Author

Mr Lukas Montoya

Associate - Lévy Kaufmann-Kohler

Editors
See all

Transparency

I. Definition

1.

Transparency seeks making the arbitration process public. Achieving transparency may thus include giving the general public access to the record of the arbitration (the parties’ submissions, witness statements and expert reports), to the hearing (either in person, by way of live streaming, or through the publication of the transcript), and to the arbitral tribunal’s awards, decisions, and orders. Transparency is also concomitant to greater access to the inner workings of arbitral institutions. Other transparency related aspects are the increasing demand for disclosing the identity of third-party funders (and, eventually, the underlying funding arrangements), as well as for the possibility of submitting amicus curiae briefs or the intervention of non-disputing parties.1

2.

Overall, transparency plays an important role in promoting the public scrutiny of the arbitral process and the accountability of all actors involved. In deciding on transparency issues, however, investment tribunals must consider both the public interest in the case and the parties’ interest in the fair and efficient resolution of their dispute.

II. Treaty practice

3.

Investment treaties traditionally have been silent on transparency and its constant tension with the potential confidentiality interests of disputing parties. NAFTA’s Free Trade Commission (“FTC”) took notorious first steps departing from this trend. In 2001, the FTC issued an interpretive note determining that nothing in NAFTA imposed a general duty of confidentiality. Subject to the redaction of confidential or privileged information, NAFTA parties undertook to publish all documents submitted to, or issued by a Chapter 11 arbitral tribunal.2 The FTC continued this practice by issuing an additional interpretative note in 2003 on non-disputing parties. It stated that NAFTA arbitration was compatible with accepting written submissions from non-disputing parties and set out the procedure, requirements and conditions for their participation.3 Between 2003 and 2004, the NAFTA treaty parties issued further statements undertaking to consent and requesting consent from investors seeking a claim under NAFTA to conduct hearings open to the public.4

4.

Since then several bilateral investment treaties,5 as well as investment chapters of free trade agreements,6 have incorporated provisions specifically dealing with transparency at varying degrees. For instance, CAFTA-DR requires the publication of the parties’ pleadings, the transcripts of the hearing, and the tribunal’s decisions, orders, and awards.7 Aspiring to the publication of the same categories of documents, ChAFTA specifically gives discretion to the treaty parties on the publication of the disputing parties’ submissions and the decisions of the tribunal.8 In all cases, confidential, privileged or otherwise protected information is exempted from disclosure. To that effect, treaties that also provide for open hearings allow the tribunal to put in place the necessary logistical arrangements to protect this sort of information.9

III. The UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (“UNCITRAL Rules on Transparency”)

5.

The UNCITRAL Rules on Transparency provide for the publication of benchmark information of treaty-based investor-State cases, the parties’ and non-disputing parties’ submissions, witness statements, expert reports, transcripts, and all decisions rendered by the tribunal.10 They also provide for public hearings.11

6.

The UNCITRAL Transparency Rules moreover account for exceptions to transparency. They recognize that “confidential or protected information”, deemed as such by the tribunal after consultation with the disputing parties,12 “shall not be made available to the public”.13 This is the case of confidential business information, information that if disclosed would impede law enforcement, or information that is protected against disclosure either by the relevant investment treaty, by the law of the respondent State, or by any law or rules deemed applicable by the tribunal.14 To avoid the dissemination of these categories of information, the UNCITRAL Transparency Rules enable tribunals to arrange for the redaction of the information at issue, and/or to hold private portions of hearings while said information is discussed.15 The UNCITRAL Transparency Rules also preclude the publication of information that could jeopardize the integrity of the proceedings by, inter alia, hampering the collection or production of evidence, or leading to the intimidation of witnesses or party representatives.16 Nor do they permit the publication of information that the State considers contrary to its essential security interests.17

7.

