Problems with Parallel and

Duplicate Proceedings:
The Litispendence Principle and
International Arbitration
by D O U G L A S D. R E I C H E R T *

A recent (and thoughtful) essay about litispendence and international arbi-

tration begins with the observation that it 'seems to treat the quintessential
non-subject. 1 The authors proceed to cite a number of French, Swiss, German,
and Austrian writers who deny the existence of any question of litispendence
in the context of arbitration. These writers base their conclusions on different
grounds. All of these grounds are related to the notion that a contractual
undertaking to arbitrate is sufficient, in and of itself, to preclude the
concurrent exercise of jurisdiction by public authorities, thus mooting the
problem of litispendence. However, Schweizer and Guillod end their essay
with the suggestion that judges should apply the litispendence principle by
suspending court proceedings whenever an arbitration involving the same
dispute and the same parties is already pending, and should do so prior to
assessing the effects of the arbitration agreement under the New York
Convention or other similar law. 2 This suggestion is sound, but it raises the
question of whether and under what circumstances a corresponding rule
might also be applied by arbitrators when another court or arbitral proceed-
ing involving the same dispute and the same parties presents the risk of a
conflicting decision. 3
The discussion which follows addresses the arbitral side of the litispendence
question. It does not aim at a comparative law analysis of the litispendence
principle in different legal systems. It is concerned with the place, if any, for
the litispendence principle in the repertory of a developing procedural law of

* Member of the California Bar based in the Geneva-Lausanne region, Switzerland; formerly Registrar
of the Egypt-Israel Arbitration Tribunal in Geneva, Legal Assistant at the Iran-United States Claims
Tribunal in The Hague. The author extends special thanks to Jean Patry of Pestalozzi Gmuer & Patry
(formerly Patry, Junet, Simon & Le Fort) in Geneva, Switzerland for his encouragement and Maria
Tan, of the New York Bar and 1991 Foreign Associate with Patry, Junet, Simon & Le Fort, for her
assistance in the preparation of this article.
1
'La presente contribution semble porter sur le non-sujet par excellence'. P. Schweizer and O. Guillod,
'L'exception de litispendance et l'arbitrage international', in Le Jurisle Suisse face aux droits et jugements
etrangers, pp. 71-87 (Fribourg, 1988).
2
Ibid', p. 79.
1
The separate problem of related proceedings involving different parties or different aspects of a
complex dispute is only indirectly relevant to this inquiry, as discussed in Part I (f) below.

ARBITRATION INTERNATIONAL, Vol. 8, No. 3

© LCIA, 1992
237
238 Arbitration International Volume 8 Number 3

international arbitration. For this reason, the examples contained in this

article are drawn exclusively from published international arbitral decisions
rather than from national court decisions. As will be seen, however, these
examples are merely illustrative of particular rationales given by a variety of
arbitral tribunals. They are generally too sparse and contradictory to consti-
tute in any way representative statements of an accepted practice amounting
to a procedural rule for international arbitration.
The problems posed by concurrent parallel or duplicate proceedings
become all too evident in situations where a litigant wishes it did not have to
bear the consequences of having signed an arbitration agreement or in
situations of multi-faceted disputes (or complex of disputes) where not all of
the parties or subject-matters come under the same arbitration clause. 4 The
problem is not confined to reluctant defendants seeking the perceived advan-
tage or convenience of the home forum. Prospective claimants may notice
possible advantages to be gained before a court of law. The party preferring
not to arbitrate, whether defendant or claimant, may thus be tempted to
institute a lawsuit notwithstanding the existence of a provision for arbitration.
While successful attacks on the validity or binding effect of an arbitration
provision may be difficult, they are not impossible, and the possibilities for
conflicts between arbitral and judicial proceedings remain numerous. 5
Nonetheless, a number of arbitration principles already operate effectively to
reduce the potential for conflicts by favouring in almost all circumstances the
path leading to arbitration. These include the principles of the severability of the
arbitral clause and the power of the arbitrators to determine their own
jurisdiction. These arbitration principles are supported by many national
arbitration laws and by international treaties which require that judges, when
seized of a matter subject to an arbitration agreement, refer the parties to
arbitration. Given the exceptions to this rule, however, as well as the different
standards that may be applied to the assessment of the exceptions by arbitrators
and judges seized of the same dispute, the possibility of conflicting decisions
remains. It is for this reason that those who proclaim the litispendence principle
to be completely irrelevant to arbitration somewhat overstate their proposition.
The fact also remains that in certain situations the best means of resolving
the dispute may be before a court of law rather than a private panel of
arbitrators, although this is not to deny that the reverse is often true.
Thus, it may happen that the same dispute involving the same parties
proceeds simultaneously before a court and an arbitral tribunal. Can such
conflicts be avoided through recourse to the litispendence principle?
This article responds with the argument that the litispendence principle is a
useful and available procedural rule ready for adaptation to the international

Several paradigms for 'multi-fora' disputes are reviewed by Michael Schneider in his article
'Multi-Fora Disputes', 6 Arbitration International, pp. 101-121 (1990).
See generally Schlosser, 'Conflits entre Jugement Judiciaire et Arbitrage', 1981 Revue de I'Arbitrage, p.
371.
 Problems with Parallel and Duplicate Proceedings 239

arbitral context, but that it must be considered and exercised with due care if
the overriding objective of dispute resolution is to be observed.

I. B A S I C E L E M E N T S

(a) Introduction - General Features

The litispendence principle, simply stated, stems from the notion that conflict-
ing decisions arising out of duplicate proceedings between the same parties
and concerning the same subject matter should be avoided by according
preference to one proceeding over any others. The principle is adopted in
several European civil procedure codes as a defensive objection, going to the
admissibility of the second action. 6 In some circumstances, the principle
applies provisionally to suspend the proceedings until the jurisdiction of the
first tribunal is confirmed or denied.
In French, the rule is called Vexception de litispendance, and it may be raised in
the context of any proceeding started after another. The analogous plea in
Anglo-American law is lis alibi pendens - a suit pending elsewhere - but the
common law judge enjoys discretion to determine which of two competing
jurisdictions should entertain the case, notably on the basis of considerations
of convenience and expense, and regardless of which was instituted first.7 The
shorthand term 'litispendence' is used in this article to denote both concepts,
even though, strictly speaking, this term covers only the pending status of a
legal proceeding and not the competing status of multiple proceedings.
The strict litispendence principle applied in civil law jurisdictions gives
effect to a 'first-in-time' rule if two proceedings are pending involving (i) the
same dispute (ii) between the same parties (iii) before another, equally
competent jurisdiction. This 'first-in-time' rule provides a rigorous and
objective standard for resolving which of two presumably equal jurisdications
should be entitled to adjudicate the dispute, thus eliminating the risk of
conflicting judgments. The rule, however, encourages a 'race to the court-
house'. The flexible litispendence principle applied in common law jurisdic-
tions relies on the same criteria, but depends on the discretion of the judge. It
does not, however, entirely eliminate the risk of conflicting judgments when-
ever the judge decides to order discontinuance of foreign proceedings, due to
the uncertain extraterritorial effect of such an order.

