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__ , ‘Interpretation of the Umbrella Clause in Investment Agreements’, OECD Working Paper (2006) Footnotes ?I would like to offer my sincere appreciation and thanks to my colleagues in the ILA Committee on Foreign Investment, Thomas W?lde and Jackie van Haersolte-van Hof, for their very valuable comments on this chapter. 1 Mark Friedman in his presentation on parallel proceedings at the 2006 ICCA Conference in Montreal stated that he was able to locate and review awards in 78 ICSID cases and found evidence of parallel proceedings in 41% of them: see M Friedman, ‘Related Dispute Resolution Regimes: Parallel Proceedings in BIT Arbitration’, Draft, 31 May 2006 (on file with the author). 2 The risk of parallel proceedings could also arise in the case of multi-party consortia which may include not only project sponsors but also financing institutions and possibly other participants. 3 Mr Lauder had made an investment in the Czech Republic through a Dutch intermediary holding company that he controlled, CME Czech Republic BV. It was alleged that the investment had been expropriated. Two arbitrations were commenced: one under the US-Czech Republic BIT by Mr Lauder; the other under the Netherlands-Czech Republic BIT by CME CR BV. For the purposes of the expropriation claims, the facts were the same in each arbitration. The Lauder tribunal issued its Final Award on 3 September 2001 finding the Czech Republic not liable. The CME tribunal issued a Partial Award on Liability on 13 September 2001 finding against the Czech Republic and holding it liable to pay damages. In the second (quantum) phase of the CME arbitration, the Czech Republic argued that the Lauder Final Award had a res judicata effect on questions of liability. 4 See Lauder v The Czech Republic , Final Award (3 September 2001) at para 172. 5 The CME tribunal likewise rejected the Czech Republic's argument that Mr Lauder had impermissibly ‘treaty shopped’: ‘The argument of abusive treaty shopping is not convincing. A party may seek its legal protection under any scheme provided by the laws of the host country. The Treaty, as well as the US Treaty, is part of the laws of the Czech Republic and neither of the treaties supersedes the other. Any overlapping of the results of parallel process must be dealt with on the level of loss and quantum but not on the level of breach of treaty’. CME Czech Republic BV v The Czech Republic , Final Award (14 March 2003) at para 419. 6 .CMS Gas Transmission Company v The Republic of Argentina ICSID case No. ARB/01/8, Decision on Objections to Jurisdiction, in 42 ILM 788 (2003), available at <http://www.asil.org/ilib/cmsargentina.pdf>. The CMS Gas Transition Company (‘CMS’) purchased shares of an Argentine company, Transportadora de Gas del Norte (‘TGN’), pursuant to Argentina's privatization programme in 1995. Argentina argued that CMS lacked standing to file its claim because it was merely a minority non-controlling shareholder and thus did not have standing to claim damages suffered by TGN. The tribunal ruled that the Convention did not require control over a locally incorporated company in order to qualify under the Convention. It also ruled that the Convention does not bar a claim brought by a minority non-controlling shareholder such as CMS, observing that previous ICSID tribunals in also finding jurisdiction had ‘not been concerned with the question of majority [ownership] or control but rather whether shareholders can claim independently from the corporate entity’. The tribunal answered this question in the affirmative. CMS , ibid at para. 55. 7 Other tribunals examining cases brought against Argentina came to the same conclusion. See Lanco Int'l Inc v Argentina Republic , Preliminary decision on jurisdiction, 40 ILM 457, 463 (2001). 8 This may occur when in addition to investor-state arbitration, inter-state dispute settlement is possible before the ICJ, for instance, after an espousal of the investor's claim by the home state. An attempt at such an espousal in addition to the investor-state arbitration was rejected by the tribunal in the case Banro American Resources Inc v Democratic Republic of Congo . In this case, the Canadian parent company—having the nationality of a non-contracting state and consequently no standing before an ICSID tribunal after the dispute had arisen—transferred the investment to the US subsidiary having such standing, a measure which made it possible for the Banro Group to benefit from both diplomatic protection and ICSID arbitration. The tribunal found that there were questions of international public policy involved and declined jurisdiction to hear the request of the US subsidiary. It stated that it ‘cannot allow the requirements of nationality imposed by the Washington Convention to be neutralised by investors who are seeking to avail themselves, depending on their own interests at a given point in time, simultaneously or successively, of both diplomatic protection and ICSID arbitration, by playing on the fact that one of the companies in the group does not have the nationality of a Contracting State party to the Convention, and can therefore benefit from diplomatic protection by its home State, while another subsidiary of the group possesses the nationality of a Contracting State to the Convention and therefore has standing before an ICSID tribunal’. Banro v Congo, ICSID Case No. ARB/98/7, Award on jurisdiction, 1 September 2000, at para 25. 