The UNCITRAL Rules on Transparency apply to all cases initiated under the UNCITRAL Arbitration Rules pursuant to investment treaties concluded on or after 1 April 2014, unless the parties to the treaty opt-out.18 Their application to disputes concerning investment treaties concluded before that date is contingent on the agreement of the treaty or disputing parties.19 Where the UNCITRAL Rules on Transparency are indeed applicable further to the consent of the treaty parties, the disputing parties in principle may not derogate from their content.20 Otherwise, the disputing parties may adjust the content of the Rules as they deem appropriate.21 In all circumstances, the arbitral tribunal retains discretionary authority to adapt the requirements of any specific provision in the Rules to the extent it is necessary yet consistent with their transparency objective.22

8.

The United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (“Mauritius Convention”) is an example of States broadening of the scope of application of the UNCITRAL Transparency Rules. It provides that the UNCITRAL Transparency Rules apply to any investor-State arbitration pursuant to an investment treaty concluded before 1 April 2014, in which both the claimant’s State and the respondent State are parties to the Mauritius Convention.23 Likewise, recent investment treaties expressly refer to the UNCITRAL Transparency Rules and extend their applicability to disputes under them whether or not initiated in accordance with the UNCITRAL Arbitration Rules.24

IV. Institutional developments

9.

Subject to the consent of the disputing parties, the International Centre for Settlement of Investment Disputes (“ICSID”) may publish arbitral awards,25 as well as the minutes and other records of the proceedings, including the parties’ pleadings and submissions.26 Unless either party objects, ICSID tribunals may also allow persons other than the parties, their representatives, witness or experts to attend or observe all or part of the hearings.27

10.

Lacking the parties’ consent ICSID still publishes extensive information regarding ongoing cases.28 This may include the names of the disputing parties, counsel and tribunal members, the method of their appointment, the economic sector and general subject matter of the dispute, the instrument of consent invoked, the applicable arbitration rules, and the stage of the proceedings. ICSID also publishes excerpts of the tribunal’s legal reasoning in the award should the parties disagree on the publication of the award itself.29

11.

Subject to the disputing parties’ agreement, the Permanent Court of Arbitration (“PCA”) publishes a list of the cases it administers or for which it acts as registrar. The information therein may include the names of the parties and their representatives, the case’s number, status and type (i.e. whether it concerns commercial or investment arbitration), the subject matter or economic sector of the dispute, the applicable procedural rules, the treaty or contract under which the proceedings were commence, the language of the proceedings, the seat of the arbitration, the names of the members of the tribunal, and/or the tribunal’s orders or awards.30 Upon the tribunal’s instructions, the PCA also issues press releases containing information on the procedural steps taken during the arbitration, as well as high-level information regarding the dispute and the tribunal’s general findings.31 These press releases have been instrumental for the public to cover and follow proceedings with a defaulting or non-appearing respondent State.

V. Arbitral practice

12.

Tribunals may establish the transparency/confidentiality regime governing the proceedings subject to the parties’ agreement or any other applicable law, including provisions in the instrument providing for consent to Investor-State arbitration (be it a treaty or a contract), the applicable arbitration rules, or the lex arbitri. Neither the UNCITRAL Arbitration Rules,32 nor the ICSID Arbitration Rules,33 are understood to incorporate a general presumption of either confidentiality or transparency. By contrast, the SCC,34 LCIA,35 SIAC,36 and CRCICA37 arbitration rules set confidentiality as the default option. The ICC arbitration rules in turn authorize the tribunal to make orders on the confidentiality of the proceedings if so requested by either party.38

13.

Tribunals have taken different approaches to establish confidentiality regimes in the absence of the parties’ agreement or applicable provisions specifically governing the parties’ conduct on confidentiality or transparency. Some have done so through procedural orders pursuant to their powers for the efficient administration of the proceedings.39 Others, further to a request by the interested party, have done so through the adoption of provisional measures.40 In either case, the tribunal’s purpose is, in light of the public interest of the case, to strike a balance between transparency and confidentiality, while avoiding aggravating the dispute or affecting the integrity of the proceedings. Tribunals have therefore prevented the public dissemination of categories of information that (i) could exert undue pressure on either Party; (ii) whose function and aim is to present a one-sided story of the dispute or that carry a greater risk of giving an incorrect impression of the proceedings; and/or (iii) that is likely to be taken out of context.41

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