See e.g., articles 1458 and 1498 nCPCF (France); 1027a ZPO (Germany). Note, however, the
observation of the European Court of Justice that the notion of litispendence is not the same in all of
the legal systems of the European Community, Judgment of the European Court of Justice in Case
144/86, Gubisch v. Palumbo, [1987] ECR 4861.
For a more detailed discussion of the lis alibi pendens principle, see Dicey and Morris, The Conflict of
Laws, Vol. I, pp. 389, 395-98 (11th ed, London 1987). 'A common ground on which the court has
been asked to interfere by staying English proceedings or by restraining foreign proceedings is that
simultaneous actions are pending in England and in a foreign country between the same parties and
involving the same or similar issues'.
240 Arbitration International Volume 8 Number 3

(b) The Old Requirement of International Recognition

It is worth noting, especially in the context of international arbitration,
that the strict litispendence principle was, until relatively recently, not
even deemed applicable in the international context. 8 This limitation was
maintained in France until 1974,9 and, where accepted earlier, it was in
any event subjected to the additional condition that the ultimate outcome
of the foreign proceeding be susceptible of recognition and enforcement in
the second country, where the litispendence objection was raised. 10
Some general features of the operation of this additional condition in the
international arbitral context may be discerned from two arbitral decisions
originating from Czechoslovakia and Bulgaria.
In Case no. Rsp. 57/78 from Czechoslovakia," the claimant initiated
arbitration in Prague on its sales contract and later commenced a court
proceeding in Brussels on the bill of exchange securing the unpaid pur-
chase price of the goods. The defendant raised the plea of litispendence
in the arbitral proceeding. The arbitrators reviewed Czechoslovak law on
the question of conflicts of jurisdiction and noted the procedural law pro-
vision that 'decisions of foreign jurisdictions have no direct, automatic
and extraterritorial impact in Czechoslovakia, unless recognized by the
respective Czechoslovakian authorities'. 12 The arbitrators also noted that
Czechoslovak jurisprudence consistently holds that 'an objection of litispen-
dence, where the lawsuit was pending before a foreign jurisdiction, could be
sustained only on the understanding that the judgment of that jurisdiction
would be enforceable in Czechoslovakia'. 13 The defendant's motion was
denied.
In Case no. 152/1972 before the Bulgarian Chamber of Commerce and
Industry, 14 the claimant initiated an arbitration seeking payment on goods
sold to a French company, and later, when the French defendant was
declared bankrupt, brought the same claim before the bankruptcy court in
France. The defendant's trustee-in-bankruptcy requested termination of the
arbitral proceedings because of the pendency of the same claim before the
bankruptcy court in France. The arbitrators rejected this request, noting their
institutional jurisprudence that a foreign bankruptcy judgment enjoyed no

8
See e.g., Societe Algerienne Bala c/ Vve Rognon, Cour d'Appel de Paris, 19e Chambre, 6 Juillet 1965,
Clunet 1966 p. 364, note J-D. Bredin. Here, the court observed '[Q]ue l'exception de litispendance
ne puisse etre opposee, devant les tribunaux fran^ais, au motif qu'une meme instance avait ete
introduite devant les juridictions algeriennes, n'etait que 1'application de ce principe general qu'il n'y
a pas, au regard du droit francais, de litispendance internationale.' See also Cie. Astree c/ Dlle Couturier,
Cour de Cassation ler Dec. 1969; Ste Anciens Etabl. Valla et Richard, 1970 Clunet 707, note A. Huet.
9
Cass. civ. I, 26 Novembre 1974, Clunet 1975, p. 108, note Ponsard.
10
Les Assurances Rationales, Perez et Dame £anzouri cj Demoiselle Hania, Cour d'Appel de Paris, 19e
Chambre, 18 October 1972, 1973 Clunet, pp. 371, 380-81, note F. Deby-Gerard.
11
VI Yearbook Commercial Arbitration (1981), p. 127.
12
Czechoslovak Private International Law and Procedure Act, 1963, section 63.
13
Ibid., at p. 128.
14
IV Yearbook Commercial Arbitration (1979), p. 191-192.
 Problems with Parallel and Duplicate Proceedings 241

extraterritorial effect and could not deprive the arbitrators of their compet-
ence nor release them from the duty to render an award. They decided
pursuant to Article 9 of the Bulgarian Code of Civil Procedure that Bulgarian
courts do not terminate or suspend their proceedings if proceedings as to the
same dispute or to a dispute connected with it are pending before a foreign
court. 15

(c) The European Model of the Brussels and Lugano Conventions

The modern international litispendence rule in civil and commercial matters
in Europe is largely regulated by treaty between member-States of the
European Community (EC), which may become party to the 1968
Brussels Convention, and between E C and European Free Trade Associa-
tion (EFTA) States, which may become party to the 1988 Lugano
Convention. Under these treaties, judges are obligated to observe the 'first-
in-time' rule in all judicial proceedings involving civil and commercial
matters.
Although essentially similar, the wording of the two conventions differ with
respect to the question of when the second court must cede jurisdiction to
the first tribunal seized. Article 21 of the Lugano Convention 16 provides as
follows:
Where proceedings involving the same cause of action and between the same parties are
brought in courts of different Contracting States, any court other than the court first seised
shall of its own motion stay its proceedings until such time as the jurisdiction of the court first
seised is established.
Where the jurisdiction of the court first seised is established, any court other than the court
first seised shall decline jurisdiction in favour of the c o u r t . "

Article 21 of the Brussels Convention 18 is similar in effect, but contains slight

textual differences. Article 21(1) of the Brussels Convention reads:
Where proceedings involving the same cause of action and between the same parties are
brought in the courts of different contracting states, any court other than the court first seised
shall of its own motion decline jurisdiction in favor of that court. 19

The Brussels Convention thus calls for a mandatory rejection of jurisdiction by

the second court. The Lugano Convention, in contrast, initially calls on the
second court to stay proceedings until the first court's jurisdiction has been
established, at which point the second court would be compelled to decline
jurisdiction.

