Mass Torts and Arbitration: Lessons from Abaclat v. Argentine Republic
University of Missouri School of Law
May 22, 2012
University of Missouri School of Law Legal Studies Research Paper No. 2012-15
Conventional wisdom considers post-dispute arbitration agreements involving large numbers of parties to be impossible to obtain due to difficulties associated with obtaining consent from the various parties. However, the recent jurisdictional award in Abaclat v. Argentine Republic suggests otherwise, particularly with respect to claimants’ consent.
Abaclat involves 60,000 Italian bondholders who sought to bring a claim jointly against Argentina in the context of an international investment arbitration proceeding under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID Convention) and a bilateral investment treaty (BIT) between Argentina and Italy. Although this is the first time that a mass claim has been asserted in the ICSID arena, a majority of the tribunal held in a much-heralded jurisdictional award that such claims are admissible, at least as an initial matter.
Although some people may view Abaclat as limited to the world of international investment arbitration, the majority and dissenting awards provide a number of useful lessons to those working in other areas of law as well. This chapter uses Abaclat as an initial starting point for a number of important analyses, including whether and to what extent arbitration is better suited than litigation to resolve large-scale international disputes. The discussion also addresses key concerns involving consent in the absence of a pre-dispute arbitration agreement, including:
(1) practical and logistical difficulties associated with obtaining consent from a large number of claimants; and
(2) tactical difficulties associated with obtaining consent from respondents in a dispute involving mass claims.
While some aspects of the discussion focus on particular issues relating to mass torts, the text is equally relevant to other types of disputes, particularly in the wake of recent U.S. Supreme Court decisions in AT&T Mobility LLC v. Concepcion and Stolt-Nielsen SA v. AnimalFeeds Int’l Corp. Thus, the analysis will be of interest to those working in class actions, global class actions, class arbitration, collective redress, collective arbitration, international commercial arbitration and international investment arbitration, as well as mass torts.
This chapter is scheduled to appear in a collection of articles entitled Uncertainty and Mass Tort: Causation and Proof in late 2012 or early 2013. The volume will published in English, Spanish and Portuguese.
Keywords: class actions, global class actions, class arbitration, collective redress, collective arbitration, international commercial arbitration and international investment arbitration, mass torts, alternative dispute resolution, arbitration, civil procedure
Date posted: May 23, 2012