9 On this topic see the detailed analysis of Jacomijn J van Haersolte-van Hof and Anne K Hoffmann, ‘The Relationship between International Tribunals and Domestic Courts’, ch 24 above. 10 B Hanotiau noted that ‘ … it is true that even if the ICC Rules of Arbitration do not contain any provisions concerning res judicata, it would be difficult to imagine the ICC International Court of Arbitration approving a second arbitral award between the same parties on the same subject matter that contradicts a prior award already approved by the Court’. B Hanotiau, ‘The Res Judicata Effect of Arbitral Awards’, in Complex Arbitrations: Perspectives on their Procedural Implications (Special Supplement—ICC Int'l Court of Arb Bull, 2003) at 49. 11 See A Reinisch, ‘The Use and Limits of Res Judicata and Lis Pendens as Procedural Tools to Avoid Conflicting Dispute Settlement Outcomes’, 3(1) The Law and Practice of International Courts and Tribunals (2004). 12 In his dissenting opinion in the Chorzow Factory case before the PCIJ, Judge Anzilotti referred to res judicata as one of the ‘general principles of law recognised by civilised nations’, in the sense of Art 38 of the PCIJ Statute. See Interpretations of Judgements Nos 7 & 8 concerning the case of the Factory at Chorzow, 1927 PCIJ Ser A No. 11, at 27, 16 December (Dissenting Opinion of Judge Anzilotti). B Cheng, General Principles of Law as Applied by International Courts and Tribunals (Cambridge, Cambridge University Press, 1953) also noted that: ‘There seems little, if indeed any question as to res judicata being a general principle of law as to its application in international judicial proceedings’. See also Vaughan Lowe, ‘Res Judicata and the Rule of Law in International Arbitration’, 8 African J Int'l Comp L 38 (1996); Yuval Shany, The Competent Jurisdictions of International Courts and Tribunals (Oxford, Oxford University Press, 2003); Hanotiau, above n 10; Reinisch, above n 11. 13 W Dodge, ‘National Courts and International Arbitration: Exhaustion of Remedies and Res Judicata under Chapter Eleven of NAFTA’, 23 Hastings Int'l & Comp L Rev (1999–2000) at 357. 14Ne bis in idem—‘not twice for the same’—no legal action can be instituted twice for the same cause of action. It is a general concept originating in Roman Civil Law—but also found in common law jurisdictions. It is usually used in criminal law. 15ILA Committee on International Commercial Arbitration, Interim Report on ‘Res Judicata and Arbitration’ (Berlin, 2004). 16 See G Sacerdoti's Expert Opinion in CME Czech Republic BV v The Czech Republic, published in 2(5) TDM (2005) at 109: ‘Under public international law, res judicata has a limited recognition, as equivalent to “finality” of a decision, but that it does not prevent a different adjudicatory body, absent a specific treaty provision to the contrary, from hearing either in parallel or subsequently a dispute being substantially the same than another one, previously examined by another body, if this body has competence in accordance with its own jurisdictional basis’. 17 See cases cited in the ILA Interim Report on Res Judicata, above n 15: Effect of Awards of Compensation Made by the United Nations Administrative Tribunal (1954) ICJ Report 47 at 53; Case Concerning the Arbitral Award Made by the King of Spain on 23 December 1906 ( Honduras v Nicaragua ) 1960 ICJ Rep 192; South West Africa Case (1966) ICJ Rep 4 at 240; Request for Interpretation of the Judgment of 11 June 1998 in the Case Concerning the Land and Maritime Boundary between Cameroon and Nigeria ( Cameroon v Nigeria ), (1999) ICJ Rep 31 at 39; Maritime Delimitation and Territorial Questions between Qatar and Bahrain, (2001) ICJ Rep para 303. 18 See cases cited in the ILA Interim Report on Res Judicata, above n 15: Case 14/64, Mrs Emilia Gualco v High Authority of the European Coal and Steel Community [1965] ECR 51; Cases 172, 226/83, Hoogovens Groep v Commission [1985] ECR 2831; Cases 358/85, 51/86, France v Parliament [1988] ECR 4846 at 4849–50. See also KPE Lasok, The European Court of Justice: Practice and Procedure (London, Butterworths, 2nd edn, 1994) at 219. 19Pious Fund of the Californias ( US v Mexico ), Hague Ct Rep (Scott) 1 at 5 (1902); Trail Smelter ( US v Canada ), 3 RIAA 1905 at 1950 (1935). 20Southern Pacific Properties (Middle East) Ltd v Egypt, 3 ICSID Rep 112 (1985) and 3 ICSID Rep 131 (1988). 21Amco Asia Corp v Indonesia (Resubmission: Jurisdiction), ICSID, 89 ILR 552 at 560. The Tribunal in this case was confronted with the situation where an ICSID award rendered in an earlier stage of the same proceedings accorded limited res judicata effect to the decisions of the Annulment Committee (recognizing the nullification of the first award but refusing to follow the reasoning adopted by the Committee during re-litigation). 