CYIL 2014

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. 18 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. 19 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. 18 B.M. Cremades, I. Madalena, supra note 3, p. 15.

19 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.

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