Good-Faith Rule against Abusing Process by Multiplying Action

Abstract

Investor-State tribunals are equipped with lis pendens, res judicata, abuse of process, and adverse cost orders to ensure that parties are not twice vexed for the same issue or to minimize the harm from multiplying action. When abuse of process is applied to a parallel or successive arbitration, it is considered whether the later action could have been joined, consolidated or coordinated with an earlier one and whether there is a reasonable basis for bringing a separate action. The good faith question surrounds the accused’s intent or purpose, which can be measured subjectively if there is an intent to harm or objectively in the absence of reasonable basis. Raising the question of abuse thus involves asking whether the accused acted in good faith. But where lis pendens and res judicata do not apply, there is a colorable basis for the claim and sensible grounds for advancing with separate proceedings, the claimant is within right to bring further action. The good faith element of abuse reaches the middle ground between the claimant’s interest in accessing the arbitral forum and the respondent’s interest in being free from vexation.