22Waste Management Inc v United Mexican States (II) (Mexico's Preliminary Objection) ICSID Case No. ARB(AF)/00/3, 26 June 2002 41 ILM 1315. 23Waste Management Inc v United Mexican States (I) , Case No. ARB(AF)/98/2 (26 May 2000). 24Plama Consortium Ltd v Republic of Bulgaria , ICSID Case No. ARB/03/24, Decision on Jurisdiction, 8 February 2005, at paras 180–1: ‘any decision rendered by the Tribunal will be binding upon PCL as well as on Bulgaria and will be res judicata between the parties. If Dolsamex is found to be the owner of the shares of PCL, it may have a claim against the company or against Mr. Vautrin; but the Tribunal does not see how PCL, with new shareholders, could successfully make the same claims against the Respondent as in the present arbitration or reopen the Tribunal's decision’. 25 See eg I Brownlie, Principles of Public International Law (Oxford, Clarendon Press, 6th edn, 2003) at 50, where he states that ‘There is no effect of res judicata from the decision of a municipal court so far as an international jurisdiction is concerned …’. 26ILA Committee on Commercial Arbitration, Recommendation 3(40) (Toronto, 2006). 27 See Reinisch, above n 11. 28Certain German Interests, 1925 PCIJ (Ser A) No. 6 at 20; Chorz?w Factory, PCIJ (Ser A) No. 17, at 27; The Mox Plant ( Ireland v UK ) Order of 3 December 2001, 41 ILM (2002) 405. 29The Mox Plant Case ( Ireland v UK ), Request for Provisional Measures, ITLOS, Case No. 10, 3 December 2001, at para 51. 30CME , Final Award, above n 5 at 433. 31 See Reinisch, above n 11. 32 Ibid . 33Amco v Indonesia , Decision on Jurisdiction, 25 September 1983, 1 ICSID Reports at 389. 34Klockner v Cameroon , Award, 21 October 1983, 2 ICSID Reports at 9. 35 C Schreuer, The ICSID Convention: A Commentary (Cambridge, Cambridge University Press, 2001) Art 25, para 216. 36 G Sacerdoti in his Expert Opinion in CME Czech Republic BV v The Czech Republic noted that the cases Amco v Indonesia and Klockner v Cameroon involved indeed a local subsidiary incorporated in the host state. However, ‘the protection granted to the foreign investor for investments made through a local company in the host state was not dependent on an “economic approach” drawn from the group of companies theory. These decisions constitute an application, in conformity with the ICSID Convention object and purpose, of an accepted notion of general international law’. Sacerdoti, 2(5) TDM (2005) at 110–27. 37 In this case, the arbitral tribunal found a lack of identity of parties between one case brought by a company against the Republic of Congo, and a second case brought by the Government of Congo against the shareholder of the company SARL Benvenuti & Bonfant v People's Republic of Congo (Case No. ARB/77/2) 15 August 1980, VIII YB Com Arb 145 (1983) at para 1.14. 38 Sacerdoti, ‘Expert Opinion’, above n 16 at 110–27. 39CME , Final Award, above n 5 at para 432. 40 Shany, above n 12. 41 D Reichert, ‘Problems with Parallel and Duplicate Proceedings: The litispendence Principle and International Arbitration’, 8(3) Arb Int'l 237 (1992) concluding that ‘Decisions of arbitral tribunals on lis pendens are generally too sparse and contradictory to constitute in any way representative statements of an accepted practice amounting to a procedural rule for international arbitration’. 42 See Reinisch, above n 11; Shany, above n 12; V Lowe, ‘Overlapping Jurisdiction in International Tribunals’, 20 Australian YB Int'l L 191 (1999); P Mayer, ‘Litispendance, connexit? et chose Jug?e dans l'arbitrage international’, in J-D Bredin, P Lative, JF Poudret, and F Terre (eds), Liber Amicorum Claude Reymond (Paris, Litec, 2004). 43 Agreed Minutes between the Czech Republic and the Netherlands at 3, as referred to in Sacerdoti, above n 16. 44ILA Committee on International Commercial Arbitration, ‘Final Report on Lis Pendens and Arbitration’ (Toronto, 2006). 45 In international commercial arbitration, some consider the very concept of lis pendens a logical impossibility. This view has been increasingly challenged. In the landmark decision in Fomento de Construcciones y c Contratas S.S. v Colon Container Terminal SS , the Swiss Federal tribunal unhesitatingly cast aside doubts on the applicability and advisability of lis alibi pendens in international arbitration and stated that the rules regarding competing jurisdiction of national courts are applicable, by analogy, to competing jurisdiction between a national court and an arbitral tribunal. See E Geisinger and L L?vy, ‘Lis Alibi Pendens in International Commercial Arbitration’, in Complex Arbitrations—Special Supplement, ICC Int'l Court of Arb Bull (2003) at 53. 46 Sacerdoti above n 16. 47Southern Pacific Properties (Middle East) Ltd. v Egypt , above n 20. 