZECH REPUBLIC, incorporated under Dutch law. The

majority shareholder of this company was Mr. Lauder, who happened to be a national

of the United States of America. Mr. Lauder commenced London based arbitral

proceedings pursuant to the BIT concluded between the United States and the Czech

Republic. Subsequently CME, pursuant to the opportunities offered in the Dutch-

Czech BIT, went ahead and launched a second arbitration against the Czech Republic,

with the appointed place of arbitration to be in Stockholm. This did not prevent the

tribunal from continuing the proceedings, since the three-tier test failed to show the

identity of the cases (The Tribunal did not regard the parties to be identical.).

Also the Swedish Court of Appeal did not take into account a more flexible

approach towards the emanation of the term “investor“ and concluded that: “

The issue

whether lis pendens and res judicata may be applicable in a situation such as the instant

one has not, as far as is known, arisen previously. The mere fact that the arbitrations were

initiated under different investment treaties which were entered into between different

states, the Czech Republic and the United States in the one treaty and the Czech Republic

and the Netherlands in the other, militates against these legal principles being applicable

at all. […] Identity between a minority shareholder, albeit a controlling one, and the

actual company cannot, in the Court of Appeal’s opinion, be deemed to exist in a case

such as the instant one. This assessment would apply even if one were to allow a broad

determination of the concept of identity.”

As some authors concluded, „the

CME

and

Lauder

cases were the object of

severe criticism“

. Nonetheless, neither of the adjudicating parties

repudiated the

Ronald S. Lauder v. The Czech Republic

, Ad hoc-UNCITRAL Arbitration Rules, Final Award of 3

September 2001.

CME Czech Republic B.V. v. The Czech Republic

, Ad hoc-UNCITRAL Arbitration Rules, Partial Award

of 13 September 2001 and IIC 62 (2003), Final Award of 14 March 2003.

CME v. the Czech Republic

, Swedish Court of Appeal, Decision dated 15 May 2003, Case No T 8735-01,

paras. 95, 98.

B. M. Cremades, I. Madalena,

supra

note 3, p. 8.

Notwithstanding the approach taken by the two different Tribunals in the

CME

and

Lauder

cases,

the Czech Republic

de facto

rejected consolidation proceedings (Award,

supra

note 62, para. 173: “the