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27 J. Int'l Arb. 361 (2010)
Too Many Forums for Investment Disputes? ICSID Illustrations of Parallel Proceedings and Analysis

handle is hein.kluwer/jia0027 and id is 371 raw text is: Journal of International Arbitration 27(4): 361-378, 2010. @ 2010 Kluwer Law Intenational. Printed in The Netherlands. Too Many Forums for Investment Disputes? ICSID Illustrations of Parallel Proceedings and Analysis Jamie SHOOKMAN* Parallel proceedings occur when the same cause of action is adjudicated in more titan one forum, either before multiple domestic courts, domestic and international courts, or before multiple internationalforuns. Parallel pro- ceedings are problematic at both the national and international levels as they waste money and conficting results undermine legal certainty. The doctrines of lis pendens and res judicata are the most common solutions to managing the problem, yet both are dificult to apply in the arbitration context. Other mechanismns, such as anti-suit injunctions, so-called umbrella clauses, and fork-in-the-road clauses, are therefore intended to target the problent of parallel proceedings in international arbitration. Parallel proceedings are particularly problematic in investment arbitration because of features in investment treaties such as bilateralism, non-exclusivity, exclusion of local remedies and multiple investor claims. Two recent ICSID cases, SGS v. Pakistan and Toto v. Lebanon, reveal some of the current problems with creating rules on parallel proceedings in investment arbitration. The cases demonstrate that the distinction between treaty claims (which trigger ICSID jurisdiction) and contract claims (which are typically adjudicated in national courts) is untenable and likely to increase future parallel proceedings. The distinction is especially dificult to maintain because determining the nature of a claim is often a question of interpretation, and arbitral tribunals are hesitant to scrutinize a claimant's fonnulation of its cause of action. The two cases also show the uncertain force of choice-of-forum clauses and how they often allow arbitrators to simply bypass parties' previous agreements. Finally, umbrella clauses have created much confusion, as previous arbitral tribunals have inter- preted nearly identical clauses in four different ways. The uncertainty surrounding the future management of parallel proceedings highlights deeper, unsolved questions regarding the power private international law affords multinational enterprises vis-a-vis soveretgn states in an increasingly global legal order. I. INTRODUCTION International arbitration is a private form of dispute resolution with numerous goals, namely, to protect investors' rights in a neutral forum, to quicken the time of litigation and lower expenses, and to offer procedural flexibility allowing businesses to continue operation.' These goals, however, are often frustrated. One problem in international arbi- tration receiving a great deal attention is the growing frequency of parallel proceedings, or situations in which disputes that are linked in some way or which have some similarities are brought before different adjudicators.'2 The term can therefore refer to multiple pro- ceedings in state courts, proceedings before arbitral tribunals and state courts, or parallel proceedings in different international forums. * Jamie Shookman,J.D., (Boston University). Daniela Caruso, Private Law and State-Making in the Age of Globalization, 39 N.YU. J. INT'L & POL. 1, 20 (2006). 2 Gilles Cuniberti, Parallel Litigation and Foreign Inestmnent Dispute Settlement, 21 ICSID Rev. 381,382 (2006).

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