Forthcoming book chapter in Uncertainty and Mass Tort ...

Forthcoming book chapter in

Uncertainty and Mass Tort: Causation and Proof (Cambridge University Press, 2015)

1

Mass Torts and Arbitration:

Lessons From Abaclat v. Argentine Republic

S.I. Strong*

One glance at the daily news is enough to suggest that mass torts are on the rise. From oil spills

in the Gulf of Mexico to international fraud perpetrated by Bernard Madoff to personal injury

caused by asbestos, humanity seems increasingly capable of causing personal and economic

injury on a massive, often international, scale.

All, however, is not lost. Indeed, even while our propensity for harming others appears

to have increased, so, too, has our ability and inclination for providing legally sanctioned redress.

Where once there was only one form of large-scale legal relief – the class action, as developed in

the United States – there is now a diverse range of procedural mechanisms that provide

collective redress for non-contractual injuries.

While national differences regarding collective relief are irrelevant when a mass injury is

contained within a single state, a rising number of large-scale legal injuries are international in

scope. Indeed, the European Commission recently estimated that nearly ten percent of all

collective injuries within the European Union include a cross-border element.1

The increasing incidence of international large-scale legal injuries has not gone

unnoticed. Numerous international and regional organizations have begun to consider issues

* D.Phil., University of Oxford (U.K.); Ph.D., University of Cambridge (U.K.); J.D., Duke University;

M.P.W., University of Southern California; B.A., University of California, Davis. The author, who is

admitted to practice as an attorney in New York and Illinois and as a solicitor in England and Wales, is

Senior Fellow at the Center for the Study of Dispute Resolution and Associate Professor of Law at the

University of Missouri. This paper was written in part while the author was the Henry G. Schermers

Fellow at the Hague Institute for the Internationalisation of Law and the Netherlands Institute for

Advanced Study in the Humanities and Social Sciences, and the author gratefully acknowledges the

contributions of both institutions.

1 See Green Paper, Consumer Collective Redress, COM(2008)794 ¶15 (27 November 2008).



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relating to cross-border collective redress, with the American Bar Association,2 the American

Law Institute (ALI),3 the Canadian Bar Association,4 the European Union,5 the International Bar

Association (IBA)6 and the Organization for Economic Co-operation and Development (OECD)7

all either undertaking relevant research projects or proposing various means of resolving the

substantive and procedural difficulties that arise in large-scale international disputes. Courts

have also addressed this issue, albeit on a largely ad hoc basis and with varying degrees of

success.8

Although states often differ in the types of group litigation devices that they adopt,9 there

is one common thread, namely the desire to avoid duplicating the kinds of problems that are

commonly associated with U.S. class actions.10 Thus, legislators have focused on the

development of procedural mechanisms that limit both the ability and inclination to institute

2 See ABA, Aug. 2011; see also ADEBOYEJO, B.M., Aug. 6, 2011. 3 See ALI, GUIDELINES; see also ALI, PRINCIPLES, 2010. 4 See CBA, June 2011. 5 See European Commission Communication, 2013: ¶¶2.3, 3, 3.7, 4; European Commission Draft

Recommendation, 2013: Recital 26; European Parliament, Resolution, 2012; European Commission,

Public Consultation, 2011. 6 See IBA Submission, April 28, 2011; IBA Collective Redress, Oct. 16, 2008. 7 See OECD, 2007: 12-13. 8 Some of the best examples of judicial decisions addressing cross-border collective relief arise out of

Canada and the United States. See Morrison v. National Australia Bank Ltd., 130 S.Ct. 2869, 2885-89

(2010); Canada Post v. Lépine, [2009] 1 S.C.R. 549, 2009 S.C.C. 16; In re Vivendi, SA Securities

Litigation, No. 02 Civ. 571(RJH) (HBP), 2009 WL 855799, at *14 (S.D.N.Y., Mar 31, 2009); Silver v.

Imax Corp., (2009) 66 B.L.R. (4th) 222 (Can. Ont. Sup. Ct. J.); HSBC Bank Canada v. Hocking, 2008

CarswellQue14596, ¶¶83-88; Johnson v. United States, 238 F.R.D. 199, 214-15 (W.D. Tex. 2006); Currie

v. McDonald’s Restaurants of Canada Ltd. (2005) 74 O.R. (3d) 321 (C.A.); Parsons v. MacDonald’s

Restaurants of Canada Ltd., 2005 CarswellOnt 544; Kern v. Siemens Corp., 393 F.3d 120, 128-29 (2d

Cir. 2004). 9 Courts have long been protective of their domestic forms of civil procedure, with some commentators

claiming that states “may be more likely to consider abandoning their own substantive regimes of

commercial law . . . than they would surrender their own procedure.” MAIN, T.O., 2010: 837. 10 See European Parliament, Resolution, 2012: ¶2; European Commission, Public Consultation, 2011:

¶¶21-26; Green Paper, Consumer Collective Redress, ¶48; HENSLER, D.R., ET AL. (Eds.), 2009;

STIGGLEBOUT, M., 2011: 444.



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mass proceedings.11 However, efforts to reform the civil justice system are usually not

undertaken in a vacuum. Instead, those working in this area of law typically attempt

simultaneously to identify any alternative means of dispute resolution that may reasonably be

adapted to the unique challenges of mass claims.12

While mediation is often discussed as an appropriate counterpart to collective redress,13

arbitration has a longer and arguably stronger track record in resolving large-scale legal

disputes.14 For example, class arbitration has been available in the United States since the early

1980s,15 with other jurisdictions, most notably Canada and Colombia, having also considered

11 See HODGES, C., Resolving, 2009: 333. 12 See HODGES, C., Resolving, 2009: 333. Thus, for example, the European Commission explicitly sought

input regarding alternative dispute resolution devices in a recent public consultation on cross-border

collective redress and the European Parliament expressed an intent to pursue alternative means of dispute

resolution as part of its coherent approach to the issue. See European Parliament, Resolution, 2012: ¶25;

European Commission, Public Consultation, 2011: 13, 15, 19-20. 13 See European Parliament, Resolution, 2012: ¶25; European Commission, Public Consultation, 2011:

¶¶4, 19, Question 19. This is particularly true in Europe, given the recent directive concerning mediation

in cross-border commercial matters. See Directive 2008/52/EC of the European Parliament and of the

Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters [2008] OJ L

136/3. Indeed, Spain has recently enacted Real Decreto-ley 5/2012 de marzo, de mediación en asuntos

civiles y mercantiles, which will address mediation in civil and commercial matters, including those of a

cross-border character. See Real Decreto-ley 5/2012 de marzo, de mediación en asuntos civiles y

mercantiles, Boletín Oficial Del Estado, martes 6 de marzo de 2012, Núm. 56, Pág. 18783, art. 2(a),

available at http://www.boe.es/boe/dias/2012/03/06/pdfs/BOE-A-2012-3152.pdf. However, mediation

does not appear to be the panacea some people hope it will be, particularly in multiparty scenarios. See

NOLAN-HALEY, J.M., 2012: 981; SUSSKIND, L.E. & L. CRUMP, 2008. 14 See STRONG, S.I., Class, Mass, 2013: ¶¶1.12-1.28. Multiparty proceedings outside the context of

collective redress have increased in recent years. See LEW, J.D.M., ET AL., 2003: ¶16-1 (noting the

percentage of multiparty arbitrations administered by the ICC rose from 20 percent to 30 percent between

1995 and 2001); OSTRAGER, B.R., ET AL., 1999: 443 (discussing non-class arbitration with 140 parties);

PLATTE, M., 2002: 67 (noting more than 50 percent of LCIA arbitrations reportedly involve more than

two parties). 15 See Keating v. Superior Court, 645 P.2d 1192, 1209–10 (Cal. 1982), rev’d on other grounds sub nom.

Southland Corp. v. Keating, 465 U.S. 1 (1984); SZALAI, I.S., 2008: 421-25 (suggesting representative

relief in arbitration dates back to 1918-19).



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adoption of the device for use in domestic disputes.16 Several other jurisdictions, most notably

Spain and Germany, have also developed non-class forms of collective arbitration.17

At this point, all types of class or collective arbitration have involved situations where

there is a pre-existing contractual relationship between the parties.18 Indeed, some commentators

have written that it is “impossible” to obtain consent to arbitrate from all parties to a dispute

where the commonality of facts is the sole link between the parties.19

This puts parties to mass torts in something of a difficult position, since it suggests that

the only type of mass tort that may be arbitrated involves situations where the parties are already

in some sort of pre-existing contractual relationship.20 However, recent developments in the area

of international investment arbitration suggest that mass tort arbitration may not be as far-fetched

as it once appeared. Instead, arbitration of mass tort claims may in fact be possible, although

these sorts of disputes will have to be made subject to a submission agreement (compromis) that

is entered into after the dispute itself has arisen.21

16 See Manitoba Law Reform Commission, Report 115, Mandatory Arbitration Clauses and Consumer

Class Proceedings 3-4, 22-23 (April 2008); Valencia v. Bancolombia; STRONG, S.I., Canada, 2012: 922. 17 See Real Decreto-ley 231/2008 de 15 de febrero, por el que se regula el Sistema Arbitral de Consumo,

Boletín Oficial Del Estado, lunes 25 de febrero de 2008, Núm. 48, Pág. 11072, arts. 56-62; S v M, Case

No. II ZR 255/08 (German Federal Court of Justice, 6 April 2009), Kriendler Digest for ITA Board of

Reporters, available at www.kluwerarbitration.com; see also BORRIS, C., 2011: 62; STRONG, S.I., Spain,

2013: 495. 18 See, e.g. Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013); Sutter v. Oxford Health Plans

LLC, 133 S. Ct. 2064 (2013); AT&T LLC Mobility v. Concepcion, 131 S.Ct. 1740 (2011); Stolt-Nielsen

S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010); Bazzle v. Green Tree Fin. Corp., 539 U.S. 444

(2003) (plurality opinion). 19 See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18. 20 These torts may arise in the alternative, as an entirely different cause of action (as in cases involving

negligence, for example), or may be inherently dependent on the contractual relationship (as in cases

involving medical malpractice). See KOENIG, T.H., 2008: 735 (discussing “contorts” and claiming “[t]he

sharp division between torts and contracts is breaking down as so many tort causes of action arise out of

contractual relationships”). 21 Parties to contractual and other disputes can also enter into an arbitration agreement after the dispute

has arisen, but it is usually easier to obtain an agreement to arbitrate before legal controversies arise, since

one party may believe there are tactical advantages to proceeding in litigation once hostilities begin. See

BORN, G.B., 2010: 37.



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This is a novel proposition, and this paper therefore considers whether and to what extent

it is both possible and desirable to have mass torts resolved in arbitration. In so doing, this

discussion focuses exclusively on cases where there is no pre-existing arbitration agreement, thus

distinguishing the analysis from existing debates about class and collective arbitration.22 While

much of the discussion focuses on international disputes,23 many of the issues raised herein are

equally applicable in the domestic realm.

The structure of the paper is as follows. First, Section I begins with a description of the

types of mass torts that are most amenable to arbitration so as to establish a common

understanding of the factual scenarios at issue.

Next, Section II describes several basic problems that arise when parties attempt to use

judicial forms of collective relief to resolve a cross-border dispute. As will be seen, these

obstacles make it difficult, and in some cases impossible, to resolve all claims at a single time, in

a single forum, thus thwarting one of the primary purposes of class and collective relief.

22 Some mass torts will arise within the context of a contractual relationship. See KOENIG, T.H., 2008:

735. If there is an arbitration agreement in that contract, even if it is silent or ambiguous as to class

treatment, then courts and arbitrators must consider the amenability of those claims to arbitration under

existing analyses. See Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013); Sutter v. Oxford

Health Plans LLC, 133 S. Ct. 2064 (2013); AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011);

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010); STRONG, S.I., First Principles, 2012;

STRONG, S.I., Sounds of Silence, 2009. If there is no arbitration agreement in the contract (which is

different than an arbitration agreement that is silent or ambiguous as to class treatment), then the claims

can be considered under the analysis in this paper. The Spanish system of collective consumer arbitration

may also be highly relevant to this analysis. See STRONG, S.I., Spain, 2013: 495. 23 A mass tort can become “international” through one of several means. First, a tort may be considered

international if the injury is experienced in several different countries (for example, if a toxic cloud from a

manufacturing facility extends over several states). Second, a tort may become international if the effects

were initially experienced locally but some of the injured parties reside in other jurisdictions and therefore

“transport” their injury home with them (for example, if a train wreck occurring in one country injures

nationals of that country as well as tourists from other countries). Third, all of the injured persons may be

based in one country but one or more of the alleged tortfeasors may be based elsewhere (for example, if

an injury is caused by several corporate respondents, including a corporate subsidiary in the place where

the injury occurred and a parent company based in another jurisdiction). Although most scholarly and

judicial attention has been paid to issues relating to international plaintiff classes (situations one and two),

the third scenario can also arise. See GONZALEZ, A., 2012 (discussing a twenty-year mass dispute

between Ecuadorian plaintiffs and Chevron regarding pollution of the environment).



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Section III considers whether arbitration can resolve any of the issues raised in Section II.

As it turns out, arbitration resolves a number of these problems but simultaneously creates

others, most prominently with respect to the issue of consent to arbitration.

Although issues relating to consent once seemed insurmountable in the realm of mass tort

arbitration as both a practical and tactical concern,24 Section IV offers some new solutions in this

regard, based on an award that was recently rendered in the context of an investment arbitration

filed with the International Centre for Settlement of Investment Disputes (ICSID).25 The dispute,

entitled Abaclat v. Argentine Republic, is the first mass arbitration in the ICSID context and

involves a joint claim brought by 60,000 Italian bondholders against Argentina under various

investment treaties.26 Although international investment arbitration is governed by principles of

public international law rather than private international law, Abaclat provides some important

insights for those considering the possibility of mass tort arbitration, particularly with respect to

the concept of consent and procedure.

24 Traditionally, problems with claimant to consent to mass arbitration have focused on the practical

difficulties associated with identifying all relevant parties after the dispute has arisen and obtaining their

consent. See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18. Concerns about respondent consent have

centered on the belief that respondents are disinclined towards all forms of class and collective forms of

arbitration. See SMIT, H., 2004: 210-12. Certainly that is true in contexts other than mass torts.

However, much of that animosity may be due to the expectations held by many corporate respondents that

pre-dispute arbitration agreements in the consumer, employment and other realms were supposed to

eliminate the possibility of class relief. See STRONG, S.I., First Principles, 2012: 201. Because mass tort

arbitration will not suffer under the weight of those historic expectations and will instead be subject to

submission agreements that are completed after the dispute has arisen, it is possible that parties will

undertake a more rational cost-benefit analysis regarding the pros and cons of large-scale suits in

arbitration versus similar suits in litigation. See STRONG, S.I., Class, Mass, 2013: ¶¶6.6-6.52. 25 See ICSID Convention; Argentina-Italy BIT. 26 See Abaclat Award, 2011. On October 28, 2011, a dissenting opinion was rendered by Professor

Georges Abi-Saab, who subsequently resigned from the panel. See Abaclat Dissent, 2011. Two other

ICSID arbitrations also deal with mass claims arising out of the same basic fact pattern. See Ambiente

Ufficio Award; Alemanni v. Argentine Republic; CROSS, K.H., 2011; PETERSON, L.E., 2008. The

Ambiente Ufficio dispute cited Abaclat with approval. See Ambiente Ufficio Award, ¶¶7, 10-12; STRONG,

S.I., 2014.



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After considering the various lessons offered by Abaclat, the paper concludes in Section

V by drawing together the various threads of discussion and providing some final remarks

regarding the future of arbitration in mass torts. Among other things, this section discusses areas

where additional research would be useful.

Before beginning the analysis, it is important to dispel certain potential misconceptions

about arbitration. While people often consider arbitration to involve a single standard procedure,

arbitral practices actually vary significantly according to the subject matter of the claim at issue.

Because the procedures differ so radically, many of the criticisms that apply to one form of

arbitration are entirely inapplicable to another. It is particularly important to note that many of

the concerns associated with consumer and employment arbitration (including a perceived lack

of sophistication and resources on the part of some of the parties, benefits to repeat players,

inequality of bargaining power, and so on) do not apply to class and collective arbitration, which

is much more akin to complex commercial arbitration and litigation.27 Therefore, the level of

sophistication and formality of an arbitration involving mass tort claims would be very different

than an arbitration involving individual consumer or employment claims.28

Having cleared up that matter, it is time to consider the potential for mass tort arbitration

in cross-border cases. The discussion will begin with an analysis of the types of mass tort claims

that are most suitable for resolution in arbitration.

I. Mass Torts – Are Any Amenable to Arbitration?

27 See STRONG, S.I., Guide, 2012: 4-5; STRONG, S.I., First Principles, 2012: 201. For example, although

arbitration is often informal, the procedural approach used in some arbitrations “can closely resemble

proceedings in the commercial courts” at times, “[p]articularly in major matters,” such as class or

collective suits, where a great deal of money is at stake. BORN, G.B., 2009: 1746. 28 See STRONG, S.I., First Principles, 2012: 201.



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When considering which, if any, mass torts are amenable to arbitration, the first issue that must

be addressed is what constitutes a “mass tort.” Deborah Hensler, considering the question from

the U.S. perspective, has written that:

Mass torts involve a common set of injuries that occurred in the same or similar

circumstances – for example, a hotel fire, a building collapse, or widespread

product use – and that are allegedly linked to the actions of a single or small

number of defendants. Plaintiffs and defendants are represented by a small

number of law firms (relative to the magnitude of the litigation), and a single or

small number of judges frequently manage the litigation because of aggregative

procedures such as multidistricting and class action certification.

Because of this high degree of commonality, the outcome of any one case within

the litigation – regardless of whether it has been formally grouped with other such

cases – is highly influential on the outcome of other cases. A single large plaintiff

award for compensatory or punitive damages will increase the value not only of

other pending cases asserting the same facts and legal doctrine but also of similar

claims that may be filed in the future. A key doctrinal decision in a single case –

for example, on the availability of market share liability – may presage the

success or failure of massive litigation against particular defendants.

In addition to numerosity, commonality, and interdependence of case values,

many mass personal injury torts share three other features: controversy over

scientific evidence of causation, emotional or political heat, and higher than

average potential for claiming by allegedly injured parties.29

This definition of mass torts is striking in the way that it focuses on procedural issues

rather than factual or legal ones. There may be several reasons for this approach. For example,

some jurisdictions may find it necessary to conceptualize the notion of “mass torts” by reference

to certain procedural devices30 because mass torts arise out of such diverse fact scenarios that no

other unifying characteristic exists.31 In a way, the field of mass torts may be facing the kind of

29 HENSLER, D.R., 1995: 1596 (footnotes omitted); see also BRESCIA, R.H., 2009: 13-14; NAGAREDA,

R.A., 2007: viii. 30 See BRESCIA, R.H., 2009: 13; CAMPOS, S.J., 2011: 232; EFFRON, R.J., 2008: 2424 n.3; HENSLER, D.R.,

2000: 139-41; HENSLER, D.R., 1995: 1596; WILLGING, T.E. & E.G. LEE, 2010: 794. 31 Indeed, the field of “mass torts” may even be expanding to include human rights violations and

subprime mortgage litigation. See BRESCIA, R.H., 2009: 2-3 (analogizing the financial products at issue

as akin to other types of “toxic products” and noting that “borrowers, municipalities, large hedge funds,



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identity crisis that plagued individual torts a century ago, when courts and commentators could

not decide on whether there was a “law of tort” rather than a “law of torts.”32

Alternatively, some jurisdictions may need to rely on procedural factors to define the

field because of the fragmentary nature of the laws providing for collective redress. For

example, European legislation concerning collective injuries is typically differentiated by subject

matter area, thus requiring different analyses depending on whether the dispute involves

consumers, intellectual property, late payments in commercial transactions, electronic privacy,

environmental damages, product liability issues or competition (antitrust) law claims.33 While

European authorities have recently contemplated the creation of a coherent approach to cross-

border collective redress that would involve adoption of a horizontal, rather than sectoral,

approach, it will likely be some time before any binding procedures are adopted.34

Whatever the reason, the field of mass torts currently appears to be defined by matters of

procedure as much as (or perhaps even more than) matters of substance. However, this

phenomenon creates a number of difficulties, since the recent diversification of the various forms

of collective redress suggests that there is no cross-border understanding of what constitutes a

mass tort. A brief summary of the types of collective relief currently available around the world

demonstrates the extent of the problem from a procedural perspective.

sovereign wealth funds, and state attorneys general are actual and potential litigants”); CABRASER, EJ.,

2004: 2217-34 (discussing Holocaust claims as well as other global human rights class actions). 32 See STRONG, S.I. & L. WILLIAMS, 2011: 6 (discussing MILES, J.C., ET AL., 1910). 33 See HODGES, C., 2009: 78-82; SPACONE, A.J., 2000: 343, 349-50; STIGGLEBOUT, M., 2011: 443;

WAJERT, S., 2011. 34 See European Commission Communication, 2013; European Commission Draft Recommendation,

2013; European Parliament, Resolution, 2012: ¶15. However, numerous problems exist under the current

regime. See STRONG, S.I., Quo Vadis, 2013: 508.



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At this point, collective redress exists in three basic forms.35 First is the representative

class action, which is most commonly associated with the United States even though the device

is now available in one form or another in a variety of countries. Indeed, more than eighteen

states from both the common law and civil law traditions now provide for some type of class

relief in their national judicial systems.36 Although the more recently-adopted procedures are

often characterized as “class actions” because they provide for representative relief, most differ

from the U.S. model in certain key respects.

For example, some states make representative relief available only for certain substantive

claims, rather than adopting the trans-substantive model used in the United States. Furthermore,

some jurisdictions only allow a claim to be brought by an approved intermediary entity, such as a

formally recognized association, rather than permit private individuals to assert a suit on behalf

of others, as is the case in the United States. Finally, some states only permit representative

actions to be brought for injunctive relief, as opposed to the approach used in the United States,

where injunctive relief and individual damages are both available.37 This multiplicity of

procedures has led some commentators to use the term “collective” redress to describe non-

representative group litigation as well as any type of representative relief that varies significantly

from the U.S. model.38

35 For a survey of over thirty nations that have adopted some form of class or collective relief, see

HENSLER, D.R., ET AL., 2009; see also Global Class Actions Exchange; HENSLER, D.R., 2009: 14. 36 See HENSLER, D.R., 2009: 13. Interestingly, many states began to move toward U.S.-style class relief

at precisely the same time that the United States began to curtail class actions. See NAGAREDA, R.A.,

2007; SMITH, D.G., 2009: 895. 37 See HENSLER, D.R., 2009: 13-14; HODGES, C., Resolving, 2009: 331-32; STRONG, S.I., De-

Americanization, 2010: 501-04. 38 See HODGES, C., Resolving, 2009: 331-32.



