CYIL 2014

ZUZANA JAHODNÍKOVÁ – CYIL 5 ȍ2014Ȏ (or a state-owned enterprise). Given the fact that the contract comprises various rights and promises upon which the legitimate expectation of an investor may rely, it is needless to say that in the case of a contract breach, the investor will also seek to litigate contractual breaches. 4 Despite the fact that BIT breaches may result in multiple litigations which could grow in magnitude, claims do not end at this stage; contractual obligations can add up to a problem which can be denominated under the heading of “parallelism”. In practice, investment tribunals may also either reach different results concerning the same or similar facts and measures adopted by the host State, such as in CMS, LG&E, Sempra, Enron v. Argentina , 5 or they may come to contradictory results in situations where the dispute is litigated by a subsidiary and his mother company, such as in CME/Lauder v. Czech Republic. 6 Given the autonomy of investment tribunals and their capacity to assess the dispute, their decisions and opinions on a case may substantially differ even when the legal issues under their scrutiny are the same or very similar legal issues. 7 This leads to a number of novel questions which, in order to apprehend the background to proceedings held in parallel, have to be both asked and subsequently answered while assessing parallelism. The authors will attempt to assess not only the basic premise upon which the notion of parallelism lies, but also measures aiming to foresee and target the negative effect of multiple proceedings. The authors aim to confirm their hypothesis that despite the fact that there are viable instruments which could facilitate the prevention of parallel proceedings, their usage and regulation should be encouraged more strongly in order to facilitate the increase of their effectiveness. Considering the paramount significance of the EU, one can hardly 4 According to Cremades and Madalena, whereas contract breach refers to a breach of a contractual obligation by the State or its entities, a violation of BITs or of other international investment instruments are based on the breach of a public international obligation. Ibid , p.9. 5 LG&E ENERGY CORP., LG&E CAPITAL CORP., LG&E INTERNATIONAL INC. and Argentine Republic , ICSID Case No. ARB/02/1, CMS Gas Transmission Company v. Argentine Republic , ICSID Case No. ARB/01/8, Sempra Energy International. v. Argentine Republic , ICSID Case No. ARB/02/16, Enron Creditors Recovery Corporation (formerly Enron Corporation) and Ponderosa Assets, L. P. v. Argentine Republic, ICSID Case No. ARB/01/3. As to the multiplicity of tribunals, the CMS Tribunal noted in this respect that “ the Centre has made every effort possible to avoid a multiplicity of tribunals and jurisdictions, but that it is not possible to foreclose rights that different investors might have under different arrangements. .” CMS v. Argentina, ICSID Case No. ARB/01/8, Decision on Jurisdiction, July 17, 2003, 42 ILM 788 (2003), para. 86. 6 Ronald S. Lauder v. The Czech Republic , Ad hoc-UNCITRAL Arbitration Rules, Final Award of 3 September 2001 and 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. 7 As an example one can name the SGS v. Pakistan and the SGS v. Philippines , where two ICSIDTribunals reached two contradictory conclusions when assessing the character of an “umbrella clause”. Whilst the first held that a breach of a contract does not automatically amount to a breach of international law, the later decided that a breach of BIT by the host State is failure to observe existing binding commitments. See: SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan , Case No. ARB/01/13 and SGS Société Générale de Surveillance v. Republic of the Philippines, ICSID Case No, ARB/02/6. MILOŠ OLÍK

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