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Docteur Maximilian Pika

Associate - Morgan, Lewis & Bockius LLP

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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. 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. The doctrine it precludes re-litigation of the same subject-matter between the same parties 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 will be precluded.4
2.

Res judicata is therefore said to have a negative effect (ne bis in idem) and a positive effect (conclusive effect in a subsequent proceeding).5

II. Rationale and context

3.

Res judicata preclusive and conclusive effects prevent inconsistent decisions. Thereby, it serves both public and private interests in justice, consistency, legal certainty, prevention of abuses and efficiency.6 At the same time, the doctrine affects the adjudicatory power of the tribunal applying it and the precluded party’s right to be heard.7

4.

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. (See further Parallel Proceedings)

III. Sources

5.

A general principle of international law,8 res judicata is not codified explicitly. Notwithstanding phrases stating that decisions are “final and binding between the Parties” (e.g. Articles 59, 60 ICJ Statute9, article 53(1) of the ICSID Convention10), res judicata’s specifics come down to jurisprudence. Many discussions on the specifics under international law exist due to significant divergences between national doctrines.11

6.

Recognition under e.g. the New York Convention is a pre-requisite, not a synonym for cross-jurisdictional res judicata.12

IV. Applicable law

7.

Treaty tribunals apply international law to res judicata.13 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.14 For this reason, several arbitral tribunals,15 the ILA16 and academic authors17 favoured the creation of transnational principles.

V. Requirements under international law

A. First requirement: final decision

8.

Res judicata can be based upon partial decisions and non-annulled parts of arbitral awards,18 but not on interim decision (i.e. provisional measures and procedural orders) which are temporary in nature.19 One tribunal noted that its own injunctive relief granted in an award but limited in time, may constitute res judicata.20

9.

Moreover, a final award can lose its res judicata effect to the extent it was annulled.21

10.

Settlements need to be confirmed in a consent award for res judicata to apply.22

11.

Regarding res judicata of decisions on jurisdiction in particular, numerous tribunals affirmed this effect,23 some of them without formally mentioning the principle.24 Some tribunals mentioned the power to re-visit jurisdictional decisions, especially when new facts come to light.25 

12.

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;26
  • whether an ICSID award is res judicata during an ongoing annulment procedure;27 or
  • whether the prior tribunal’s jurisdiction can/must/must not be reviewed as a pre-requisite for res judicata of the prior tribunal’s decision.28

B. Second requirement: same subject-matter

1. General principles

13.

The triple identity test (i.e. identity of petitum, causa petendi, persona) is often implicitly or explicitly mentioned by tribunals to determine the res judicata effect of a final decision.29 At a closer look, however, the identiy of petitum (claim)30 and cause petendi (cause of action31) are  addressed together regularly (herein as “subject-matter”).32

14.

In order to assess whether the prior decision had the same subject-matter as the pending arbitration, 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.33

15.

The resulting principles are:

  1. The material facts brought before the prior and the subsequent tribunal must be identical.34 Three ICSID tribunals mentioned that they could re-open their own prior decisions when new facts came to light.35
  2. The underlying legal grounds must be identical,36 for which functional identity suffices also in treaty matters according to several authorities.37 26
  3. Res judicata cannot go further than what the prior tribunal actually adjudicated.38 In particular, the ICJ held that a dismissal for lack of evidence was not res judicata on the underlying legal grounds.39 Moreover, jurisdictional or admissibility decisions settle only these matters.40

2. The particular issue of ‘issue estoppel’, ‘issue preclusion’ or ‘collateral estoppel’

17.

On substance, investment treaty tribunals tend to favour issue preclusion.45

16.

The problem whether res judicata only applies to the adjudication of the prior petitum (request) as in civil-law doctrine41 or to the entire reasoning as at common law, is a classic of international res judicata.42 The doctrine of ‘issue preclusion’, ‘issue estoppel’ or ‘collateral estoppel’ (the terms are used interchangeably in international law), derived from Common Law, precludes a party from re-litigating a point of law or fact that was decided by a previous tribunal and formed an essential element in deciding the dispute.43 Whether under international law, issue preclusion is a distinct doctrine or only a broad application of res judicata’s same-subject-matter requirement  may be an academic question.44

18.

In one case, an objection of ‘collateral estoppel’ was raised unsuccessfully with regard to a separate, yet related issue, i.e. whether arguments that were not but should have been raised in earlier proceedings are also precluded (see also Abuse of Process).46

C. Third requirement: same parties

19.

All parties of the subsequent proceedings must either be parties to the prior decision, successors, or “privies”. “Privity” requires a certain proximity.47 Subsidiaries and majority shareholders are “privies” according to several authorities,48 whereas the CME and Eskosol tribunals held otherwise due to the succinct facts.49 Privity under international law between the State and State-owned companies was mentioned in an obiter dictum.50

D. Considerations on the identity of legal order: res judicata of national decisions before treaty tribunals

20.

National judgments on treaty/customary international law are not binding on international tribunals.51 This rule serves the rationale enshrined in Article 27 VCLT.

 

21.

By contrast, generally, if the national judgment, adjudicated on a contract or national law and the international tribunal deal with a treaty claim, res judicata will fail for difference in subject-matter.52 The national judgment can only be a fact53 on e.g. national law’s content54 or a measure. The fate of subsequent claims under umbrella clauses depends on whether the latter does or does not create independent treaty rights.

22.

If a non-treaty based arbitral tribunal deals with a claim on the same subject-matter as a prior judgment, res judicata can generally apply.55 

VI. Functionally-related preclusion doctrines

23.

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.56

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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