Generally, in simple terms, it is agreed that disputes subjected to neutral parties for determination must come to an end. It is also the position of the law that a dispute between parties, once determined by a competent neutral party, shall not resurface before another neutral party between the same disputing parties and on the same issues or cause of action as the case may be except where an appeal or application to the same court level or higher court is allowed by law. The law calls this res judicata.1 In International Arbitration the principle is not any different except that it is developed to fit the transnational nature of disputes.
Redfern and Hunter explained the principle of res judicata in international arbitration as such:
The basic principle of res judicata provides that a right or fact specifically put in issue and determined by court or tribunal of competent jurisdiction cannot later be put back in question as between the same parties.2
Given the international application, or transnational nature if you like, of international arbitration the application of the principle of res judicata varies as between jurisdiction.3 The variation is mainly influenced by the disparity between civil law and common law jurisdictions across the world. It is important to note that the disparity has given rise to major variances between the common law and civil law approaches to the application of the doctrine of res judicata and its ambit.4
Conceptualizing the principle of res judicata is of paramount importance because it affects the outcome of arbitration especially where a tribunal exercises its right to decide whether and to what extent is going to bound itself by past decisions and findings of a tribunal or court. It opens doors or bars access to further arbitration or court.
2 Deconstructing Res Judicata in International Arbitration
To appreciate the principle of res judicata in international arbitration this paper will explore the principle under both common and civil law jurisdictions while bringing out their similarities and the points of divergence. It will also explore whether the concept dwells on procedures or substance. It will start by looking at the principle of res judicata alongside issue estoppel and while at it explore the likely occurrences of this phenomenon.
a) Res judicata and Issue Estoppel
It apparent that the principles of res judicata and issue estoppel make part of the broader concept of res judicata. Whether it is always the case is a matter of fact dependent on each case. Res judicata is explained above by Redfern and Hunter as “a right or fact specifically put in issue and determined by court or tribunal of competent jurisdiction cannot later be put back in question as between the same parties”5.
On the other hand a plea or defence of issue estoppel, if successful, stops a party in proceedings from challenging a finding of fact or law that has already been determined in earlier proceedings between the same parties (or their privies) – provided that the determination was central to the decision in those proceedings6.
These two related principles are generally affected by a number of factors such as; whether the tribunal should apply substantive or procedural law in determining res judicata; whether the tribunal would consider lex arbitri which is based the seat of arbitration procedural laws or lex causei which is based on substantive law. Sometimes a careful reading of arbitration clauses in agreements exposes the saving of lex arbitri or similar terms. It therefore follows that generally it is the tribunal to determine, upon careful consideration, whether to construe any challenge based on res judicata as regulated by lex arbitri or lex causei.
b) Res Judicata under Common Law
Common law jurisdictions like Uganda apply the principle of res judicata more broadly. The narrow construction provided under the civil law jurisdiction, as explored below, is relaxed. Under common law the parties to a past decision or litigation is defined to include their privies as discussed. Res judicata, therefore, can be stated to be a rule of evidence and admissibility concerning the earlier decision, and whether it must be regarded as conclusive and binding.7
Take for example section 7 of the Civil Procedure Act Cap laws of Uganda that states:
No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties or between parties under whom they or any of them claim, litigating under the same title in a Court competent to try the subsequent suit or the suit in which the issue has been subsequently raised and has been heard and finally decided by that Court.
In common law jurisdiction res judicata covers a number of distinct concepts. These include the concept of ‘cause of action estoppel’ and ‘issue estoppel’.8 An example of a common law jurisdiction is Uganda where, as cited above, under section 7 of the Civil Procedure Act9 a plea of defence based on a cause of action estoppel, if sustained by court, stops a party following a claim which has already been determined by a court of competent jurisdiction in previous litigation between the same parties or persons claiming under them.10
As for issue estoppel, it is the practice in common law that issues determined in an earlier litigation may be raised by a party to an arbitration as a defence is stopping a new litigation on the same determined issues. Sometime this principle is stretched further to operate to prevent a party raising claims and defences that could have been raised in the earlier proceedings but were not. It is customarily referred to as ‘the rule in Henderson v Henderson’.11
c) Res Judicata in Civil Law Jurisdiction
In civil law jurisdiction, such as France, res judicata is characterized by triple identity. These are identity of object, identity of cause and identity of parties.12 The concept of res judicata is often in a codified form. In this jurisdiction parties are barred under the principles of res judicata from litigating the same dispute again, once a final judgment has been rendered by a competent court13.
It is commonly recognized, however, that in civil law jurisdictions the concept of res judicata has a much tighter application. This is reflected, for example, in the French Civil Code (article 1351), which applies a strict triple identity test for the application of the doctrine of res judicata:14
The authority of res judicata applies only to what was the object of a judgment. It is necessary that the thing claimed be the same; that the claim be based on the same cause; that the claim be between the same parties and brought by them acting in the same capacity.15
1 This is the position in both statutory law and case law. In Uganda, for example, the Magistrates Court Act, The Civil Procedure Act and the Judicature Act have the principle embedded. In international Arbitration, awards such as AMCO Asia Corp v Indonesia (Resubmission: Jurisdiction), ICSID, 89 1LR 552, at 560 dealt with the principle.
2 Alan Redfern, Martin Hunter, Nigel Blackaby and Constantine Partasides, Redfern and Hunter on International Arbitration, (Oxford, 5th Edition) 2009, p. 561.
3 Ibid, p.362
4 Res Judicata and Issue Estoppel in Arbitration http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration , Publication | May 2016
5 Alan Redfern, Martin Hunter, Nigel Blackaby and Constantine Partasides, Redfern and Hunter on International Arbitration, (Oxford, 5th Edition) 2009, p. 561.
6 Res Judicata and Issue Estoppel in Arbitration http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration , Publication | May 2016
7 Camille Jojo and Ben Ridgeon, Res judicata and issue estoppel in arbitration, http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration (retrieved 27/08/2018).
8 Res Judicata and Issue Estoppel in Arbitration http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration , Publication | May 2016
10 Res Judicata and Issue Estoppel in Arbitration http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration , Publication | May 2016
11 Rupert Higgins, Rolling back the tide - Henderson v Henderson re-litigation, http://www.hardwicke.co.uk/insights/archive/articles/rolling-back-the-tide---henderson-v-henderson-re-litigation
12 Vaughan Lowe, Res Judicata in International Arbitration, Chichele Professor of Public International Law. All souls College, Oxford and Essex Court Chambers. Lecture Notes.
13 Res Judicata and Issue Estoppel in Arbitration http://www.nortonrosefulbright.com/knowledge/publications/139449/emres-judicataem-and-issue-estoppel-in-arbitration , Publication | May 2016
15 Article 1351 of the French Civil Code
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