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This chapter examines the most common situations where parallel proceedings can occur in investment arbitration. It considers whether the principles of res judicata and lis pendens apply in investment arbitration and could prevent conflicting awards. Finally, the chapter looks at the way investment treaties regulate and/or prevent the occurrence of parallel proceedings, with a particular emphasis on the consolidation of claims.

Investor-state dispute settlement mechanisms embodied in most investment treaties provide rights to foreign investors to seek redress for damages arising out of alleged breaches by host governments of investment-related obligations. The system of investment dispute settlement has borrowed its main elements from the system of commercial arbitration despite the fact that investor-state disputes often raise public interest issues which are usually absent from international commercial...

This paper was prepared by Katia Yannaca-Small, Legal Advisor, Investment Division, Directorate for Financial and Enterprise Affairs, OECD. Thanks are due to Catriona Paterson, a consultant to the Investment Division, for research input. It has been developed as an input to the Investment Committee’s work aimed at enhancing understanding of the "umbrella clause" in international investment agreements and has benefited from discussions and a variety of perspectives in the Committee. It was also a subject for discussion at an APEC-UNCTAD Regional Seminar on Investor-State Dispute Settlement in Mexico City on 9-10 October 2006. The paper as a factual survey does not necessarily reflect the views of the OECD or those of its Member governments. It cannot be construed as prejudging ongoing or future negotiations or disputes pertaining to international investment agreements.

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