We have posted on the role of class or other collective actions in international litigation, both in the U.S. and elsewhere. The issue is also pertinent to the question we have also discussed in various contexts: whether class or collective actions are available in the arbitration context.
Comes now an arbitral panel in the International Centre for Settlement of Investment Disputes, or ICSID, and in a 282 page preliminary decision on jurisdiction and admissibility finds that roughly 60,000 Italian bondholders can join together to bring claims against the Republic of Argentina, Abaclat and Others v. Argentina, ICSID Case No. ARB/07/5. The default by Argentina is the same default that has occupied so much time of the U.S. courts (see our postings, for example, reflecting the District Court's and Second Circuit's treatment of the Argentine bond default).
The claimants did not institute individual arbitral proceedings. Rather, they eight of the major Italian banks formed what in English the Panel calls Task Force Argentina, which was formed as an association under Italian law. The TFA then contracted with individual bondholders. TFA was given authority to negotiate and then sue.
The award is noteworthy from an international practice perspective for the following reasons:
First, the decision addresses the question of whether "mass" claim liability was consented to by the relevant persons. Unlike most class action litigation in the U.S., the ISDIS panel drew a distinction between who was objecting, the claimants/plaintiffs or the respondents/defendants. Here it was not the claimants but the respondents who were objecting, and the panel therefore imposed a...