Treaty-based Investor-State Arbitration Research Articles

The 2022 ICSID Rules: A Leap Toward Greater Transparency in ICSID Arbitration

The International Centre for Settlement of Investment Disputes (ICSID) recently issued an amended set of rules to govern its arbitration proceedings.2 One of the core topics addressed by the new Rules is transparency and the mechanisms by which ICSID arbitrations—traditionally confidential—may be ‘opened’ to the public. On this issue, the 2013 UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration played an influential role in shaping the new ICSID Rules.3 But ICSID took a slightly different approach by giving States more authority to decide which parts of the proceedings will be kept confidential. This note addresses ICSID’s new transparency regime and how it differs from UNCITRAL’s regime. The transparency movement began with the North American Free Trade Agreement (NAFTA) in 2001. The three NAFTA States—Canada, Mexico and the United States—agreed that ‘nothing in the NAFTA precludes [them] from providing public access to documents submitted to, or issued by, a [NAFTA] tribunal’.4 Two years later, they allowed non-disputing parties to comment on the proceedings.5 One year later, they opened NAFTA hearings to the public.6

International Experience of Applying Transparency Rules in Arbitration Processes Between Investors and States

Abstract Following modern worldwide trend of transparency, the United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, which were incorporated in UNCITRAL Arbitration Rules. The Convention on Transparency (the Mauritius Convention) adopted later was an attempt to resolve the situation with treaties, which were concluded prior to April 1, 2014. As soon as few previous studies covered this issue, the research is aimed to assess the extent to which the Rules on Transparency are applicable and inevitable. By way of qualitative analysis of documents covering the transparency issue in investor-state treaties and arbitration was revealed that like the treaties concluded after April 1, 2014, which were automatically covered by the scope of application, the treaties made prior to that date were dropped out of the Rules on Transparency and the parties thereto have to express an explicit will to apply the Rules on Transparency. The Mauritius Convention designated to resolve this problem still requires a member state to join the Convention to make the Rules applicable to all treaties with such member state. On the other hand, both discussed documents provide the parties with options to avoid transparency in arbitration. Thus, despite increasing mandatory transparency in national legislations, the transparency of investor-state arbitration proceedings remains the matter of a good will of the parties. This study provides the foundation for stakeholders to conduct investor-state agreements as well as arbitration processes in line with transparency. The issue of transparency in investor-state agreements and arbitration processes in different countries can be illustrated in the following studies based on this study.

The Mauritius Convention on Transparency: Comments on the Treaty and its Role in Increasing Transparency in Investor-State Arbitration

Since 2008, the United Nations Commission on International Trade Law (UNCITRAL) has officially recognized the “importance of ensuring transparency in investor-State dispute resolution.” In July 2013, it reached an important milestone in turning that principle into law. Recognizing “the need for provisions on transparency in the settlement of treaty-based investor-State disputes to take account of the public interest involved in such arbitrations,” UNCITRAL adopted the Rules on Transparency in Treaty-Based Investor-State Arbitration (“Transparency Rules” or “Rules”). Those Rules, which require disclosure of a wide range of information submitted to and issued by tribunals, and facilitate participation by amicus curiae and nondisputing State parties, will do much to transform – and open up –investor-State disputes, when the rules apply.Notably, however, Article 1(2) of the Transparency Rules requires certain conditions to be satisfiedbefore the Transparency Rules can apply to any arbitration arising under any of the approximately 3000 treaties that were concluded before the Rules entered into force on April 1, 2014. Namely, for the Rules to apply under those “existing treaties,” either (1) the investor’s home State and the respondent have to expressly agree, after April 1, 2014, to apply the Rules to their treaty (and all disputes arising under it); or (2) the investor and respondent State must agree to apply the Rules in the context of a particulardispute.This provision requires States and/or investors to expressly “opt in” to the Transparency Rules fordisputes arising under existing treaties. Given that it is this vast mass of existing treaties that is likely to give rise to the bulk of investment arbitrations for the foreseeable future, the hurdle imposed by Article 1(2) risks undermining UNCITRAL’s overarching goal of ensuring transparency in investor-State arbitration. To address that issue, UNCITRAL decided to create another instrument that States could use to require application of the Transparency Rules to any investment arbitration arising under their existing treaties.In July 2014, UNCITRAL finalized and adopted the “Mauritius Convention on Transparency”(“Transparency Convention”). This treaty establishes a mechanism through which all parties to existing investment treaties can efficiently and effectively update the procedural rules governing investor-State arbitrations under those treaties so as to effectively implement the Transparency Rules and better take into account the public interest nature of these disputes.In order to promote greater awareness and understanding of the Convention, this paper reproduces its text and, after each article, provides additional comments on the provisions. The commentary is based on attendance at UNCITRAL’s sessions, as well as written public records of the negotiations.

