Mass Claims

Mass claims are claims brought by a large number of claimants within the scope of a single proceeding against a respondent.¹

The concept should be distinguished from consolidation, as it is the combination of multiple arbitral proceedings started separately² and from joinder, which is the possibility for a third-party to join an existing arbitration proceeding as claimant or respondent.³

There has been debate over the terminology of various kinds of multi-party proceedings, including the phrase “mass claims”.⁴ However, arbitral tribunals refrain from delving into the details of classification in an abstract manner.⁵ When employing the phrase “mass claims” in a given case, arbitral tribunals usually add a caveat that they do not prejudge any particular form of proceedings that are found in various legal systems, such as representative proceedings, aggregate proceedings, a class action⁶ or even "self-consolidated" claims.⁷

As a result of tribunals keeping the terminology broad, no legal consequence flows from the use of the phrase “mass claims” as such, and the questions of jurisdiction and admissibility of mass claims need to be decided on the basis of the substantive nature of the claims in a given case.⁸ A dissenting arbitrator has said that the terms “mass claims” and “multi-party proceedings” entail different legal effects, particularly with regard to consent to arbitration.⁹

Neither the ICSID Convention and Rules nor Bilateral Investment Treaties (BITs) contain any provision that would specifically address the question of mass claims in investment arbitration.¹⁰ Two issues have emerged from arbitral practice as to the jurisdiction of an arbitral tribunal to entertain mass claims. As a result, the question revolves around the interpretation of Article 44 of the ICSID Convention, which authorizes an arbitral tribunal to decide any question of procedure which is not covered by the Convention or arbitration rules.¹¹ 

Two main issues have emerged from arbitral practice as to the jurisdiction of an arbitral tribunal to entertain mass claims.

It has been debated whether a specific and additional consent of the respondent regarding the mass form of arbitral proceedings is required.¹²

Arbitral tribunals (contrary to what has been stated in dissenting opinions)¹³ concluded that no such specific or additional consent on the part of the respondent is required,¹⁴ on the ground, inter alia, (i) that it is difficult to conceive why a tribunal having jurisdiction over the claimants’ claims individually¹⁵ could lose its jurisdiction where the number of claimants outgrows a certain threshold; (ii) that the collective nature of the proceedings derives from the nature of the investment made;¹⁶ and (iii) that consent can be “manifested in numerous ways.”¹⁷ Another tribunal has reasoned that interpreting the ICSID Convention’s silence on mass claims as a ‘qualified silence’ categorically prohibiting collective proceedings, is “contrary to the purpose of the BIT and to the spirit of ICSID”.¹⁸ Some explained it as being a natural consequence of consent “without privity” in investment treaty arbitration.¹⁹

Tribunals therefore considered that the “mass” aspect of the proceedings related to the question of admissibility of claims (or “manageability” of proceedings) and not to the question of jurisdiction.²⁰ However, other tribunals considered such distinction to have no particular importance.²¹ 

Setting aside the issue of specific and additional consent to mass proceedings discussed above, some arbitral tribunals have taken the view that their jurisdiction over mass claims can be upheld when individual claims can be put together as a single dispute and not just a myriad of separate disputes.²² Multiple claims can be found to constitute a single dispute when there exists a “substantial unity”²³ or “similarity”²⁴ among them. This will be the case when:

• the claims in question are all based on the same actions of the respondent;
• they are all claiming essentially the same treaty breach and complain about the same illegality;
• they have essentially identical prayers for relief; and
• they base themselves on the same factual background to establish their claims.²⁵

Some tribunals have considered that the in-depth analysis of the existence of a single dispute is closely linked to the substance of the dispute and that it should therefore be joined to the merits phase.²⁶

The admissibility of mass claims may be questioned when conducting a mass proceeding and could raise due process concerns, especially if such concerns could not be addressed by way of Article 44 of the ICSID Convention and of Rule 19 of the ICSID Arbitration Rules.²⁷ For example, an arbitral tribunal took the view that group examination of claims was acceptable where claims raised by a multitude of claimants were considered to be “identical or at least sufficiently homogeneous”.²⁸ Another tribunal examined the admissibility of claims by looking at various considerations such as the verification of individual claims,²⁹  document discovery,³⁰ length of written submissions and oral hearings,³¹ and quantification of damages.³² The same tribunal also assessed the manageability of the proceedings by:

a) balancing the rights of the claimants to have their claims heard;

b) the capacity of the ICSID framework to manage the claim process; and

c) the due process rights of the respondent.³³

Tribunals having accepted mass claims may then decide to split the merits phase of the proceeding in different phases to better assess all claims and issues presented.³⁴

Cabrera Colorado, O.F., The Freedom of Arbitrators to Conduct Collective Proceedings When the Rules are Silent: Considerations in the Wake of the Abaclat Decision, Journal of International Dispute Settlement, 2015, pp. 163-187.

Cross, K.H., Investment Arbitration Panel Upholds Jurisdiction to Hear Mass Bondholder Claims against Argentina, ASIL Insights, 2011.

Donovan, D.F., Abaclat and Others v Argentine Republic: As a Collective Claims Proceeding, ICSID Review – Foreign Investment Law Journal, 2012, pp. 261-267.

Kabra, R., Has Abaclat v Argentina Left the ICSID with a ‘Mass’ive Problem?, Arbitration International, 2015, pp. 425-453.

McCarl, R., ICSID Jurisdiction over International Mass Investment Arbitrations: Due Process and Default Rules, Stanford Journal of International Law, 2015, pp. 173-194.

Nakajima, K., Beyond Abaclat: Mass Claims in Investment Treaty Arbitration and Regulatory Governance for Sovereign Debt Restructuring, Journal of World Investment & Trade, 2018, pp. 208-247.

Rosenfeld, F., Mass Claims in International Law, Journal of International Dispute Settlement, 2013, pp. 159-174.

Steingruber, A.M., Abaclat and Others v Argentine Republic: Consent in Large-scale Arbitration Proceedings, ICSID Review – Foreign Investment Law Journal, 2012, pp. 237-246.

Strong, S.I., Mass Procedures as a Form of ‘Regulatory Arbitration’ – Abaclat v. Argentine Republic and the International Investment Regime, Journal of Corporation Law, 2013, pp. 259-324.

Strong, S.I., Class, Mass, and Collective Arbitration in National and International Law, 2013.

van Houtte, H. and McAsey, B., Abaclat and Others v Argentine Republic: ICSID, the BIT and Mass Claims, ICSID Review – Foreign Investment Law Journal, 2012, pp. 231-236.

Wilske, S, Collective Action in Investment Arbitration to Enforce Small Claims: Justice to the Deprived or Death Knell for the System of Investor-State Arbitration?, Contemporary Asia Arbitration Journal, 2012, pp. 165-203.