6 - Shareholders’ Claims for Reflective Loss and the Dangers of Parallel Proceedings

Summary

This chapter analyses what is probably the biggest concern raised by shareholders’ claims for reflective loss: parallel proceedings and the risks they engender such as inconsistent decisions and double recovery. Parallel proceedings, which can lead to double recovery and inconsistent or contradictory decisions, can severely impact the legitimacy of international investment arbitration by creating uncertainty, inconsistency, and unfairness. This chapter scrutinizes the different types of parallel proceedings to which shareholders’ claims for reflective loss can lead. It also undertakes an in-depth analysis of the dangers created by parallel proceedings. Finally, this chapter focuses on a specific instance of parallel proceedings involving proceedings before domestic courts and international courts or tribunals. In particular, it is explained why traditional claim-limiting provisions found in international investment agreements are of limited practical use in the context of shareholders’ claims for reflective loss.