48 Shany notes that, although this reasoning might seem consistent with previous case-law since the case involved competition between an international tribunal and a domestic court, ‘there was nothing in the dicta of the tribunal to indicate that the tribunal limited its view to that particular category of jurisdictional competition only, and it could be cited in support of the view that international law does not recognise the lis alibi pendens rule at all’. See Shany, above n 12. 49 The decision to suspend proceedings rather than to decline jurisdiction is based on an earlier observation by the tribunal according to which one of the problems of parallel proceedings might be that both competing fora would end up declining jurisdictions, leaving the applicant without an effective remedy—‘negative conflict of jurisdictions’. 50Decision on Jurisdiction I, 27 November 1985, 1 ICSID Reports 112 at 129, para 84. 51Benvenuti & Bonfant Ltd v Congo , 1 ICSID Rep 330, 340 (1980). 52 Friedman in his presentation at the ICCA 2006 Conference in Montreal found the tribunal's reference to Benvenuti & Bonfant‘intriguing because it was not a fork in the road clause or even an investment treaty clause. … the award contains no real exploration of the lis pendens rule. The Azurix tribunal applied these lis pendens principles to interpret a treaty based on the fork in the road provision’. Friedman, above n 1. 53 The tribunal cited as authority: Certain German Interests in Polish Upper Silesia, Jurisdiction (1925) PCIJ, Series A, No. 6, at 20 (PCIJ jurisdiction not barred by the existence of separate proceeding); American Bottle Company ( US v Mexico ), (1929) 4 RIAA 435 at 437 (submission to another tribunal of an identical dispute between the same parties has no effect on tribunal's jurisdiction) and SSP (ME) Ltd v Egypt , First Decision on Jurisdiction, 27 November 1985, 106 ILR 502 at 529. 54 C Schreuer, ‘Calvo's Grandchildren: The return of Local Remedies in Investment Arbitration’, 4 The Law and Practice of Int'l Courts and Tribunals (January 2005) and C Schreuer, ‘Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road’, 5 (2) JWIT 231 (2004). 55 Guatemala has notified ICSID that it requires the exhaustion of local administrative remedies as a condition of its consent to arbitration under the Convention (2003). 56 See Romania-Sri Lanka BIT, Argentina-Spain BIT Art X(3)(a), and Emilio Augustin Maffezini v The Kingdom of Spain , Decision on Jurisdiction, 25 January 2000, 16 ICSID Rev—FILJ 203 (2001). 57 See France-Argentina BIT (Art 8.2): ‘If such dispute could not be solved within six months from the time it was stated by any of the parties concerned, it shall be submitted at the request of the investor: either to the national jurisdictions of the Contracting Party involved in the dispute; or to investment arbitration … . Once an investor has submitted the dispute either to the jurisdictions of the Contracting Party involved or to international arbitration, the choice of one of the other of these procedures shall be final’. 58 See eg the following cases: Olguin v Paraguay ; Vivendi v Argentina ; Genin v Estonia ; Lauder v the Czech Republic ; Middle East Cement v Egypt ; CMS v Argentina ; Azurix v Argentina ; and Enron v Argentina . For a more detailed and complete description of these cases and analysis of this provision, see Schreuer, above n 54. 59 The question one could ask is whether the fork in the road corresponds somehow to the treaty formulation of the lis pendens principle and should therefore be interpreted accordingly. 60 P Turner, ‘The “Fork in the Road” Revisited’ in F Ortino, A Sheppard, and H Warner (eds), Investment Treaty Law, Current Issues, Vol 1 (London, BIICL, 2006) at 177–82. 61 C Soderlund, ‘Multiple Judicial Proceedings and the Energy Charter Treaty’, in C Ribeiro (ed), Investment Arbitration and the Energy Charter Treaty (Huntington, NY, JurisNet, LLC, 2006). 62 Provisional measures: ‘Except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party’. 63 Interim measures of protection: ‘A Tribunal may order an interim measure of protection to preserve the rights of a disputing party, or to ensure that the Tribunal's jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party or to protect the Tribunal's jurisdiction. A Tribunal may not order attachment or enjoin the application of the measure alleged to constitute a breach referred to in Article 1116 and 1117. For purposes of this paragraph, an order includes a recommendation’. 64‘An investor may seek interim relief, not involving the payment of damages, from the judicial or administrative tribunals of a Contracting Party, for the preservation of its rights and interests pending resolution of the dispute, without being deemed, thereby, to have submitted the dispute for resolution for purposes of subparagraph 4(b)’. DAFFE/MAI/EG1(96)12 ‘Settlement of disputes between an investor and a contracting party’. 65Art 26(2)(3). 66Art 10.18. 67Art 10.17. 68Art 10.17. 69 C Brower and J Sharp, ‘Multiple and Conflicting International Arbitral Awards’, 4 J WIn 211 (2003). 70 In his comments on a draft of this chapter, Thomas W?lde noted that an investor can only waive ‘his/her right’ and not those of somebody else. For instance, if a minority shareholder, even one with a controlling influence, waives his/her right, this may create a potential conflict of interest situation if the other shareholders do not agree with that waiver. 