There is great uncertainty surrounding the application of the res judicata doctrine in international arbitration, including misunderstandings about the doctrine’s nature and purpose as well as the situations in which it applies. Does it serve essentially private interests and is to be invoked by the parties, or is it part of a state’s public policy, to be raised ex officio by the court or arbitral tribunal? Questions also abound regarding the requirements that must be met in order for the res judicata doctrine to apply, the doctrine’s objective and subjective scope, as well as the precise effects that a judgment or award with res judicata effect has in further proceedings.
One of the main reasons for this uncertainty is the lack of clarity regarding the law governing res judicata. The determination of the applicable law plays a pivotal role in international arbitration because the doctrine of res judicata varies considerably among jurisdictions. One often hears that the doctrine’s scope is wider in common law countries than in civil law countries, encompassing not only claim preclusion, but also issue preclusion and abuse of process. While this is true in principle, the problem extends beyond the civil law – common law divide, with differences existing also among countries belonging to the same legal tradition.
Consequently, the question of the law governing res judicata is not of a mere academic interest; it constitutes a real issue with potentially unpredictable and outcome-determinative implications.