Ibid., at p. 192.
Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters,
Done at Lugano on 16 September 1988, reprinted in 28 I.L.M. 620 (1989), 88/592/EEC.
Ibid.
Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, Done
at Brussels on 27 September 1968, Bulletin E. C. Supp. 2/69.
Ibid. See also Judgment of the European Court of Justice in case 144/86, Gubisch v. Palumbo [1987]
ECR 4861.
242 Arbitration International Volume 8 Number 3

It is important to note, however, that these particular treaty rules are

inapplicable to arbitrations. 20

(d) The Basic Elements

Even though many authors contend that the litispendence principle has no
relevance to arbitration, the argument is sometimes raised in arbitral proceed-
ings and thus falls to be considered by arbitrators. A few additional examples,
drawn from published arbitral decisions, illustrate how the three basic
elements of the principle have been applied in the arbitral context.

(i) Identical Parties

The requirement that the parties be identical is illustrated by the award in
I C C Case no. 2272 (1975). 2 ' A Belgian defendant introduced a lawsuit against
the claimant and another company before the Belgian Court of Trade three
months after being named as defendant in the I C C arbitration in Paris. The
decision of the Belgian Court of Trade is not given in the award but the
arbitrator decided that 'whereas the parties in each of these proceedings are
not the same, and their mutual and reciprocal requests do not have the same
purpose, the subsidiary plea of pendency . . . cannot be sustained.' 22

(ii) Identical Claims

The requirement that the claims be identical was applied in I C C Case no.
1512 (Second Preliminary Award of 14 J a n u a r y 1970).23 There, a Pakistani
defendant bank objected before the I C C arbitrator in Geneva that pendent
proceedings before the High Court of West Pakistan created the possibility of
conflicting decisions. The arbitrator decided that 'even a rapid and superficial
comparison of the submissions . . . demonstrates that there is no identity of
subject matter.' 24 The plea of litispendence was denied.

(Hi) Equal Jurisdictions

The third requirement that the competing jurisdictions be equally competent
may be illustrated, albeit obliquely, by the decision of the Iran-United States
Claims Tribunal in its interim award in Fluor Corporation v. Iran.25 In Fluor, the
Tribunal's Chamber One decided that, so long as the question of its
jurisdiction remained undecided, the claimant would not be prevented from

Article 1 (4) of both Conventions excludes arbitration. See Marc Rich & Co. A.G. v. Societa Italiana
Impianti P.A. (The Atlantic Emperor), European Court of Justice, Decision of 25 July 1991.
II Yearbook Commercial Arbitration, ^>. 151 (1977).
Ibid., at p. 152.
V Yearbook Commercial Arbitration, p. 174, 175 (1980).
Ibid., at p. 175.
Fluor Corporation v. Government of the Islamic Republic of Iran and the National Iranian Oil Company, Award
No. 62-333-1, 6 August, 1986, 11 Iran-US C.T.R. 296 (1986).
 Problems with Parallel and Duplicate Proceedings 243

instituting identical proceedings before the International Chamber of

Commerce (ICC) so as to preserve its claim (due to a time-bar issue) in
the event that the Claims Tribunal lacked jurisdiction. This decision was
clearly based on an undertaking by the claimant not to pursue the I C C
arbitration so long as the case before the Claims Tribunal was still pend-
ing. The Claims Tribunal reached this position in spite of Article V I I ,
paragraph 2 of the Claims Settlement Declaration, which prescribes the
exclusive jurisdiction of the Claims Tribunal over claims brought before
it. The Tribunal reasoned that this exclusivity provision did not auto-
matically bar a claimant from filing in another forum, particularly when this
filing would be necessary to protect a claim that might otherwise be
time-barred. 26 The Tribunal noted, however, that its decision was without
prejudice to the defendant's renewing its request for a stay of the I C C
proceedings once the jurisdictional issue was resolved. In other words, until
the Claims Tribunal had determined whether or not it had jurisdiction, both
fora had a legitimate basis upon which to be seized of the dispute. However,
due to the exclusive nature of the Claims Tribunal's jurisdiction, only one
could lawfully adjudicate the merits. The hierarchical aspect of this condition
will be discussed later in relation to supranational tribunals, where it has
particular relevance.

(e) The Exclusion of the Litispendence Principle

The theory that the litispendence principle is irrelevant to international
arbitration is reflected in two French I C C arbitral awards.
In I C C Case no. 6142 (1990), 27 the arbitration was preceded by a lawsuit
in Spain brought by one of the defendants against the claimant and the
co-defendant. The lawsuit was dismissed by the Spanish court for lack of
jurisdiction due to the arbitration clauses contained in the licence agreements
between the various parties. The defendant appealed this decision in Spain
while the claimant requested arbitration of the dispute in Paris. The defend-
ant then objected before the single arbitrator in Paris that the matter should
be referred to the court in Spain. The arbitrator determined that manifestly
there was no litispendence between the two procedures since, even though
both actions involved the same parties and subject matters, the parties did not
have the same status in both proceedings. 28 Furthermore, the arbitrator stated
that litispendence became impossible once an arbitration agreement was
declared valid, since the object of a valid arbitration agreement was to oust
the jurisdiction of the ordinary courts. 29

11 I r a n - U S C.T.R. at 298.
1990 Journal du Droit International, p. 1039, note Derains.
This distinction is artificial and does not make any difference under most conceptions of the
litispendence principle. It is for this reason not recognized above as one of the necessary conditions for
litispendence. See also J u d g m e n t of the European Court of Justice in Case 144/86, Gubisch v. Palumbo
[1987] E C R 4861.
Ibid., at p. 1041.
244 Arbitration International Volume 8 Number 3

In I C C Case no. 5103 (1988), 30 the arbitral tribunal faced a complex web
of parties, contracts, and proceedings in France and Tunisia. Three claimants
brought the arbitration against four defendants on the basis of several
contracts, one of which lacked an arbitration clause and none of which clearly
indicated the International Chamber of Commerce as the arbitral institution.
The defendants contested the jurisdiction of the arbitral tribunal. However,
they also raised a counterclaim and contended that only the arbitral tribunal
had jurisdiction over the counterclaim, even though they also presented the
counterclaim as a claim before the Court in Tunis. The claimants, as
defendants to the counterclaims, objected on the basis of litispendence. This
plea was denied by the arbitrators on the ground that the disputes were not
brought before 'equally competent . . .jurisdictions'. The Tribunal recognized
the cogency of the litispendence principle only as between concurrent judicial
proceedings. The Tribunal rejected, however, the principle's application to
concurrent judicial and arbitral proceedings, on the hypothesis that the
respective competence of the competing judicial and arbitral tribunals is
determined solely according to the existence, validity, and scope of the
arbitration clause. 31 The arbitrators' reasons reveal that they reached this
conclusion by excluding the possibility that either negative or positive
conflicting decisions could be reached, and by assuming that in all possible
instances either the arbitral tribunal or the court will assume jurisdiction, but
never neither nor both. As will be seen below in several cases, experience
reveals the fallacies contained in this hypothesis.

