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Parallel Proceedings

Res judicata and lis pendens

an emerging international consensus?

Valentina Wong

ASA below 40

Zurich, 27 November 2009

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Res Judicata & Lis Pendens

Res judicata

Lis pendens

general principles of law recognized by civilized nations

(Article 38 no 3 of the Statute of the International Court of Justice)

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Res Judicata

Res judicata effects

Positive/conclusive effect

Negative/preclusive effect (ne bis in idem)

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Res Judicata

Res judicata effect of court decisions in national jurisdictions (English) common law

Prerequisites:

competent forum

final decision on the merits

same parties

Related concepts:

claim estoppel

issue estoppel

former recovery

abuse of process

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Res Judicata

Res judicata effect of court decisions in national

jurisdictions civil law

Prerequisite of triple identity: same claim/cause of action

same legal grounds

same parties

Only dispositive part?

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Res Judicata

Res judicata effect in various situations

(1) Arbitral award vis--vis arbitral tribunal (2) Arbitral award vis--vis state court

(3) Court judgement vis--vis arbitral tribunal

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Res Judicata

The law applicable to determining res

judicata effects

Law of the place where decision was made

Law of the place where new claim is brought

Law governing the main contract

Transnational rules (ILA Rec. 2)

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Res Judicata

Ad (1) Arbitral award vis--vis arbitral tribunal

Prerequisites for res judicata effect: award is final and binding in the country of origin and no impediment

to recognition at the seat of the subsequent arbitration (ILA Rec. 3.1) triple identity (ILA Rec. 3.2 3.4)

Consequences: dispositive part and necessary reasoning (ILA Rec. 4.1)

issue estoppel (ILA Rec. 4.2)

issues that could have been raised procedural unfairness/abuse oflaw (ILA Rec. 5)

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Res Judicata

Ad (2) Arbitral award vis--vis state court

Article III NYC: recognize as binding

Article 35(1) Model Law: be recognized as binding

Common law: no explicit statutory provisions, but recognised by case law

ENG: final and binding(58 AA)

Civil law:

F & B: lautorit de la chose juge(1476, 1500 NCPC; 1703 JC)

CH: dfinitive/endgltig(190 PILA)

GER & AUT: Wirkungen eines rechtskrftigen gerichtlichen Urteils(1055 ZPO; 607 ZPO)

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Res Judicata

Ad (3) Court judgement vis--vis arbitral tribunal

Decisions on the merits: preclusive effects to be recognised by tribunal (both incommon law and civil law)

Decisions on the tribunals jurisdiction

court at the place of arbitration vs./foreign court

common law vs./ civil law

preclusive effect vs./ no preclusive effect subject to Articles II(1) and V(2)NYC:

court decisions:

United Arab Emirates v. Westland Helicopters

Condesa v. Buenaventa

Fomento de Construcciones y Contratos SA v. Colon ContainerTerminal SA

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Lis Pendens

Definition

a situation in which parallel proceedings,

involving the same parties and the same causeof action, are taking place in two different

states at the same time.

(ILA Final Report on Lis Pendens)

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Lis Pendens

Common law forum non conveniens lis alibi pendens

abuse of process Civil law

first-in-time rule

Council Regulation 44/2001 first-in-time rule

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Lis Pendens

Lis pendens in various situations

(1) Between arbitral tribunals

(2) Between an arbitral tribunal and a state

court

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Lis Pendens

Ad (1) Lis pendens between arbitral

tribunals

Generally held not to be applicable

But: e.g. Andersen cases, Lauder/CME v. The Czech

Republic

ILA Rec. 5: 2nd arbitral tribunal to decline jurisdiction or

stay proceedings if 1starbitral tribunal has jurisdiction, and

no material prejudice to party opposing the stay

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Lis Pendens

Ad (2) Between an arbitral tribunal and a

state court

Article VI(3) EuC: sequencing

Article II(3) NYC (& Article 8 Model Law ): priority for

arbitral tribunal, unless null and void, inoperative or

incapable of being performed

parallel proceedings

full review orprima facie review?

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Lis Pendens

Between an arbitral tribunal and a state court(with regard to the tribunals jurisdiction)

F: court not have jurisdiction unless manifestly null and void

(Art 1458 NCPC) CH: arbitral tribunal shall decide , unless serious reasons requirestay(Art 186 PILA)

ENG: court shall not consider application unless parties so agree, or arbitral tribunal so permits (Art 32 AA)

GER: Model Law; but: request to court prior to tribunalsconstitution possible (sec 1032 ZPO)

AUT: Model Law; plus: various scenarios (sec 584 ZPO)

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Lis Pendens

Between an arbitral tribunal and a state court

Arbitral proceedings and parallel proceedings at the

place of arbitration: mindful (ILA Rec. 3) Arbitral proceedings and parallel proceedings other than

at the place of arbitration: proceed (ILA Rec. 4)

Sound case management (ILA Rec. 6)

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Res Judicata & Lis Pendens

An emerging international consensus?

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Res Judicata & Lis Pendens

Selected bibliography

Arbitral Tribunals or State Courts. Who must defer to whom?ASA Special

Series No. 15, 2001

Complex Arbitrations, ICC Bulletin, Special Supplement 2003

Parallel State and Arbitral Procedures in International Arbitration, Dossier III

from the ICC Institute of World Business Law 2005

Interim Report on res judicata and arbitration 2004, ILA 2004, and Final

Report on lis pendens and arbitration, ILA 2006, in Arbitration International

2009, Vol. 25, No. 1

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Thank you!