71Robert Azinian et al v Mexico , Award, 1 November 1999 (Case No. ARB(AF)/97/2) ) at para 86. 72 However, due to the fact that NAFTA Article 1135 limits a Chapter 11 tribunal to awarding damages, restitution, and costs, there is a possibility for a certain ‘claim splitting’ to be allowed: a foreign investor may bring a NAFTA claim for damages and at the same time or afterwards seek injunctive relief in domestic courts, since it cannot be granted by NAFTA tribunals. See Dodge, above n 13. 73Waste Management Inc v Mexico (I) , above n 23. 74 Ibid at para 27, 235–6. 75Waste Management Inc v Mexico (II) , above n 22, at para 29. 76 For a comprehensive discussion and analysis on umbrella clauses, see AC Sinclair, ‘The Origins of the Umbrella Clause in the International Law of Investment Protection’, 20(4) Arb Int'l (2004); Schreuer, above n 54; T W?lde, ‘The Umbrella Clause in Investment Arbitration—A Comment on Original Intentions and Recent Cases’, 6(2) J W In T (2005); W Ben Hamida, ‘La clause relative au respect des engagements dans les trait?s d'investissement’ (May 2005) at 21 (draft on file with author); E Gaillard, ‘Centre international pour le reglement des differends relatifs aux investissements (CIRDI): chronique des sentences arbitrales’, Journal du droit int'l 219 (2006) at 326–50; and Jacomijn J van Haersolte-van Hof and Anne K Hoffmann, Ch 24 above. 77 As Professor W?lde notes: ‘The question of whether an international arbitration tribunal had jurisdiction over contractual counter-claims was never fully examined, nor was the question of whether contractual jurisdiction clauses should oust—or precede—the jurisdiction of treaty-based tribunals’. W?lde, above n 76. 78 The first ICSID case that addressed, but did not analyse, the umbrella clause arose in 1998: Fedax NV v Republic of Venezuela (Case No. ARB/96/3) based on the BIT between the Netherlands and the Republic of Venezuela. In this case, the tribunal was unaware that there was an umbrella clause, and did not carry out any in-depth examination of the clause or its application. It simply applied the ‘plain meaning’ of the provision, that commitments should be observed under the BIT, to the promissory note contractual document. It found that Venezuela was under an obligation to ‘honour precisely the terms and conditions governing such investment, laid down mainly in Article 3 of the Agreement, as well as to honour the specific payments established in the promissory notes issued’. Fedax v Venezuela , Award, 9 March 1998, at para 29. The merits of the case were partially settled by the parties. 79 K Yannaca-Small, ‘Interpretation of the Umbrella Clause in Investment Agreements’, OECD Working Paper (October 2006). 80SGS Soci?t? G?n?rale de Surveillance, SA v the Republic of the Philippines , ICSID Case No. ARB/02/6, Decision on Jurisdiction, 29 January 2004; Waste Management Inc v United Mexican States (II) , ICSID Case No. ARB (AF)/00/3, Award, 30 April 2004; Consorzio Groupement LESI-DIPENTA c. R?publique alg?rienne d?mocratique et populaire , ICSID Case No. ARB/03/08, Award, 10 January 2005; Sempra Energy International v Republic of Argentina , ICSID case No ARB/02/16, Decision on Objections to Jurisdiction, 11 May 2005; Eureko BV v Poland , Partial Award, 19 August 2005; Noble Ventures, Inc. v Romania , ICSID Case No. ARB/01/11, Award, 12 October 2005; and LG&E Energy Corp., LG&E Capital Corp, LG&E International Inc v the Argentine Republic , ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006. However, the tribunals in CMS v Republic of Argentina , ICSID Case No ARB/01/8, Award, 12 May 2005; El Paso International Energy Company v the Argentine Republic , ICSID Case No. ARB/03/150, Decision on Jurisdiction, 27 April 2006; and Pan American Energy LLC and BP Argentina Exploration Company v Argentine Republic , Decision on Preliminary Objections, 27 July 2006, are the only ones so far faced with a ‘proper’ umbrella clause, ie ‘any obligation’, which adopted a narrow interpretation. 81SGS Soci?t? G?n?rale de Surveillance, SA v Pakistan , ICSID Case No. ARB/01/13, Decision on Jurisdiction, 6 August 2003; Joy Mining Machinery Limited v The Arabic Republic of Egypt , ICSID Case No. ARB/03/11, Award on Jurisdiction, 6 August 2004; Salini Construttori SpA and Italstrade SpA v The Hashemite Kingdom of Jordan, ICSID Case No. ARB/02/13, Decision on Jurisdiction, 29 November 2004. 82 See K Yannaca-Small, ‘Consolidation of Claims: A Promising Avenue for Investment Arbitration ’ in OECD, International Investment Perspectives (Paris, OECD, September 2006). 83 See the Australian International Commercial Arbitration Act 1989. 84 The word ‘may’ shows that a court faced with a connexity defence has discretion to accept or refuse the action. It is different when the court is faced with a lis pendens defence. 