(/") The Problem of Related Proceedings

Parallel proceedings often involve third parties and separate contracts, in
which case neither an arbitral agreement nor the question of litispendence will
be truly relevant. However, parallel proceedings may well face identical
questions, and so the risk of conflicting decisions is also present. In addition,
the amount of a defence of set-off in an arbitration may frequently depend on
the outcome of a related and parallel proceeding. Although the question of
related proceedings is not the subject of this article, three examples involving
such issues are worth noting. The first two cases relate to interdependent issues
between related proceedings, the third to questions of set-off in the arbitral
context.
In Society for Maritime Arbitrators Award no. 2065 (24 April 1986),32 the
claimant, a voyage charterer, sought a declaratory ruling from the maritime
arbitrators in New York that it was entitled to indemnification from the

1988 Journal du Droit international, p. 1206.

Ibid., at p. 1210. ['Cette situation de competence concurrente ne peut surgir entre une juridiction
arbitrale et une juridiction etatique, pour la raison que leur competence respective ne depend que
d'un seul facteur; l'existence, la validite et l'etendue de la convention d'arbitrage.']
'Nalo Express' Maritime Arbitration, XII Yearbook Commercial Arbitration, p. 172 (1987) (Society of
Maritime Arbitrators, New York. Award No. 2065, 24 April 1986).
 Problems with Parallel and Duplicate Proceedings 245

defendant, a voyage sub-charterer, with respect to any liability arising in

connection with a California wrongful death lawsuit in which it was one of the
defendants, together with the defendant voyage sub-charterer. The defendant
voyage sub-character requested a stay of the arbitration pending resolution of
the California wrongful death litigation. The arbitrators agreed, considering
that it was 'unreasonable and impractical to expect [the defendant] to
assemble the highly technical evidence relating to the derrick's design,
construction and maintenance which is certainly more available to [the
Owner]' (who was also a defendant in the California litigation, but not
present in the arbitration), expecting that 'a wealth of such evidence will be
presented in the California litigation.' 33
In a preliminary award in I C C case no. 6401 (1991), involving
consolidated arbitrations brought by three Westinghouse Electric Corpora-
tion companies and by Burns & Roe Enterprises Inc. against the Philippines
National Power Company ('NPC') and the Republic of the Philippines, the
arbitrators held that jurisdiction over the Republic of the Philippines (which
was not a signatory to NPC's contracts with the claimants), could not
be derived from the fact that the Republic had initiated parallel pro-
ceedings, together with NPC, against Westinghouse and Burns & Roe in
a United States Federal Court. 33a Interestingly for purposes of applica-
tion of the litispendence principle, the Westinghouse arbitration and the
court proceedings against Westinghouse and Burns & Roe were com-
menced on the same day, while the Burns & Roe arbitration was introduced
three weeks later. In addition, the Philippines' complaint against Westing-
house for tortious interference in the fiduciary duties owed by President
Marcos to the Philippine people, and the complaints of the Philippines
and NPC against Burns & Roe (with one exception), were not subject
to arbitration under the contractual arbitration clauses. 33b Thus both
tribunals could validly exercise jurisdiction simultaneously over essentially
the same dispute. Quite understandably, therefore, both tribunals initially
faced requests from the respective defending parties for a stay of their
proceedings. The U.S. judge reached his decision before the arbitral tri-
bunal was even constituted. 33c He first of all stayed those portions of
the lawsuit covered by the arbitration clauses as mandated by section 3 of
the U.S. Federal Arbitration Act. In addition, he exercised his judicial
discretion and stayed the portions of the lawsuit which, while not covered
by the arbitration clause invoked by Burns & Roe, presented similar issues
to those subject to arbitration under the Westinghouse contract. Finally,
however, the judge ruled that the portion of the lawsuit alleging tortious

' Ibid., at p. 173.

Ia
Award dated 19 December 1991, p. 122, published in International Arbitration Report, Vol. 7, no. 1
(January 1992), Annex B.
Ib
The Republic of the Philippines et al. v. Westinghouse Electric Corporation et at., 714 F. Supp. 1362 (D.N.J.
1989).
Ir
See Ibid.
246 Arbitration International Volume 8 Number 3

interference in fiduciary duties was totally excluded from the arbitration, and
would proceed in parallel.
Following this decision, NPC and the Philippines withdrew their request for
a stay of the arbitral proceedings. 33d The arbitral tribunal was spared the need
to determine a litispendence question, even on its own motion, because the
U.S. judge had clearly demarcated the contours of the respective proceedings
and then organized his treatment of the case in a way which would avoid any
conflict. In fact, both tibunals reached the same result in respect of arbitral
jurisdiction over the Republic of the Philippines. 330 In any event, the U.S.
judge emphasized that the portion of the lawsuit allowed to proceed was
factually and legally distinct from the issues before the arbitrators. 33f On the
eve of the jury trial on the question whether Westinghouse had paid bribes to
President Marcos in connection with NPC's nuclear power plant contracts,
the parties announced a settlement of the dispute. 338
The third example stems from a complex web of contracts concluded in the
mid-1970's and related to co-operation between France and Iran in the field
of nuclear energy. These contracts gave rise, follow ing the 1979 Iranian
revolution, to an extremely complex dispute involving high-level diplomatic
negotiations and multiple arbitrations and legal proceedings in France and
Switzerland. Very schematically for the present purposes, S O F I D I F and
CEA (and others) in 1979 instituted an I C C arbitration in Paris against Iran
(and another). 34 In 1984, Iran instituted another I C C arbitration in Geneva
against CEA, based on a different contract. CEA thereupon was assigned a
part of S O F I D I F ' s claim in the Paris arbitration, and raised this disputed
debt as a set-off against Iran's claim in the Geneva arbitration. CEA thus
hoped to block the progress of the Geneva arbitration by invoking Article 29
of the then-applicable Swiss arbitration law (the Concordat or 'CIA') which
provided for a mandatory stay of arbitration pending determination by a
competent tribunal of a set-off claim. In an unpublished partial award dated
2 December 1988, the arbitrators decided to suspend the arbitral proceedings,
considering that article 29 C I A was mandatory and that it was premature to
consider the legal question of whether a set-off was permissible under Iranian
law. Iran successfully petitioned to have this award set aside by the Geneva
Court of Justice, whose decision was later confirmed by the Swiss Federal

