Transparency Rules and the Mauritius Convention: A Favourable Haircut of the State's Sovereignty in Investment Arbitration?

Abstract

This paper investigates whether the United Nations Commission on International Trade Law (UNCITRAL) Transparency Rules on treaty-based investor-state arbitration (Transparency Rules) increases transparency in investment arbitration fairly for all the participants. The hypothesis is that both together work as a more favourable conflict of laws for the host states than as an independent international transparency obligation. Several tribunals have accepted third persons' submissions; for instance, the North American Free Trade Agreement’s (NAFTA) Free Trade Commission declared disputes accessible and freedom of information acts established duties to inform the public. After this success for a civil society, since 2006, civil society lobbied for transparency at UNCITRAL. In 2013, this commission adopted the Transparency Rules and successfully suggested that the United Nations General Assembly adopt the UN Draft convention on transparency in treaty-based investor-state arbitration (Mauritius Convention). Transparency brings pressure for a level playing field among disputing parties. In Detroit International Bridge Company v Government of Canada, UNCITRAL, PCA Case 2012-25, the tribunal accepted the prevalence of the in camera obligation in the procedural rules upon a general treaty obligation and against the state’s arguments. In Philip Morris Asia Limited v The Commonwealth of Australia, UNCITRAL, PCA Case 2012-12, the tribunal accepted Australia’s need to disclose certain information under their domestic laws but to exclude confidential business information as determined by the arbitral tribunal. Other decisions exist in which tribunals decide in one or the other direction, re-shaping the level playing field. Over all, tribunals seem to increasingly consult the disputing host state's freedom of information act irrespective of their seat. The adoption of the Transparency Rules seems to constitute this principle and the Mauritius Convention emphasises the legitimacy of the Transparency Rules. This paper investigates the actual principle of equality as applied by arbitral tribunals. Thereafter, it considers the legal nature of transparency under the Transparency Rules standalone and in combination with the Mauritius. It outlines the content and its reference to freedom of information acts. It concludes by determining how this discretion affects the level playing field of all the participants.