TRANSPARENCY AND CONFIDENTIALITY REQUIREMENTS IN INVESTMENT TREATY ARBITRATION

he values of confidentiality and transparency are often invoked in the theory and practice of investment treaty arbitration. Transparency is considered to be one of the key aspects of good governance and corporate social responsibility. It includes the obligation of the host state to publish all the legal rules, regulations and other statutory requirements affecting investors. Confidentiality is considered the hallmark and unique feature of arbitration as a dispute resolution mechanism. However, it is difficult to balance these two values, in principle due to the difference in the various investment arbitration cases, as well as the high degree of public interest involved in such proceedings. The competing interests between transparency and confidentiality have significantly increased in the recent past, and the difficulty lies in drawing a medial line between them. There is also debate as to what extent non-disputing parties are allowed to participate in investment arbitration, and what the essential requirements are to admit them.It is in this connection that this article makes an in-depth analysis of how investment arbitration frameworks have approached the questions of transparency, confidentiality and amicus curiae participation over the years. The article assesses and explores similar issues within the International Convention on the settlement of investment disputes between States and nationals of other States, 1965 (ICSID), the North American Free Trade Agreement, 1994 (NAFTA) and the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, 1978. The study also makes a critical analysis of celebrated cases falling within each category. The article further elaborates the transparency requirements in the U.S. Model Bilateral Investment Treaty (BIT), 2012, and the recently adopted Indian Model BIT, 2015. The study is very significant because the United Nations has recently adopted the Convention on Transparency in Treaty-based InvestorState Arbitration, 2014 (Mauritius Convention), which ensures transparency and public accessibility to investor-state arbitration.

Od poverljivosti do transparentnosti u poslovnim ugovorima zaključenim od strane države

This paper analyses the issue of confidentiality in international business contracts concluded by a state and explores the shift from confidentiality to transparency emerging in recent years. Confidentiality obligation may be established with respect to information arising out of or connected to the contract, or with respect to the elements of the dispute settlement mechanism. While the principle of confidentiality still predominantly governs the information arising out of or connected to the contract, the dispute settlement system gradually becomes much more permeable to the principle of transparency. This is particularly true for the treatybased investor-state arbitration, whose legal framework has undergone significant changes over the last decade. The reason for the emergence of the principle of transparency in international business contracts concluded by a state lies in greater public interest. Still, confidentiality obligation is most often included in international business contracts concluded by a state by free will of contracting parties, and the parties to the contract are encouraged to use this possibility. To that effect, they may find model confidentiality clauses and model contracts prepared and published by international organisations particularly useful.

The Changing Landscape of Transparency in Investor-State Arbitration: The UNCITRAL Transparency Rules and Mauritius Convention

This article examines the recent developments in transparency in investor-State arbitration. Part II begins with a brief definition of “transparency” as the term is used in discussions about investor-State arbitration. It then proceeds to provide an outline of the principal normative arguments which explain the recent drive for increased transparency in investor-State arbitration. Part III analyses recent global trends on transparency in treaty-based investment arbitration. Part IV elaborates on the application of the 2014 UNCITRAL Rules on Transparency and their key provisions. Finally, Part V addresses the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (“the Mauritius Convention”), which opened for signature in April 2015.

