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Res Judicata In Arbitration

The ending of disputes or any suit is a main objective of arbitration. Most of the arbitration award are voluntarily respected, so the protection given by the doctrine of res judicata is rarely tested. As a result, the application is not always well understood. This paper explores the scope of cause of action estoppel, issue estoppel, and the abuse of process doctrine in the context of arbitration proceeding internationally.

The research paper gives practical guidance in the scope and limits of the given principle before UK, Singapore, Australian courts. It concludes that the practitioners need to be aware of the significant limitation of the doctrine of res judicata to evaluate the risk that arbitral award may not fully determined a dispute.

In the international arbitration there is one of the fundamental objectives is present i.e., finality of decision. While most of the arbitral award are voluntarily respected and remarkably which has been devoted by the national courts or commentators to the res judicata doctrine and estoppel.

While understanding the nuances of the estoppel and res judicata it can assist practitioners to asses on the opportunities following an award and inform the cause of action and pleadings.
This research paper gives the practical guidance on the scope of the given doctrine to country like UK, Singapore and Australia. How res judicata applied in arbitration and with the help of various other principle in different country like UK, Singapore and Australia?

Doctrine of res judicata and final decision

Historically, inaccurate pleadings and judgment tended to cancel the different facts of the res judicate doctrine, making the field more difficult to search. The modern tendency has been to use the doctrine of res judicata to cover all these given doctrines of estoppel. A final judicial and arbitral determination animate the estoppel. In the arbitration it is well established that an award is final and bonding and creates the doctrine of res judicata between the parties.

This doctrine of res judicata may be distilled into three conceptually through inter-related with the principle i.e., cause of action estoppel, issue estoppel, the abuse of process. The given principle is overlap and more than one may apply to the same facts.

The cause of action estoppel is the narrowest and the strongest part of the res judicata shield. It prevents a party from the asserting a cause of action or defense that has been previously determined in the proceeding between the same parties.

It never prevents two separate cause of action which is arising from the same set out of facts. In practical way, it is more unlikely that party will attempt or relitigate a matter which is having the same cause of action and decided by the arbitral tribunal.

In the case of issue estoppel, it prevents the parties from seeking the reagitate the issue that was in the reasoning of previous arbitral decision even when the cause of action is different. It is broader concept then the cause of action estoppel and it may be complicated to apply and protection it offers successful parties in an arbitration to limitation.

In UK and Australia, the estoppel extends to issue that should have but not actually raise in the earlier proceedings. In the doctrine of issue estoppel, it may raise in respect of point but it didn't argue and in Singapore where litigant raise a point but it concedes or fails to argue that's why Singapore has preferred to apply the doctrine of abuse of process.

In the special circumstances, when the element of issue estoppel is established, the court may be decline to apply the special circumstances doctrine.

In Singapore and UK, the issue estoppel doctrine is more flexible than the cause of action estoppel.

Special circumstances are not a closed category and it will depend upon the facts of the case. For example: 1. Default judgment 2. The revelation of new material not reasonably discovered in the earlier proceeding.

The special circumstances exception and judicial tendency toward caution may limit the scope of issue estoppel doctrine quite substantially. For the practitioners it is very important to note the extent of limitation in asses the risk of relitigating of matter which may determine in an arbitration.

In the case of abuse of process, this doctrine is voluntary appearance of the inherent power which court of justice must be possess to prevent the misuse of its procedure. In the context of res judicata doctrine from the given case "Henderson vs. Henderson in UK" and "Port of Melbourne authority vs. Anshun Pty Ltd in Australia".

Proceeding that are not estoppel it may be nevertheless constitute an abuse of process.

There are some points where proceeding would be abusive if:
  1. oppressive or unjustly harass the defendants
  2. dishonestly element
  3. produce inconsistent which involve relitigating a claim
  4. not argued which is abandoned

An arbitral award is the decision where it will be considering as res judicata in any subsequent proceeding that the same parties is attempt to bring the case against each other. In res judicata, it considered as final decision which binding upon the parties.

Res judicata applies apply that the subject matter of judgment is previously heard and final and cannot be relitigate as judgment is final and between the parties which subject to any appeal and challenge.

The common law approached which allowed the various res judicata plea i.e., a plea of cause of action estoppel, issue estoppel or abuse of process.