id
See Arbitral Award, op cit., pp. 2-3.
,c
Curiously, the jurisdictional basis for arbitration of NPC's counterclaims against Burns & Roe (which
the U.S. judge had determined were not subject to arbitration under the arbitration clause invoked
by Burns & Roe) is not set out in the Arbitral Award. Presumably, Burns & Roe accepted arbitral
jurisdiction over NPC's counterclaims even though these exceeded the scope of the relevant contrac-
tual arbitration clause.
' The Republic of the Philippines et al. v. Westinghouse Electric Corporation et al., no. 88—5150, slip opinion
at 15-21 (D.N J . February 4, 1992), published in International Arbitration Report, Vol. 7, no. 2 (February
1992), Annex A.
Ig
See International Arbitration Report, Vol. 7, no. 3 (March 1992), pp. 10-11.
1
See e.g., the factural summary contained in the 17 May 1990 decision of the Swiss Federal Tribunal,
116 ATF l a p . 154 ff.
 Problems with Parallel and Duplicate Proceedings 247

Tribunal. 35 Subsequently, the Paris arbitration was nullified by the French

courts for lack of jurisdiction of the arbitrators, 36 and the Governments of
France and Iran ultimately concluded a global settlement putting an end to
the legal sideshows.37 These three cases provide textbook examples of the
special challenges presented by concurrent and related proceedings.

II. R E L E V A N T L E G A L R U L E S

(a) National Laws and International Conventions

As seen above, the litispendence question is encountered from time to time in
the arbitral context. However, few specific legal rules have been estabished for
the benefit of arbitrators. The few legal rules which do exist on this point are
mainly directed to the national court judge. For instance, the 1961 European
Convention on International Commercial Arbitration 38 provides in Article
VI(3). that:
Where either party to an arbitration agreement has initiated arbitration proceedings before
any resort is had to a court, courts of Contracting States subsequently asked to deal with the
same subject-matter between the same parties or with the question whether the arbitration
agreement was non-existent or null and void or had lapsed, shall stay their ruling on the
arbitrator's jurisdiction until the arbitral award is made, unless they have good and
substantial reasons to the contrary. 3 9

France has codified an exception de litispendance arbitral in its civil procedure

code, in addition to the litispendence exception concerning concurrent law-
suits. To the knowledge of the author, France is the only country to have
specified such a legal rule. The new French Code of Civil Procedure provides
in its article 1458(1) that:
Lorsqu'un litige dont un tribunal arbitral est saisi en vertu d'une convention d'arbitrage est
porte devant une juridiction de l'Etat, celle-ci doit se declarer incompetente.

It may be noted that these rules of court procedure concerning arbitral

litispendence operate only in favour of arbitration, generally allowing the
arbitrators the priority to determine questions concerning their jurisdiction.
A legal rule addressed to arbitrators is given in the U N C I T R A L Model
Law on International Commercial Arbitration, 40 which expressly authorizes

Ibid.
1991 Rev. arb., p. 326.
Le Monde, 31 December 1991, p. 20.
European Convention on International Arbitration, Done at Geneva, 21 April 1961, entered into force
Jan. 7, 1964, 484 U.N.T.S. 349 (1963-1964), no. 7041.
Ibid.
Model Law of the United Nations Commission on International Trade Law (UNCITRAL),
reprinted in 24 I. L. M. 1302 (1985), reproduced from the Report of the United Nations Commission
on International Trade Law on work of its 18th session, June 3-21, 1985, United Nations Official
Records, Fortieth Session, Supplement No. 17 (A/40/17), Annex I, pp. 81-93.
248 Arbitration International Volume 8 Number 3

the arbitral tribunal to proceed in parallel with a lawsuit, even if the lawsuit
was initiated first. Article 8 of the Model Law reads:
(1) A court before which an action is brought in a matter which is the subject of an
arbitration agreement shall, if a party so requests not later than when submitting his first
statement on the substance of the dispute, refer the parties to arbitration unless it finds that
the agreement is null and void, inoperative or incapable of being performed.
(2) Where an action referred to in paragraph (1) of this article has been brought, arbitral
proceedings may nevertheless be commenced or continued, and an award may be made,
while the issue is pending before the court. 41

This 'green light' given to the arbitral tribunal in instances of duplicate

proceedings pending before ordinary courts is also expressly stipulated in
section 1037 of the Civil Procedure Code of Germany:
Die Schiedsrichter konnen das Verfahren vorsetzen und den Schiedsspruch erlassen, auch
wenn die Unzulassigkeit des Schiedsrichterlichen Verfahren behauptet . . . wird ( . . . ) .
A similar provision is also found in Article V(3) of the 1961 European Convention:
Subject to any subsequent judicial control provided for under the lex fori, the arbitrator
whose jurisdiction is called in question shall be entitled to proceed with the arbitration, to
rule on his own jurisdiction and to decide upon the existence or the validity of the arbitration
agreement or of the contract of which the agreement forms part. 42

In situations where these legal rules are applicable, the arbitrator may
proceed as if no concurrent litigation was pending, subject, however, to the
arbitral award later being nullified or ignored. In all other situations, the
judge and the arbitrator operate without specific directives regarding the
conduct of parallel or duplicate proceedings beyond a determination of their
respective or concurrent claims to jurisdiction.
As mentioned above, the law in most countries requires that the judge, when
seized of a dispute involving an agreement to arbitrate, refer the parties to arbi-
tration unless certain exceptions apply. 43 Article II of the New York Convention
contains the most widespread expression of the rule and its exceptions:
1. Each Contracting Party shall recognize an agreement in writing under which the parties
undertake to submit to arbitration all or any differences which have arisen or which may
arise between them in respect of a defined legal relationship, whether contractual or not,
concerning a subject matter capable of settlement by arbitration.
2. T h e term 'agreement in writing', shall include an arbitral clause in a contract or an arbi-
tration agreement, signed by the parties or contained in an exchange of letters or telegrams.
3. T h e court of a Contracting State, when seized of an action in a matter in respect of which
the parties have made an agreement within the meaning of this article, shall, at the request of
one of the parties, refer the parties to arbitration, unless it finds that the said agreement is
null and void, inoperative or incapable of being performed. 44