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The second form of large-scale legal relief involves judicial aggregation, as practiced

primarily in England through the Group Litigation Order (GLO)39 and in the United States

through federal multi-district litigation (MDL).40 Judicial aggregation is a relatively

uncontroversial process, since parties are still asserting claims in their individual capacities, with

disputes only being joined for certain case management purposes in order to achieve procedural

efficiency.41

The third and final form of large scale judicial relief involves the creation of a class for

settlement purposes. This approach, which was pioneered by the Netherlands via the Act on

Collective Settlements 2005,42 has been successfully used in several high-profile cases.43 Other

nations also promote settlement of representative and aggregate disputes, but those settlements

typically arise informally as part of the litigation process. Notably, settlement in multiparty

39 The English GLO involves the creation of a judicial registry of individual claims that arise out of the

same fact pattern. See Civil Procedure Rules, Part 19, Section III (Engl.); Civil Procedure Rules, Practice

Direction 19B, Group Litigation (Engl.); HENSLER, D.R., 2009: 16-17; HODGES, C., England, 2009: 109-

10 (noting “[t]he GLO has been used in a wide variety of cases, notably product liability, abuse in child

care homes, holiday disasters, transport crashes, and cases against the government in respect of U.K. tax

issues”). The Law Society operates the Multi-party Action Information Service, which contains

information regarding any GLOs which are currently filed with the courts. See Law Society. 40 The U.S. MDL approach allows federal cases to be consolidated for pretrial purposes (typically

discovery and initial motions) and then returns the individual claims to their respective courts for final

disposition on the merits. See 28 U.S.C. §1407; HENSLER, D.R., 2009: 16-17. Notably, some U.S.

commentators have taken the view that certification of classes is particularly difficult in situations

involving mass torts, leading to the possible increase in use of aggregative techniques such as MDL. See

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011); Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999);

Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997); WILLGING, T.E. & E.G. LEE, 2010: 776-77,

806. However, researchers have been careful to note that “MDL aggregation is not exactly an alternative

to class action aggregation of claims.” WILLGING, T.E. & E.G. LEE, 2010: 794. 41 See HENSLER, D.R., 2009: 17; see also OECD, 2007: 11. 42 See TZANKOVA, I. & D.L. SCHEURLEER, 2009: 153-55; see also HODGES, C., Resolving, 2009: 342. 43 See TZANKOVA, I. & D.L. SCHEURLEER, 2009: 149 (noting the 2005 Act “places the Netherlands in the

forefront of developments on mass disputes”).

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disputes can be difficult, particularly in cases involving representative relief, since courts may

need to be assured that all parties’ right to procedural fairness have been met.44

Contemporary reliance on procedure as a means of defining “mass torts” makes it very

difficult to identify any subset of cases that would be more or less amenable to arbitration, at

least as an initial concern, although Abaclat may be instructive on this point, as discussed further

below.45 However, one objection that could be made in all factual scenarios is that these kinds of

claims simply cannot be made subject to arbitration, i.e., that mass torts are inherently non-

arbitrable.46

In some ways, this would be a difficult argument to make, since there is no doubt that

individual tort claims are arbitrable. To the extent that a mass tort is nothing more than the

assertion of a type of legal claim that can also be asserted by an individual, there would seem to

be no problems in allowing mass tort claims to be brought in arbitration. This conclusion is

bolstered by the fact that some types of mass tort claims have already been brought in class

arbitration, albeit in conjunction with various contract claims.47

44 See SUSSKIND, L.E. & L. CRUMP, 2008. The American Law Institute has specifically discussed

settlement procedures in both representative and aggregative contexts as part of its Principles of the Law

of Aggregate Litigation. See ALI, PRINCIPLES, 2010: ch. 3. 45 In particular, the Abaclat majority’s emphasis on homogeneity may suggest that only a small subset of

mass torts would be amenable to arbitration. See infra notes 259-71 and accompanying text. 46 Claims that are “non-arbitrable” may only be heard in court. See GAILLARD, E. & J. SAVAGE, 1998:

¶¶532-33. This paper uses the terms “arbitrable” and “arbitrability” in their international sense. In the

United States, arbitrability refers not only to the question of what issues are reserved to the courts as a

matter of law but also to matters relating to the scope of the arbitration agreement as a matter of party

intent. See BORN, G.B., 2009: 767. 47 For example, the claimants in William Spradlin v. Trump Ruffin Tower I LLC asserted fraudulent

misrepresentation, negligent misrepresentation, fraud in the inducement and fraudulent concealment in

addition to various securities and other claims. See William Spradlin v. Trump Ruffin Tower I LLC

(Am. Arbitration Ass'n, Sept. 3, 2009), available at http://www.adr.org/sp.asp?id=37509; see also Sussex

v. Turnberry/MGM Grand Towers, LLC, Case No. 11 115 01858 09 (Am. Arbitration Ass’n, Sept. 8,

2009), available at http://www.adr.org/si.asp?id=6154 (making similar claims). Another recent class

arbitration, Kent Knudsen v. North Motors, Inc., involved claims made in negligence. See Kent Knudsen

v. North Motors, Inc., Case No. 11 155 02699 09 (Am. Arbitration Ass’n, Dec. 29, 2009), available at

http://www.adr.org/si.asp?id=6234. A third arbitration, American Legal Funding v. Lopez, involved a

http://www.adr.org/si.asp?id=6154



13

However, mass torts may be seen as somewhat different from individual torts in that they

fulfill certain regulatory functions that some people might believe should remain subject to

public scrutiny.48 Alternatively, concerns might be raised about procedural fairness in large-

scale disputes, including those relating to access to justice and the right to individual conduct of

any procedure adjudicating one’s substantive rights.49

The question of arbitrability is a complicated one and is beyond the scope of the current

paper.50 However, it has been strongly suggested that a tribunal cannot “lose” its jurisdiction

over a mass claim if it has jurisdiction over a single claim based on the same facts.51 Indeed, the

United States Supreme Court has indicated that once certain matters have been determined to be

inherently susceptible to resolution by arbitration, they cannot be made non-arbitrable simply by

virtue of a change in procedure.52 These factors suggest that mass tort claims should be

considered arbitrable. However, the potential for difficulties regarding the arbitrability of mass

claim for statutory fraud, albeit in the somewhat usual context of a counterclaim against a litigation

funding entity. See American Legal Funding v. Lopez, Case No. 76 148 00391 08 GLO (Am. Arbitration

Ass’n, June 6, 2008), available at http://www.adr.org/si.asp?id=6330. 48 See BURCH, E.C., 2008: 74-76; HODGES, C., Resolving, 2009: 335-38; HENSLER, D.R., ET AL., 2000:

121-22; IBA Submission, 2011: 5-6; KOENIG, T.H., 2008: 734-35. Indeed, many Western nations do not

allow mass torts to be addressed through private litigation at all, since those issues that can be anticipated

ex ante are handled by regulation and social insurance while unexpected and catastrophic injuries are

remedied through public compensation funds. See KOENIG, T.H., 2008: 739; STRONG, S.I., Regulatory

Arbitration, 2013: 259; STRONG, S.I., Regulatory Litigation, 2012: 899; MULLENIX, L.S., 2011: 908

(noting that in this approach “government and industry combine[ ] to provide claimants with expeditious

relief without the necessity for litigation, findings of causation, liability, and damages”); PIP Breast

Implants and Mass Torts in Europe (claiming that “the European approach is more reliant on criminal law

than tort for deterrence, compensatory damages are limited because of the comparatively extensive

governmental social insurance, punitive damages are unavailable, and class actions are traditionally not

embraced,” although the latter is changing). 49 See BUCKNER, C., 2006: 195-203; WESTON, M., 2006: 1742-63. 50 More reading is available. See BORN, G.B., 2009: 766-841; STRONG, S.I., Regulatory Arbitration,

2013: 259; STRONG, S.I., Regulatory Litigation, 2012: 899. 51 See Abaclat Award, ¶490. While this observation was made in the context of a discussion regarding

consent, it would seem to have equal applicability to questions of arbitrability. 52 See Mitsubishi Motors Corp. v. Soler Chrylser-Plymouth, Inc., 473 U.S. 614, 633 (1985) (noting that

courts cannot claim that certain matters are “inherently insusceptible to resolution by arbitration, as these

same courts have agreed that an undertaking to arbitrate . . . [such] claims entered into after the dispute

arises is acceptable”); see also STRONG, S.I., Class, Mass, 2013: ¶3.113.



14

torts gives rise to questions about whether litigation might be an adequate means of resolving

large-scale claims in the cross-border context. This issue is discussed in the following section.

II. Mass Torts and Cross-Border Litigation

Procedural differences relating to the resolution of mass torts create no problems when all of the

parties to the dispute reside within the same jurisdiction. However, significant difficulties arise

when the parties involved in a mass tort reside in different countries. The principal concerns

relate to jurisdiction, enforcement, procedure and conflict of laws. Each is discussed separately

below.

A. Jurisdiction

The first and perhaps most important issue to consider in the context of cross-border litigation

involves jurisdiction, since every court must confirm that it has jurisdiction over both the parties

and the dispute before it can hear any particular case. However, international mass torts can

experience difficulties with respect to the extraterritorial exercise of both judicial and legislative

jurisdiction.53

Questions involving judicial jurisdiction consider whether a court has the right to assert

its power over persons involved in the matter at bar.54 This principle is applied differently in

different states.55 Parties involved in inter-European litigation might be presumed to experience

53 See COLANGELO, A.J., 2011: 1031-35; MONESTIER, T.J., 2010: 567-72. 54 Typically the issue involves personal jurisdiction, meaning the court’s power over a foreign party, but

some courts, including those in the U.S. federal system, must also consider issues relating to subject

matter jurisdiction, meaning the type of dispute in question. See STRONG, S.I., 2010: 537-57. 55 International lawyers are well-versed in the debate about different countries’ exercise of “exceptional”

extraterritorial jurisdiction. See EPSTEIN, D., ET AL., 2008: §§1.01, 3.02; BOLT, J.W. & J.K. WHEATLEY,

2006: 5-6; DUBINSKY, P.R., 2008: 306; MICHAELS, R., 2006: 1057-61. However, recent studies have



15

few difficulties in cross-border conflicts due to the application of the Brussels I Regulation

concerning jurisdiction and the enforcement and recognition of foreign judgments, since the

Brussels I Regulation attempts to minimize forum shopping and jurisdictional conflicts by setting

forth simple and predictable rules dictating where particular disputes should be heard in litigation

involving domiciliaries of different European Member States.56 The application of the

Regulation to individual torts is relatively straightforward, in that “[a] person domiciled in a

Member State may, in another Member State, be sued . . . in matters relating to tort, delict or

quasi-delict, in the courts for the place where the harmful event occurred or may occur,” in

addition to the place where the defendant is domiciled.57

However, application of the Brussels I Regulation breaks down in situations involving

mass torts.58 For example, cases involving multiple defendants can be brought wherever any one

of the defendants is domiciled.59 Mass torts involving consumers, employees or insureds could

be subject to various provisions expanding and diversifying the number of places where a suit

can be brought.60 While the Brussels I Regulation limits the possibility of parallel actions being

brought through provisions regarding lis pendens and the consolidation of related cases, mass

suggested that it is not just the particular national practices that are different, but the underlying

conceptions of jurisdiction. See MICHAELS, R., 2006. 56 See Brussels I Regulation. The Brussels I Regulation was recently revised, with the changes going into

effect on 10 January 2015. See Brussels I Recast; STRONG, S.I., Brussels I, 2013. However, these

revisions do not affect the current analysis. 57 See Brussels I Regulation, arts. 2, 5(3). Jurisdiction may exist elsewhere as well. See STRONG, S.I.,

Brussels I, 2013. 58 See STRONG, S.I., Brussels I, 2013; STRONG, S.I., Quo Vadis, 2013. 59 See Brussels I Regulation, art. 6(1) (stating “[a] person domiciled in a Member State may also be sued .

. . where he is one of a number of defendants, in the courts for the place where any one of them is

domiciled, provided the claims are so closely connected that it is expedient to hear and determine them

together to avoid the risk of irreconcilable judgments resulting from separate proceedings”). This

provision could provide the basis for bringing non-European defendants into the national court of a

European Member State. See Owusu v. Jackson, [2005] Q.B. 801 (Engl.); FELLAS, J. & D. WARNE, 2004:

373-88; MAYER, T.V.H. & P. SIGLER, 2004: 129-34; STRONG, S.I., 2005: 43. 60 See Brussels I Regulation, arts. 9, 15-16, 19.



16

torts may nevertheless involve a race to the courthouse as parties attempt to identify the venue

with the substantive and procedural laws that are most beneficial to their case.61

Outside the European Union, the situation is even worse, since there are no widespread

multilateral treaties on jurisdiction.62 Instead, courts typically consider jurisdictional issues

under their own national laws.63 There is no system of centralized coordination of actions, which

increases the possibility of parallel proceedings, anti-suit injunctions and anti-anti-suit

injunctions.

In contexts other than class and collective relief, questions of judicial jurisdiction relate

solely to matters involving the defendant. While jurisdiction over the defendant can be a

problem in cases involving international mass torts, the real debate about judicial jurisdiction in

collective disputes involves whether and to what extent a multinational plaintiff group can be

formed.

Normally, judicial jurisdiction over a plaintiff is established when that person files a

claim, since that act demonstrates consent to the jurisdiction of that particular court. However,

some class and collective suits deviate from the classic means of asserting a claim to the extent

that a single “lead” plaintiff or small group of plaintiffs can attempt to bring a cause of action on

behalf of themselves and a number of other similarly situated parties. In some cases, these

61 The possibility of forum shopping is increased because there is no single standard mechanism for group

or collective actions within Europe. See HODGES, C., 2009: 78-85; STRONG, S.I., Quo Vadis, 2013: 508.

While the number of potential venues will not be as broad under the Brussels I Regulation as it is under

principles of jurisdiction applicable in U.S. state and federal courts, where forum shopping is also

common in cases involving mass torts, the approach lacks the predictive certainty found in other aspects

of the Brussels I Regulation. See MICHAELS, R., 2006: 1007-08, 1019-20, 1027-64; see also European

Commission, Public Consultation, ¶28 (noting need to avoid forum shopping with new measures on

cross-border collective redress). 62 There are some regional exceptions, such as the Montevideo Convention, which is applicable in Latin

America, but even that instrument is not widely ratified. See Montevideo Convention; see also

Montevideo Convention Status. 63 National conceptions of jurisdiction can vary radically. See EPSTEIN, D., ET AL., 2008: §§1.01, 3.02;

BOLT, J.W. & J.K. WHEATLEY, 2006: 5-6; DUBINSKY, P.R., 2008: 306; MICHAELS, R., 2006: 1057-61.



17

additional parties are only joined into the mass suit if they affirmatively indicate their consent by

“opting in” to the action.64 However, some courts accept jurisdiction over parties unless those

parties affirmatively indicate that they do not want to be part of the suit, a process known as

“opting out” of the action.65 Opt-out actions can create jurisdictional problems in international

suits, since that process is antithetical to some jurisdictions’ conception of the parties’ individual

litigation rights.66 Because some foreign courts refuse to give preclusive effect to any judgment

that attempts to bind a foreign party through opt-out measures, some courts will refuse to accept

jurisdiction over any foreign members of a plaintiff class at the initiation of the suit, thus

eliminating the possibility of an international class or collective.67

Although the legal literature on cross-border collective redress focuses largely on the

problem of judicial jurisdiction over opt-out classes, difficulties can also arise with respect to

legislative jurisdiction, meaning the extraterritorial reach of a nation’s substantive laws. Because

a state typically only legislates for wrongs occurring or experienced within its own borders,

parties from different countries may be subject to different laws and cannot always consent to the

application of the forum state’s law.68 However, some courts allow the extraterritorial

64 Parties to aggregate actions also clearly indicate their consent to suit. 65 See MULHERON, R., 2012: 181-82; MULHERON, R., 2009: 441-48. 66 See MULHERON, R., 2012: 181-82; MULHERON, R., 2009: 441-48; STRONG, S.I., Brussels I, 2013. 67 See MULHERON, R., 2009: 445-46; STRONG, S.I., Brussels I, 2013; STRONG, S.I., Due Process, 2008:

90; WASSERMAN, R., 2011: 346-69. Some courts have accepted jurisdiction over foreign plaintiffs who

affirmatively opt into the action. 68 See STRONG, S.I., Regulatory Litigation, 2012: 899. Although agreements regarding choice of law are

permissible in many respects, some countries require a showing that either the parties or the dispute to

have some connection to the jurisdiction. Other states permit their laws to be chosen by parties regardless

of whether there is any connection to the forum. However, most choice of law agreements are made prior

to the time that the dispute arises, since tactical considerations may preclude agreement on choice of law

issues after a claim has been asserted.



18

application of national law in certain special circumstances.69 In most cases, the rationale is that

the laws must be given global effect if they are to fulfill their intended purpose.70

This raises an interesting question in the context of mass torts. While individual torts are

traditionally seen as being primarily a matter of local concern,71 the regulatory quality of mass

procedures could permit or require courts to give extraterritorial application to procedural

mechanisms that provide a regulatory effect. Unfortunately, this is a complicated issue that is

beyond the scope of this paper, but it bears mention as an issue that requires further analysis.72

While issues relating to judicial and legislative jurisdiction can be difficult in bilateral or

small-scale multilateral disputes, there is usually at least one venue where the matter can be

finally resolved, even if it is not optimal from some parties’ perspective. However, international

mass torts face an entirely different situation, in that there may not be a single national court that

has jurisdiction over all interested parties.73

This creates several problems. First, if a court is unable to assert jurisdiction over all of

the parties to the dispute, then one of the primary rationales supporting collective relief (i.e., the

resolution of large-scale disputes at a single time, in a single forum) cannot be fulfilled, thus

denying the parties of both efficiencies of scale and finality.

69 See Hartford Fire Ins. Co. v. California, 509 U.S. 764, 798-99 (1993); BROWER, C.H., II, 2011: 1131;

COLANGELO, A.J., 2011: 1042; KNOX, J.H., 2011: 635. 70 See BUXBAUM, H.L., 2006: 268-70. 71 This conclusion is demonstrated by conflict of laws rules indicating that the law of the place of the tort

should be applied regardless of where the claim is heard. See ALI, RESTATEMENT, §§6, 145 (U.S.).

Similarly, the Brussels I Regulation gives jurisdiction over an inter-European tort dispute to the court at

the place where the injury was felt. See Brussels I Regulation, art. 5(3). 72 The author has considered this issue elsewhere. See STRONG, S.I., Regulatory Arbitration, 2013: 259;

STRONG, S.I., Regulatory Litigation, 2012: 899. When considering such matters, courts and

commentators may be able to obtain some assistance from projects such as New York University’s

research program on global administrative law, which consider the interplay between regulatory regimes

in different countries. See New York University Institute for International Law and Justice; KINGSBURY,

B., ET AL., 2005: 15. 73 See NAGAREDA, R.A., 2009: 32-41; SAUMIER, G., 2005: 41-42.

http://web2.westlaw.com/find/default.wl?mt=208&db=780&tc=-1&rp=%2ffind%2fdefault.wl&findtype=Y&ordoc=0366190075&serialnum=1993130616&vr=2.0&fn=_top&sv=Split&tf=-1&pbc=EAD10D54&rs=WLW12.01



19

Second, requiring mass disputes to go forward in different jurisdictions can lead to

different parties having different rights and remedies, despite their having suffered identical

injuries. While these disparities also exist in cases involving individual torts as a matter of

principle, there is something disturbing about allowing some parties to a mass tort to obtain one

kind of relief while other parties are denied that opportunity even though their injuries arise out

of the same fact scenario. While some disparities in treatment may be justifiable as a result of

relevant national differences concerning the nature and scope of recovery,74 it is not clear

whether courts take these issues into account during a jurisdictional analysis.

Third, requiring matters to go forward in multiple jurisdictions can lead to inconsistent

results, since courts in one state are not bound by factual or legal determinations made

elsewhere. This can lead to defendants being required to undertake conflicting duties,

particularly if injunctive relief is sought. It can also give rise to the inequitable treatment of

injured parties, if judgments that are rendered earlier in time eviscerate a limited fund.75

Finally, international litigation always involves the possibility that some state courts are

inclined to render corrupt or biased judgments in cases involving foreign defendants.76 While

this is typically not a matter that is brought up at the jurisdictional stage,77 it is nevertheless an

74 For example, the presence of social insurance or public compensation funding in some jurisdictions

could offset the need for certain types of individual damages. See KOENIG, T.H., 2008: 739; MULLENIX,

L.S., 2011: 908; PIP Breast Implants and Mass Torts in Europe. 75 See BURCH, E.C., 2009: 42. 76 Certainly that has been the claim of Chevron in its longstanding battle against certain Ecuadorian

judgments regarding mass claims of environmental degradation. See CROOKS, E. & N. MAPSTONE, 2012. 77 The availability of a suitable alternate venue is, however, often a consideration in determinations

regarding motions to dismiss on grounds of forum non conveniens, which is a common law action seeking

dismissal of a lawsuit on the basis that the matter would be better heard in another venue. See STRONG,

S.I., Jurisdictional Discovery, 2010: 516. Dismissal on the grounds of forum non conveniens is different

than dismissal based on lack of jurisdiction, since in forum non conveniens cases the court has proper

jurisdiction but is simply declining to exercise it.



20

issue of great significance to parties who are faced with the possibility of defending themselves

in a foreign state court.

B. Enforcement

Jurisdictional issues are not the only difficulty associated with cross-border litigation.

International enforcement of foreign judgments can also create problems, particularly in the area

of mass torts.

Again, the analysis is somewhat different according to region, with inter-European

disputes possibly experiencing fewer problems than those arising elsewhere, although the

collective element creates certain unique problems.78 Enforcement of a foreign judgment within

the European Union is governed by the Brussels I Regulation, which aims to provide easy

enforcement of judgments rendered by courts in one Member State in the territory of another

Member State by requiring the courts of one European Member State to recognize the judgments

of courts of other Member States without requiring any special procedures or undertaking any

substantive review of the merits of the judgment.79 Only a few exceptions to recognition exist.80

As a result, parties to a single inter-European collective action should be able to obtain

recognition and enforcement of a collective award with some ease, although a number of

problems can arise if parties who did not choose to join that collective suit seek to bring an

individual action or a second collective action concerning the same subject matter.81

78 See STRONG, S.I., Brussels I, 2013; STRONG, S.I., Quo Vadis, 2013. 79 See Brussels I Regulation, arts. 33, 36. 80 These focus on judgments that are “manifestly contrary to public policy in the Member State in which

recognition is sought” or that are inconsistent with other relevant decisions of European Member States.

See Brussels I Regulation, art. 34. 81 See STRONG, S.I., Brussels I, 2013; STRONG, S.I., Quo Vadis, 2013.



21

Issues relating to the recognition and enforcement of collective judgments under the

Brussels I Regulation are beyond the scope of this paper.82 However, the potential difficulties

relating to recognition and enforcement of collective judgments within the European Union

could make collective arbitration the preferred means of addressing large-scale legal injuries

involving parties from different European Member States.83

Judgments that do not fall under the Brussels I Regulation are much more difficult to

enforce, since there is no widespread international (i.e., non-regional) treaty regarding

enforcement of foreign judgments.84 Instead, parties to the vast majority of cross-border disputes

must rely on the principles of international comity to obtain extraterritorial enforcement of a

judgment rendered by a national court.85 Comity analyses are typically subject to a significant

amount of judicial discretion, making international enforcement of foreign judgments highly

unpredictable and subject to political influences.

