Abuse of Process in Investment Arbitrations

Due to the increase and development of international investment arbitrations, investors have abused procedural tactics to increase their chances of winning in these arbitration proceedings. This undermines the credibility of international arbitration as one of the effective means of resolving international disputes. Abuse of processes in investment arbitration takes place when an investor exercises his right in a way that is contrary to the aim and purpose of that right. It happens when chain companies and subsidiaries owned by a parent company or shareholders of a chain company with different nationalities seek the same relief against the host at different arbitral tribunals in parallel or simultaneous lawsuits. Therefore, the host state will face multiple claims from multiple investors and is required to pay multiple damages. The principle of abuse of process is an expression of the more general principle of good faith, a fundamental principle of international law, as well as investment law. So, ICSID tribunals will often invoke the principle of abuse of process in their cases.