Ibid.
See supra, note 38.
See supra, text accompanying note 3 and following pages.
1958 New York Convention on the Recognition and Enforcement of Arbitral Awards, 330 U.N.T.S.
3. A detailed commentary on the litispendence impact of Article 11(3) appears in Van den Berg, XI
Yearbook Commercial Arbitration, p. 425 (1986).
 Problems with Parallel and Duplicate Proceedings 249

It may be noted that Article 8 of the U N C I T R A L Model Law, reproduced

above, only repeats the exception stated in paragraph 3 and neglects that
contained in paragraph 1. However, most Model Law jurisdictions are also
likely to be New York Convention countries, and so the omission is of little
practical consequence. 45

(b) International Law and 'Supranational' Tribunals

The relevant legal rules under international law are different since, at least in
theory, international tribunals are not in conflict with national tribunals.
When a court or arbitral tribunal is created on the basis of a treaty between
States, the international tribunal is considered to be hierarchically superior to
any national court or private arbitral tribunal (the generally international
composition of private arbitral tribunals does not affect this status). Such
supranational tribunals typically determine that their jurisdiction takes pre-
cedence, and is not subject to the litispendence principle. 46 The Fluor decision
of the Iran-US Claims Tribunal, discussed above, is one example of this
principle, although the emphasis was placed on the exclusive nature of the
Claims Tribunal's jurisdiction rather than on any inherent superiority.
Tribunals established pursuant to the provisions of the Convention on the
Settlement of Investment Disputes between States and Nationals of Other
States 47 (hereinafter T C S I D tribunals') provide direct illustrations of such
situations, as do several historical international tribunals.

(i) ICSID Tribunals

The first I C S I D arbitral proceeding was also the first to face a litispendence
argument. Morocco invoked the possibility of proceedings which might be
brought before its domestic courts on certain loan agreements involving third
parties, but which were related to the investment agreement brought before
ICSID. 4 8 The arbitral tribunal stated that:
In such a hypothetical situation the Moroccan tribunals should refrain from making decisions
until the Arbitral Tribunal has decided these questions or, if the Tribunal had already
decided them, the Moroccan tribunals should follow its opinion. Any other solution would,

The UNCITRAL Model Law was approved by General Assembly Resolution 40/72 of 11 December
1985. Since then, several countries have proceeded to review the Model Law with an eye towards
either adopting it wholesale or incorporating parts of it into existing or new national arbitration laws.
As of April 1990, the following jurisdictions had adopted the Model Law: Canada (most provinces
and the Federal Parliament), Scotland, Cyprus, Australia, New Zealand, Nigeria, and Hong Kong,
as well as several states of the United States of America. The New York Convention is applicable in
all of these jurisdictions.
For a contrary view, consider the arguments advanced by Professor C. Schreuer, Decisions of
International Institutions Before Domestic Courts, pp. 327-346 (1981).
The Washington Convention was opened for signature March 18, 1965, 17 U.S.T. 1270, T.I.A.S.
No. 6090, 575 U.N.T.S. 159.
See the account of this arbitration published by Prof. P. Lalive, 'The First World Bank' Arbitration
(Holiday Inns v. Morocco) - Some Legal Problems', 1980 British Yearbook of International Law, p. 123-
161.
250 Arbitration International Volume 8 Number 3

or might, put in issue the responsibility of the Moroccan State and would endanger the rule
that international proceedings prevail over internal proceedings. 49

Another I C S I D tribunal addressed a litispendence issue quite differently.

In Benvenuti and Bonfant v. Congo,50 the defendant Government of Congo
referred to the existence of a suit it brought against Mr. Bonfant, in his
capacity as agent of the nationalized company, before the Revolutionary
Court of Brazzaville. It argued that the I C S I D tribunal should relinquish the
case to the Revolutionary Court. The I C S I D tribunal disposed of the
objection by declaring that 'the pendency of a case was in order only in the
event of the identity of the parties, of the subject matter, and of the cause of
the suits pending before the two tribunals.' 51 Since the Tribunal found that
these conditions were not fulfilled, on the basis that the parties were not the
same in the two proceedings, it did not even consider the question of hierarchy
of tribunals, or, to put it another way, the inequality of the competing
jurisdictions.

(ii) Historical Tribunals

Several older international tribunals provide further illustrations of the
invocation of the superior status of treaty-based tribunals over national courts
in the context of litispendence objections.
In the case of Estate of Jean-Baptiste Caire {France) v. United Mexican States^
the Franco-Mexican Commission rejected the Mexican Agent's objection of
litispendence based on a concurrent claim before the Mexican National
Claims Commission. The Commissioners reasoned that the fact a claim was
pending before a national tribunal did not preclude an international tribunal
from exercising jurisdiction. They went on further to declare that, although
they recognized the principle of litispendence, no rule of international law
obliged an international arbitral tribunal to abstain on that basis.53 However,
they identified a possible exception: when a national court was seized of
preliminary issues, the resolution of which was essential to the international
tribunal's adjudication of the dispute, the international tribunal might stay its
decision pending resolution of those issues.54
In its consideration of the Selwyn case,55 the British-Venezuelan Claims
Commission addressed a litispendence objection grounded on the pendency of
an identical suit before local Venezuelan courts. There, the convention
creating the Commission specifically stipulated that the Commission was
superior to local courts, and would not be jurisdictionally affected by the fact

Ibid., at p. 160.
VIII Yearbook Commercial Arbitration, p. 145 (1983).
Ibid.
Dec. No. 33 June 7, 1929, V RIAA 516.
Ibid., at 520.
Ibid., at 525.
IX RIAA 380.
 Problems with Parallel and Duplicate Proceedings 251