85 An example of examination of this definition is found in the Ship Tatry case where the ECJ held that ‘the term “irreconcilable … judgment” must be interpreted by reference to … the objective of … Art. 22 of the Convention’ which is ‘to improve coordination of the exercise of judicial functions within the Community and to avoid conflicting and contradictory decisions even when the separate enforcement of each of them is not precluded’ Case C-406/92, The Tatry [1994] ECJ I-5439 at para 54. 86Article 1046, Netherlands Code of Civil Procedure 1986. 87Section 6B, Hong Kong Arbitration Ordinance 1997. 88Colombia Decree 2279 of 10 July 1989. 89 See F Mantilla Serrano, ‘La Nouvelle L?gislation colombienne sur l'arbitrage’, Revue de l'arbitrage 41 (1992) at 54. 90 The CME v Czech Republic tribunal, in its Final Award ordering the Czech Republic to pay damages, reiterated the respondent's repeated rejection of CME's offer to structure the two cases so as to avoid potentially conflicting arbitral awards: ‘At the hearing the Respondent declined anew to accept any of the Claimant's alternative proposals … i) to have the two arbitrations consolidated into a single proceeding, ii) to have the same three arbitrators appointed for both proceedings, iii) to accept the Claimant's nomination in this proceeding of the same arbitrator that Mr. Lauder nominated in the London proceeding, iv) to agree that the parties to this arbitration are bound by the London Tribunal's determination as to whether there has been a Treaty breach, v) that after the submission of the parties' respective reply memorials and witness statements in this arbitration, the hearing be postponed until after the issuance of an award in the London Arbitration’. 91 When reviewing possible improvements to the 1985 UNCITRAL Model Law, the Secretariat proposed work on a provision on consolidation of claims. The Working Party, however, could not reach agreement on the importance to attach to this issue nor whether this issue was capable of resolution at that time. Ultimately, the UNCITRAL Model Law 2002 contained no reference to consolidation of claims. 92 Crivellaro suggests that ‘Article 26 of the ICSID Convention which stipulates that “consent of the parties to arbitration under this Convention … be deemed consent to arbitration to the exclusion of any other remedy … ” is an important reference point as a policy of consolidation since it excludes the parallel referral of the dispute to domestic courts and serves to avoid duplication of proceedings’. A Crivellaro, ‘Consolidation of Arbitration and Court Proceedings in Investment Disputes’, presentation at the ICC Institute of World Business Law, 24th Annual Meeting (Paris, 15 November 2004) (draft on file with the author). Professor Schreuer also suggests that the function of Art 26 is to create a ‘rule of priority vis-?-vis other systems of adjudication in order to avoid contradictory decisions and to preserve the principle of “ne bis in idem”?’. Schreuer, above n 35 at 359. 93 DAFFE/MAI(98)7REV1, available at <http://www1.oecd.org/daf/mai/pdf/ng/ng987r1e.pdf>. 94Art 9e of the Draft MAI: ‘An investor may withdraw the dispute from arbitration under this paragraph 9 and such dispute may not be resubmitted to arbitration under paragraph 2c. If it does so no later than 15 days after receipt of notice of consolidation, its earlier submission of the dispute to that arbitration shall be without prejudice to the investor's recourse to dispute settlement other than under paragraph 2c’. 95 Available at <http://www.dfait-maeci.gc.ca/nafta-alena/chap11-en.asp?#article_1125>. 96US-Chile Free Trade Agreement (Art 10.24) signed on 1 March 2004. 97US-Morocco Free Trade Agreement (Art 10.24) signed on 15 June 2004. 98US-CAFTA-DR (Art 10.25) signed on 5 August 2004. 99 Available at <http://www.dfait-maeci.gc.ca/tna-nac/cda-chile/chap-g26-en.asp#II>. 100 Available at <http://www.sice.oas.org/ctyindex/MEX/MEXagreements_e.asp>. 101Art 83 of the Japan-Mexico Free Trade Agreement, available at <http://www.mofa.go.jp/region/latin/mexico/agreement/agreement.pdf>. 102Art 33, available at <http://www.state.gov/documents/organization/38710.pdf>. 103Article 32, available at <http://www.dfait-maeci.gc.ca/tna-nac/documents/2004-FIPA-model-en.pdf>. 104 Usually, the same fact is a state measure which is allegedly in breach of the state's obligation. ‘This concept is a more precise criterion for consolidation than the “same dispute” requirement under the traditional lis pendens/res judicata theories’. See Crivellaro, above n 92. 105NAFTA Art 1126(2)(b), Art 33(6)(b) of the US Model BIT, and Art 32(2)(b) of the Model FIPA. 106 Partial consolidation further raises the question whether, and if so, to what extent, the individual claim tribunals should adjourn the proceedings before them, pending resolution by the consolidation tribunal. The consolidation tribunal in the softwood lumber cases (see below) has raised but not examined the question. See Canfor Corp v United States of America , Terminal Forest Products Ltd v United States of America and Tembec Inc et al v United States of America , Order of the Consolidation Tribunal, 7 September 2007, para 158, available at <http://naftaclaims.com/Disputes/USA/Softwood/Softwood-ConOrder.pdf>. 