Dawn of a new era? The UNCITRAL Rules and UN Convention on Transparency in Treaty-Based Investor-State Arbitration

This article considers how the UNCITRAL Rules on Transparency and UN Convention on Transparency alter the structure of international investment arbitration, as well as its relationship with other regimes of international law. The article provides an overview of how transparency was regulated prior to the advent of the Rules and Convention, their structure and coverage, and their impact thus far (Section II). The article then considers their implications. Section III illustrates how the Rules and Convention effect a fragmentation of international arbitration through their distinction between investment treaty arbitration and other forms of arbitration. That Section furthermore highlights how the Rules and Convention reflect, and may prompt, a growing convergence of investment treaty arbitration and how they promote its linkage to other regimes of public international law. Section IV considers how the Rules and Convention modify the underlying structure of investment treaty arbitration, controlling disputing party and arbitral discretion to shift the structure of arbitration from a private form of dispute settlement to a more public form that takes into account external interests and participants. Section V examines the motivations prompting the development of the Rules and Convention, highlighting their development as a source of legitimacy and acceptance of the investment treaty arbitration regime. That Section highlights the promise of the Rules and Convention and their potential pitfalls, before canvassing a number of topics for future empirical study.

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

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 the Transparency Rules and the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (Mauritius Convention), work together as a mechanism that is more favourable for the host states than for the investor, and thereby anticipate the different roles of all participants in treaty-based arbitration. 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 national laws, but to exclude confidential business information as determined by the arbitral tribunal. Other decisions exist in which tribunals decide similarly. This paper explores the actual principle of equality as applied by arbitral tribunals. Thereafter, it considers the legal nature of transparency under the Transparency Rules, standing alone and in combination with the Mauritius Convention. It concludes by determining how this discretion affects the level playing field of all the participants.

DEMOCRATIC DEFICIT OF INVESTMENT ARBITRATION IN THE VIEW OF RULES ON TRANSPARENCY AND MAURITIUS CONVENTION ON TRANSPARENCY

This paper presents and analyzes the concept of transparency in investment arbitration, recognized by the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration and Mauritius Convention on Transparency in Treaty-based Investor-State Arbitration in the perspective of democratic principles of public participation, legitimacy and accountability. It holds that, transparency of investment arbitration endorsed by these documents constitutes a next step in the process of democratizing investment arbitration, contributes to the increase of democratic principles and cures the alleged democratic deficit of Investor— State arbitration.

Case Study on Treaty-Based Investor-State Arbitration and Environmental Litigations with Specific Reference to Chevron/Ecuador Litigation

Case Study on Treaty-Based Investor-State Arbitration and Environmental Litigations with Specific Reference to Chevron/Ecuador Litigation

United Nations Convention on Transparency in Treaty-based Investor-State Arbitration

On December 10, 2014, the United Nations General Assembly adopted the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, also known as the Mauritius Convention on Transparency, which was prepared by the United Nations Commission on International Trade Law (UNCITRAL). The Mauritius Convention is intended to provide states with an efficient mechanism for applying the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules) in investor-state arbitrations arising under investment treaties concluded before the Transparency Rules’ effective date of April 1, 2014. The Mauritius Convention was opened for signature on March 17, 2015, in Port Louis, Mauritius.

AAWeathermappfor International Arbitration: Mainly Sunny, Some Cloud, Possible Thunderstorms

This paper offers some broader theoretical perspectives on the already wide-ranging and very thought-provoking keynote speech by Professor Filip De Ly, at the Queen Mary University of London conference in April 2015 celebrating the 30th anniversary of its School of International Arbitration. The paper first focuses on how ‘the sources’ he analyses for 1985-2015, to anticipate the trajectory of international arbitration over the next generation, can be usefully linked to the nature of the ‘general principles’ that Professor De Ly outlines in the second half of his presentation. In particular, it is instructive to consider how the spread of Anglo-American influence may be linked to formalization (including delays and especially costs) in international arbitration principles. To do so and better locate our present position, Part 1 goes back in history to the earlier generation or era of international arbitration, the thirty years prior to the UNCITRAL Model Law of International Commercial Arbitration (1985). A significant portion of cases involved investment disputes with host states, yet the normative paradigm was distinctly more global and informal. Part 2 then takes a closer look at international arbitration’s contemporary and ongoing ‘move East’. It suggests that this new phase of globalization is and will likely remain characterized by ever-growing formalization of international commercial arbitration, due in particular to strong information asymmetries in this market for services.Part 3 develops the counter-intuitive suggestion, however, that treaty-based investor-state arbitration may eventually exert some counterbalancing influence, through the heightened transparency associated with this hybrid form of dispute resolution. Yet investor-state arbitration also risks promoting even greater formalization, and there are serious doubts about the long-term viability of this system of international dispute resolution – including in the Asian region, where there remain some broader historical concerns about foreign investment in general.Part 4 concludes more generally by suggesting that the main theoretical underpinning for international commercial arbitration has settled from the 1980s into a variant of ‘neoclassical’ theory in contract law, with indeed some recent arguments for even greater formalization, in contrast to the theoretical ‘richness of contract law’ described in the US around 1997. Nonetheless, the growth of investment treaty arbitration opens the possibility of more theoretical diversity and therefore debate in the world of international commercial arbitration as well.