Enforcement of foreign judgments is problematic enough in cases involving bilateral

disputes. However, the potentially wide variation in national procedures regarding class and

collective relief and the significant policy and regulatory concerns that exist in cases involving

mass torts make the situation even more problematic when mass claims are involved.86

Enforcement of a foreign judgment can also be politically sensitive, especially in cases where a

82 The issues are discussed elsewhere. See STRONG, S.I., Brussels I, 2013; STRONG, S.I., Quo Vadis,

2013. 83 See STRONG, S.I., Brussels I, 2013. This is an interesting notion, since some commentators have

suggested that collective arbitration will not develop in Europe because the legal and commercial forces

that drove the development of class arbitration in the United States are absent in the European context.

See STRONG, S.I., Tea Leaves, 2010: 197-206; STRONG, S.I., De-Americanization, 2010: 495. 84 See BORN, G.B. & P.B. RUTLEDGE, 2007: 907-94. One other example of a regional treaty is the

Montevideo Convention, but it is not widely adhered to, even within Latin America. See Montevideo

Convention; see also supra note 62. 85 See Hilton v. Guyot, 159 U.S. 113, 163-164 (1895); BORN, G.B. & P.B. RUTLEDGE, 2007: 1009-18. 86 See NAGAREDA, R.A., 2009: 20 (also discussing “structural” differences).



22

particularly large amount of money is at issue or when the decision is perceived to have been

rendered pursuant to corrupt judicial practices.87

Interestingly, issues regarding enforceability do not typically arise at the end stages of a

dispute, i.e., during enforcement procedures themselves.88 Instead, concerns about enforcement

are more often lodged at the jurisdictional stage, when the decision is being made whether to

allow parties from other countries to join the group litigation.89 While such determinations make

sense on one level, in that they save parties from having to litigate a matter that may ultimately

result in an unenforceable judgment, this approach actually forestalls the further development of

this area of law. For example, a pre-emptive decision to prohibit a multinational class or

collective not only denies large-scale relief to the individual parties in question, it also eliminates

the future ability of other states to recognize that judgment, which might lead to the recognition

of a pro-enforcement policy. This approach seems particularly inapposite given the widespread

and diverse nature of class and collective relief around the world and the age of many of the

precedents on which these decisions are being based.90

The international legal community has recognized the significant problems associated

with international enforcement of class and collective judgments, and has responded with the

87 See Chevron, Ecuador Lawsuit; STRONG, S.I., Regulatory Litigation, 2012: 899. 88 There are exceptions, typically when the defendant is the only foreign party involved. See GONZALEZ,

A., 2012. 89 See DIXON, J.C.L., 1997: 134; BUSHKIN, I.T., 2005: 1581; MONESTIER, T.J., 2011: 1. In the United

States and other countries following a class action model, this is typically called the class certification

stage. See Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 996 (2d Cir. 1975) (admitting affidavits from

practitioners from the United Kingdom, the Federal Republic of Germany, Switzerland, Italy and France

stating that courts in those jurisdictions would not enforce judgments resulting from US class actions).

But see Cromer Finance Ltd v. Berger, 205 F.R.D. 113, 134-135 (S.D.N.Y. 2001) (allowing international

class). 90 One early U.S. decision, Bersch v. Drexel Firestone, Inc., is still frequently cited by courts and

commentators. See Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 996 (2d Cir. 1975) (admitting

affidavits from practitioners from the United Kingdom, the Federal Republic of Germany, Switzerland,

Italy and France stating that courts in those jurisdictions would not enforce judgments resulting from US

class actions); SIMARD, L.S. & J. TIDMARSH, 2011: 88; STIGGLEBOUT, M. 2011: 455; WASSERMAN, R.,

2011: 315.



23

creation of a number of procedural recommendations and protocols. Thus, for example, the IBA

has drafted a set of guidelines for recognizing and enforcing foreign judgments arising out of

cross-border collective redress,91 while the ABA and CBA have drafted a number of protocols to

address class actions involving U.S. and Canadian parties.92 Of course, while these provisions

are helpful, they are not in any way binding on national courts.

C. Procedure

Questions involving jurisdiction over and enforcement of multinational class and collective

lawsuits have been routinely discussed in the legal literature for years. Much less attention has

been paid to potential problems relating to the diversity of procedures associated with class and

collective relief, primarily because the United States was for many years the only country with a

private form of collective redress. In those days, the only important questions were whether a

U.S. class action could include non-U.S. citizens in the class and whether the award could be

enforced internationally. However, with so many different types of group litigation now

available, it is possible for parties to a mass tort to come from legal systems with vastly differing

procedures regarding class or collective relief.

Procedural clashes can involve several different issues. For example, states vary widely

with respect to their attitudes toward opt-in and opt-out mechanisms.93 Opt-out mechanisms

provide notice to various interested parties that they will be included in a particular class or

91 See IBA, Collective Redress, 2008. 92 See ABA, 2011; CBA, 2011. 93 Opt-in mechanisms are considered less problematic than opt-out mechanisms because parties

affirmatively indicate assent to suit in an opt-in procedure. See infra notes 64-67 and accompanying text.

Notably, there are different interests at stake in opt-in versus opt-out actions. See OECD, 2007: 10-11.



24

collective unless they affirmatively opt out of the proceedings.94 These kinds of procedures tend

to expand the size of a class or collective, which carries the benefit of finality for both the

defendant and the plaintiffs.95 However, opt-out procedures can also put significant pressure on

a defendant to settle even non-meritorious claims (the so-called “strike suit” phenomenon) and

can give rise to certain jurisprudential concerns as to whether a party is truly exercising his or her

independent right to litigate a particular issue by simply failing to opt out of a group action.96

Opt-in mechanisms reflect a different approach to the constitution of the class or

collective, in that a party who has been given notice of a pending group action must affirmatively

choose to join the proceedings.97 While opt-in procedures usually result in a smaller class or

collective and therefore do not provide the same degree of finality as an opt-out procedure, many

states view them in a more favorable light because parties must take the initiative to join the

action and therefore can be said to have clearly chosen to participate in the litigation.98

In most instances of cross-border litigation, questions of procedure are decided by

reference to the law of the state where the lawsuit is pending. However, problems can arise in

cases involving mass claims if some potential parties reside in a jurisdiction that allows opt-out

procedures and other potential parties reside in a jurisdiction that only allows opt-in procedures.

For example, questions may arise as to whether an opt-out procedure can be considered to

establish jurisdiction over a person who is culturally unfamiliar with such a process and whether

any judgment from such a lawsuit has preclusive (i.e., res judicata) effect in a foreign court such

94 The United States is the best-known opt-out jurisdiction. See Federal Rule of Civil Procedure 23

(U.S.). 95 See BASSETT, D.L., 2011: 27. 96 See HENSLER, D.R., 2009: 15-16. 97 European states tend to favor opt-in systems whenever representative relief is contemplated on an

individual basis. See European Parliament, Resolution, 2012; MULHERON, R., 2009: 415. However,

some commentators take the view that an opt-out system is better, even in Europe. See MULHERON, R.,

2009: 450-53. 98 See HENSLER, D.R., 2009: 15-16; MULHERON, R., 2009: 431-34.



25

that a foreign member of the class will be barred from bringing another action against the

defendant in that foreign court.99 Significant questions also exist as to whether it is better to treat

all parties to a multinational class or collective under the procedure used in domestic disputes or

whether to is better (or even possible) to differentiate among the parties by nationality, providing

opt-out treatment to domestic parties and opt-in treatment to foreign parties.100 While the first

approach provides for one type of procedural fairness, namely equal treatment among the

plaintiff group, the second approach addresses other due process concerns, namely the right of

each individual to choose the time and manner of protecting his or her legal rights.101

Another procedural difficulty involves questions of notice, since each jurisdiction has its

own rules regarding how notice is to be provided to the plaintiff group in cases involving class

and collective claims.102 Thus, for example, Australian courts typically allow publication notice

in cases involving representative class actions while U.S. courts usually require individual notice

by mail, at least in cases where such notice is practicable.103 Differences in notice provisions can

give rise to the same problems as in situations involving opt-in and out-opt procedures, in that a

court facing a multinational class must consider whether its domestic approach to notice is

appropriate in an international dispute and if not, what sort of alterations can and should be made

to ensure that all parties are treated fairly.

Courts and commentators might be tempted to assume that procedures are similar within

legal families (i.e., within either the civil law or common law tradition) or within certain

categories of group relief (i.e., that all representative class actions are essentially the same).

99 See WASSERMAN, R., 2011: 346-69. 100 See MULHERON, R., 2012: 181-82. 101 The IBA has made some suggestions on how to consider these procedural differences when enforcing

collective judgments across national borders. See IBA, Collective Redress, 2008: art. 4. 102 See Federal Rule of Civil Procedure 23 (US) (regarding notice in US class actions in federal court);

MULHERON, R., 2004: 344-46, 352 (comparing notice in Australian and Canadian class actions). 103 See MULHERON, R., 2004: 344-45.



26

Another preconception might be that states that are in close geographic proximity to one another

are likely to be more amenable to cross-border class and collective actions, given what might be

seen as a higher possibility of shared procedural mechanisms. However, neither of these

conclusions is correct.104 For example, the United States and Canada show a high degree of

procedural similarity in their respective forms of class actions, due, in large part, to Canada’s

having based much of its class action legislation on the U.S. model.105 However, those

similarities have not necessarily increased the likelihood of a successful cross-border class action

involving U.S. and Canadian parties. Instead, U.S. and Canadian cases involving multinational

classes are all over the board, leading to a great deal of unpredictability for parties.106 While the

ABA and CBA have recently issued protocols to help courts deal with the special challenges

associated with cross-border class actions, these recommendations are not in any way binding.107

Interestingly, the situation involving U.S.-Canadian class actions suggests a second area

of concern in the area of procedure. While most analyses in this area of law focus on issues

relating to the class or collective mechanism itself, parties to these kinds of disputes are affected

by more than just the group litigation device(s) in question.108 Each state also has its own

background rules of civil procedure that apply in all cases, regardless of the number of parties

involved or the types of claims asserted. These procedures can also cause difficulties in large-

scale international disputes.

104 See HENSLER, D.R., 2009: 13-17. 105 See STRONG, S.I., Canada, 2012: 928. 106 See Morrison v. National Australia Bank Ltd., 130 S.Ct. 2869, 2885-89 (2010); Canada Post v. Lépine,

[2009] 1 S.C.R. 549, 2009 S.C.C. 16; In re Vivendi, SA Securities Litigation, No. 02 Civ. 571(RJH)

(HBP), 2009 WL 855799, at *14 (S.D.N.Y., Mar 31, 2009); Silver v. Imax Corp., (2009) 66 B.L.R. (4th)

222 (Can. Ont. Sup. Ct. J.); HSBC Bank Canada v. Hocking, 2008 CarswellQue14596, ¶¶83-88; Johnson

v. United States, 238 F.R.D. 199, 214-15 (W.D. Tex. 2006); Currie v. McDonald’s Restaurants of Canada

Ltd. (2005) 74 O.R. (3d) 321 (C.A.); Parsons v. MacDonald’s Restaurants of Canada Ltd., 2005

CarswellOnt 544; Kern v. Siemens Corp., 393 F.3d 120, 128-29 (2d Cir. 2004). 107 See ABA, 2011; CBA, 2011; STRONG, S.I., Canada, 2012: 926-27. 108 See STRONG, S.I., Canada, 2012: 925-27.



27

These difficulties can take a variety of forms. Sometimes the problem lies in domestic

laws concerning the court’s jurisdictional reach. For example, U.S. federal courts have an

expansive ability to address a variety of multijurisdictional matters, including those involving

class actions, as a result of the broad interpretation of the concept of interstate commerce under

the Commerce Clause of the U.S. Constitution.109 As a result, international class actions can be

brought in U.S. federal courts with relative ease, at least as a matter of judicial jurisdiction.

The situation is very different in Canada because there the Federal Court:

is a statutory court, and its statutory jurisdiction does not include most of the

topics that typically give rise to class actions. As the Court’s statute now stands,

its jurisdiction over claims against the Crown in right of Canada would be the

most promising avenue for class actions. But the Court does not have jurisdiction

over claims in tort or contract against defendants other than the federal Crown.110

These limitations on the jurisdiction of the Federal Court of Canada would be of scant

significance if provincial courts in Canada were be able to hear multijurisdictional classes.

However, provincial courts experience significant difficulties when attempting to assert

jurisdiction over non-residents. As territorially-restricted institutions, the only time that a

provincial court may assert jurisdiction over a party is if (1) the party is present in the

jurisdiction, based on service of a writ on the defendant in the province; (2) the party consents to

jurisdiction; or (3) the court can assume jurisdiction, as in cases where there is service of the writ

outside the province supported by a “real and substantial connection between the litigation and

the province.”111 Although there is no conceptual reason why this test could not be met in cases

involving multijurisdictional class actions, the difficulties associated with asserting jurisdiction

109 U.S. Constitution, art. II, § 8. This reading has arisen despite the jurisdictional limitations explicitly

reflected in Article III of that document. See U.S. Constitution, art III; U.S. Constitution, amendment 11. 110 HOGG, P.W. & S.G. MCKEE, 2010: 283. Proposals to expand the power of the Federal Court with

respect to multijurisdictional class actions have been opposed on constitutional grounds. See CBA, 2011:

6-7. 111 HOGG, P.W., 2011: 13-22.



28

over large numbers of non-residents (which could include both defendants and unnamed

members of the plaintiff class) have severely limited Canada’s development of international class

actions in practice.112

To some extent, the difference in the way that U.S. and Canadian courts react to

multinational classes is based on how each country conceptualizes the jurisdiction of its federal

and local courts. However, the issue also appears to be affected by the procedural mechanism

used to assert class claims in each country. For example, in the United States, parties wishing to

institute a class suit rely on rules of civil procedure at either the state or federal level. In Canada,

parties to class suits typically rely on various pieces of legislation enacted by individual

provinces or territories.113 This distinction may not only be relevant to the availability of

international classes but also the question of whether the right to proceed as a group is

substantive or procedural in nature.114

Other background procedural matters can also affect class or collective relief in the cross-

border setting, although in these cases the issue is more tactical than legal, in that the concerns

relate to whether the parties want to pursue their claims in that particular venue rather than

whether an international action can be brought. For example, it is common for class actions

seated in the United States to involve extensive pre-trial discovery, punitive damages and trial by

jury. All three of these procedures are available in the United States in bilateral disputes and, as

112 See HOGG, P.W. & S.G. MCKEE, 2010: 292; MONESTIER, T.J., 2012: *16-52. But see WALKER, J.,

2010: 143. While Canada’s history with international cases has been mixed, the recent case of Silver v.

Imax Corp. has been heralded as potentially making “Ontario a new haven for secondary market class

actions” involving shareholders from around the world. GELOWITZ, M., 2010; see also Silver v. Imax

Corp., (2009) 66 B.L.R. (4th) 222 (Can. Ont. Sup. Ct. J.); Silver v. Imax Corp., (2009) 86 C.P.C. (6th) 273

(Can. Ont. Sup. Ct. J.); Canada Post v. Lépine, [2009] 1 S.C.R. 549, 2009 S.C.C. 16; Currie v.

McDonald’s Restaurants of Canada Ltd. (2005) 74 O.R. (3d) 321 (C.A.); MONESTIER, T.J., 2012: *2. 113 See STRONG, S.I., Canada, 2012: 928-32; KALAJDZIC, J., ET AL., 2009: 48-49. 114 The issue has not yet been firmly decided in either the United State or Canada. See STRONG, S.I.,

Canada, 2012: 965-75. However, the European Parliament takes the view that the right is procedural.

See European Parliament, Resolution, 2012: ¶15.



29

such, are uncontroversial in domestic class actions. However, when viewed in the context of an

international suit, all three procedures appear to be prime examples of American exceptionalism,

since none of these devices are used in other national courts. This can create problems both

during the litigation (to the extent that some states resist U.S.-style discovery of persons resident

within that state’s national borders)115 and afterwards (in that some states regard punitive

damages to be contrary to public policy, leading to non-enforcement of the eventual

judgment).116 The easy availability of these devices in U.S. courts also means that defendants,

both foreign and domestic, will often do all they can to thwart a case from going forward on a

global basis in a U.S. state or federal court. Thus, foreign defendants will resist the jurisdiction

of the U.S. court while both U.S. and foreign defendants will attempt to limit the size of the class

so as to avoid treble damages on a larger base sum.

D. Conflict of Laws

The fourth and final issue to consider involves conflict of laws. Although these types of

concerns also arise in bilateral disputes, questions regarding the applicable law can become

particularly complicated in cases involving class and collective relief because these forms of

redress often reflect certain regulatory choices made by the forum state.117

The situation is made even more difficult because conflict analyses typically focus on

matters involving substantive law118 rather than issues relating to conflict of regulatory

115 See BORN, G.B. & P.B. RUTLEDGE, 2007: 907-94. 116 See LEW, J.D.M. ET AL., 2003: ¶26-118. 117 This may be particularly true in cases involving mass torts. See KOENIG, T.H., 2008: 735; RINGE, W.

& A. HELLGARDT, 2011: 33-34 (noting conflict of laws issues in the regulatory context concerning capital

markets and the problem of whether such matters should or could be considered as a species of tort law). 118 Conflict of laws issues involving substantive tort law have been considered at length by numerous

commentators. See ALI, RESTATEMENT, §§145-85; Institute for European Tort Law.



30

regimes.119 However, questions have been raised recently about the usefulness of standard

conflict of laws analyses in the area of tort, given the way in which tort law interacts with other

fields of law. Indeed, as the Institute for European Tort Law has noted:

[t]he piecemeal enactment of rules by the European Union (EU) in isolated areas

shows that up until now insufficient attention has been focused on the basic

questions of tort law, leading to significant inconsistencies in those rules and to

inadequate regulation. . . . Although such basic questions have undoubtedly been

visited the results are, on the one hand, anchored in the distant past and on the

other hand the research was not conducted on a broad comparative basis. Further,

the role of tort law in the context of the overall legal system, in particular, in

relation to unjust enrichment, social security and criminal law, among others, has

not been examined in depth nor have new scholarly tendencies – eg economic

analysis – been included in discussions.120

A detailed analysis of conflict of laws questions involving the substantive law of tort is

beyond the scope of this paper. However, it is appropriate to ask whether some sort of conflict

of laws analyses will or should be undertaken with respect to the relevant procedures to be used

in cases involving international mass torts. Such inquiries might consider whether the right to

class or collective relief should be considered procedural or substantive in nature.121

Interestingly, this is an issue that the U.S. Supreme Court122 and the Supreme Court of

Canada123 have largely overlooked, despite the centrality of that issue to certain matters recently

119 See New York University Institute for International Law and Justice; BUXBAUM, H.L., 2006: 268-70;

KINGSBURY, B., ET AL., 2005: 15; RINGE, W. & A. HELLGARDT, 2011: 33-34. 120 Institute for European Tort Law. 121 See STRONG, S.I., Canada, 2012: 965-75; STRONG, S.I., De-Americanization, 2010: 519-20. The

magnitude of the injuries at issue and the important policy implications associated with the method of

redress would also bode in favor of a conflict of law analysis in international mass torts cases. 122 See AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1753 (2011) (holding that individuals may

waive their right to class relief in certain circumstances, even though standardized waivers can eviscerate

the regulatory effect of collective redress); see also Am. Express Co. v. Italian Colors Rest., 133 S. Ct.

2304 (2013); Sutter v. Oxford Health Plans LLC, 133 S. Ct. 2064 (2013). But see STRONG, S.I., First

Principles, 2012: 201; see also SMIT, H., 2004: 203. 123 See Dell Computer Corp. v. Union des consommateurs, [2007] 2 S.C.R. 801, 2007 S.C.C. 34, ¶160;

Bisaillon v. Concordia University, [2006] 1 S.C.R. 666, 2006 S.C.C. 19, ¶¶15-17; STRONG, S.I., Canada,

2012: 971-75; see also Seidel v. Telus Communications Inc., 2011 S.C.C. 15 ¶ 33 (construing legislation

from British Columbia as opposed to Quebec and declining to opine on the nature of the right to proceed

as a class).



31

considered by both courts. Commentators have also been largely silent on conflict of laws

concerns, leaving courts with very little authority to help them decide which laws or rules should

govern in cases of conflict between different regulatory regimes.124

III. Mass Torts and Cross-Border Arbitration

As the preceding section suggests, significant problems exist with respect to judicial forms of

class and collective relief in the cross-border context. While different organizations are working

on ways to resolve some of these issues,125 it may be that arbitration can provide useful solutions

to some of the obstacles to international mass tort litigation. As this section describes, arbitration

provides a very useful alternative to mass tort litigation with respect to three matters –

enforcement, procedure and conflict of laws – but runs into difficulties with respect to the fourth

issue, jurisdiction.

A. Enforcement

The first issue to consider involves enforcement issues. As mentioned previously, international

enforcement of civil judgments is largely based on principles of comity, which can be

unpredictable even in the best of circumstances. Furthermore, the likelihood that a foreign

judgment will be enforced internationally diminishes significantly when the judgment provides

for class or collective relief.

124 Although more research on this point is necessary, it may be that the closest analogies are to

competition/antitrust law or insolvency law, in that both of those regulatory regimes rely on consistent

national (and in some cases international) application of their rules in order to maintain their efficiency.

While the IBA has made some suggestions on how these issues should be handled, these

recommendations are non-binding. See IBA, Collective Redress, 2008: arts. 1.03, 2.01, 3.02. 125 See ABA, 2011; ALI, Guidelines; CBA, 2011; EU, Consultation Paper: 2011; IBA, Collective

Redress, 2008; OECD, 2007.



32

Far fewer problems exist in arbitral realm because enforcement of foreign arbitral awards

is largely governed by treaty, most prominently by the United Nations Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, known as the New York

Convention.126 With 149 state parties, the New York Convention is the most successful treaty of

its type and has revolutionized international commerce by creating a neutral, reputable,

predictable and effective means of resolving international legal disputes.127

The benefit of the New York Convention and similar instruments is that they create a

presumption in favor of enforceability that can only be overcome in a few limited

circumstances.128 Notably, an objection to the enforcement of a foreign arbitral award is not

only narrowly drawn under the New York Convention, it is narrowly interpreted.129 Therefore,

even those issues that can be used to provide the basis for an objection to enforcement of both a

foreign judgment and a foreign arbitral award are given much narrower scope when enforcement

of an arbitral award is involved.130

126 See New York Convention. 127 See New York Convention Status; BORN, G. B., 2010: 91-101; LEW, J.D.M., ET AL., 2003: ¶¶1-21 to 1-

22. 128 See New York Convention, art. V; BORN, G.B., 2009: 2711. Given the predominance of the New

York Convention in the field of international arbitration, this paper will refer primarily to that instrument

rather than similar regional conventions. See European Convention on International Commercial

Arbitration, Apr. 21, 1964, 484 U.N.T.S. 364; Inter-American Convention on International Commercial

Arbitration of 1975, Pub. L. No. 101-369, 104 Stat. 448 (1990) (commonly known as the Panama

Convention); Organization of American States, Inter-American Convention on Extraterritorial Validity of

Foreign Judgments and Arbitral Awards, May 14, 1979, 1439 U.N.T.S. 87 (commonly known as the

Montevideo Convention). 129 See LEW, J.D.M., ET AL., 2003: ¶26-114. 130 For example, parties may assert the enforcing state’s public policy as a means of resisting enforcement

of both a foreign judgment and a foreign arbitral award. However, courts and commentators have

concluded that “only violations of the enforcement state’s public policy with respect to international

relations (international public policy or ordre public international) is a valid defense” to an action under

the New York Convention. See New York Convention, art. V(2)(b); see also ILA, 2002: ¶¶10-11;

BRULARD, T. & Y. QUINTIN, 2001: 546. Domestic public policy concerns are not enough to bar

enforcement, as would be the case in an action to enforce a foreign judgment. See LEW, J.D.M., ET AL.,

2003: ¶26-114; see also ILA, 2002; BRULARD, Y. & Y. QUINTIN, 2001: 546.



