CYIL 2014

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: http://www.univie.ac.at/intlaw/wordpress/pdf/nationality_investors. 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.

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