There is no doubt that the principle of res judicata has been recognized and accepted as the ‘general principle of international law’. It prevents a party from defending itself twice for the same action. However, certain requirements must be fulfilled before the doctrine of res judicata can be applied. The main aim of this article is to explore the effects of this principle in international arbitration in comparison to litigation, specifically in the case of parallel proceedings. Are there any differences between res judicata in international arbitration and litigation and what kind of legal effects does this principle have for the parties? Moreover, a larger problem arises when an arbitration clause is extended onto third-parties. The third-party effect of an arbitral award has a different scope from that of the res judicata effect. The last section, therefore, contains reflections on third-party effects in international arbitration and litigation in terms of application of the res judicata effect.