that the same question might be pending before a national court. 56 Within
limits set by the convention, the commission was empowered to act without
reference to national court decisions regarding the same dispute. 57
The Permanent Court of International Justice also faced the litispendence
issue in the unusual circumstances of the Case Concerning Certain German Interests
in Polish Upper Silesia.56 Three procedures concerning essentially the same
dispute (resulting from the expropriation of a factory at Chorzow) were
pending simultaneously, having been introduced (i) by the German sharehol-
ders before a court in Poland, and also (ii) before the Germano-Polish Mixed
Arbitral Tribunal, and (iii) by Germany before the Permanent Court of
International Justice. The P C I J rejected Poland's plea of litispendence,
observing that the actions were not identical, the parties were not the same,
and in any event the various courts were not of the same character. In a later
phase of the dispute, in the context of a further procedure brought by
Germany against Poland, the litispendence question was again addressed. The
Court held that 'when it has to define its jurisdiction in relation to that of
another tribunal, [it] cannot allow its own competency to give way unless
confronted with a clause which it considers sufficiently clear to prevent the
possibility of a negative conflict of jurisdiction involving the danger of a denial
of justice.' 59
Three cases before different Mixed Arbitral Tribunals also addressed the
litispendence principle. In an early preliminary decision in Battus c. Etat
Bulgare,60 the tribunal refused to order suspension of pending criminal pro-
ceedings in Bulgaria, as requested by the claimant, and likewise refused to
suspend its own proceedings, as requested by the defendant. The tribunal
asserted that its mixed character, established by international treaty, con-
firmed its predominant role for the resolution of all disputes attributed to its
special jurisdiction. The maxim 'le criminel dent le civil en etat', common to
French and Bulgarian Law and otherwise applicable in conflicts between two
national jurisdictions, was considered without relevance in the context of a
treaty-based international tribunal.
In Socaciu c. Etat Autrichien et autres,61 the existence of a pending procedure
before the courts of Romania was not considered, on the facts, to exclude the

The British-Venezuelan Claims Commission was constituted under the Protocols of 13 February and
7 May 1903, reprinted in IX RIAA 351 et seq. An original English text can also be found in British
and Foreign Stale Papers Vol. 96, p. 99. See specifically Article III of the Protocol of February 13, and
paragraph I of the Supplementary Protocol of May 7. For the Report on this Convention, see Jackson,
H. Ralston and W. T. Sherman Doyle, Venezuelan Arbitrations of 1903, including Protocols,
Personnel and Rules of Commission, Opinions, and Summary of Awards, S. Doc. No. 316, Fifty-eighth
Congress, Second Session, Washington, Government Printing Office, 1904, p. 292-479.
IX RIAA 380. For French translation, see Descamps-Renault, Recueil International des Traites de XXe
Siecle 1903, p. 795. See also Rudlqff Case, American-Venezuelan Claims Commission, IX RIAA 244,
254.
Series A, No. 6, pp. 19-20.
Series A, No. 9, pp. 31, 32.
Recueil des decisions des Tribunaux arbitraux mixtes, (Recueil TAM) Tome I, p. 791ss (11 fevrier 1922).
Recueil TAM, Tome VII, p. 785ss (14 mai 1927).
252 Arbitration International Volume 8 Number 3

jurisdiction of the tribunal. The litispendence principle had no basis, since

once the tribunal confirmed its jurisdiction, the competing national court
proceeding lost all purpose.
Finally, in Boskovitz c. S. A. Haditermeny et Etat hongroise,62 the tribunal refused
the litispendence objection raised by the defendant corporation regarding an
identical claim pending before the Budapest courts. The tribunal observed that
the two procedures did not concern exactly the same parties, as the State of
Hungary was not named in the action before the Hungarian court. More
importantly, however, the tribunal stated that, in international law, the
litispendence defence was justified in cases of a free choice made by the claimant
of the first court seized and by the danger of contradictory judgments from
equally competent judges which would render both decisions ineffective.
However, the tribunal determined that neither condition was present, since the
claimant had been compelled by a mandatory time limit to commence the
Hungarian action, and had requested and obtained a suspension of the
Hungarian proceedings pending the decision of the Mixed Arbitral Tribunal.
These three decisions thus illustrate both the special jurisdictional preroga-
tives of a truly supra-national arbitral tribunal and some of the basic policy
considerations which could justify acceptance of a litispendence defense before
an international arbitral tribunal.

III. C O N C L U D I N G O B S E R V A T I O N S
While a number of laws and legal rules stipulate the decision which a State
judge must take when confronted with a dispute involving an agreement to
arbitrate, no similar provisions automatically limit the arbitrator's discretion
when confronted with a dispute involving a simultaneous, equally competent
court proceeding. Indeed, some rules expressly authorize the arbitral tribunal
to proceed notwithstanding the duplicate lawsuit. How then should this
freedom be exercised?
Wholesale transfer of the first-in-time rule from civil court procedure into
international arbitral procedure would provide too rigid a standard to
promise satisfactory results in the context of international arbitration. As
noted throughout, the tendency is rather to favour the arbitral proceedings,
subject always to the ultimate sanction of the courts.
When a contract-based arbitration, however, competes with a national
court proceeding, and both tribunals may assert jurisdiction, no concrete
principles determine which should proceed. 63 It might be tempting to profit

Recueil TAM, Tome VIII, p. 607ss (15 septembre 1928).

Pierre Bellet has suggested that if arbitration should prevail over State justice, it should only be in
limited fields, with strong usages, where arbitration made its first progress (such as maritime
arbitration). Report on Concurrent Arbitration and Litigation, London School of International
Arbitration Colloquium on Multi-Party Arbitration, March 1986, p. 9.
 Problems with Parallel and Duplicate Proceedings 253

from the confusion which can easily arise between international arbi-
tration based on treaties and international commercial arbitration based
on contracts, particularly when State contracts are involved, and to assert
that arbitration is entitled to priority over litigation. It is worth re-
calling, however, that traditionally litigation was given priority over arbi-
tration. 64 Even though modern arbitration laws and jurisprudence have
neutralized this tradition, and indeed often give preference to arbitra-
tion,65 this does not completely settle the matter.
It is not possible to place public courts and private arbitration in the
same category. The most that can be said is that they are functionally
equivalent. There would appear to be no grounds, therefore, to assert a
prioritizing distinction between them. Thus, the extreme attitude that arbitra-
tion should automatically enjoy priority and in all circumstances would only
increase the number of conflicting decisions between arbitral and judicial
tribunals.
Conflicting decisions can arise when both the arbitrator and the judge are
simultaneously engaged in the process of deciding the validity of the arbitra-
tion agreement and/or the arbitrability of the subject matter of the dispute,
and neither has the obligation to await the decision of the other. Ideally, the
risk of conflicting decisions in such circumstances is attenuated if the same law
is applied to determine these questions, but there can be no guarantee even
then. The risk of conflicting decisions is increased, however, if the arbitration
is taking place in an arbitration-haven.
Switzerland is a leading example of a traditional host-country for interna-
tional arbitration. It has also recently enacted a modern arbitration law
designed to facilitate international arbitration proceedings. Under the new
Swiss international arbitration law, the validity of the arbitration agreement
may be confirmed by reference to any one of three or more possible legal
systems - the personal laws of the parties, the proper law of the contract, and
Swiss law. 66 In addition, the arbitrability of the subject matter is assessed
exclusively in accordance with the very liberal Swiss law, and not under either
the proper law of the contract or the personal laws of one or both of the
parties, if these differ from Swiss law.67 If, for example, the dispute is