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

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.

Transparency in International Arbitration: Any (Concrete) Need to Codify the Standard?

In the last decades, transparency has become a fundamental principle in international adjudication. It is usually defined as including concepts such as public access and disclosure of documents or information. Due to the high impact of the activities of international institutions on civil societies and the growing relevance of individuals as subjects of the International Community, it became evident that there was a need to: 1. make the decision-making processes of international organisations more transparent; 2. increase the accountability of the international institutions towards civil societies; 3. give access to the public to international dispute settlement mechanisms. For the purpose of this article, the third aspect, ie access to the public to international dispute settlement mechanisms, will considered. In particular, even though reference will be made to other international dispute settlement systems, the practice of international investment and commercial arbitral tribunals will be dealt with. The article will then study the role of transparency in international arbitration, highlighting three main challenges. First, the author will consider the difficult relation between transparency and confidentiality in arbitral proceedings. As this issue is extremely delicate in international commercial arbitration, this practice will be the focus of this section of the article. Second, transparency as a tool to reach a higher level of consistency in international arbitration will be discussed. This is a highly topical issue in international arbitration, as shown by the United Nations Commission on International Trade Law (UNCITRAL) negotiations that led to the adoption in 2014 of the Rules on Transparency in Treatybased Investor-State Arbitration. As a matter of fact, UNCITRAL looked into the issue of amicus curiae briefs provided by the investor’s home State on issue of treaty interpretation, to secure more consistent and harmonised interpretations of standards in investment arbitration. The author will explore whether consistency through transparency is desirable in international arbitration. Third, the paper will deal with the growing tendency to codify standards in international arbitration. This phenomenon is well illustrated by the current negotiations on investment and trade treaties such as the EU-US Transatlantic Trade and Investment Partnership (TTIP) and the EU-Canada Comprehensive Economic and Trade Agreement (CETA) that provide for specific provisions on transparency relating to investor-to-State disputes. The necessity and effectiveness of this codification will be investigated.

The human right to water: defences to investment treaty violations

At times, and for a variety of reasons, states will regulate the market in the furtherance of public-policy objectives—including to implement specific human rights obligations. Where investment agreements are in place, these kinds of measures may trigger an investor’s claim for breach by the state of its treaty obligations. Over the course of the last few decades, these hitherto distinct areas of international law protecting international investment on the one hand, and human rights on the other, have intersected with increasing regularity. Investment arbitration tribunals tasked with adjudicating a state’s conduct vis-a-vis its treaty obligations are now engaging in in-depth analyses of international human rights issues, including questions of applicability and substance. This article charts the development of the ‘right to water’ as a stand-alone human right in international legal jurisprudence and examines the future implications arising from key international policy developments. (ICSID) Convention on the Settlement of Investment Disputes between States and Nationals of other States (1965) Compania de Aguas del Aconquija SA and Vivendi Universal v Argentine Republic , ICSID Case No. ARB/97/3 Socieded General de Aguas de Barcelona S., Vivendi Universal SA v Argentine Republic , ICSID Case No. ARB/03/19, Order in Response to a Petition for Transparency and Participation as Amicus Curiae IIC 229 (2005) SAUR International v Argentine Republic , ICSID Case No. ARB/04/4 PacRim v El Salvador , ICSID Case No. ARB/09/12, Decision on the Respondent’s Jurisdictional Objections, IIC 543 (2012) UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (2014) UN Guiding Principles on Business and Human Rights (2011)

Transparency Standards in International Investment Agreement Negotiations: A Chinese Lawyer's Perspective on the UNCITRAL Rules

The 47th Session of the UNCITRAL finalized the draft Convention on Transparency in Treaty-based Investor-State Arbitration. It aims to provide a mechanism to allow the UNCITRAL Rules on Transparency to be applied to investment dispute arbitrations mandated by investment treaties concluded before April 1, 2014. This paper intends to examine these UNCITRAL Rules on Transparency and the draft Convention on Transparency. It is particularly in contrast with the relevant rules in the NAFTA, the U.S. Model BIT 2012 and the ICSID Rules 2006, to see if transparency can be enhanced in treaty-based investor-State arbitrations and to extrapolate the implications of the Rules on Transparency and the draft Convention for China’s strategy in BIT or FTA negotiations amid the trendy advancement of transparency standards.