33

Although the wide availability and pro-enforcement bias of the New York Convention

gives arbitration a clear edge over litigation in most international disputes,131 some questions

could arise as to whether the New York Convention would or should apply to arbitral awards

arising out of class or collective arbitration of mass torts. For example, some states only apply

the New York Convention to disputes that are commercial in nature, leading to potential

problems if the dispute in question does not reflect a sufficient degree of commerciality.132

However, this is not likely to constitute a significant obstacle, since many jurisdictions define

commercial activity so broadly as to cover almost any transaction involving money or having an

economic effect.133 Therefore, parties to mass tort actions should be aware of this issue but

should not be unduly concerned by it.

Alternatively, some objections could be raised on the grounds that mass claims are not

susceptible to arbitration, based on the unavailability of class or collective relief in one or more

of the relevant state courts.134 However,

it is difficult to see what public policy or non-arbitrability objections could be

raised to class arbitrations. The fact that class actions are not recognized or

available in many national litigation systems should not preclude the use of class

action arbitrations (just as the unavailability of documents only, fast-track, or

131 While parties to inter-European disputes will experience no significant differences with respect to the

enforceability of a foreign judgment and a foreign arbitral award, since the New York Convention is in

some ways the arbitral equivalent of the Brussels I Regulation, European parties will see a clear

distinction between enforcement of judgments and arbitral awards once the dispute moves outside the

European Union. 132 The New York Convention allows state parties to make an express declaration limiting their

obligations under the Convention to cases involving commercial disputes. See New York Convention,

art. I(3). Approximately one third of the state parties to the New York Convention have made this

declaration. See BORN, G.B., 2009: 261 n.295. 133 See BORN, G.B., 2009: 260-61, 777-79. 134 The issue here relates to the concept of arbitrability. See New York Convention, arts. II(1), V(2)(a);

BORN, G.B., 2009: 766-68. Courts and arbitrators considering this issue may need to take the laws of

several different countries into account, including the law that governs the arbitral procedure (typically

but not always the law of the arbitral seat), the law that governs the substantive dispute and/or the law that

governs the validity of the arbitration agreement. See LEW, J.D.M., ET AL., 2003: ¶¶9-28 to 9-29. In

some cases, it may also be useful to consider the mandatory law of the state where enforcement is likely,

since doing so could increase the international enforceability of the award. See PLATTE, M., 2003: 312.



34

similar dispute resolution mechanisms in litigation does not invalidate arbitration

agreements requiring such procedures). There may be requirements regarding

procedural regularity and an opportunity to be heard, imposed by national law,

but these would involve the implementation of the class action arbitration, not its

basic enforceability.135

Thus, arbitration appears to be superior to litigation when it comes to enforcement issues

relating to mass torts.

B. Procedure

The second issue to consider involves the procedures used to resolve mass torts arising in the

cross-border context. This is another area where arbitration demonstrates significant advantages

over litigation, primarily because parties to an arbitration can tailor the procedure to suit the

dispute. In so doing, parties can either (1) use a group procedural device that is available in one

or the other of the parties’ home legal systems or (2) create an entirely new procedure that suits

their particular needs, subject, as always, to basic principles of procedural fairness.136 This type

of procedural flexibility has always been a hallmark of arbitration, so its use in class and

collective suits is not in any way remarkable.137

Parties to a mass tort arbitration have a number of existing models from which to choose.

The most well-known type of large-scale arbitration is class arbitration. This mechanism has

been available in the United States since the early 1980s, although use of the device did not

become widespread until the early 2000s as a result of a 2003 decision by the U.S. Supreme

Court recognizing the power of the arbitrators to decide whether class proceedings are permitted

135 BORN, G.B., 2009: 1232 n.442. 136 See BORN, G.B., 2009: 1232 n.442. 137 See BORN, G.B., 2009: 1232 n.442. Interestingly, the absence of a collective mechanism in a state’s

domestic courts could be construed by some people to increase the need for (and, by extension, the

legitimacy of) mass arbitration. See Abaclat Award, ¶¶484, 587. The absence of any effective remedy in

litigation could be seen as an infringement on the parties’ procedural rights, most predominantly the right

to access to justice. See Abaclat Award, ¶¶487-88.



35

under the parties’ arbitration agreement.138 Over 300 known class arbitrations were initiated

between 2003 and 2012,139 which was roughly similar to the number of international investment

arbitrations filed with ICSID between 1966 and 2010.140

Parties wishing to pursue class arbitration have several alternatives open to them. For

example, parties can choose to adopt one of several specialized sets of arbitral rules that have

been published by various arbitral institutions.141 These rules were explicitly based on Rule 23

of the U.S. Federal Rules of Civil Procedure establishing the class action remedy in U.S. federal

courts and are considered to comply with international notions of due process and procedural

fairness.142 Alternatively, parties to class arbitrations may proceed under general arbitral rules or

on an ad hoc basis, with the parties and/or the arbitral tribunal creating any specialized

procedures to be used before or during the hearing.143 Although class arbitrations proceed

independently of any judicial involvement,144 courts retain ultimate authority over the propriety

138 See Green Tree Fin. Corp v. Bazzle, 539 U.S. 444, 452-53 (2003). The common understanding of

Bazzle was called into question recently by the U.S. Supreme Court. See Stolt-Nielsen S.A. v.

AnimalFeeds Int’l Corp., 559 U.S. 662, 679-81 (2010). 139 See AAA Searchable Class Arbitration Docket (listing 308 cases). These numbers only relate to class

arbitrations filed with the American Arbitration Association. Class arbitrations can also be administered

by other arbitral institutions or can proceed on an ad hoc basis. See JAMS Class Action Procedures. 140 See ICSID Cases. 141 See AAA Supplementary Rules; JAMS Class Action Procedures; STRONG, S.I., Class, Mass, 2013:

¶¶2.30-2.203. The AAA Supplementary Rules and the JAMS Class Action Procedures may also be

adopted implicitly in cases where the parties have invoked any of the other rules of arbitration

promulgated by the AAA or JAMS, respectively. See AAA Supplementary Rules, rule 1(a); JAMS Class

Action Procedures, rule 1(b). 142 See BORN, G.B., 2009: 1232 n.442; STRONG, S.I., Sounds of Silence, 2009: 1017; STRONG, S.I., Due

Process, 2008: 1. 143 See STRONG, S.I., Sounds of Silence, 2009: 1072-76. 144 At one time, U.S. courts utilized what was called the “hybrid” model of class arbitration, which

allowed courts to retain responsibility for certain decisions (such as certification of and notice to the class

as well as fairness approvals of the final arbitral award) while the arbitrators took jurisdiction over the

evaluation of the merits of the case. See Blue Cross of Cal. v. Superior Court, 78 Cal. Rptr. 2d 779, 785

(Cal. Ct. App. 1998); Dickler v. Shearson Lehman Hutton, Inc., 596 A.2d 860, 876 (Pa. Super. Ct. 1991);

Bazzle v. Green Tree Fin. Corp., 569 S.E. 2d 349, 360–61 (S.C. 2002), vacated, 539 U.S. 444 (2003);

BUCKNER, C.J., 2004: 320-23. These fairness reviews were similar to those adopted by courts in class

actions proceeding under the U.S. Federal Rules of Civil Procedure. See Federal Rule of Civil Procedure



36

of the process, since a judge can refuse enforcement of any arbitral award that fails to comply

with required notions of procedural fairness.145

Some commentators have questioned the continuing vitality of class arbitration in the

United States based on several recent decisions from the U.S. Supreme Court that apparently

limit the availability of the class device in arbitration.146 However, some scholars caution against

too broad a reading of these precedents.147 Indeed, a number of lower federal court decisions

have illustrated the continued relevance of the class arbitration device.148 Furthermore, it should

be noted that parties to mass tort disputes are not constrained by these precedents, which all

involve pre-dispute arbitration agreements that are easily distinguishable from the type of

submission agreements that would be used in cases involving mass torts.

Although class arbitration is most strongly linked to the United States, other countries,

most notably Colombia and Canada, have also considered this device legislatively and

23 (U.S.); BUCKNER, C.J., 2004: 320-23. This approach, which developed as a common law, judge-made

device, was meant to avoid any violations of the parties’ procedural rights that might arise as a result of

arbitrators’ inexperience with class proceedings. See BUCKNER, C.J., 2006: 226-39. Although this model

was standard in the early days of class arbitration, it is unclear whether hybrid procedures are still in use

in the United States. See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 686-87 (2010)

(discussing only procedures under AAA Supplementary Rules); see also BUCKNER, C.J., 2004: 301

(claiming the hybrid model has been “swept away”). 145 The timing of this review is somewhat under debate. While judicial review at the end of the merits

hearing is always available, the specialized rules promulgated by the AAA and JAMS permit early review

of certain interim decisions on procedure. See AAA Supplementary Rules, rules 3, 5; JAMS Class Action

Procedures, rules 2-3. The propriety of this early review system has been subject to criticism, although

the issue has not yet been explicitly addressed by the U.S. Supreme Court. See Stolt-Nielsen S.A. v.

AnimalFeeds Int’l Corp., 559 U.S. 662, 670 n.2 (2010); Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,

559 U.S. 662, 689-92 (2010) (Ginsburg, J., dissenting). 146 See Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013); Sutter v. Oxford Health Plans

LLC, 133 S. Ct. 2064 (2013); AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011); Stolt-Nielsen

S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010); see also Green Tree Fin. Corp. v. Bazzle, 537 U.S.

444 (2003) (plurality opinion); GLOVER, J.M., 2012: 1166-67; RUTHERGLEN, G., 2012: 24-25. 147 See BERMANN, G.A., 2012: 45; STRONG, S.I., Class, Mass, 2012: ¶¶4.7-4.121. 148 See Jock v. Sterling, 646 F.3d 113 (2d Cir. 2011), petition for cert., 132 S.Ct. 1742, 2012 WL 895979

(2012); In re American Express Merchants’ Litigation, 634 F.3d 187 (2d Cir. 2011); STRONG, S.I., Doors,

2010: 565; STRONG, S.I., Class, Mass, 2012: ¶¶4.7-4.121.



37

judicially.149 While no known class arbitration has taken place outside the United States, it is

likely that the device will spread beyond U.S. borders in the relatively near future.150

Although class arbitration is the best-known contemporary type of large-scale arbitral

relief, it is not the only model available to parties to mass tort disputes. A second form of

collective arbitration is also available, providing relief on an opt-in, non-representative basis.

This model was developed in Germany for certain types of shareholder disputes following a

decision of the German Federal Court of Justice (Bundesgerichtshof or BGH) in 2009 declaring

such arbitrable.151 Later that year, the German Institution of Arbitration (Deutsche Institution für

Schiedsgerichtsbarkeit or DIS) drafted a new set of specialized rules known as the

Supplementary Rules for Corporate Law Disputes (DIS Supplementary Rules) that describe the

procedures to be used in certain types of multiparty disputes.152 Although the DIS

Supplementary Rules may only be used in certain limited types of corporate controversies, the

rules offer a number of procedural innovations that could be adapted for use in other types of

cases, including those involving mass torts.153

Of course, parties who do not want to use one of these highly specialized rule sets can

always create their own unique procedures, subject, of course, to any necessary principles of

procedural fairness and due process.154 In fact, a number of commentators would likely applaud

the development of new procedural devices, given concerns that existing rules on class

149 See Manitoba Law Reform Commission, Report 115, Mandatory Arbitration Clauses and Consumer

Class Proceedings 3-4, 22-23 (April 2008); Valencia v. Bancolombia; STRONG, S.I., Canada, 2012: 922;

STRONG, S.I., Sounds of Silence, 2009: 1031; STRONG, S.I., Due Process, 2008: 49-50. 150 See STRONG, S.I., De-Americanization, 2010: 548. 151 See S v M, Case No. II ZR 255/08 (German Federal Court of Justice, 6 April 2009), Kriendler Digest

for ITA Board of Reporters, available at www.kluwerarbitration.com; see also BORRIS, C., 2011: 65. 152 See DIS Supplementary Rules. 153 For example, the DIS model has been considered in the context of internal trust disputes. STRONG,

S.I., Trust Procedures, 2012: 591. Further reading on the DIS Supplementary Rules is available

elsewhere. See BORRIS, C., 2011; STRONG, S.I., DIS, 2011. 154 See BORN, G.B., 2009: 1760, 1782; LEW, J.D.M., ET AL., 2003: ¶21-3.



38

arbitration “fail to engage with the possibilities of class arbitration” and take an “impoverished

view” of the procedure by not taking advantage of the possibility of individually tailored

procedures and remedies that are the hallmark of arbitration.155 This ability to individualize

procedures constitutes one of the primary benefits of arbitration in both bilateral and multilateral

disputes.156

Indeed, international commercial arbitration is well-known and well-appreciated for its

ability to harmonize procedures from both the civil and common law traditions so as to provide

parties from all legal traditions with a fair and familiar dispute resolution process.157 This

attribute will be equally welcome in cross-border collective disputes, since it will allow parties

from divergent legal traditions to craft procedures that comply with the procedural demands of

all of the parties’ legal systems, thus increasing the likely enforceability of the final award.

Although arbitration provides a useful means of devising appropriate cross-cultural

procedures for use in large-scale dispute resolution proceedings, that is not its only benefit.

Arbitration also helps parties avoid a number of the more troubling aspects of domestic civil

procedure.

This benefit is particularly apparent in cases where U.S. procedural law might otherwise

apply. For example, class arbitration is not subject to the type of wide-ranging discovery that is

typical in U.S. class actions.158 Limiting or eliminating pre-trial discovery would not only (1)

reduce the cost of both defending and pursuing such actions and (2) minimize the risk to

155 WEIDEMAIER, W.M.C., 2007: 94-95; see also SMIT, H., 2004: 211. 156 See SMIT, H. 2004: 210 (noting corporate respondents in particular should prefer class arbitrations to

class actions, since parties can “control the whole process to a far greater extent in arbitration than in

litigation”). 157 See BORN, G.B., 2009: 1786-92; LEW, J.D.M., ET AL., 2003: ¶¶21-33 to 21-39. 158 Discovery in the United States includes extensive production of documents by both parties and third

parties as well as oral depositions of witnesses who may not ever be called at trial. See Federal Rule of

Civil Procedure 26 (U.S.).



39

respondents that new actions or grounds of liability will be identified through the discovery

process, it would also (3) eliminate the need to seek international assistance for the production of

certain types of evidence.159

Any restrictions on discovery would likely be welcomed by corporate respondents, since

that would limit litigation costs and reduce exposure to related claims. Claimants might be less

pleased by this sort of approach, particularly if they were hoping to use the discovery process

either to expand the size of the class or build the grounds for their substantive case.160 However,

a number of claimants’ concerns are mitigated by the fact that arbitral tribunals have some ability

to require pre-hearing production of documents as well as the appearance of witnesses at

hearings.161 Parties can also stipulate to certain processes regarding the taking of evidence in

their submission agreement. Furthermore, a tribunal may impose an adverse inference against a

party who does not produce relevant documents that the tribunal would normally expect to see.

While this more limited approach to disclosure might seem unfair or unduly burdensome

to U.S.-based claimants who are used to the extremely pro-plaintiff procedures available in

judicial class actions, such procedures are very much in accordance with international practice in

both litigation and arbitration and therefore might be relatively unobjectionable outside the

United States.162 Claimants might also very well decide that compromising on discovery issues

is warranted, tactically speaking, given the other benefits of arbitration.

Another reason why class and collective arbitration may be more attractive than U.S.

class action litigation involves the absence of juries. “Runaway juries” are commonly

159 Parties in U.S. litigation often have difficulty obtaining evidence located abroad, due to the exceptional

nature of US-style discovery. See BORN, G.B. & P.B. RUTLEDGE, 2007: 907-94. 160 Broad discovery is seen by U.S. parties as particularly important in certain kinds of torts, including

mass fraud or product liability, since most of the evidence of wrongdoing is believed to be contained

within the defendant’s files rather than available through other means. 161 See, e.g., IBA, Evidence, arts. 3-5. 162 See EPSTEIN, D., ET AL., 2008; BOLT, J.W. & J.K. WHEATLEY, 2006; DUBINSKY, P.R., 2008.



40

considered to be the cause of much of the risk and expense commonly associated with class suits

in the United States,163 and the elimination of juries through arbitration might very well lead to

lower awards, to the extent that arbitrators are less likely to be swayed by emotion and more

likely to consider damages in a measured, reasoned and business-like manner. Again, some

U.S.-based claimants may feel that they are losing either an entitlement or a tactical advantage in

foregoing their ability to have their dispute heard by a jury, but there could again be significant

benefits to proceeding without a jury, particularly in cases involving a great deal of technical or

scientific information. Arbitration allows parties to choose their own decision-makers, subject to

various safeguards concerning independence and impartiality,164 which means that a tribunal can

include persons with expertise in epidemiology, statistics, engineering, economics, medicine or

any other relevant field.165 This could be a significant advantage to claimants, since such experts

are likely to be better equipped to deal with complex technical issues than a jury of laypersons.

These advantages relate primarily to comparisons between U.S. class actions and class

arbitrations. However, class and collective arbitration reflect other procedural benefits as well.

For example, class or collective claims may be heard more quickly in arbitration than in court.

This result obtains because of (1) reductions in the amount of pre-hearing motion practice and

discovery and (2) replacement of one or more appeals on the merits with a limited right to

judicial review of the procedural propriety of the arbitration.

Conventional wisdom in the bilateral context suggests that claimants and respondents

benefit equally from these aspects of arbitration. However, corporate respondents in contract-

based class arbitrations in the United States have claimed that pre-hearing motion practice and

163 Corporate actors also believe that class suits are primarily brought for frivolous reasons, although

empirical evidence suggests otherwise. See BURCH, E.C., 2008: 85; RUSSELL, T.L., 2010: 150-52. 164 See IBA, Conflicts, 2004. 165See LEW, J.D.M., ET AL., 2003: ¶¶10-38 to 10-44.



41

merits-based appeals are so valuable to them that they would prefer to have their disputes heard

in litigation rather than arbitration so as to be able to utilize these processes.166 However, the

reasoning behind this position appears somewhat fallacious.

First, corporate respondents’ wish to engage in motion practice is typically based on the

belief that most class suits are frivolous and a motion to dismiss is an effective counter-remedy.

However, empirical evidence suggests that most class claims are not in fact frivolous.167

Furthermore, there is no evidence suggesting that motions to dismiss are more successful in the

class or collective context than in other types of lawsuits: to the contrary, empirical research

suggests that motions to dismiss class claims are granted at roughly the same rate as non-class

claims.168 Therefore, the allegation that there is a heightened need for these types of motions in

class or collective disputes seems somewhat specious. Furthermore, respondents in mass torts

may not need this particular type of motion, since the submission agreement could be made after

initial motions to dismiss have been made in the relevant court or courts or could be made

subject to the parties’ agreement that such preliminary motions will be allowed.

Second, the corporate community’s desire to retain the right to substantive appeal appears

largely based on concerns about arbitral tribunals making a mistake regarding the facts or the

law. However, there is no guarantee that judges are more likely to avoid such errors. In fact,

empirical evidence indicates that plaintiffs in U.S. class actions are far more likely to appeal after

losing a decision than defendants are, suggesting that corporate interests would be better served

by a dispute resolution system (such as arbitration) that limits post-award review to certain

166 See SMIT, H., 2004: 210-12 (arguing this is a poor choice on the part of defendants); Chambers Brief,

2010: 17. 167 See BURCH, E.C., 2008; RUSSELL, T.J., 2010. 168 See WILLGING, T.E., ET AL., 1996: 108-10.



42

procedural issues and that provides the parties with the ability to choose decision-makers with

particular procedural or substantive expertise in the type of dispute at issue.169

Notably, when speaking about time savings, the relevant comparisons are between large-

scale litigation and large-scale arbitration. No one takes the view that class or collective

arbitration is or should be as speedy as individual bilateral arbitration.170 Nevertheless, the time

savings associated with class or collective arbitration is so significant that respondents would

find it impossible to conduct all of the necessary bilateral proceedings within the same time

period. This realization led the tribunal in Abaclat to conclude that forcing the respondent to

face thousands of arbitral “proceedings would be a much bigger challenge to [the respondent’s]

effective defense rights than a mere limitation of its right to individual treatment of homogenous

claims in the present proceedings.”171

In fact, evidence suggests that respondents do not find the reality of defending large

numbers of individual claims to be as palatable as some parties have claimed. For example, one

corporate respondent, having prevailed in its efforts to avoid class arbitration through use of a

class waiver,172 subsequently found itself subject to approximately 1,000 arbitrations filed by

customers hoping to block a proposed merger.173 The corporation quickly filed suit in court to

169 See WILLGING, T.E., ET AL., 1996: 170-71; see also New York Convention, art. V; 9 U.S.C. §10

(2012) (U.S.); Arbitration Act 1996, §§66-68 (Engl.). 170 See AAA Brief, 2010: 24 (suggesting that although class arbitration takes longer than an individual

bilateral arbitration, the total amount of time it would take to resolve each of the constituent claims

individually would doubtless consume far more time than one large-scale procedure). See AT&T Mobility

LLC v. Concepcion, 131 S.Ct. 1740, 1759 (2011) (Breyer, J., dissenting) (noting that “AAA statistics

‘suggest that class arbitration proceedings take more time than the average commercial arbitration, but

may take less time than the average class action in court’” (citation omitted)). 171 Abaclat Award, ¶545 (discussing 60,000 claims in the international investment context). 172 Critics of class arbitration waivers have noted that the purpose of those waivers is not to encourage

bilateral arbitration but to eliminate claims in all contexts, bilateral and multilateral. See AT&T Mobility

LLC v. Concepcion, 131 S.Ct. 1740, 1761 (2011) (Breyer, J., dissenting) (noting the only “realistic

alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or

a fanatic sues for $30” (citation and emphasis omitted)). 173 See REUTERS, Aug. 17, 2011.