107Corn Products International, Inc v United Mexican States and Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc v United Mexican States , Order of the Consolidation Tribunal, 20 May 2005. 108 Request on consolidation by the USA, 7 March 2005: available at <http://www.state.gov/documents/organization/43492.pdf>. 109 See transcript of the consolidation hearing available at <http://www.state.gov/documents/organization/48508.pdf>. 110Canfor Corp v United States of America , Terminal Forest Products Ltd v United States of America and Tembec Inc et al v United States of America , Order of the Consolidation Tribunal, 7 September 2007, available at <http://naftaclaims.com/Disputes/USA/Softwood/Softwood-ConOrder.pdf>. 111 E Obadia, ‘ICSID, Investment Treaties and Arbitration: Current and Emerging Issues’, in Investment Treaties and Arbitration, ASA Swiss Arbitration Association Conference (25 January 2002) at 67–77. 112Salini Construttori SpA and Italstrade SpA v Kingdom of Morocco , ICSID Case No. ARB/00/4 in 42 ILM 609 (2003). 113Consortium RFCC v Kingdom of Morocco , ICSID Case No. ARB/00/6, available at <http://www.worldbank.org/icsid/cases/rfcc-decision.pdf>. 114 See Crivellaro, above n 92. 115Sempra Energy International v Argentina , ICSID Case No. ARB/02/16, Decision on Objection to Jurisdiction, 11 May, 2005. 116Camuzzi International SA v Argentina , ICSID Case No. ARB/03/2, Decision on Objection to Jurisdiction, 11 May 2005. Camuzzi has also raised a second claim in relation to its electricity distribution and transportation enterprise, Camuzzi International SA v Argentina, ICSID Case No. ARB/03/7; this claim is being heard by a different tribunal, separately and independently of its other claim. 117 One arbitrator was appointed jointly by Sempra and Camuzzi, Argentina appointed the second arbitrator, and the president of the tribunal was appointed by the Secretary-General of ICSID. Other procedural matters also appear to have been agreed by the parties, including the timetable for submissions and, where appropriate, submission of consolidated pleadings. See Decision, at paras 9–14. 118Electricidad Argentina, SA, & EDF International SA v Argentina , ICSID Case No. ARB/03/22. 119EDF International SA, SAUR International SA & L?on Participations Argentinas SA v Argentina , ICSID Case No. ARB/03/23. No procedural history of these two cases is available, thus the degree of integration and the procedures adopted, are, at present, unclear. 120Aguas Provinciales de Santa Fe, SA, Suez, Sociedad General de Aguas de Barcelona, SA and Interagua Servicios Integrales de Agua, SA v Argentine Republic , ICSID Case No. ARB/03/17. 121Aguas Cordobesas, SA, Suez, and Sociedad General de Aguas de Barcelona, SA v Argentine Republic , ICSID Case No. ARB/03/18. 122Aguas Argentinas, SA, Suez, Sociedad General de Aguas de Barcelona, SA and Vivendi Universal, SA v Argentine Republic , ICSID Case No. ARB/03/19. 123 For a detailed discussion of the advantages and disadvantages of consolidation in the context of commercial arbitration, see J Chiu, ‘Consolidation of Arbitral Proceeding and International Arbitration’, 7 (2) J Int'l Arb 53 (1990). 124 On the other hand, it is also possible that a party's costs may actually increase through consolidation of claims; this may arise, for example, where the increased complexity of the case results in a longer procedure than would have occurred had a party been required to be present only at a single unconsolidated arbitration. See E Gaillard, ‘Consolidation of Arbitral Proceedings and Court Proceedings’, in Complex Arbitrations: Perspectives on their Procedural Implications, Special Supplement—ICC International Court of Arbitration Bulletin (December 2003) at 35–42; G Born, International Commercial Arbitration (The Hague, Kluwer, 2nd edn, 2001) at 674; Chiu, above n 123. 125 M Platte, ‘When Should an Arbitrator Join Cases ’, 18(1) Arb Int'l 67 (2002). 126 Chiu, above n 123. 127 An issue for reflection is whether where the treaty contains an umbrella clause, consolidation should extend to claims and counter-claims under covered contracts, eg, for additional costs, delay, or unpaid invoices. Would it be possible or desirable to permit the consolidation of proceedings under a BIT (in which an investor is pursuing contractual claims through an umbrella clause) with proceedings under a contract (where a state is pursuing contractual claims or counter-claims against the same investor), provided of course that all claims arise out of the same contractual relationship? 128 See Crivellaro, above n 92. 129 Order of the consolidation tribunal in the Softwood Lumber cases (Canfor Corp v United States of America , Terminal Forest Products Ltd v United States of America and Tembec Inc et al v United States of America ), 7 September 2005, at para 125. 