It is not possible to list all the comprehensive possible form of abuse so one cannot any fast rule to determine on the given facts.


Identity of parties
In the principle of cause of action estoppel, the parties to the earlier and subsequent proceeding must be same. Where a party commence a proceeding in a representative capacity it will be also binds the person which they are representing. The person who acts in a representative capacity may sue separately in their own capacity.

In case of issue estoppel, the requirement for the parties in the earlier and subsequent proceeding also applied to issue estoppel. The so called broader, approach or the principle to issue estoppel in which one that didn't strictly require the identity of parties.

There is one case which dealt with issue estoppel and considered that collateral estoppel i.e., "Rachel S. Grynberg, Miriam Z. Grynberg and RSM Production Company v. Grenada" in which it is well established as a general principle of law applicable in international arbitral tribunal being a species of res judicata.

In the principle of abuse of process, in the litigation this doctrine is broad, flexible and merit based which does not require any identity of parties to same in the UK and Singapore.

But the presence of new party it will be very difficult to establish that a subsequent proceeding is abusive. In the case of arbitration, UK court have made that clear that special circumstances will be arbitral determination that prevent the litigation or arbitration where the parties are not same.

In Australia the court haven't yet abandoned the requirement of identity of parties, anshun estoppel has been limited to situation where the parties to the earlier subsequent proceeding are same.

In the international investment tribunal have applied a civil law approach to res judicata in the case of "Gavazzi v. Romania" where it is applied a triple identity criterion to consider that there was no res judicata as under the international law three condition must be fulfilled for a decision to binding effect in later proceeding i.e., object of claim, the cause of action and the parties are identical.

Conclusion
This research paper concludes that the doctrine of res judicata protects the side of international arbitration by ensuring finality of the disputes. As we know, most of the arbitral award are voluntarily respected and the protection offered by the doctrine of res judicata is rarely tested.

In the practical term, it says that the shield offered by the doctrine of res judicata may in fact be less certain and less effective than it is commonly assumed. As we know, that cause of action estoppel is narrow but strongest principle. Issue estoppel is not so simple to apply and the court have to exercise caution in deploying it.

So the special circumstances is exception to the doctrine which has also increased scope in the UK and Singapore. The principle of abuse of power which is rarely deployed to preclude the proceeding. However, the practitioners must be aware of the limitation of the doctrine of res judicata to more accurate and assess the risk associated with arbitration and even in situation where appeal rights are also heavily circumscribed.

The international disputes are becoming more complex which involve multi proceeding that means more arbitral tribunals will have to rule on the doctrine of res judicata issues. By this it may increase the no. of arbitral award will outcome especially in international commercial arbitration.

Reference:
  1. Rachel S. Grynberg, Miriam Z. Grynberg and RSM Production Company v. Grenada ICSID Case no. ARB/10/6, Award,10 December 2010 para 4.6.6; amco asia corporation v. republic Indonesia decision on May 10, 1988.
  2. Article 1355 of the French Civil Code which reads as follows: "The authority of res judicata applies only with respect to the subject-matter of the judgment. The subject-matter of the claim must be the same; the claim must have the same ground; the claim must be between the same parties, and brought by and against them in the same capacity." Which is retrieved on 24th April 2022.
  3. Effem foods pty ltd v. Trawl industries of Australia pty ltd (1993) 43 FCR 510 538 39 (GUMMOW J) which is retrieved from the website of http://www.arbitrationmatter.com
  4. Varun Ghosh BA (HONS), LLB (west Aus.); LLM (cantab) is a senior associate at king & wood Mallesons, Perth and sessional lecturer at university of western Australia which is retrieved on 24th April 2022.
  5. Gary B Born, international commercial arbitration (2nd edition, Kluwer Law international, 2014) 3741.
  6. See e.g., Henderson v Henderson (1843) 3 Hare 100 which is retrieved from the website of arbitration/resjudicata.com
  7. Res judicata in arbitration is given in the website of http://www.acerislaw.com which is retrieved on 24th April 2022.
  8. The example of case and judgment related to arbitration in res judicata which is retrieved from the website of http://www.blog.ipleader/arbitration/resjudicata.com
  9. An uncertain shield: Res judicata in arbitration is retrieved from the international commercial arbitration matter which there are some case related to some principle from the website http://viamediationandarbitrationcenter.com

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