43

stop its customers from filing any further arbitrations.174 While the U.S. Department of Justice

intervened in that case to address the proposed merger, giving that particular respondent some

practical relief, the question remains open as to whether individual suits in litigation or

arbitration are really feasible in cases involving these kinds of large-scale legal claims, regardless

of a purported waiver of such relief by one or all of the parties.175

C. Conflict of Laws

The third matter to consider involves conflict of laws issues. Here, too, arbitration provides

certain advantages over litigation, primarily because arbitrators may be seen as more willing to

apply certain mandatory principles of substantive law to a particular dispute.

Although arbitration is reputed to allow decisions to be made solely on the basis of

general principles of fairness or equity, arbitrators are in fact required to apply the law chosen by

the parties or, in the absence of party choice, the law that the arbitrators determine to be most

relevant to the dispute, unless the parties have stipulated otherwise.176 In many ways, the

conflict of laws analysis used in arbitration is very similar to that used in litigation.

However, there are some instances where conflict of laws issues may lead to a better

result in arbitration than in litigation. These cases involve situations where a judge is faced with

a motion to enforce either an arbitration agreement or a foreign forum selection clause in the face

of a statutory provision that appears to give the courts of the state hearing the motion exclusive

174 See REUTERS, Aug. 17, 2011; see also STRONG, S.I., Canada, 2012: 944-45, 965-72 (suggesting

purpose of class waivers is to reduce the likelihood that complex claims will be heard in any forum). 175 See GRUENWALD, J., Sept. 1, 2011. This issue involves important regulatory and efficiency-based

considerations that are beyond the scope of this paper. 176 See BORN, G.B., 2009: 2111, 2153. Arbitrators may only rely on equitable principles if they have

been expressly given permission to do so by the parties through the grant of the power to act ex aequo et

bono or as an amiable compositeur. See LEW, J.D.M., ET AL., 2003: ¶¶17-18, 18-5.



44

jurisdiction over certain substantive matters.177 While these exclusive jurisdiction statutes could

be read as prohibiting resolution of this particular dispute in all other forums, judicial or arbitral,

some courts have read this type of legislation as barring litigation in a foreign court while

allowing arbitration.178 These decisions are typically based on the belief that arbitrators have

more freedom (or more inclination) than foreign courts to apply mandatory provisions of law of

a state other than that chosen by the parties.179 Notably, this latter reading could allow

recognition of a global class in arbitration but not in litigation, since a court would be assured of

the application of important principles of mandatory law.180

This distinction is very important for proponents of mass tort arbitration, since large-scale

torts often implicate regulatory issues that may be subject to these types of exclusive jurisdiction

statutes. If courts are indeed more inclined to enforce an arbitration agreement than a foreign

forum selection clause in situations like these, then this would be yet another example of how

international arbitration is superior to international litigation.

D. Jurisdiction

The final matter to consider involves jurisdiction. One of the primary problems associated with

litigation of large-scale disputes relates to the difficulty that national courts have in asserting

jurisdiction over all relevant parties.181 Because arbitration is an anational, consent-based

177 See KRÖLL, S.M., 2009: ¶¶16-25-65; STRONG, S.I., Trust, 2012: 1157. 178 See KRÖLL, S.M., 2009: ¶¶16-25-65; STRONG, S.I., Trust, 2012: 1157. 179 See KRÖLL, S.M., 2009: ¶¶16-20 to 16-22. 180 The court would have the opportunity to review the application of these principles under the “second

look” doctrine, which involves certain issues of public policy. See Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, 473 U.S. 614, 639 n.21 (1985); BORN, G.B., 2009: 2857; KRÖLL, S.M., 2009: ¶¶16-

66 to 16-74. 181 See BASSETT, D.L., 2011: 27.



45

mechanism, it experiences no difficulties concerning either judicial or legislative jurisdiction.182

Instead, arbitration provides parties from anywhere in the world with the means of resolving

their dispute in a single forum and a single proceeding.

However, relying on consent as a means of establishing arbitral jurisdiction can be

problematic in cases involving mass torts because it is often said to be difficult, if not impossible,

to obtain a pre-dispute arbitration agreement with all relevant parties to a mass tort.183 The

reasons for the absence of an arbitration agreement are manifold. In some cases, such as those

involving environmental disasters, the tort is so entirely unexpected and the identity of the

injured persons so random that it is impossible to obtain an arbitration agreement in advance. In

other instances, such as those involving consumer claims in Europe, pre-dispute arbitration

agreements are prohibited as a matter of law.184 In other instances, the parties may have had the

opportunity to enter into an arbitration agreement but either affirmatively decided not to do so or

simply failed to consider the matter at the time the contract was concluded.185

182 Typically an arbitration agreement is combined with a choice of law provision that will answer

questions about the extraterritorial reach of any legislative enactments. 183 See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18. Recent reports have suggested that some parties have

attempted to create an arbitration agreement by posting an “Arbitration Notice” on the door of a retail

store stating that:

[b]y entering these premises, you hereby agree to resolve any and all disputes or claims

of any kind whatsoever, which arise from the products, services or premises, by way of

binding arbitration, not litigation. No suit or action may be filed in any state or federal

court. Any arbitration shall be governed by the Federal Arbitration Act, and administered

by the American Mediation Association.

See HINSHAW, A., Jan. 11, 2011. However, there are no known cases discussing or upholding “arbitration

notices” of this type. 184 See Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts [1993] OJ

L95/29; BORN, G.B., 2009: 820-21. 185 For example, the clients of disgraced international financier Bernard Madhoff could have included

arbitration agreements in their contracts with him, but did not.



46

Arbitration of mass torts will therefore primarily arise as a result of a post-dispute

submission agreement (compromis).186 This procedural approach appears unobjectionable as a

matter of arbitration law, since every court that has considered class or collective arbitration thus

far has recognized, either implicitly or explicitly, that class and collective procedures are entirely

permissible in cases involving express consent.187 Nevertheless, proponents of mass tort

arbitration need to be aware of three jurisdictional-type issues that could give rise to concerns:

(1) identification of members of the class or collective; (2) notice to the members of the class or

collective; and (3) consent of the class or collective. Each of these issues is discussed below.

1. Identification of the class of collective

In some ways, the task of identifying potential claimants in a mass tort case in arbitration may be

more difficult than it is in litigation. For example, while courts are able to require defendants to

produce client lists or other relevant information about potential plaintiffs in situations where the

tort arises from a pre-existing contractual relationship, arbitrators may be unwilling or unable to

require respondents to undertake similar actions in arbitration, due to differences between

disclosure and discovery. While this may make arbitration more palatable to respondents, it does

not necessarily encourage claimants to consent to this particular process.188 However, concerns

about access to the respondent’s files for purposes of identifying the claimant group could be

186 Mass torts that arise in the presence of a pre-dispute arbitration agreement are analogous to contract-

based arbitrations and can be considered under existing lines of analysis. 187 See Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013); Sutter v. Oxford Health Plans

LLC, 133 S. Ct. 2064 (2013); AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011); Stolt-Nielsen

S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010); Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444,

450 (2003) (Breyer, J.); Southland Corp. v. Keating, 465 U.S. 1 (1984); S v. M, Case No. II ZR 255/08

(German Federal Court of Justice, 6 April 2009), Kriendler Digest for ITA Board of Reporters, available

at www.kluwerarbitration.com. 188 Of course, a respondent who was keen to proceed in arbitration could produce the relevant information

voluntarily.



47

somewhat overstated, since there are numerous jurisdictions where parties in litigation are not

allowed easy access to the defendant’s records when attempting to establish the members of the

class or collective.189

Sometimes the way in which the class or collective is identified will be the same,

regardless of whether the proceeding is in an arbitral or judicial forum. For example, claimants

in mass environmental disasters cannot typically be identified through recourse to the

respondent’s records. Therefore, claimants in this context do not suffer any additional burdens

by proceeding in arbitration.

Notably, identification of the relevant group is only important in class or collective

devices that require some sort of individual action: for example, opt-in and opt-out

representative actions, aggregative actions and settlement. Identification of the group may not

be necessary in representative actions undertaken by an intermediate association, since the

organization acts on behalf of its constituent members.190 Similarly, identification of a group

may not be necessary in cases where injunctive relief is sought, since relief as to one member of

the group will provide relief as to all. However, some care must be taken in cases involving

injunctive relief, since there have been suggestions in the past that arbitrators do not have the

189 An analogy might be drawn to different approaches to methods of establishing jurisdictional facts. In

the United States, plaintiffs are routinely given access to the defendant’s files to discover information

establishing jurisdiction over a party who would not otherwise be within the geographic reach of the

court. See STRONG, S.I., Transnational Litigation, 2011: 1; STRONG, S.I., Jurisdictional Discovery, 2010:

489. However, Australia has explicitly forbidden this practice, while England does so implicitly. See

Armacel Pty Ltd. v. Smurfit Stone Container Corp., [2007] F.C.A. 1928 ¶8 (Austl.); see also STRONG,

S.I., Jurisdictional Discovery, 2010: 509-23 (noting English approach). 190 Of course, the association would have to establish that it had the authority to act on behalf of the

affected individuals. This could be done as a matter of law (in that some associations may have statutory

authority to act on behalf of a group) or by individual consent (as was the case to some extent in Abaclat).

See Abaclat Award, ¶85.



48

power to provide injunctive relief that affects members of a class, although that decision appears

to have been based on the precise language of the statute providing for group relief.191

2. Notice to and consent of the class or collective

Once the members of the class or collective have been identified,192 it is necessary to provide

notice of the pending action to those persons and obtain their consent to proceed with the

arbitration. Parties must take care in this regard, for while some analogies could exist between

procedures used in arbitration and those used in litigation, there are some important distinctions

between the two processes. For example, states that might be amenable to an opt-out regime

when providing notice of a class arbitration in the judicial context might take a different view

about the propriety of an opt-out system to consent to arbitration (including mass arbitration),

since parties to arbitral procedures are often seen as waiving important procedural rights in order

to take advantage of the various benefits of arbitration.193

Indeed, it has long been the case that consent to arbitration must be clearly exhibited,

even if that consent is implicit.194 Notably, an opt-in regime may meet that standard more

readily than an opt-out regime.195 Furthermore, an agreement to arbitrate often must be reflected

191 See Seidel v. Telus Communications, Inc., 2011 S.C.C. 15 ¶ 55, 146; STRONG, S.I., Canada, 2012: 952. 192 Typically problems arise with the identification of the claimant group in a mass tort situation, but in

some cases it can be equally hard to identify the proper respondent(s). While some states have developed

the market share theory of defendant liability to address problems associated with the identification of

defendants, there is no guarantee that such an approach would be acceptable in arbitration. See SPACONE,

A.J., 2000: 352 (noting market share theory is not reflected in European legislation on product liability, as

it is in parts of the United States). 193 For example, parties to an arbitration waive their right to an appeal on the merits. See BORN, G.B.,

2009: 81. 194 See BORN, G.B. 2009: 592-95; RAU, A.R. 2008: 247. Some states require agreements reflecting

consent to arbitration to be more clear than other types of agreements. See BORN, G.B., 2009: 585. 195 Notably, the situation with mass torts is different than that involving class arbitration pursuant to a pre-

dispute arbitration agreement. In the latter category of cases, the parties have already clearly agreed to

arbitration, so the use of an opt-out mechanism to demonstrate consent to initiate an arbitral proceeding is

less problematic.



49

in a written document containing contract-like elements such as the signature of the parties or

mutuality of consideration in order to be internationally enforceable.196 Again, this may suggest

the need for an opt-in regime for mass tort arbitration, even if the legal system whose law

controls this issue considers opt-out procedures to satisfy the requirements of procedural fairness

in judicial actions.197

Similar issues arise with respect to notice procedures. For example, some states may

allow publication notice to serve as a means of establishing a judicial class action.198 However, a

court or arbitral tribunal might decide that a more stringent notification process, such as actual

notice, is appropriate when that notice is requesting consent to mass arbitration. This may be

particularly true in cases involving cross-border disputes, since some members of the group may

not be expecting to be notified of a pending class or collective dispute through a publication,

196 See New York Convention, art. II(2). However, some states have adopted more lenient requirements

regarding the form of the arbitration agreement, with some jurisdictions going so far as to enforce

agreements to arbitrate based on part performance, estoppel or other types of conduct. See Note by the

Secretariat, United Nations Commission on International Trade Law (UNCITRAL), Working Group

II(Arbitration), U.N. Doc. A/CN.9/WG.II/WP.139 (14 Dec. 2005); See BORN, G.B. 2009: 592-96; LEW,

J.D.M., ET AL., 2003: ¶¶7-1 to 7-58; LANDAU, T., 2003: 20-23. 197 National rules of civil procedure should never be considered to apply in arbitration absent the clear

consent of the parties. See BORN, G.B., 2009: 1764-65, 1781. However, those rules will likely reflect

and influence national considerations regarding procedural fairness. Identifying the state whose law

governs this issue is somewhat difficult. While questions of procedure are normally considered pursuant

to the agreement of the parties or the law of the place where the arbitration takes place, see New York

Convention, art. V(1)(d), enforcing states may consider certain issues to be a matter of public policy and

may attempt to apply their own national law, see New York Convention, art. V(2)(b). See also Jiangsu

Changlong Chem. Co., Inc. v. Burlington Bio-Med. & Sci. Corp., 399 F. Supp. 2d 165, 168 (E.D.N.Y.

2005) (relying on enforcing state’s notions of due process, not forum state’s); Guang Dong Light

Headgear Factory Co., Ltd. v. ACI Int’l, 31 Y.B. COM. ARB. 1105, 1118 (2006) (citing U.S. Supreme

Court precedent concerning due process requirements of notice in the context of an international

enforcement proceeding); Unión de Cooperativas Agrícolas Epis-Centre (France) v. La Palentina SA

(Spain), 27 Y.B. COM. ARB. 533, 538–39 (2002) (noting procedural safeguards must be examined “in

accordance with the criteria established by the Constitutional Court, which is the highest interpreter of the

fundamental provisions in whose principles, rights and liberties international public policy is embodied”);

Italian Party v. Swiss Company, 29 Y.B. COM. ARB. 819, 829 (2004) (“Denial of due process is in

principle a violation of procedural public policy.”); Buyer (Danish) v. Seller (German), 4 Y.B. COM. ARB.

258 (1979) (dealing with failure to give notice of the names of the arbitrator and noting that, “As the right

of the parties to challenge has a fundamental meaning for a fair arbitral procedure, the exclusion of this

right constitutes a violation of the German public order”). 198 This is the case in Australia. See MULHERON, R., 2004: 344-46 (quoting FAC (Aus). S 33Y(4)).



50

assuming an appropriate media outlet can even be found. However, recent cases allowing

service of process through social networking sites such as Facebook suggest that some level of

innovation might be permitted with respect to methods of notice.199

Finally, issues will likely arise with respect to both the content of the notice and the

request for consent to arbitration. Parties to cross-border class and collective disputes will not

only have to take into account various issues regarding form requirements for arbitration

agreements,200 they will also have to address translation issues for multi-lingual groups or

concerns about the level of sophistication of the reader, particularly in situations where the

potential claimant does not reside in a country that is familiar with class or collective relief in the

judicial context.201

Therefore, significant issues arise with respect to consent involving arbitration of mass

torts. However, none of these concerns is insurmountable. Indeed, there may be several ways to

handling each of these matters. Interestingly, some very interesting potential solutions come

from the realm of public international law, as discussed in the next section.

IV. Curing the Consent Problem in Mass Tort Arbitration

In some regards, arbitration looks to be an excellent option for the resolution of mass torts that

involve parties in several different states, providing major benefits in the area of enforcement,

procedure and conflict of laws. Arbitration also solves problems regarding judicial jurisdiction

over all the members of the potential class, although the benefits in this regard are not as clear-

199 See KU, J., Feb. 22, 2012 (noting recent English High Court decision allowing service via Facebook

and indicating Australia and New Zealand “routinely” permit such methods of service). 200 See supra note 196 and accompanying tex5. 201 Courts have already noted the difficulties associated with providing notice of judicial class actions

when some of the putative parties were not native speakers of the language of the court. See STRONG,

S.I., De-Americanization, 2010: 538.



51

cut, since parties to a mass tort arbitration still need to establish consent of all the parties through

a post-dispute submission agreement.

Commentators have traditionally considered it difficult if not impossible to establish class

or collective arbitration through a submission agreement, based on difficulties associated with

identifying the members of the group and obtaining both their and the respondent’s consent.202

However, recent developments in public international law have suggested possible solutions to

these obstacles.

There are several public international law mechanisms that might serve as appropriate

models for actions in private international law. For example, some analogies might be made

between mass tort arbitration and the mass claims processes established by the Permanent Court

of Arbitration (PCA) in The Hague.203 A number of those processes involve the resolution of

private individual claims, including those sounding in tort,204 and in that sense could be

considered a form of mass tort arbitration.205 However, mass claims processes at the PCA are

typically established by the consent of various governments, which distinguishes them from the

kinds of private tort claims at issue in this paper, since the consent to be gained here needs to be

that of the parties themselves, not their governments.206 Furthermore, most of the PCA’s

tribunals and mass claims processes resolve claims on an individual, bilateral basis, although

there are a few notable exceptions, most notably the United Nations Compensation Commission

202 See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18. 203 See PERMANENT COURT OF ARBITRATION, 2009: PERMANENT COURT OF ARBITRATION, 2006. 204 See KRISTJÁNSDÓTTIR, E. & B. SIMEROVA, 2006: 109-37. 205 Interestingly, some of the mechanisms established in the United States following the terrorist attacks in

September 2001 and the collapse of a well-traveled bridge might be said to follow a model somewhat

similar to some of the processes used at the PCA, in that the funds were publicly administered (though

jointly funded through public and private means) and subject to a streamlined procedure to establish who

should be compensated and for how much. See STEENSON, M. & J.M. SAYLER, 2009: 592-98. This sort

of compensation fund approach has said to be very typical of European models of mass claim resolution.

See MULLENIX, L.S., 2011: 908; see also MULLENIX, L.S., 2011: 908-13 (discussing various U.S. funds). 206 See CROOK, J.R., 2006: 43-59.



52

(UNCC), which was created following the first Gulf War in 1990-91.207 As such, procedures at

the PCA are distinguishable from the processes at issue in this paper, since this paper

contemplates mass tort disputes being resolved through a single, multilateral arbitration rather

than multiple, bilateral arbitrations.208 However, it is nevertheless interesting that claims

presented to the UNCC:

were screened and verified in large groups using essentially administrative

techniques, including sampling and statistical modeling. Evidentiary

requirements were set to require only the amount of evidence judged appropriate

in the circumstances faced by particular types of claimants. . . . Standardized

formats and processes were created to allow electronic capture of massive

quantities of claims data, its storage in databases, and electronic identification,

sorting and grouping of claims with common characteristics.209

Some of these processes are similar to those suggested in the jurisdictional awards in

Abaclat.210 However, it remains to be seen whether these procedures are eventually adopted in

the merits phase of the arbitration.

This is not to say that the PCA could not develop a new type of mass claim process or a

single-process dispute resolution mechanism for mass torts, either on a standing or ad hoc basis.

Indeed, the PCA could provide a very useful service in this regard by establishing the means of

207 See CROOK, J.R., 2006: 46-48 (noting “except for the largest of its 2.6 million claims, the UNCC’s

processes consciously abandoned the model of individualized case-by-case adjudication” and instead

drew “on lessons learned from US mass tort litigation” and identified “large groups of claimants with

common characteristics and similar losses”); see also Abaclat Dissent, ¶¶186-87 (claiming the procedure

in most mass claims processes is “normally non-adversarial, and the remedies can be in terms of flat-rate

compensation, etc. The treatment of claims is not necessarily individual,” with the exception of the Iran-

U.S. Claims Tribunal and the Claims Resolution Tribunal for Dormant Accounts in Switzerland). 208 How long the multilateral phase lasts is a question for future discussion. For example, some disputes

may involve claims that are so similar that they may proceed as a multilateral dispute from start to finish.

This is often the case with contract-based class arbitration in the United States. STRONG, S.I., First

Principles, 2012: 201. It may also be true in cases involving injunctive relief. Alternatively, some mass

tort arbitrations might be joined for purposes of liability but separated into various subclasses for

purposes of damages claims, to the extent that individual damages claims were considered permissible. 209 CROOK, J.R., 2006: 48. 210 See infra notes 311-48 and accompanying text.



53

overcoming issues of individual party consent as well as any potential biases against class or

collective procedures that might exist as the state level.211

However, there are has been another recent development, also in the realm of public

international law, that may provide an even better starting point for analysis. The matter in

question involves a jurisdictional award recently rendered in Abaclat v. Argentine Republic that

establishes for the first time a party’s right to bring mass claims in the context of an investment

arbitration filed with ICSID.212 Although this award involves public (treaty-based) arbitration

rather than private arbitration, it nevertheless provides certain useful ideas and analogues for

mass tort arbitration in the cross-border context. Indeed, one of the award’s most useful

contributions revolves around the way it considers consent in the context of a post-dispute,

stand-alone document, similar to what will likely be the case in disputes involving mass torts.213

This section therefore summarizes the salient aspects of both the majority and dissenting

award on jurisdiction in Abaclat before going on to consider how the procedures and analysis in

Abaclat can help advance the debate about consent in the realm of mass tort arbitration. In so

doing, the text addresses problems associated with the consent of the respondent separately from

problems associated with the consent of the claimants.

1. Abaclat v. Argentine Republic

211 These issues have been introduced by the author elsewhere and will not be repeated herein. See

STRONG, S.I., PCA, 2010. 212 See Abaclat Award, ¶295. Notably, the jurisdictional award was “limited to general issues” and was

not meant to “include ‘issues touching specifically upon each individual claimant.’” Abaclat Award,

¶226; see also Abaclat Award, ¶424. Instead, the award simply “set forth the general requirements for the

Tribunal’s jurisdiction regarding the present case and the admissibility of Claimants’ claims.” Abaclat

Award, ¶227. 213 See infra notes 216-19 and accompanying text.



54

Abaclat arose as a result of Argentina’s default on approximately $100 billion worth of sovereign

debt in 2001, a move that made the investments of thousands of Italian bondholders worthless.214

In September 2002, eight major Italian banks formed an associazione non riconosciuta under the

name l’Associazione per la Tutela degli Investitori in titoli Argentini, or “Task Force Argentina”

(TFA).215 The purpose of TFA was to “represent the interests of the Italian bondholders in

pursuing a negotiated settlement with Argentina,”216 an aim that was carried out through a series

of agreements between TFA and individual bondholders wherein the bondholders authorized

TFA to negotiate with Argentina on their behalf.217

After several years, negotiations with Argentina had not progressed to the satisfaction of

TFA,218 and TFA therefore sought and obtained a new mandate from the individual and

institutional bondholders (TFA Mandate Package) that included (1) a letter of instruction

explaining the purposes and procedures of arbitration with ICSID; (2) a declaration of consent,

delegation of authority and power of attorney for the law firm of White & Case to act on behalf

the bondholders; (3) a grant of mandate to TFA allowing TFA to coordinate the ICSID

arbitration; (4) a questionnaire asking for documents and information relating to the nationality

and ownership of the bonds in question; and (5) additional instructions regarding the gathering of

documents.219 Relevant portions of these documents are discussed in more detail below.