News from the United Nations Commission on International Trade Law (UNCITRAL) - UNCITRAL at the end of 2014

In pursuance of its mandate and benefiting of a universal membership, the United Nations Commission on International Trade Law (UNCITRAL) is carrying out legislative-drafting as well as technical assistance activities by preparing uniform texts through a formal inter-governmental process in order to actively improve the global legal framework for the international trade and investment. At its last session in New York (7 to 18 July 2014), the Commission approved the draft convention on transparency in treaty-based investor-State arbitration. The present note also covers the activities undertaken by UNCITRAL in 2014, including working group sessions and technical assistance activities. At its 47th session in New York, the Commission finalized and approved a draft convention on transparency in treaty-based investor-State arbitration. The objective of the convention is to provide a mechanism for the application of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration to arbitrations arising under investment treaties concluded prior to the effective date of the Rules (i.e. 1 April 2014). Disputes between a foreign investor and a State often touch on subjects of public interest, such as infrastructure development, resource extraction, and environmental standards, but the arbitrations concluded to resolve these disputes have frequently taken place outside public view. Hence, the work of UNCITRAL in the field of transparency aims at significantly balancing the parties’ interests in a fair resolution of their dispute and the public interest in the matters at stake. The convention will be submitted to the United Nations General Assembly at its forthcoming session for adoption.

Dispute Settlement Transparency in Europe’s Evolving Investment Treaty Policy

In a number of documents released (and leaked) over the past two years, the European Commission has made clear that future treaty arrangements on investment between the European Union (eu) and third states will include robust provisions on transparency in investor-state dispute settlement. The Commission’s position reflects the acceptance of a “new normal” with respect to transparency in the investment treaty making practice of states. This article discusses the global context of the Commission’s conclusion and the rapid evolution of treaty provisions and arbitral rules on transparency in investor-state dispute settlement and non-disputing party participation. This article then analyses the Commission’s 2012 leaked draft negotiating text and reflects upon the Commission’s choice to adopt the 2013 uncitral Rules on Transparency in Treaty-based Investor-State Arbitration for its future treaties.

Uncitral Rules on Transparency in Treaty-Based Investor-State Arbitration

On July 11, 2013, the United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules). The new Transparency Rules are the product of three years of negotiations in UNCITRAL. The Transparency Rules will be available in two forms: (1) as part of the UNCITRAL Arbitration Rules, for use in arbitrations conducted under those rules, and (2) as a free-standing set of rules, available for use in arbitrations conducted under other arbitral rules, such as the Rules of the International Centre for Settlement of Investment Disputes (ICSID), or in ad hoc proceedings. The Transparency Rules, as well as the new version of the UNCITRAL Arbitration Rules that incorporates the Transparency Rules, will come into effect on April 1, 2014. The Transparency Rules are for use only in treaty-based investor-State arbitration – not in traditional commercial arbitration.

UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration

In July 2013, UNCITRAL adopted Rules on Transparency in Treaty-based Investor-State Arbitration (the "Rules on Transparency" or the "Rules"), which will be, coming into force on 1 April 2014, the most comprehensive set of procedural rules in existence governing transparency in treaty-based investor-State disputes. The intergovernmental nature of the negotiation of, and consensus in relation to, the final instrument, confers a legitimacy that is unique to UNCITRAL. This article proceeds to set out the resolution of the intensively debated issue of consent - as ultimately encapsulated in the scope of application of the Rules on Transparency - as well as briefly addressing the content of the Rules, by reference to the deliberations of the Working Group and the Commission, current practice in investment treaty arbitration, and the possible implications for future arbitrations conducted under the Rules on Transparency.