Author

Dr Maximilian Pika

Associate - Morgan, Lewis & Bockius LLP

Editors
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Res Judicata

I. Definition

1.

The doctrine of res judicata safeguards the final and binding effect of decisions in three ways.

  1. First, the doctrine precludes re-litigation of the same subject matter within the same proceeding, e.g. after a partial decision (such as on jurisdiction)1 or after the partial annulment of an award.2
  2. Second, it precludes re-litigation of the same claim and cause of action between the same partes in follow-up proceedings in that duplicative claims are inadmissible (ne bis in idem).3
  3. Third, if the subject-matter of the prior decision becomes an incidental matter in follow-up proceedings, the prior decision will be conclusive and contrary pleadings precluded.4

II. Rationale and context

2.

Res judicata prevents inconsistent decisions. Thereby, it serves both public and private interests in justice, consistency, legal certainty and efficiency.5 At the same time, the doctrine affects the adjudicatory power of the tribunal applying it and the precluded party’s right to be heard.6

3.

Res judicata is only one out of several means for achieving forum coordination. Others balance comparable interests, e.g. consolidation, lis pendens or irreconcilability as a ground for non-enforcement. The principles may thus affect res judicata issues.

III. Sources

4.

A general principle of international law,7 res judicata is not codified explicitly. Notwithstanding phrases stating that decisions are “final and binding between the Parties” (e.g. Articles 59, 60 ICJ Statute),8 res judicata’s specifics come down to jurisprudence. Many discussions on the specifics under international law exist due to divides between national doctrines.9 

5.

Recognition under e.g. the New York Convention is a pre-requisite, not a synonym for cross-jurisdictional res judicata.10 11

IV. Applicable law

6.

Treaty tribunals apply international law to res judicata.12 For arbitral tribunals with their seat in a national jurisdiction, the potential conflict-of-laws approaches to res judicata are plentiful and rarely settled by appellate jurisprudence.13 For this reason, several arbitral tribunals,14 the ILA15 and academic authors16 favoured the creation of transnational principles.

V. Requirements under international law

A. Final decision

7.

Res judicata can be based upon partial decisions and non-annulled parts of arbitral awards,17 but not on interim decision. Several other preliminary requirements known from national laws have not yet been addressed in detail by international jurisprudence, such as: 

  • whether res judicata can be considered upon a tribunal’s own motion;18
  • whether an ICSID award is res judicata during an ongoing annulment procedure; or
  • whether the prior tribunal’s jurisdiction can/must/must not be reviewed.19 

B. Same subject-matter

8.

The potentially-precluded pleading must concern the same claim and cause of action of the prior decision, both of which are often addressed together (herein as “subject-matter”).20 The prior decision must be assessed on the basis of its dispositif (operative part) and the reasoning – particularly with regard to the matters that the parties brought before the prior tribunal for adjudication.21 The resulting principles are:

  1. The material facts brought before the prior and the subsequent tribunal must be identical.22 Two ICSID tribunals also re-opened their own prior decisions when new facts came to light.23
  2. The underlying legal grounds must be identical,24 for which functional identity suffices also in treaty matters according to several authorities.25 26
  3. Res judicata cannot go further than what the prior tribunal actually adjudicated.27 In particular, the ICJ held that a dismissal for lack of evidence was not res judicata on the underlying legal grounds.28 Moreover, jurisdictional or admissibility decisions settle only these matters.29
  4. Whilst the transnational proponents in commercial arbitration are divided on whether res judicata only applies to the adjudication of the prior petitum (request) as in civil-law doctrine30 or to the entire reasoning as at common law (“issue preclusion/estoppel”),31 investment treaty tribunals favoured issue preclusion.32 

C. Same legal order

9.

National judgments on treaty/customary international law are not binding on international tribunals.33 This rule serves the rationale enshrined in Article 27 VCLT.

10.

If the national judgment, by contrast, adjudicated on a contract or national law and the international tribunal deals with a treaty claim, res judicata will already fail for difference in subject-matter.34 The national judgment can only be a fact on e.g. national law’s content or as a measure. The fate of subsequent claims under umbrella clauses depends on whether the latter create independent treaty rights. 

11.

If a non-treaty tribunal deals with a claim on the same subject-matter as a prior judgment, res judicata can generally apply.

D. Same parties

12.

All parties of the subsequent proceedings must either be parties to the prior decision, successors or “privies”. “Privity” requires a certain proximity.35 Subsidiaries and majority shareholders are “privies” according to several authorities,36 37 whereas the CME and Eskosol tribunals held otherwise due to the succinct facts.38

VI. Functionally-related preclusion doctrines

13.

When res judicata is inapplicable due to the requirements set out above, preclusion might apply under the doctrine of abuse of process or due to a factual effect of the prior decision erga omnes.39

Bibliography

Cheng, B., General Principles of Law as Applied by International Courts and Tribunals, 1953, Chapter 17.

Gaillard, E., Coordination or Chaos – Do the Principles of Comity, Lis Pendens and Res Judicata Apply to International Arbitration?, American Journal of International Arbitration, 2018, pp. 205-242.

Mayer, P., Litispendance, connexité et chose jugée dans l’arbitrage international, in Liber Amicorum Claude Reymond – Autour de l’arbitrage,  2004, pp. 185-203.

McLachlan, C., Shore, L., and Weininger, M., International Investment Arbitration: Substantive Principles, 2nd ed.  2017, paras. 4.169-4.199.

Radicati di Brozolo, L.G., Res Judicata and International Arbitral Awards, Post Award Issues, ASA Special Series No. 38, 2011, pp. 127-140.

Shaw, M., (ed.), Rosenne’s Law and Practice of the International Court: 1920-2015, 5th edn. 2017, Vol. III, Chapter 27, para. 391.

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