214 See Abaclat Award, ¶58. 215 See Abaclat Award, ¶65. 216 See Abaclat Award, ¶66. 217 See Abaclat Award, ¶66. The mandate is described in paragraph 67 of the majority award and

identifies the scope of the TFA’s negotiating power. See Abaclat Award, ¶67. The mandate also states

that the individual person or institution giving the mandate may terminate the proxy on 15 days’ notice or

upon the sale of the bonds in question. See Abaclat Award, ¶67. Ostensibly, over 450,000 natural and

legal persons initially submitted mandates to TFA. See Abaclat Award, ¶68. 218 See Abaclat Award, ¶84 (outlining negotiation attempts). 219 See Abaclat Award, ¶85.



55

The Mandate Package, which was distributed by the various TFA member banks to their

clients, was accepted by over 180,000 bondholders, although the number of claimants

subsequently dropped to 60,000.220 Once the documents were in hand, White & Case filed a

Request for Arbitration with ICSID.221 After being duly appointed, the tribunal decided to

bifurcate proceedings into a jurisdictional phase and a merits phase.222 The majority and

dissenting awards discussed in this paper are limited to matters of jurisdiction.223

The first thing to note about the majority award is that it was very careful to frame the

dispute as a “mass” arbitration rather than a class arbitration.224 As discussed further below, the

majority saw the procedure as constituting a “hybrid” of different types of group litigation

mechanisms, although the dissent disputed this characterization.225 This distinction led the

majority to consider the jurisprudential propriety of the collective claims at issue in terms of both

jurisdiction and admissibility.226

The question of jurisdiction involved matters of consent from the point of view of both

the claimants and the respondent. Interestingly, however, claimants did not contest consent on

their own behalf. Instead, it was the respondent Argentina who was objecting to the nature and

quality of the consent reflected by the claimants in their agreements with TFA.

220 See Abaclat Award, ¶¶1, 3, 90. 221 See Abaclat Award, ¶91. 222 See Abaclat Award, ¶127. 223 Notably, the majority emphasized that it was not ruling on the admissibility of any particular claims in

the August 4, 2011, award but was instead simply setting set forth the general criteria that must be met for

a claim to be considered admissible. See Abaclat Award, ¶466. 224 See Abaclat Award, ¶480. 225 See Abaclat Award, ¶¶488; Abaclat Dissent, ¶¶130-45. 226 The Abaclat majority award considered “the concept of jurisdiction under the [ICSID] Convention” to

cover “issues which may usually be regarded as issues of ‘admissibility’” as well as jurisdiction per se.

See Abaclat Award, ¶245; see also Abaclat Award, ¶246. Lack of jurisdiction means that the “claim

cannot at all be brought in front of the body called upon” whereas “a lack of admissibility means that the

claim was neither fit nor mature for judicial treatment.” Abaclat Award, ¶247(i). Admissibility was also

defined as relating to “the question whether ordering the parties to proceed collectively is within the scope

of the Tribunal’s discretion and authority.” See Abaclat Award, ¶485.



56

Although this type of reverse objection may seem strange, it is not unexpected, since any

insufficiencies with respect to the consent of the claimant group could lead to difficulties later

for the respondent by putting the preclusive value of the award into doubt.227 As a result, the

respondent could be subject to a type of double jeopardy, not only having to defend itself in the

arbitration but also in later litigation with any parties who claimed that their consent to the

arbitration was invalid.

It is difficult for courts and arbitrators to know how to treat these kinds of allegations.

On the one hand, the concerns asserted by the respondent could be entirely legitimate. On the

other hand, objections of this nature are somewhat premature and speculative, leading to worries

that they are being brought only to impede the arbitration.228

This creates something of a dilemma. Claimants obviously have a legitimate interest in

having an arbitral tribunal take their consent at face value while respondents have an equally

legitimate interest in protecting themselves from the possibility of multiple proceedings.229

While concerns about the preclusive effect of class or collective judgments have led some judges

to refuse to allow group litigation in cases where the defendant might find itself open to future

claims from members of the group,230 the Abaclat majority arrived at a different solution. Rather

than decide the issue immediately, the tribunal postponed its consideration of certain individual

aspects of consent until a later date, when the full facts had been developed.231 However, the

award did state that, as a general matter, “the Tribunal shall give due regard to the fact that

227 See STRONG, S.I., Due Process, 2008: 90; WASSERMAN, R., 2011: 346-69. 228 See WASSERMAN, R., 2011: 346-69; see also STRONG, S.I., Due Process, 2008: 90. 229 See STRONG, S.I., Due Process, 2008: 90. 230 See Strong, S.I., De-Americanization, 2010: 507, 536. 231 See Abaclat Award, ¶466.



57

Claimants themselves do not invoke such lack of consent, which may impose a higher standard

of proof than if the mistake or fraud [was] invoked by the affected party itself.”232

This appears to be a very useful approach to take, since it balances the interests of all of

the various parties. Furthermore, this technique might work equally well in the private law

context. However, it should be noted that Abaclat involved a situation where the parties had

affirmatively signaled their consent to the arbitration through what is essentially opt-in or

aggregative procedures and most of the judicial decisions denying class or collective treatment

involve an opt-out representative regime.233 This suggests that parties seeking to develop mass

tort arbitration may be better served by using a form of consent that requires the claimants to

indicate affirmatively that they wish to be part of the group.

The majority then moved on to consider the nature and scope of Argentina’s consent to

this sort of mass claim. Much of this analysis focused on treaty-based issues that are not relevant

to mass tort arbitration.234 However, in the course of its discussion, the tribunal provided a

detailed description of the nature of the claims at issue.235 This analysis could prove useful to

parties to private arbitrations and will be reproduced here.

First, the majority recognized that there are two primary means of dealing with large-

scale claims: representative proceedings and aggregate proceedings.236 (For purposes of the

232 See Abaclat Award, ¶445. 233 The Abaclat majority characterizes this aspect of the claims as aggregative, see Abaclat Award, ¶486,

but the procedure is also reminiscent of opt-in representative proceedings, see supra notes 93-98 and

accompanying text. 234 See Abaclat Award, ¶¶467-92 (discussing the ICSID Convention and the Argentina-Italy BIT). The

dissent had significant issues with the way in which the majority interpreted the treaties and considered

matters relating to Argentina’s consent. See Abaclat Dissent, ¶¶120-273. 235 See Abaclat Award, ¶¶480-88. 236 See Abaclat Award, ¶483 (citing STRONG, S.I., De-Americanization, 2010 (misattributed to “Stacy I.

Starck”)).



58

award, the majority set aside groups created for purposes of settlement.237) However, the

different types of procedures are not as distinct as they might seem at first, since:

these various forms of collective proceedings share a common “raison d’etre”:

Collective proceedings emerge[ ] where they constitute[ ] the only way to ensure

an effective remedy in protection of a substantive right provided by contract or

law; in other words, collective proceedings [a]re seen as necessary, where the

absence of such mechanism would de facto . . . result[ ] in depriving the claimants

of their substantive rights due to the lack of appropriate mechanism.238

This focus on the need for group proceedings may be relevant to mass tort arbitration in a

variety of ways, not the least of which might be the ability to overcome certain formal obstacles

such as those associated with form requirements.239 However, the dissenting award correctly

advised caution, noting that proponents of mass arbitration cannot simply conclude that consent

exists because to do so would result in a more efficient procedure or promote a general

philosophy regarding the value of international investment arbitration.240 Notably, this tension

between strict formalism and purposive interpretation is also apparent in the United States in

contract-based forms of class arbitration.241

Rather than placing the claims in Abaclat in one or another category of group

proceedings, the majority took the view that both representative and aggregative elements were

237 See Abaclat Award, ¶483. 238 Abaclat Award, ¶484 (citing STRONG, S.I., De-Americanization, 2010). The dissent denied that failure

to allow the claims to proceed en masse would deprive the claimants of their substantive rights. See

Abaclat Dissent, ¶¶254-57. 239 Indeed, numerous courts and commentators have criticized the extent to which outmoded form

requirements bar the arbitration of disputes that have clearly been contemplated and consented to by the

parties. See Report of the Secretary General, United Nations Commission on International Trade Law

(UNCITRAL), Working Group II(Arbitration), U.N. Doc. A/CN.9/WG.II/WP.108/Add.1 (Jan. 26, 2000)

¶8; BORN, G.B., 2009: 618. 240 See Abaclat Dissent, ¶272 (cautioning “against the tendency of certain ICSID tribunals to consider any

limitation on their jurisdiction . . . as an obstacle in the way of achieving the object and purposes of [the

ICSID Convention and related BITs], which they interpret as being exclusively to afford maximum

protection to investment, notwithstanding the legitimate interests of the host State”); see also FRICK, J.G.

2001: 231-32 (claiming “efficiency is not in itself a goal of a dispute resolution mechanism, at least in

proceedings that are not publicly financed”). 241 See STRONG, S.I., Sounds of Silence, 2009: 1043; STRONG, S.I., First Principles, 2012: 201.



59

present.242 Thus, the arbitration was considered to be “a hybrid kind of collective proceedings, in

the sense that it starts as aggregate proceedings, but then continues with features similar to

representative proceedings due to the high number of Claimants involved.”243 The aggregative

elements were visible in the claimants’ “individual and conscious choice of participating in the

arbitration” while the representative elements were evident in the fact that claimants’

“participation is thereafter limited to a passive participation in the sense that a third party, TFA,

represents their interests and makes on their behalf all the decision relating to the conduct of the

proceedings.”244 Representative elements could also be seen in the effect that the procedure had

on the parties, in that “[t]he high number of Claimants . . . makes it impossible for the

representative [of the Claimants] to take into account individual interests of individual

Claimants, and rather limits the proceedings to the defense of interests common to the entire

group of Claimants.”245

The dissent disagreed with this characterization of the proceedings. According to the

dissent, aggregated procedures do not involve a “change or alteration of the procedure followed

to handle these claims other than as normal individual claims.”246 Instead, in aggregate

proceedings, individual claims are consolidated only during the pre-trial period before being

separated for individual hearings on liability and/or damages.247 However, representative

242 See Abaclat Award, ¶¶486-87. 243 Abaclat Award, ¶488. The dissenting arbitrator criticized the majority’s characterization of the

proceeding as being “hybrid” in nature. See Abaclat Dissent, ¶¶130-45. 244 See Abaclat Award, ¶487. Although the majority did not raise this possibility, the proceedings in

Abaclat could also be framed as an opt-in representative proceeding, wherein the parties must

affirmatively signal their assent to the mass proceedings but thereafter cede control of the conduct of the

dispute to the lead claimant, who act as an agent for the passive members of the group. See supra notes

93-98 and accompanying text. 245 See Abaclat Award, ¶487. 246 Abaclat Dissent, ¶132. 247 See Abaclat Dissent, ¶131.



60

proceedings, which can be brought either by a member of the class or by an agent representing

the whole class, involve:

in the final analysis, only one claim, albeit with many, or even a mass of claims.

The tribunal deals thus with one claim and can examine every aspect of it

specifically, through adversarial debate and scrutiny that guarantees to the parties,

particularly the respondent, all their due process rights.248

Unlike the majority, which saw the arbitration as beginning in an aggregative manner and

then moving to representative-type proceedings, the dissent believed the claims in Abaclat

retained their individual nature throughout the entire process and thus did not acquire any

characteristics typical of representative relief.249 In large part, this conclusion was based on the

dissent’s factual finding that the claims were not homogenous in nature.250

Correctly determining the precise nature of the procedure was not just a theoretical

exercise in Abaclat. Instead, the tribunal’s conclusions about the character of the proceedings

affected the manner of analysis. According to the majority, the central legal issue in

representative proceedings involves consent, while the primary concern in aggregative

proceedings is admissibility, particularly “whether ordering the parties to proceed collectively is

within the scope of the Tribunal’s discretion and authority.”251

In coming to this conclusion, the majority did not suggest that consent was not important

in aggregative proceedings. Instead, the majority simply appeared to recognize that the type of

248 See Abaclat Dissent, ¶¶134-35. The dissent also recognized that representative actions can involve

both injunctive relief and individual damages, although individual damages claims are seen as somewhat

more problematic due to the possible infringement of both the defendant’s and the claimants’ right to

individualized proceedings. See Abaclat Dissent, ¶137 (citing STRONG, S.I., De-Americanization, 2010:

504). 249 See Abaclat Dissent, ¶¶139-40. 250 See Abaclat Dissent, ¶¶142-45. 251 Abaclat Award, ¶485; see also Abaclat Award, ¶491. This is at least the case in international

investment arbitration. The analysis might be slightly different in private arbitration, although

admissibility concerns under a treaty could be analogized to admissibility concerns under a contract, at

least in contract-based forms of class and collective arbitration. The issues are not quite the same in mass

tort arbitration subject to a compromis, since the admissibility of the claims will be specifically addressed

in the submission agreement.



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consent in aggregate arbitration is explicit and individual, and therefore not unlike the type of

consent that is typically seen in bilateral arbitration. However, if correct, this conclusion could

also suggest that consent is less problematic in both opt-in representative proceedings (which

resemble aggregative proceedings in that the consent to participate is explicit and individual) and

representative proceedings featuring an intermediary organization (which also involve explicit

and individual consent, in the sense that the intermediary organization consents on its own

behalf).252 That suggests that only opt-out representative proceedings – which are the kinds of

proceedings used in U.S.-style class arbitration – require heightened scrutiny with respect to

consent.253

Having concluded its analysis of the issue of consent, the majority in Abaclat turned its

attention to issues relating to admissibility of the claims. Though extremely important for those

involved in international investment arbitration, most of this discussion is not relevant to

questions relating to mass tort arbitration, since the focus is on the interpretation of treaty

provisions that will not be at issue in matters involving private international law.254 Suffice it to

say that ultimately the majority concluded that both the bilateral investment treaty (BIT) between

252 Arbitration involving injunctive relief may depend on whether the state whose law controls the issue

allows arbitrators to provide injunctive relief to one party that may effect the rights of others. See supra

note 191 and accompanying text. 253 Interestingly, U.S. courts have begun to differentiate between opt-in arbitrations, which have been

termed “collective arbitrations”, and opt-out proceedings, which are considered “class arbitrations.” See

Velez v. Perrin Holder & Davenport Capital Corp., 769 F.Supp.2d 445, 446-47 (S.D.N.Y. 2011); JetBlue

Airways Corp. v. Stephenson, 88 A.D.3d 567, 573-74 (N.Y. App. Div. 2011); STRONG, S.I., Class, Mass,

2013: ¶¶2.145-2.147. Notably, the concept of “heightened scrutiny” of consent in opt-out representative

proceedings does not mean that express consent to a particular procedure is required, at least in contract-

based forms of arbitration. In cases where consent to arbitration is clear, consent to a particular procedure

may be implicit. See STRONG, S.I., 2009: 1055-83. 254 For example, cases involving mass torts will not need to consider whether a treaty’s failure to address

collective proceedings results in a “‘qualified silence’ that should be interpreted to mean that collective

arbitration is not possible and not admissible under the current ICSID framework” or whether the silence

should “be considered a ‘gap,’ which was unintended and which the Tribunal has the power to fill.”

Abaclat Award, ¶517. Notably, the dissent took a different view from the majority on what kind of

silence existed and whether that constituted a gap that the tribunal had the power to fill. See Abaclat

Dissent, ¶¶154-75.



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Argentina and Italy and the underlying ICSID framework permitted the tribunal to fill certain

procedural gaps in the treaties,255 which allowed the analysis to move on to the question of

whether and to what extent the tribunal could adopt certain mass examination procedures to

resolve the dispute. This was a somewhat difficult subject, given that mass proceedings can not

only affect the rights of individual claimants to control the conduct of the case but also the right

of the defendant to mount an individualized defense.256 These concerns are particularly

important in many civil law jurisdictions, where the individual right to pursue and defend against

a claim is constitutional in nature.257

Although much of the tribunal’s analysis was legal in nature, there were some factual

findings that helped the majority reach the conclusion that a workable mass procedure could be

devised. First, the broad scope of consent reflected in the TFA Mandate Package offset any

objections the claimants might have about potential injuries to their right to control the shape of

the litigation. This was important because some legal systems consider the right to initiate a

lawsuit to be individual in nature such that the right cannot be exercised by anyone other than the

right holder him or herself.258

Second, the homogenous nature of the claims offset any objections that the respondent

might have had that its right to mount an individualized defense had been breached. The dissent

had its doubts about this conclusion, stating that:

the majority award sets aside all the specificities of the claims concerning the

security entitlements (price, date of purchase, place of purchase, in which

currency, applicable law, chosen forum, etc.) as characteristics relevant only to

255 See Abaclat Award, ¶¶520-33. The dissent did not view this process as “gap filling,” instead

characterizing it as adopting “proprio motu (on its own motion or initiative), a whole set of rules of

procedure, replacing the normal ‘Arbitration Rules’ or large segments thereof, without the agreement of

the Parties or the approval of the Administrative Council.” Abaclat Dissent, ¶194. 256 See Abaclat Award, ¶¶536-47. 257 See STRONG, S.I., Brussels I, 2013; STRONG, S.I., 2008: 32. 258 See STRONG, S.I., Brussels I, 2013; STRONG, S.I., 2008: 32.



63

the contractual rights of their holders, i.e., to contract claims; while what counts

here, according to the majority award, are the treaty claims, which are

homogenous. . . . But . . . how can the Tribunal for example evaluate a treaty

claim for compensating damages caused to an asset, without knowing (or while

making abstraction of) the time the asset was acquired, the price paid for it and

the currency of denomination?259

The majority did more than distinguish between the treaty claims and the contract claims.

The majority also took the view that forcing Argentina “to face 60,000 proceedings would be a

much bigger challenge to Argentina’s effective defense rights than a mere limitation of its right

to individual treatment of homogenous claims in the present proceedings.”260 Indeed, the

majority held that the large number of claimants “makes it de facto impossible to deal with all

them seriatim.”261 Furthermore:

not only would it be cost prohibitive for many Claimants to file individual claims

but it would also be practically impossible for ICSID to deal separately with

60,000 individual arbitrations. Thus, the rejection of the admissibility of the

present claims may equal a denial of justice. This would be shocking given that

the investment at stake is protected under the BIT, which expressly provides for

ICSID jurisdiction and arbitration.262

As a result of these and other considerations, the majority concluded that it would be

appropriate to adopt mass proceedings in this matter. However, in so doing, the majority

expressly stated that it was not intending to create general rules of procedure for mass dispute

resolution within the ICSID framework.263 Instead, the award clearly indicated that it was

259 See Abaclat Dissent, ¶¶142-44. 260 Abaclat Award, ¶545. 261 See Abaclat Award, ¶665. 262 Abaclat Award, ¶537. 263 See Abaclat Award, ¶¶523-26. However, an ICSID tribunal can and often does consider the decisions

of other international tribunals “where it believes that . . . is appropriate in the light of the specific factual

and legal context of the case and the persuasiveness of the legal reasoning of these earlier decisions.” See

Abaclat Award, ¶293 (citation omitted). Thus, Abaclat will likely prove persuasive to later tribunals

faced with collective claims. Indeed, one tribunal has already cited Abaclat with approval. See Ambiente

Ufficio Award, ¶¶7, 10-12; STRONG, S.I., 2014.



64

limited to creating a procedure to be used in this particular dispute.264 At this point, the proposed

procedures are somewhat general in nature, but are nevertheless discussed below.265

Although the majority award does, of course, control the future disposition of the case,

the dispute did generate a strongly worded dissenting opinion.266 The dissent made a number of

points that have already been noted in the preceding paragraphs, but one issue that has not yet

been noted involves the dissent’s view about the extent to which the proposed changes regarding

the taking of evidence affected the rights of the parties.267 In particular, the dissent noted that

Argentina’s procedural rights – particularly those relating to the right to mount an individualized

defense to individualized claims – would be detrimentally affected by the majority’s proposed

procedures.268

To a large extent, the dissent’s position on this point is driven by the belief that the

claimants’ allegations are not homogenous. However, the dissent was also not persuaded by

what it viewed as a dismissive attitude on the part of the majority toward the rights in question as

being “merely” procedural. Instead, the dissent noted that substantive rights are built on

procedural rights and that both need protection.269 While the majority opinion characterized the

conflict somewhat differently, framing the need for collective proceedings as “constitut[ing ] the

only way to ensure an effective remedy in protection of a substantive right provided by contract

264 See Abaclat Award, ¶¶227, 527; see also Abaclat Award, ¶¶665-81; 265 See Abaclat Award, ¶¶531, 610; see also infra notes 311-48 and accompanying text. The dissent took

the view that these procedures do not fill gaps as much as they change existing procedural rules. See

Abaclat Dissent, ¶¶210-44. 266 See Abaclat Dissent. Some of the dissent’s concerns – such as whether the dispute in question

constituted an “investment” under the relevant treaties – are not addressed in this paper, since they do not

translate to a private international law setting. See Abaclat Dissent, ¶¶34-117. 267 See Abaclat Dissent, ¶¶223, 236. 268 See Abaclat Dissent, ¶238. 269 See Abaclat Dissent, ¶225.



65

or law,”270 this distinction between the relative importance of procedural and substantive rights,

as well as the question of whether the right to proceed as a class or collective is procedural or

substantive in nature, will likely arise in mass tort arbitration as well.271

B. Consent From Claimants

The preceding subsection provides a general summary of the majority and dissenting awards on

jurisdiction in Abaclat. The following subsections consider the specific manner in which

claimants indicated consent to arbitration in that case and apply those lessons to disputes

involving mass torts.

1. Claimant consent in Abaclat

Before it could pursue any actions on behalf of the various Italian bondholders, TFA needed to

obtain those bondholders’ consent. That consent was reflected in a number of items found in the

TFA Mandate Package, including (1) a letter of instruction explaining the purposes and

procedures of arbitration with ICSID; (2) a declaration of consent, delegation of authority and

power of attorney for the law firm of White & Case to act on behalf the bondholder; (3) a grant

of mandate to TFA allowing TFA to coordinate the ICSID arbitration; (4) a questionnaire asking

for documents and information relating to the nationality and ownership of the bonds in question;

and (5) additional instructions regarding the gathering of documents.272 Several of these

documents are considered in more detail herein, since they might serve as appropriate templates

for claimants in mass tort arbitrations.

270 Abaclat Award, ¶484 (citing STRONG, S.I., De-Americanization, 2010). The dissent denied that failure

to allow the claims to proceed en masse would deprive the claimants of their substantive rights. See

Abaclat Dissent, ¶¶254-57. 271 See supra notes 121-24 and accompanying text. 272 See Abaclat Award, ¶85.



