Under international law, the doctrine of abuse of process precludes a claim as inadmissible. The doctrine is an implementation of the general doctrine of abuse of rights and the principle of good faith.1 Abuse of process “denotes conduct that is not prima facie illegal” but that “can nonetheless cause significant prejudice to the party against whom it is aimed and can undermine the fair and orderly resolution of disputes by international arbitration.”2 The assessment is discretionary and fact-based.
Immunities and Criminal Proceedings (Equatorial Guinea v. France), Judgment - Preliminary objections, 6 June 2018, para. 146; Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010, para. 175; Philip Morris Asia Limited v. The Commonwealth of Australia, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 December 2015, para. 539; Orascom TMT Investments S.à r.l. v. People's Democratic Republic of Algeria, ICSID Case No. ARB/12/35, Award, 31 May 2017, para. 541; Chevron Corporation and Texaco Petroleum Company v. The Republic of Ecuador (II), PCA Case No. 2009-23, Second Partial Award on Track II, 30 August 2018, para. 7.87; United States — Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58, AB-1998-4 - Report of the Appellate Body, 12 October 1998, para. 158.
Arbitral Award of 31 July 1989 (Guinea-Bissau v. Senegal), Judgment, 12 November 1991, para. 27; Certain Phosphate Lands in Nauru (Nauru v. Australia), Judgment - Preliminary Objections, 26 June 1992, para. 38; Armed Activities on the Territory of the Congo (New Application: 2002) (Democratic Republic of the Congo v. Rwanda), Judgment - Jurisdiction of the Court and Admissibility of the Application, 3 February 2006, para. 25; Immunities and Criminal Proceedings (Equatorial Guinea v. France), Judgment - Preliminary objections, 6 June 2018, para. 150; Certain Iranian Assets (Islamic Republic of Iran v. United States of America), Judgment, 13 February 2019, para. 114; Jadhav Case (India v. Pakistan), Judgment, 17 July 2019, para. 49; Border and Transborder Armed Actions (Nicaragua v. Honduras), Judgment - Jurisdiction of the Court and Admissibility of the Application, 20 December 1988, para. 94.
II. Treaty practice
Abuse of process is a jurisprudential matter as it is included in virtually no treaty, the most prominent exception being Article 294(1) UNCLOS.4
Slovakia - United Arab Emirates (2016), 22 September 2016, Article 17.2.b; Bilateral Investment Agreement between the India Taipei Association in Taipei and the Taipei Economic and Cultural Center in India (2018), 18 December 2018, Article 13.4; Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam of the other part, 30 June 2019, Article 3.27.2.
III. Application regarding investor nationality
Several arbitral tribunals regarded claims inadmissible and declined jurisdiction when investors had conducted dispute-aimed “treaty shopping”, i.e. adopted a certain nationality by means of re-location or corporate re-structuring for the purpose of bringing the dispute under a particular treaty.5 The objection failed before other tribunals.6
The primary criterion is whether the dispute was foreseeable when the nationality was adopted (when even adopted after the measure, there is no jurisdiction ratione temporis). The burden of proof lies with the respondent State and, once a prima facie case is established, with the investor. The standard of proof is the same as on the merits.7
Phoenix Action Ltd v. Czech Republic, ICSID Case No. ARB/06/5, Award, 15 April 2009, para. 144; Tidewater Investment SRL and Tidewater Caribe, C.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/10/5, Decision on Jurisdiction, 8 February 2013, paras. 197-198; ST-AD GmbH v. The Republic of Bulgaria, PCA Case No. 2011-06 , Award on Jurisdiction, 18 July 2013, para. 423; Renée Rose Levy and Gremcitel S.A. v. Republic of Peru, ICSID Case No. ARB/11/17, Award, 9 January 2015, para. 195; Philip Morris Asia Limited v. The Commonwealth of Australia, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 December 2015, para. 588; Europe Cement Investment and Trade S.A. v. Republic of Turkey, ICSID Case No. ARB(AF)/07/2, Award, 13 August 2009, para. 175; Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20 , Award, 14 July 2010, para. 44.
Tokios Tokelés v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, 29 April 2004, para. 56; Aguas del Tunari S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Respondent's Objections to Jurisdiction, 21 October 2005, para. 331; Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010, paras. 204-205; Pac Rim Cayman LLC v. The Republic of El Salvador, ICSID Case No. ARB/09/12, Decision on the Respondent's Jurisdictional Objections, 1 June 2012, para. 2.110.
Pac Rim Cayman LLC v. The Republic of El Salvador, ICSID Case No. ARB/09/12, Decision on the Respondent's Jurisdictional Objections, 1 June 2012, paras. 2.10, 2.13, 2.47, 2.67-2.75, 2.96-2.100; Philip Morris Asia Limited v. The Commonwealth of Australia, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 December 2015, paras. 495, 554.
IV. Application for purposes of forum coordination
More recently, the doctrine of abuse of process received another function in that it precluded claims due to prior/parallel proceedings.
The tribunals in Orascom and Ampal applied the doctrine because the claimants’ subsidiaries pursued overlapping claims in other fora,9 a situation where other tribunals applied the “privy” doctrine of res judicata. CME/Lauder rejected an abuse of process plea on the grounds that the Czech Republic had refused consolidation.10
A matter not yet decided under international law is whether the doctrine cannot only be applied to overcome the “same parties” requirement of res judicata/lis pendens, but also to overcome the “same subject-matter” requirement. At common law, for instance, claims that were not but should have been brought by a claimant in prior proceedings are precluded11 – a concept also favoured within the ILA’s principles in international commercial arbitration.12 Moreover, French law compensates a very strict “same legal grounds” requirement (whose scope for res judicata is not fully settled yet in international law) by a “concentration” duty pursuant to which all legal grounds must be brought at first opportunity.13
By contrast, abuse of process cannot undermine res judicata’s “same legal order” requirement. Prior litigation does not bar arbitration of treaty rights.14
Ampal-American Israel Corp., EGI-Fund (08-10) Investors LLC, EGI-Series Investments LLC, BSS-EMG Investors LLC and David Fischer v. Arab Republic of Egypt, ICSID Case No. ARB/12/11, Decision on Jurisdiction, 1 February 2016, paras. 330-331, 333, 339; Orascom TMT Investments S.à r.l. v. People's Democratic Republic of Algeria, ICSID Case No. ARB/12/35, Award, 31 May 2017, paras. 539-548.
Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, para. 178; CME Czech Republic B.V. v. The Czech Republic, Partial Award, 13 September 2001, para. 412; Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de Venezuela, C.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/21, Award, 13 November 2017, para. 168.
Brown, C., The Relevance of the Doctrine of Abuse of Process in International Arbitration, Transnational Dispute Management, 2011, Vol. 2.
Ceretelli, C., Abuse of Process: An Impossible Dialogue between ICJ and ICSID Tribunals?, Journal of International Dispute Settlement, 2020, Vol. 11, pp. 47-68.
Gaillard, E., Abuse of Process in International Arbitration, ICSID Review, 2017, pp. 1-21.
Wehland, H., The Coordination of Multiple Proceedings in Investment Treaty Arbitration Oxford University Press, 2013, paras. 7.29-7.53.