130 E Gaillard as President of the Canfor Tribunal said that ‘ … a consolidation tribunal established pursuant to NAFTA Article 1126 could dispose of these issues for the sake of consistency and for the sake of fair and efficient resolution of the claims … .consolidating similar claims is a very important issue for the integrity of NAFTA, for the integrity of the process, for the sake of consistency, and the way the whole treaty works.’ Canfor Corporation v United States of America , Hearing on Jurisdiction, Hrg Tr (‘Canfor Hrg Tr’) Vol 1 at 15: 20-1 (7 December 2004). 131 See eg UNCITRAL Model Law on International Commercial Arbitration 1985 (UNCITRAL Model Law) Arts 34 and 36; Art V New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958; Netherlands Code of Civil Procedure 1986 Arts 1062–8; French Code of Civil Procedure 1981 Arts 1502 and 1504 ; English Arbitration Act 1996 ss 68, 69 and 103. 132Order of the Consolidation Tribunal in the Softwood Lumber cases, above n 129 at para 131. 133 Platte, above n 125; see position of Tembec in Order of the Consolidation Tribunal, ibid at para 42. 134 P Leboulanger, ‘Multicontract Arbitration’, 13(4) Int'l Arb 43 (1996) at 62. 135 Another argument advanced against the consolidation of claims in particular in the context of commercial arbitration is the difficulty in ensuring enforceability of the award. Doubts have been raised over the enforceability of an award rendered by a consolidated tribunal where consolidation was not agreed upon by the parties. The relevant literature suggests the following grounds upon which recognition and enforcement of an award rendered by a consolidated tribunal could be resisted under Art V of the New York Convention: (i) absence of an agreement in writing and (ii) irregular composition of the arbitral tribunal. For a detailed discussion on this issue, see Chiu, above n 123; AJ Van den Berg, ‘Consolidated Arbitration and the 1958 New York Arbitration Convention’, 2(4) Arb Int'l 367 (1986); S Jarvin, ‘Consolidated Arbitration and the 1958 New York Arbitration Convention—A Critique of Dr. Van den Berg’, 3(3) Arb Int'l 254 (1987); AJ Van den Berg, ‘Consolidated Arbitration and the 1958 New York Arbitration Convention—A Replique to Mr. Jarvin’, 3(3) Arb Int'l 257 (1987). 136 A number of authors, however, suggest that the absence of a consolidation clause is not of itself indicative of intent on the part of the contracting parties to exclude consolidation. Rather, they posit this omission may merely reflect that such a possibility had not been considered during their negotiations. Further, drafting a consolidation clause before a dispute arises may prove difficult or impossible where the issues and parties are not yet known. Consequently, these authors argue the absence of an arbitration agreement does not necessarily suggest intent to preclude consolidation of claims. As regards judicial modification of the arbitration agreement, Chiu argues this is not precluded by application of the doctrine of sanctity of contracts. See Chiu, above n 123. 137 Hascher describes consolidation as reflecting the will of the courts rather than of the disputing parties. D Hascher, ‘Consolidation of Arbitration by American Courts: Fostering or Hampering International Commercial Arbitration?’, 1 J Int'l Arb (1984) at 133–4. 138 Order of the Consolidation Tribunal, above n 129 at para 78, citing Henri Alvarez, ‘Arbitration under the North American Free Trade Agreement’, 16 Arb Int'l 393 (2000) at 414. 139Corn Products International, Inc v United Mexican States and Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc v United Mexican States (HFCS cases), Order of the Consolidation Tribunal, 20 May 2005, at para 12. 140 See eg UNCITRAL Model Law Art 11(3)(a). 141 Gaillard, above n 124 and Platte, above n 125 stating that: ‘ … the right to nominate an arbitrator need not be treated as sacrosanct’. 142 Hascher, above n 137 at 135: ‘ … Matters are enormously complicated by the incorporation of separate disputes in a single arbitration proceeding. Each party assumes the additional burden of hearing claims, giving evidence and discussing testimonies with all the other parties involved. There is a higher probability of delays. Risks of omission and error are multiplied’. 143 See Chiu, above n 123. 144 See Platte, above n 125. 145 Order of the Consolidation Tribunal in HFSC cases, above n 139 at para 7. 146 In the context of commercial arbitration, notwithstanding these arguments, and the few legislative acts which provide for consolidation, many jurisdictions have found this consideration insurmountable. Concerns over confidentiality formed a determinative factor in the English legislature's rejection of a provision providing for court-ordered consolidation. 147 Order of the Consolidation Tribunal in the Softwood Lumber cases, above n 129 at para 147. 148 A Diamond, ‘Multi-party Arbitrations: A Plea for a Pragmatic Piecemeal Solution’, 7(4) Arb Int'l 403 (1991). 149 See eg Arts 40 and 41 Stockholm Chamber of Commerce Arbitration Rules 1999; Art 31(3) ICC Arbitration Rules 1998. 150 Leboulanger, above n 134 at 67. Select Bibliography

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__ , Interim Report on ‘Res Judicata and Arbitration’ (Berlin, 2004)