66

a. Letter of instruction

The letter of instruction from TFA to the bondholders provided certain background information

and logistics concerning the potential ICSID arbitration. For example, the letter outlined the

various limitations on who could and could not participate in any ICSID arbitration that might be

filed and indicated that anyone choosing to join the ICSID action could withdraw at a later

date.273

The letter of instruction also described certain limitations on the bondholder’s right to

control the conduct of the case. For example, the letter indicated that “[t]he peculiarity and

complexity of the case to be presented before ICISD on behalf of TFA make it necessary, for

reasons of coherence and uniformity of the representation of all Italian bondholders, to have a

single attorney in the proceedings (White & Case) and that the latter have a single interlocutor

(TFA).” Thus, “it will not be possible [for the bondholder] to give instructions directly to the

attorneys at ‘White & Case,’” who “will coordinate directly with TFA, which . . . will act as [the

bondholder’s] sole agent.”274 The letter went on to state that “TFA, acting in the collective

interest of all bondholders, will operate autonomously, taking into consideration their general

interest without being able to adopt different conducts for each or only some of the various

bondholders at their request.”275 This statement was further clarified by the indication that it

would not “be possible to conduct autonomously the proceeding initiated jointly with all the

bondholders; accordingly, any revocation of TFA’s mandate or of the power of attorney ad litem

of the American lawyers must necessarily be preceded by withdrawal form the ICSID

273 See Abaclat Award, ¶86; see also Abaclat Award, ¶451. 274 See Abaclat Award, ¶86. 275 See Abaclat Award, ¶86.



67

proceeding; in other words, it will not be possible to revoke TFA’s mandate so as to deal

individually with your American lawyer or to appoint other agents.”276

While the language of the letter of introduction is geared toward a layperson’s

understanding, it nevertheless provides a solid summary of both the rights that the recipient has

and what rights the recipient will be giving up by joining the ICSID action. While there is a

significant amount of case law and commentary considering what kind of information must be

provided to potential parties to an arbitration agreement (primarily in the context of consumer

and employment arbitration, where one party is considered to be less sophisticated than the other

and not necessarily bargaining at arm’s length, as in arbitration agreements arising out of

commercial transactions), this appears to be the first time that consent to class or collective

arbitration has been sought. Therefore, the letter of instruction in Abaclat will likely prove

instructive in other contexts, since the majority in this case found that the information given was

appropriate and adequate for the purposes of this proceeding. However, while the form of the

consent documents were sufficiently clear in this case, given that “TFA was entitled to assume a

certain level of sophistication and knowledge” on the part of the individual claimants, parties to

mass arbitration might wish to consider whether some alteration to “the degree and nature of the

information provided” would be necessary if the claimant group could not be considered as

sophisticated as bond investors.277

b. Power of attorney

While the letter of instruction informed the bondholders about their rights and responsibilities,

should they decide to participate in the action sponsored by TFA, the power of attorney was the

276 See Abaclat Award, ¶86. 277 See Abaclat Award, ¶461.



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legal means by which the power to make decisions about the conduct of the case was transferred

from the bondholder to the attorneys. Notably, the majority found this power of attorney to

constitute “a clear and unambiguous express of irrevocable consent by the relevant Claimant to

initiate ICSID arbitration against Argentina in relation to . . . the relevant bonds,”278 which

means that claimants in other types of arbitration can look to this document as a model of an

effective means of conveying consent to class or collective arbitration.

The power of attorney begins by indicating that it constitutes “irrevocable consent to

submit, jointly with other similarly situated bondholders, the dispute” in question for settlement

by ICSID arbitration.279 The document then “[d]elegates to the law firm of White & Case LLP [.

. .], in particular Carolyn B. Lamm, Esq., and any other attorney of White & Case LLP outside of

Italy that she designates, the authority and confers the power of attorney to represent” the

signatory, “jointly with other similarly situated bondholders,” in various manners, including the

power “to accept Argentina’s offer of consent to ICSID arbitration under the Agreement” and “to

initiate and conduct for” the signatory on his or her behalf “an ICSID arbitration against

Argentina and any related litigation or other proceedings outside Italy to protect and further” the

signatory’s “interests in relation to the . . . dispute.”280 Although this power is quite broad to

begin with, the document also notes that further instructions regarding the delegation “may be

made from time to time by any duly appointed agent” of the bondholder.281

278 See Abaclat Award, ¶453. This conclusion was bolstered by the fact that Claimants sent additional

documents to TFA relating to the action. See Abaclat Award, ¶434. 279 See Abaclat Award, ¶87. The power of attorney also includes “acceptance of Argentina’s offer of

consent [sic] to ICSID jurisdiction” outlined in the Argentina-Italy BIT. Abaclat Award, ¶87. The

revocability of the consent to jurisdiction is a special issue in ICSID cases and was contested in Abaclat.

See Abaclat Award, ¶234(ii); see also Abaclat Award, ¶¶610-39 (discussing addition of new claimants

and withdrawal of other claimants, framing the latter as a discontinuance of the proceedings as to those

claimants). However, revocability will likely not be an issue in mass tort arbitration. 280 See Abaclat Award, ¶87. 281 See Abaclat Award, ¶87.



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The majority in Abaclat noted that parties must be cautious when drafting a power of

attorney, since such documents will be evaluated both for their own validity as well as the

validity of the consent reflected therein.282 Decisions regarding the validity of the consent itself

should focus on whether the consent could “be considered a free and informed consent,”283 a

conclusion that relates back to the type of information provided in the letter of instruction.284

Although defects as to the form of the power of attorney would “in principle not affect the

validity of Claimants’ consent,” problems could arise if “the circumstances at hand

simultaneously constitute[d] a fraud, a coercion or a mistake” that formed “the basis for the

[Claimants’] consent.”285

Again, the power of attorney used in Abaclat would appear to constitute an appropriate

model for parties to other types of mass arbitration. While some elements of the power of

attorney relate only to treaty arbitration, modifications could easily be made so as to make the

document appropriate for use in private law matters.

c. TFA Mandate

In the Abaclat proceedings, TFA is essentially acting as the bondholder’s agent, with the TFA

Mandate describing the objectives of TFA, namely to coordinate “any arbitral and judicial

proceedings.”286 The TFA Mandate contains a number of specifically enumerated

responsibilities, including the ability “to give to the attorneys appointed pursuant to the Power of

Attorney any instruction that the Agent, in its role as coordinator, deems useful or appropriate;”

“to appoint other attorneys directly” to represent the bondholders in ICSID and other judicial or

282 See Abaclat Award, ¶447. 283 See Abaclat Award, ¶449. 284 See supra notes 273-77 and accompanying text. 285 See Abaclat Award, ¶448. 286 See Abaclat Award, ¶88.



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arbitral proceedings or to revoke the mandate of those attorneys; “to appoint arbitrators, experts

and advisors;” “to bring against Argentina, outside Italia,” in judicial, arbitral or conciliatory

bodies, “any additional proceedings that may be necessary for the purposes of obtaining

reimbursement of principle and payment of interest on the Bonds, or proceedings seeking

damages arising out of the failure to comply with the Bonds;” “to negotiate and enter into

settlement agreements with Argentina, in judicial venues or otherwise;” “to send any

communication or notice on behalf” of the bondholders; “to obtain recognition and enforcement

outside Italy of the arbitration awards issued by the ICSID arbitral tribunal;” “to withdraw from

any action in any legal proceedings contemplated by the Power of Attorney and/or this

Mandate;” and “in general, to take any step that it deems useful in the recovery of the amounts

due under the Bonds, subject always, as an absolute priority, to equal treatment of all of the

owners of bonds issued by Argentina who have signed an identical power of attorney or attorney

ad litem and an identical mandate.”287

These are obviously very broad powers and address all of the steps that are necessary to

initiate and pursue an international investment arbitration and enforce any resulting award. As a

practical matter, it is extremely important to provide the agent with comprehensive enumerated

powers as well as a general residual power to act, since it would be extremely problematic for the

agent to have to return later to the individual claimants to seek additional authority.

Interestingly, the TFA Mandate also expressly indicates that TFA is to comply with basic

principles of procedural fairness, which is likely intended to offset any charges of overreaching

or self-interest.288 While such a provision will not immunize the agent from claims of

wrongdoing, either from the respondent or an individual claimant, language of this nature

287 See Abaclat Award, ¶88. 288 Those charges were nevertheless made. See Abaclat Award, ¶698.



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nevertheless demonstrates that the agent is at least aware of the kinds of duties incumbent upon

an agent acting on behalf of a class or collective.289

In this case, the scope and clarity of the TFA Mandate allowed the majority to set aside

Argentina’s contention that the TFA Mandate infringed upon the claimant’s individual rights to

pursue judicial or arbitral relief.290 Therefore, parties interested in creating a mass tort arbitration

can look to this document as a useful model in future cases.

2. Claimant consent in private arbitration

The analysis found in the Abaclat jurisdictional award is very useful in several regards to those

who are interested in setting up a private form of mass tort arbitration. First, the decision

identifies the practical means by which consent to mass arbitration can be obtained from a

claimant group and provides some excellent templates for other parties to follow, subject, as

always, to the need for individualized adjustments to take the particular facts of future disputes

into account. Although it may not be necessary in all cases to use a separate organization such as

TFA to act as an agent (instead, an individual person could act as lead claimant),291 certainly

there were some practical benefits to that approach, not the least of which was with regard to

funding.292 The situation would likely be made even easier if the separate organization or agent

were truly neutral, in the sense of having no independent financial interest in the outcome of the

289 See HENSLER, D.R., 2009: 14; MULHERON, R., 2004: 275-318. 290 See Abaclat Award, ¶¶428(i), 457. 291 This will likely be a question of local law. See HENSLER, D.R., 2009: 14. 292 TFA funded the arbitration, which had already run into the millions of dollars by the time the

jurisdictional award was rendered. See Abaclat Award, ¶¶65, 682-85. Litigation (and arbitration)

funding has become a big issue even in the context of bilateral disputes, and various experts have begun

to turn their attention to issues relating to funding of collective redress, particularly in jurisdictions that do

not allow contingency fees for attorneys. See HENSLER, D.R., 2009: 22-25.



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dispute,293 although questions might be raised at that point about whether the agent could itself

act as a party to the arbitration.

Second, the award is helpful in the way that it identifies the issues of importance to class

and collective arbitration, essentially noting that consent is associated with certain types of

representative relief while admissibility is associated with certain types of aggregative relief.

While mass tort arbitration will likely overcome concerns about both consent and admissibility

as a result of the parties’ use of submission agreements, Abaclat provides a useful recognition of

the various types of class and collective relief now available in arbitration while also

demonstrating that certain types of proceedings294 need not be bogged down by the kinds of

consent analyses that exist in contract-based class arbitration, which have typically used opt-out

representative proceedings.295

Finally, the Abaclat award puts the lie to the supposition that claimants cannot work

together to create a large arbitral class. Conventional wisdom has held that class and collective

arbitration is not feasible in situations where there is no pre-existing arbitration agreement,296 but

Abaclat suggests that claimant groups can come together when there is a need to do so, such as

in cases where the remedies in the national courts are insufficient to address the injuries at hand.

293 The possibility of a conflict of interest between TFA and the individual bondholders was one of the

issues raised by the respondent. See Abaclat Award, ¶¶425, 428. 294 The Abaclat majority refers to these proceedings as aggregative, but the ease of analysis would also

likely extend to opt-in representative proceedings and arbitrations involving representation through an

intermediary organization. 295 Thus far, virtually every class arbitration to date has been on an opt-out basis, although there are

exceptions. See Velez v. Perrin Holder & Davenport Capital Corp., 769 F.Supp.2d 445, 446-47

(S.D.N.Y. 2011) (allowing opt-in collective arbitration in the context of Financial Industry Regulation

Authority (FINRA) arbitration); JetBlue Airways Corp. v. Stephenson, 88 A.D.3d 567, 573-74 (N.Y.

App. Div. 2011) (noting collective arbitration differs from class arbitration and therefore Stolt-Nielsen

S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) does not apply). 296 See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18.



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C. Consent From Respondents

Most of the concerns about class and collective arbitration outside the context of contract-based

claims have focused on practical issues relating to the identification and notification of the

claimant group and the ability to obtain binding consent from those claimants.297 Notably,

Abaclat has put those worries to rest. However, the analysis is not complete, since consent must

also be obtained from respondents.

Issues relating to the consent of the respondent are usually not practical in nature, since

the respondent in most cases is readily identifiable and can give its consent to a class or

collective arbitration in the same way that it would in any other arbitration. Instead, the primary

obstacle with respect to respondents is tactical, in that it is generally considered difficult if not

impossible to convince a respondent to accede voluntarily to a large-scale, international

arbitration. Instead, respondents are commonly painted as resisting any process that might lead

to a larger claimant group, since that will be seen as increasing their financial exposure.298

However, some practitioners and scholars have recognized that the ability to achieve final

resolution of all claims on a global scale is often of great benefit to respondents and have

suggested that there are parties who would be willing to enter into a worldwide collective

arbitration so as to achieve that end.299 This latter observation does not seem as far-fetched as

297 See LAMM, C.B. & J.A. AQUA, 2002-03: 717-18. 298 See SMIT, H., 2004: 210-11; see also HENSLER, D.R., ET AL, 2000: 471. This may be somewhat short

sighted, since the elimination or significant limitation of class relief will likely lead to the imposition of

new regulatory measures that corporate interests might find even less palatable. See BURCH, E.C., 2008:

70-77, 128; STRONG, S.I., Class, Mass, 2013: ¶¶5.53-5.57. 299 Indeed, some commentators have noted that:

defendants are seeking comprehensive peace – meaning the ability to end all litigation on

that particular issue – at a higher level than formerly. Today’s more globally

interconnected marketplace correspondingly means that corporate wrongdoing can cause

injury on a worldwide scale. Businesses want to put disputes behind them; ongoing

litigation often has a very real and very negative impact not just on current cash flow, but

also on the company’s market value.



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may once have been the case, since class and collective arbitration offer numerous advantages to

respondents particularly in cross-border matters.300

Interestingly, Abaclat may prove instructive to respondents on tactical matters as well as

other issues, such as those involving consent. These items are considered below.

1. Respondent consent in Abaclat

Most of the discussion in Abaclat relating to the consent of the respondent involved matters of

treaty interpretation that are not relevant outside the context of international investment

arbitration. However, the majority award did make a number of interesting observations about

large-scale arbitration that could be relevant to those involved in private law disputes.

First, after having considered the need for class or collective suits from the claimants’

perspective,301 the majority considered the same issue from the respondent’s viewpoint,302

concluding that the cost and burden associated with defending thousands of individual

proceedings “would be a much bigger challenge to Argentina’s effective defense rights than a

mere limitation of its right to individual treatment of homogeneous claims in the present

proceedings.”303 This conclusion appears to be supported by experience in the private law realm,

where corporate respondents have found large numbers of bilateral arbitrations excessively

Despite defendants’ desire for worldwide preclusive effect, that desire runs into a

practical reality: no country’s courts have worldwide authority.

BASSETT, D.L., 2011: 27. 300 See supra notes 125-86 and accompanying text. 301 See Abaclat Award, ¶¶484, 537. 302 The majority also considered the need for mass proceedings from ICSID’s viewpoint, although the

burden on a private arbitral institution would not be relevant to an analysis of this type. See Abaclat

Award, ¶537. 303 Abaclat Award, ¶545.



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burdensome.304 One issue that was not discussed in the award but which may be relevant is

whether the cost-effectiveness of a particular dispute resolution mechanism is or should be

considered a corporate governance issue, in that businesses are encouraged or in some cases

required to act in an economically rational manner and individual defense of hundreds to

thousands of bilateral arbitrations do not constitute an effective use of company resources.

Second, Abaclat discussed the kinds of situations that would allow tribunals to introduce

procedural innovations that might affect respondents’ rights of defense,305 stating that mass

examination proceedings would only be permitted in cases where the claims were the same or

substantially the same.306 Although this holding might at first seem to bar use of arbitration for

mass torts involving individual damages, there are ways of addressing this particular concern,

either through bifurcation of the proceedings into a liability phase (which would proceed jointly)

and a damages phase (which would proceed individually), or through the creation of subclasses.

Notably, issues relating to individual injuries would not arise in cases where the claimant group

sought injunctive relief or identical recovery.

2. Respondent consent in private arbitration

As the preceding subsection demonstrates, issues relating to the consent of the respondent in

private arbitration do not, for the most part, give rise to difficult legal questions, since

respondents can usually be easily identified and can consent to arbitration on their own behalf.

Instead, the real dilemma is whether a respondent will decide as a matter of tactics that

arbitration is a better venue in which to have a mass tort resolved.

304 See supra note 173. 305 Abaclat Award, ¶545. 306 Abaclat Award, ¶540.



76

When considering this issue, respondents will need to weigh any potential savings on the

final judgments on damages in the various national courts against the relative ease of

international enforcement (which works to the respondent’s favor as much as it does to

claimants), the likely savings of time and money in reaching final resolution of the dispute, and

the ability to tailor the proceedings and avoid some of the more exceptional aspects of certain

national courts.307 All of these issues have been raised elsewhere in this paper.

However, before making a final decision on whether to agree to some form of mass

arbitration, respondents must also take into account some of the other benefits to arbitration. For

example, parties may be able to ensure a higher degree of privacy and confidentiality in the

arbitral setting than in the judicial realm.308 These attributes may be important to corporate

respondents that are keen to avoid bad publicity and loss of goodwill. Furthermore, parties to

arbitration can select a decision-maker who has particular expertise in the subject matter or

procedure at issue and who is free from any national prejudices relating to any of the parties.309

These qualities may be particularly important to parties who worry that a dispute will be put into

the hands of a decision-maker (judge or jury) who may not understand the technical nuances of a

particularly sophisticated or complicated case or who might be swayed by emotion or patriotic

sentiment when rendering a decision. Given these factors, it would seem likely that at least some

307 Interestingly, several different states seem to be vying for the right to claim that they are the

jurisdiction most amenable to large-scale litigations. For a long time, the United States seemed to be the

prime contender, but the U.S. Supreme Court decision in Morrison v. National Australia Bank Ltd., 130

S.Ct. 2869, 2885-89 (2010), created certain obstacles to the assertion of certain types of claims, including

“foreign-cubed” securities actions. Other alternative venues appear to be Ontario, Canada, at least with

respect to “secondary market class actions,” and the Netherlands, at least with respect to classes for

settlement-only purposes. See GELOWITZ, M., 2010; TZANKOVA, I. & D.L. SCHEURLEER, 2009: 149. 308 While the public nature of mass torts may require some deviation from the levels of privacy and

confidentiality seen in bilateral arbitration, class and collective arbitration will nevertheless be subject to

no more, and probably far less, publicity than similar types of litigation. See STRONG, S.I., De-

Americanization, 2010: 513-16. 309 See BORN, G.B., 2009: 78-81, 1364-65.



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respondents will be inspired to adopt class or collective arbitration in preference to similar forms

of judicial dispute resolution.310

D. Procedures

Although the Abaclat decision indicated that it was too early to make any far-reaching decisions

regarding the procedures to be used during the merits phase of the arbitration,311 the majority did

set forth certain broad procedural guidelines to help the parties prepare for the next stage of the

dispute. Some of the ideas discussed in the award might be useful to parties considering mass

tort arbitration.

For example, the majority noted that “adaptions to hear the present case collectively

would concern not that much the object of the examination, but rather (i) the way the Tribunal

will conduct such examination, and/or (ii) the way Claimants are represented.”312 Thus, with

regard to the first factor, “the Tribunal would need to implement mechanisms allowing a

simplified verification of evidentiary material.”313 This simplified process might:

concern either the depth of examination of a document (e.g. accepting a scanned

copy of an ID document instead of an original), or the number of evidentiary

documents to be examined, and if so their selection process (i.e. random selection

of samples instead of a serial examination of each document).314

Although the dissent objected to this method of examination,315 in many ways this type of

process does not seem all that different than what is currently done in complex commercial

disputes being heard in private arbitration. Indeed, those proceedings already involve large

numbers of documents being introduced into evidence en masse, after the parties have discussed

310 See SMIT, H., 2004: 151. 311 See SMIT, H., 2004: 151. 312 Abaclat Award, ¶530; see also Abaclat Award, ¶531 (discussing the content of the examination). 313 Abaclat Award, ¶530. 314 See Abaclat Award, ¶531. 315 See Abaclat Dissent, ¶¶221-44.



78

only a few important aspects of several representative items at the hearing or in the written

submission. Any other approach would make arbitral proceedings extremely cumbersome in

some cases, given the quantum of information now available in any complex dispute.

Furthermore, some arbitral rules allow tribunals to limit the introduction of cumulative or

duplicative evidence,316 thus providing tribunals with a sound jurisprudential foundation for

allowing evidence in class and collective arbitration to be presented on the basis of random

sampling.317

Indeed, much has changed since the early days of arbitration, when disputes involved a

small number of relevant documents that could all be produced in their original form at the

hearing. Nowadays, the complexity of the disputes and the underlying transactions, as well as

the wide use and availability of electronic data, means that documents are routinely produced to

arbitrators either in photocopied form (often by the box load) or in electronic form (often by

compact disk or flash drive). Only when the authenticity of a document is a live issue – a

relatively rare occurrence – is an original provided to the tribunal for inspection.

The second procedural adjustment contemplated by the majority involved the method by

which claimants would be represented.318 According to the majority, the power granted to TFA

to act as the bondholders’ agent in the ICSID proceedings was entirely adequate, suggesting that

this form of representation would be suitable in other forms of arbitration.319

Of course, changes in procedure cannot be made without considering the potential

implications. In this case, the ramifications were twofold. First, alterations of the type suggested

by the majority meant that it would “not be possible to treat each Claimant as if he/she was alone

316 See AAA International Rules, art. 16(3); IBA, Evidence, art. 8(2). 317 Furthermore, to the extent that a party believes that the items selected are not representative or random,

that party can raise the issue on cross-examination and produce competing evidence. 318 Abaclat Award, ¶530; see also Abaclat Award, ¶531 (discussing the content of the examination). 319 See Abaclat Award, ¶532.



79

and certain issues . . . will have to be examined collectively, i.e., as a group.”320 Second, the new

mass examination procedures:

will likely limit certain of Claimants’ and Argentina’s procedural rights to the

extent that Claimants have to waive individual interests in favor of common

interests of the entire group of Claimants, while Argentina will not be able to

bring arguments in full length and detail concerning the individual situation of

each of the Claimants.321

Normally, the parties’ procedural rights could not be infringed in this way. However, the

majority considered the extent and type of limitations on the parties’ procedural rights in the

context of the dispute as a whole and concluded that in these particular circumstances:

not only would it be cost prohibitive for many Claimants to file individual claims

but it would also be practically impossible for ICSID to deal separately with

60,000 individual arbitrations. Thus, the rejection of the admissibility of the

present claims may equal a denial of justice. This would be shocking given that

the investment at stake is protected under the BIT, which expressly provides for

ICSID jurisdiction and arbitration.322

Furthermore, the majority indicated that the only time a group method of examination

would be acceptable was when “claims raised by a multitude of claimants are to be considered

identical or at least sufficiently homogeneous.”323 The standard identified in Abaclat was quite

high, in that there had to be “homogeneous rights of compensation for a homogeneous damage

caused to them by potential homogeneous breaches by Argentina of homogeneous obligations

provided for in the BIT.”324 This suggests that for a mass tort to be suitable for arbitration, there

must be homogenous rights of recovery combined with homogenous injuries caused by

homogenous breaches of the relevant duty by the respondent.

