Mass Claims in International Investment Arbitration

Abstract

Mass Claims are a procedural mechanism to deal with a large number of claims against the same defendant. This mechanism is used in litigation and in some international dispute settlement mechanisms. In arbitration this mechanism has been used scarcely and regularly within a pre-defined set of facts and procedural rules. The characteristics of arbitration – party autonomy, consent, informality and flexibility – do not seem to be compatible with complex mass claims procedure, which requires a high degree of formality to work properly. Before 2011 this mechanism had not been used in international investment arbitration. This has changed with the ICSID decision on jurisdiction and admissibility in Abaclat v Argentina. The Majority decided that an arbitration of 60,000 Italian bondholders against Argentina was within the Tribunal’s jurisdiction and admissible under the ICSID convention. This paper takes Abaclat as incentive to examine the question of the general possibility of mass claims in international investment arbitration. It examines the issues arising and assesses the particular challenges within investment arbitration. Objections concerning the general admissibility, lacking consent and due process rights have to be overcome and adequate procedural rules have to be established. The paper analyses existing international mass claims mechanisms on their solutions to the raised issues. The paper discusses the decision of Abaclat and the dissenting opinion and the respective findings on some mass claims issues. Although Abaclat has mainly focussed on the particular case, some findings and the objections by the dissenting opinion provide arguments for the question of general applicability. The analysis discusses the solutions found in other mechanisms and evaluates how and if they help to overcome the raised issues. Most important conclusion is that the character of investment arbitration does not preclude mass claims in general. Specific consent is generally speaking not an absolute requirement. Due process concerns exist but can be met by adequate procedural rules. Mass Claims are principally a possible procedure in investment arbitration.