See Doleman & Sons v. Ossett Corp. [1912] 3 KB 257;.'(A)11 arbitration agreements are defeasible . ..
when there is competition between arbitration and litigation, litigation is given precedence.'
The United States Supreme Court, for example, mandates that all doubts regarding the arbitrability
of a subject matter should be resolved in favour of arbitration. Moses H. Cone Memorial Hospital, 460
US 24, 25 (1983), 103 S.Ct. 941-942 ['(QJuestions of arbitrability must be addressed with a healthy
regard for the federal policy favoring arbitration . . . The Arbitration Act establishes that, as a matter
of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration, whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability.'] See also Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 US 395, 400-404 (1967); Southland Corp. v. Keating, 465 US 1, 12 (1984);
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 US 626 (1985), 105 S.Ct. 3346, 3353.
Article 178(2) in Chapter 12 of the Swiss Statute on Private International Law [hereinafter 'LDIP'],
concerning international arbitration.
Article 177 in Chapter 12 of the LDIP.
254 Arbitration International Volume 8 Number 3

arbitrable under Swiss law (concerns patrimonial rights), but is subject to the
exclusive jurisdiction of a State court under the proper law (concerns
patrimonial rights but is inarbitrable in that jurisdiction), then both a Swiss
arbitral tribunal and a court in another competent jurisdiction may lawfully
adjudicate the case, even if the court is located in a New York Convention
country. In such circumstances, it is clearly desirable that the decisions on the
merits not be in conflict. But if they are, which of the conflicting decisions is
the enforcement judge then to prefer?
This ultimate dilemma is well illustrated by the Rakoil affair. In I C C Case
no. 3572 (1982), 68 the Government of R'as Al Khaimah, part of the United
Arab Emirates, and R'as Al Khaimah Oil Company (Rakoil), both named as
defendants, contested the jurisdiction of the arbitral tribunal and did not par-
ticipate in the proceedings. They instead filed a lawsuit in R'as Al Khaimah
against the claimant and its assignor seeking to have the contract set aside and
requesting an injunction against the I C C arbitration proceeding in Geneva,
which had been instituted one month before. The claimant did not participate
in the lawsuit, which was decided in favour of Rakoil before the arbitrators
rendered their award. The arbitrators merely noted in their award that:
'the arbitration tribunal will add that the action instituted in the courts of R'as Al Khaimah
at the beginning of April 1979, or the order by the R'as Al Khaimah court of 3 December
1979, cannot stay the competence and jurisdiction of this arbitration tribunal to proceed with
the arbitration and to award on the merits of the case.' 69

The arbitrators did not contend that this resulted from the difference in the
timing of the procedures, but rather that the arbitral tribunal was not subject
to any decision by any court outside of Switzerland. But this truism is non
sequitur. The arbitrators did not address the question of whether the national
court had the power to affect the conduct of the parties. Nor did they
apparently even consider the more relevant question of res judicata. The
arbitral award was ultimately refused enforcement in the United Kingdom,
but in the unusual context of a garnishee action against a debt due to Rakoil
from a third party, on the grounds that the conflicting decisions created the
risk that the innocent garnishee might have to pay twice, once to the claimant
and once to the defendant. 70
In the absence of arbitration rules specifically addressing the litispendence
principle, the power to apply the principle can only be grounded in the
arbitrator's inherent authority over the conduct of the proceedings. This
power was affirmed by the Iran-United States Claims Tribunal, sitting as
a Full Tribunal of nine, in E-Systems, Inc. v. The Islamic Republic of Iran and
Bank Melli.11 The claimant requested interim protection from having to

XIV Yearbook Commercial Arbitration, p. I l l (1989).

Ibid., at pp. 116-117.
See XIII Yearbook Commercial Arbitration, p. 522 (1988) and XIV Yearbook Commercial Arbitration, p. 737
(1989).
2 Iran-United States Claims Tribunal Reports, p. 51.
 Problems with Parallel and Duplicate Proceedings 255

respond to a parallel proceeding introduced in Iran by the defendant's

Ministry of Defence in respect of a claim which could have been brought as a
counterclaim in the arbitral proceeding. The Tribunal decided that its
jurisdictional charter did not give it exclusive jurisdiction over potential
counterclaims (even though it enjoyed this privilege with respect to all claims),
and so refused the claimant's arguments. Nonetheless, the Tribunal decided
that it had:
'an inherent power to issue such orders as may be necessary to conserve the respective rights
of the Parties and to ensure that [its] jurisdiction and authority are made fully effective.'72

The Tribunal then requested that the defendant Government of Iran move
for a stay of the proceedings before the Public Court in Teheran until the
arbitral proceedings were completed. It should not be neglected that the
'inherent power' of the Iran-US Claims Tribunal is grounded in the interna-
tional agreements which created it. Nonetheless, even a contract-based
private arbitral tribunal enjoys some inherent authority over the conduct of its
proceedings.
The question, then, for every arbitrator faced with a valid litispendence
situation concerns the circumstances in which the principle should be applied.
No prescription can be given. An arbitral tribunal seized first of a matter
ought reasonably to pursue its mandate, but it should not lose sight of the
possibility that proceedings instituted by one of the parties in another forum
might indeed have a stronger basis for jurisdiction. The integrity of the
arbitral process is not served if an award is nullified or ultimately refused
enforcement. Conversely, the mere fact that a lawsuit was instituted first
should not bar resort to arbitration, as contractually agreed, but the arbitra-
tors should still consider carefully whether the arbitral agreement is really
valid and enforceable. After all, conflicting outcomes only generate further
disputes, and the purpose of arbitration is to resolve them.
Thus no specific rule is available to guide the international arbitrator faced
with concurrent proceedings, except perhaps in the privileged context of
supra-national arbitral tribunals. Considerations of procedural expediency
need to be weighed against considerations of consistent judicial decisions and
such determinations can only be made case by case. While the three
conditions for application of the litispendence principle effectively reduce the
frequency of its possible use, it is also sufficiently flexible to allow for decision
either to proceed with, to stay, or to dismiss an arbitration faced with prior
proceedings pending elsewhere.

Ibid., at p. 57.