320 See Abaclat Award, ¶536. 321 See Abaclat Award, ¶536. 322 Abaclat Award, ¶537. 323 Abaclat Award, ¶540. 324 Abaclat Award, ¶541.



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The circumstances described in Abaclat are relatively narrow. However, the majority

award was written in the context of treaty-based arbitration, which places certain restrictions on

what the parties and the arbitrators may do. Arbitrations arising pursuant to a post-dispute

submission agreement have a great deal more flexibility, which means that parties to a mass tort

arbitration do not need to be constrained by the factual scenario described in Abaclat. For

example, if a mass tort were to arise involving homogenous rights of recovery combined with

homogenous breaches of duty but including non-homogenous damages, the parties could agree

to class or collective arbitration of common issues (such as liability) while reserving individual

damages for bilateral arbitration or litigation. Indeed, parties to mass claims can devise a wide

variety of procedures that meets the needs of their particular dispute.

Notably, when considering the effect of the proposed procedural amendments, the

majority found the benefits were not all one-sided. Indeed, the respondent experienced certain

benefits as a result of the mass procedures as well as the claimants.325 For example:

[w]hilst it is true that Argentina may not be able to enter into full length and detail

into the individual circumstances of each Claimant, it is not certain that such

approach is at all necessary to protect Argentina’s procedural rights in the light of

the homogeneity of Claimants’ claims. In addition, the only alternative would be

to conduct 60,000 separate proceedings. The measures that Argentina would need

to take to face 60,000 proceedings would be a much bigger challenge to

Argentina’s effective defense rights than a mere limitation of its right to

individual treatment of homogeneous claims in the present proceedings.326

Certainly the dissent made a valid point when it claimed that “it is an absolute due

process right of a respondent in a judicial or arbitral proceeding, to have every element of the

claim or claims presented against him, examined by the tribunal, through adversarial debate that

affords him full opportunity to contest and refute these elements one by one, if he can.”327

325 See Abaclat Award, ¶545. 326 Abaclat Award, ¶545. 327 Abaclat Dissent, ¶236.



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However, a number of procedural rights are routinely limited or waived through arbitration.328

Therefore, it is necessary to consider what, if anything, makes these particular defense rights so

special that they cannot be altered by the kind of mass examination procedure contemplated by

the Abaclat majority.

Two possibilities exist. First, the dissent’s objection might be based in concerns about

consent, namely that the respondent in Abaclat had not truly consented to this mass proceeding.

Certainly that argument was asserted vigorously by the respondent on grounds that have not been

developed fully in this paper, since they are largely unique to treaty-based arbitration.329

However, this kind of consent-based argument will be irrelevant in the tort context because

respondents in mass tort arbitration will have had the opportunity to outline the various

procedures to be used in the arbitration in their submission agreement.330 Furthermore, even in

cases where the compromis does not outline the procedures to be used in detail, parties can still

be held to certain procedures pursuant either to (1) the explicit powers granted to a tribunal to

create the necessary procedures under the relevant rules or arbitration agreement331 or (2)

concepts of implicit consent.332

Second, the dissent’s objection might be based on concerns that the respondent might not

be given the full and fair opportunity to present its case. Certainly it is true that the right to

present one’s case is one of the fundamental notions of both arbitration and litigation.333

However, if the multiple claims are identical, then “the tribunal can examine adversarially all the

328 See BORN, G.B., 2009: 1776. 329 See Abaclat Dissent, ¶¶120-89. 330 There is the possibility that some respondents will object to certain procedures proposed by the

arbitrators subject to their residual powers of discretion. 331 See BORN, G.B., 2009: 1758-65. 332 Although the dissent mentions secondary consent to multilateral procedures in its award, see Abaclat

Dissent, ¶¶173-74, it actually misunderstands the principle, see STRONG, S.I., 2014. 333 See New York Convention, art. V(1)(b); BORN, G.B., 2009: 1764; STRONG, S.I., Brussels I, 2013.



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aspects and components of this one claim, in spite of the multitude of the claimants, totally

safeguarding the due process rights of the respondent.”334 Furthermore, arbitration law does not

provide parties with the absolute right to present all the evidence that might possibly be relevant

to a dispute. Instead, arbitrators typically have the ability to curtail the introduction of evidence

that is duplicative, cumulative or not credible.335 So long as procedural restrictions are applied

fairly and equally, the procedure will likely pass muster.336

When enunciating its concerns in this matter, the dissent noted some of the problems that

can occur when too much of a distinction is made between substantive and procedural rights,

particularly if the latter is treated “as a second class category of rights at the disposal and

discretion of the Tribunal.”337 This phenomenon is problematic for the dissent, given its view of

procedural rights as an “essential part” of a party’s substantive rights, with the “curtailment,

abridgement, or violation in any way” of procedural rights “automatically put[ting] in serious

jeopardy the substantive rights they protect.”338

While the majority ultimately decided that the limitations on procedural rights were

justified in this case, the dissent was right to underscore the importance of procedural rights.

However, it is important to remember that procedural rights can include both individual and

334 Abaclat Dissent, ¶237. Of course, the dissent did not view the claims in Abaclat as being identical in

this manner, even though they arose out of the same factual scenario and thus shared some common

features. See Abaclat Dissent, ¶238. Thus the dissent claimed that “[t]o the extent that the individual

claims in the mass differ from each other, it is the absolute due process right of the defense, and the

obligation of the Tribunal, to have them examined individually and adversarially by the Tribunal.”

Abaclat Dissent, ¶238. The dissent did not state whether it opposed the sampling procedure suggested by

the claimants as a matter of principle or simply thought that the individual issues would not be

individually addressed as the majority said would occur. 335 See AAA International Rules, art. 16(3); IBA Rules, art. 8(2); STRONG, S.I. & J.J. DRIES, 2005: 307-

10. 336 Parties frequently agree to procedures that curtail their ability to present evidence, as is the case in

documents only or fast-track arbitration. See BORN, G.B., 2009: 1232 n.442. Furthermore, these

procedures are considered to constitute a full and fair opportunity to present one’s case in arbitration,

even if the same procedures are not available in court. See BORN, G.B., 2009: 1232 n.442. 337 See Abaclat Dissent, ¶225. 338 Abaclat Dissent, ¶226.



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collective rights.339 Indeed, class and collective rights protect important regulatory and policy

interests in addition to providing an effective and efficient means of dispute resolution in cases

where bilateral litigation or arbitration is impossible or infeasible, and therefore may constitute a

defensible right of themselves. While more work needs to be done on the issue of whether the

right to proceed as a group should be considered procedural or substantive, and whether such

rights may be waived by an individual,340 what is certain is that arbitral tribunals facing mass tort

arbitrations will have to be aware of the role that group litigation plays in the relevant

jurisdictions.341

Although the dissent is quite vocal in its concerns about procedural rights and the group

examination method proposed by the majority, it appears that both the majority and the dissent

ultimately concur that parties can agree to curtail their individual procedural rights to allow

group procedural examinations. This conclusion is based on the fact that both the majority and

the dissent agreed that the claimants in Abaclat could and did agree to these procedures through

their adherence to the TFA Mandate Package.342 This factor is very useful for those parties

wishing to resolve mass torts in arbitration, since most, if not all, of those proceedings will take

place pursuant to a submission agreement expressly contemplating mass procedures.343

339 However, Western legal analysis has focused almost exclusively on individual rights and remedies

rather than group rights. See TUSHNET, M., 1986: 734. 340 See STRONG, S.I., Class, Mass, 2013: ¶¶4.95, 4.100, 4.106-4.108, 5.70-5.72. 341 See BUXBAUM, H.L., 2006: 311; NAGAREDA, R.A., 2009: 13. 342 See Abaclat Award, ¶546 (noting that although the claimants’ rights were being somewhat curtailed,

this approach had been “consciously accepted by Claimants in order to benefit from the collective

treatment); Abaclat Dissent, ¶231 (suggesting that the majority had leapt over certain analytical steps, but

eventually conceding that the claimants could be held to have made their own choice in this matter,

subject to any limitations based on public policy). 343 Notably, the question of consent arises at the time the arbitration agreement arises, not the time the

dispute goes into arbitration. Many of the current controversies about procedural issues in class and

collective disputes arise because one or another of the parties sees a tactical advantage in opposing group

treatment at the time the matter goes to arbitration. However, the fact that a party changes its mind about

some aspect of an arbitral proceeding – be in the form of the process or the decision to be in arbitration in

the first place – at some point after the arbitration agreement has been concluded does not change the



84

When it comes to specific procedures to be used in the merits hearing, the Abaclat award

is relatively vague. Although the tribunal discussed the possibility of a “sampling procedure,”

also known as a “bell weather proceeding” or “pilot case procedure,”344 the majority concluded

that it needed to know more about the facts of the case before it could decide which sorts of

procedures were appropriate.345 However, the majority did state that the merits phase would be

split into two phases, with the first establishing issues that went to the core of the case and

conditions that needed to be met to resolve the claims.346 This first phase therefore had to

identify which issues or conditions were (i) general to all claimants, with the result that such

issues or conditions could be established once with regard to all claimants; (ii) general to all

claimants, but including certain elements that might require the creation of subgroups of

claimants, with the result that those elements could be established through a sampling procedure;

and (iii) specific to individual claimants, with the result that individual case-by-case analysis

would be required.347 Only then would it be appropriate to go to the second phrase of the merits

hearing, which would then involve the tribunal determining how best to address the various

issues and conditions raised by the parties.348

V. Conclusion

Mass tort arbitration is a complicated proposition, marrying the complexities of large-scale

litigation with the special nature of arbitration. The situation becomes even more difficult when

quality and nature of the consent that existed at the time the agreement was made. However, submission

agreements are subject to fewer disputes about consent and procedure because they are completed after

the dispute has arisen, which means the parties have made their choice about arbitration in full knowledge

of the relevant facts. 344 See Abaclat Award, ¶666. 345 See Abaclat Award, ¶667. 346 See Abaclat Award, ¶668. 347 See Abaclat Award, ¶669. 348 See Abaclat Award, ¶668.



85

legal issues arise in the cross-border context. Courts and arbitrators will have their hands full in

the coming years as they consider whether and to what extent group proceedings are appropriate,

and if so, what form the procedures should take.

As daunting as this task may seem, it is nevertheless a worthwhile one. Mass torts are on

the rise, particularly in the cross-border context, and arbitration provides a fair and efficient

means of resolving these claims in a single forum, at a single time. Although respondents are

often painted as resisting any efforts to increase the size of a class or collective, arbitration

provides respondents with numerous benefits that are not available in national courts and allows

all claims to be decided at a single time, in a single forum, regardless of where the parties reside.

Although no known mass tort arbitrations have yet been brought, there are numerous

situations where such proceedings would be appropriate, with international environmental

disasters, product liability actions and financial fraud being just a few. While some parties may

be fearful about having their disputes resolved in an international process that appears to operate

outside the realm of national courts,349 international commercial arbitration has a long and

enviable history of resolving complex disputes involving parties from multiple jurisdictions.350

As parties consider the possibility of using arbitration to resolve mass tort disputes, they

can be guided by a number of the principles outlined in Abaclat. From the terms of the

349 Although arbitration occasionally has the reputation of being a “lawless” procedure, arbitral tribunals

are required to apply the governing law unless the parties explicitly grant the arbitrators the power to act

equitably (typically known as the power to act ex aequo et bono or as an amiable compositeur). See LEW,

J.D.M., ET AL., 2003: ¶¶17-18, 18-5. Furthermore, awards are always subject to the ultimate supervision

of the courts on matters of procedure. See New York Convention, art. V; 9 U.S.C. § 10 (U.S.);

Arbitration Act 1996 §§ 67-68 (Engl.); BORN, G.B., 2009: 2649-55, 2865-70. 350 See BORN, G.B., 2009: 7-63. For example, most international arbitral awards are complied with

voluntarily. See BLACKABY, N., ET AL., 2009: ¶11.02. Even those cases that must be judicially enforced

are largely upheld. See KERR, M., 1997: 128 n.24 (citing data suggesting “about 98 per cent of awards in

international arbitrations are honoured or successfully enforced and that enforcement by national courts

has only been refused in less than 5 per cent of cases”); see also VAN DEN BERG, A.J. (noting the more

than 1400 court decisions in the Yearbook Commercial Arbitration reflect an enforcement rate of over 90

percent).



86

documents expressing the claimants’ consent and grant of authority to the recognition that parties

can agree to proceed in a group arbitration, the majority and dissenting awards in Abaclat

provide ample evidence of how parties can establish a mass tort arbitration. Furthermore, many

of the difficulties identified by the dissent will not exist in mass tort disputes, since those

problems relate primarily to the interpretation of certain treaties that are not relevant to mass

trots. Therefore, parties can use Abaclat as a useful first step in the move toward mass tort

arbitration in the private international realm.



87

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Aggregate Mass-Tort Litigation After Ortiz”, University of Kansas Law Review, 58: 775.

TREATIES AND LEGISLATION

Agreement between the Argentine Republic and the Republic of Italy on the Promotion and

Protection of Investments, signed 22 May 1990, available at Investment Instruments Online

Bilateral Investment Treaties, United Nations Conference on Trade and Development,

http://www.unctadxi.org/templates/docsearch____779.aspx (allowing user to search for BITs by

country) [hereinafter Argentina-Italy BIT].

Civil Procedure Rules 1999, Part 19.III.

Communication from the Commission to the European Parliament, the Council, the European

Economic and Social Committee and the Committee of the Regions, ‘Towards a European

Horizontal Framework for Collective Redress’, COM(2013) 401/2 [hereinafter European

Commission Communication].

Draft Commission Recommendation of 11 June 2013 on common principles for injunctive and

compensatory collective redress mechanisms in the Member States concerning violations of

rights granted under Union Law, C(2013) 3539/3 [hereinafter European Commission Draft

Recommendation].

Convention on the Settlement of Investment Disputes Between States and Nationals of Other

States, Mar. 18, 1965, 575 U.N.T.S. 159 [hereinafter ICSID Convention].

Council Directive 93/13/EEC of 5 Apr 1993 on unfair terms in consumer contracts [1993] OJ

L95/29.

Council Regulation (EC) No. 44/2001 of 22 December on jurisdiction and the recognition and

enforcement of judgments in civil and commercial matters, art. 5(3), 2001 O.J. (L 12) 1 (EC)

[hereinafter Brussels I Regulation].

Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain

aspects of mediation in civil and commercial matters [2008] OJ L 136/3.



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European Commission (EC), Public Consultation: Towards a Coherent European Approach to

Collective Redress, SEC(2011) 173, Feb. 4, 2011 [hereinafter European Commission, Public

Consultation].

European Parliament, Resolution of 2 February 2012 on “Towards a Coherent European

Approach to Collective Redress,” P7_TA(2012)0021 [hereinafter European Parliament,

Resolution]

European Parliament and Council Directive 98/27/EC of 19 May 1998 on injunctions for the

protection of consumers’ interests [1998] OJ L16/51.

Green Paper, Consumer Collective Redress, COM(2008)794 (27 November 2008).

Organization of American States, Inter-American Convention on Extraterritorial Validity of

Foreign Judgments and Arbitral Awards, May 14, 1979, 1439 U.N.T.S. 87 [hereinafter

Montevideo Convention].

Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December

2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial

matters (recast), [2012] OJ L351/1 [hereinafter Brussels I Recast].

United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards,

June 10, 1958, 330 U.N.T.S. 38 [hereinafter New York Convention].

White Paper, Damages Actions for Breach of the EC Antitrust Rules, COM(2008)165 (2 April

2008).

ARBITRAL AWARDS

Abaclat (formerly Beccara) v. Argentine Republic, ICSID Case No ARB/07/5, Decision on

Jurisdiction and Admissibility dated August 4, 2011, available at

http://italaw.com/documents/AbaclatDecisiononJurisdiction.pdf [hereinafter Abaclat Award].

Abaclat (formerly Beccara) v. Argentine Republic, ICSID Case No ARB/07/5, Decision on

Jurisdiction and Admissibility, Dissenting Opinion dated October 28, 2011, available at

http://italaw.com/documents/Abaclat_Dissenting_Opinion.pdf [hereinafter Abaclat Dissent].

Alemanni v. Argentine Republic, ICSID Case No ARB/07/8 [hereinafter Alemanni v. Argentine

Republic].

See Ambiente Ufficio S.p.A.(formerly Alpi) v. Argentine Republic, ICSID Case No ARB/08/9,

Decision on Jurisdiction and Admissibility dated February 8, 2013, available at

https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&d

ocId=DC2992_En&caseId=C340 [hereinafter Ambiente Ufficio Award].



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Valencia v. Bancolombia (Colom. v. Colom.), digest by Zuleta DIGEST for Institute for

Transnational Arbitration (ITA) (Arb. Trib. from the Bogotá Chamber of Comm. 2003),

available at http://www.kluwerarbitration.com [hereinafter Valencia v. Bancolombia].

BRIEFS

Brief of American Arbitration Association as Amicus Curiae in Support of Neither Party, Stolt-

Nielsen SA v. AnimalFeeds Int’l Corp., 130 S.Ct. 1758 (2010) (No. 08-1198), at 22-24

[hereinafter AAA Brief].

Brief of the Chamber of Commerce of the United States of America as Amicus Curiae in Support

of Petitioners, Stolt-Nielsen SA v AnimalFeeds Int’l Corp., 130 S.Ct. 1758 (2010) (No 08-1198)

p. 17 [hereinafter Chambers Brief].

WORKING PAPERS AND WEBSITES

American Arbitration Association (AAA), International Dispute Resolution Procedures, effective

June 1, 2009, available at www.adr.org [hereinafter AAA International Rules].

American Arbitration Association (AAA), Supplementary Rules for Class Arbitrations, effective

Oct. 8, 2003, available at www.adr.org [hereinafter AAA Supplementary Rules].

American Arbitration Association (AAA) Searchable Class Arbitration Docket, available at

www.adr.org.

AMERICAN BAR ASSOCIATION (ABA), PROTOCOL ON COURT-TO-COURT COMMUNICATIONS IN

CANADA-U.S. CROSS-BORDER CLASS ACTIONS AND NOTICE PROTOCOL: COORDINATING

NOTICE(S) TO THE CLASS(ES) IN MULTIJURISDICTIONAL CLASS PROCEEDINGS (Aug. 2011),

available at http://www.cba.org/cba/resolutions/pdf/11-03-A-bckd.pdf.

AMERICAN LAW INSTITUTE (ALI), GUIDELINES APPLICABLE TO COURT-TO-COURT

COMMUNICATIONS IN CROSS-BORDER CASES, available at

http://www.courts.gov.bc.ca/supreme_court/practice_and_procedure/practice_directions_and_no

tices/General/Guidelines%20Cross-Border%20Cases.pdf [hereinafter ALI, GUIDELINES].

AMERICAN LAW INSTITUTE (ALI), PRINCIPLES OF THE LAW OF AGGREGATE LITIGATION (2010)

[hereinafter ALI, PRINCIPLES].

AMERICAN LAW INSTITUTE, RESTATEMENT (SECOND) OF CONFLICT OF LAWS (1971) [hereinafter

ALI, RESTATEMENT].

CANADIAN BAR ASSOCIATION (CBA), CONSULTATION PAPER: CANADIAN JUDICIAL PROTOCOL

FOR THE MANAGEMENT OF MULTIJURISDICTIONAL CLASS ACTIONS 6-7 (June 2011).

http://www.adr.org/

http://www.courts.gov.bc.ca/supreme_court/practice_and_procedure/practice_directions_and_notices/General/Guidelines%20Cross-Border%20Cases.pdf

http://www.courts.gov.bc.ca/supreme_court/practice_and_procedure/practice_directions_and_notices/General/Guidelines%20Cross-Border%20Cases.pdf



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Chevron, Ecuador Lawsuit, http://www.chevron.com/ecuador/.

Chevron in Ecuador, “These Three Men Think They Have Power to Kill Ecuadorians’ Judgment

Against Chevron: Here’s Why They Can’t – It’s Against the Law,” Feb. 11, 2012, available at

http://www.chevroninecuador.com/ (reposted from The Chevron Pit, Feb. 22, 2012, available at

http://thechevronpit.blogspot.com/2012/02/these-three-men-think-they-have-power.html).

Deutsche Institution für Schiedsgerichtsbarkeit (DIS) Supplementary Rules for Corporate Law

Disputes, effective 15 September 2009, available at http://www.dis-

arb.de/download/DIS_SRCoLD_%202009_Download.pdf [hereinafter DIS Supplementary

Rules].

Global Class Actions Exchange, available at http://globalclassactions.stanford.edu/.

Institute for European Tort Law, The Basic Principles of Tort Law From A Comparative

Perspective, available at http://conflicts.ectil.org/.

International Bar Association (IBA), Submission to European Commission Consultation on

Collective Redress (April 28, 2011), available at

http://ec.europa.eu/competition/consultations/2011_collective_redress/iba_awg_en.pdf

[hereinafter IBA Submission].

International Bar Association (IBA), Guidelines for Recognising and Enforcing Foreign

Judgments for Collective Redress (Oct. 16, 2008), available at

http://ec.europa.eu/competition/consultations/2011_collective_redress/iba_guidlines_en.pdf

[hereinafter IBA Collective Redress].

International Bar Association (IBA), Guidelines on Conflicts of Interest in International

Commercial Arbitration (May 22, 2004), available at

http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx

[hereinafter IBA, Conflicts].

International Bar Association (IBA), Rules on the Taking of Evidence in International

Commercial Arbitration (May 29, 2010), available at


[hereinafter IBA, Evidence].

ICSID Cases, available at

icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=ListCases.

International Law Association (ILA), Final Report on Public Policy as a Bar to Enforcement of

International Arbitral Awards 2002 (ILA Final Report), available at http://www.ila-

hq.org/en/committees/index.cfm/cid/19.

JAMS Class Action Procedures, effective May 1, 2009, available at

www.jamsadr.com/rules/class_action.asp.

http://www.chevron.com/ecuador/

http://www.chevroninecuador.com/

http://conflicts.ectil.org/


http://www.ila-hq.org/en/committees/index.cfm/cid/19

http://www.ila-hq.org/en/committees/index.cfm/cid/19



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Law Society, Multi-party Action Information Service, available at

http://www.lawsociety.org.uk/productsandservices/services/multiparty.law

Montevideo Convention Status, available at http://www.oas.org/juridico/english/sigs/b-50.html.

New York Convention, Status, available at

http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html

[hereinafter New York Convention Status].

New York University Institute for International Law and Justice, available at

http://www.iilj.org/GAL/GALworkingdefinition.asp.

Organization for Economic Co-operation and Development (OECD), Recommendation on

Consumer Dispute Resolution and Redress (2007), available at

http://www.oecd.org/dataoecd/43/50/38960101.pdf.

PIP Breast Implants and Mass Torts in Europe, Mass Tort Litigation Blog, available at

http://lawprofessors.typepad.com/mass_tort_litigation/.

http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html

http://www.iilj.org/GAL/GALworkingdefinition.asp

http://www.oecd.org/dataoecd/43/50/38960101.pdf

Forthcoming book chapter in Uncertainty and Mass Tort ...

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