Managing Associate, Linklaters
A dozen below-40 arbitration organisations, including CEPANI40, organised a panel discussion on parallel proceedings and conflicts of decisions from a comparative perspective, during the 3rd day of the Paris Arbitration Week, before the traditional young arbitration cruise.
The panel, held at Auguste Debouzy under the Chatham House Rule (i.e. participants are free to use information from the discussion, but are not allowed to reveal who made any particular comment), was moderated by Judith Sawang (Ashurt) and composed of Prof. Claire Debourg(Université Paris Nanterre, France), Holger Jacobs (Allen & Overy, Germany), Giovanni Zarra (Hogan Lovells, Italy), Luis Fernando Rodríguez(Wonders & Co, Spain), and Stephanie Forrest (Latham & Watkins, United-Kingdom).
The panel first discussed various approaches to parallel proceedings. Given the range of potential scenarios, the panel recognized that there's no one-size-fits-all solution. However, they presented both preventive and curative strategies to address parallel proceedings.
The key preventive approach discussed was the drafting of clear dispute resolution clauses. While arbitration practitioners do not always draft these agreements, they should emphasize to peers from other practice areas the significant impact these clauses can have once disputes arise. Besides precise language, drafters should consider including consistent dispute resolution mechanisms across all contracts and sub-contracts in a project.
Procedural options, like joinder and consolidation, may also offer solutions. If such procedural mechanisms are not a viable option, parties, with the arbitral tribunal's assistance, can reach ad hoc agreements, such as having the same tribunal issue separate awards. This helps avoid conflicting decisions and maintains confidentiality and decision consistency.
Another curative measure is the stay of proceedings, a pause ordered by either national courts or arbitral tribunals. Arbitral tribunals considering a stay must balance several factors, including their authority, the efficiency of proceedings, justice interests, and respect for due process. Both the tribunal and parties share the duty to avoid unnecessary delays, as stipulated by arbitration rules or national laws.
National legal tools can also address parallel proceedings, such as in Germany, where courts can issue a declaration on the admissibility of arbitration proceedings. This is possible early in the process, even with no German parties involved, since German courts have general jurisdiction and can intervene when arbitral award enforcement in Germany is conceivable.
Finally, the panel examined anti-suit injunctions, court orders preventing a party from pursuing legal action in another jurisdiction / before an arbitral tribunal or a state court. The use of anti-suit injunctions is contentious, particularly in civil law countries, as it may infringe upon another state's jurisdiction and the principle of Kompetenz-Kompetenz. A recent English case sparked debate over anti-suit injunctions in support of foreign-seated arbitration proceedings. In UniCredit Bank GmbH v RusChemAlliance LLC ([2024] EWCA Civ 64), the English Court of Appeal supported an ICC arbitration seated in Paris against Russian court proceedings. The English Court asserted its interest based on English law governing the arbitration agreement and recognized its obligations under the New York Convention to uphold arbitration agreements unless found to be invalid.
The panel concluded with the conviction that parallel proceedings are an increasing issue unlikely to vanish soon. They urged arbitral tribunals to seek further information and thoroughly explain their reasoning in decisions. They also advised legal counsel to be always prepared for the possibility of parallel proceedings. While no definitive guidance exists due to the variety of scenarios, the panel noted the need for counsel to be creative and strategic in crafting individual responses.
The panel discussion was followed by a networking reception, before many participants joined the traditional young arbitration cruise.