I. Transparency within fair and equitable treatment
Transparency is a procedural obligation for arbitral tribunals,1 but it is usually considered part of the substantive obligations of States in the context of Fair and Equitable Treatment ("FET"). Yet in 2001, an award was partly quashed for having introduced transparency within FET on the basis of a provision (Article 1105 of ) that did not explicitly mentioned it.2 However, it seems that the trend has been reversed and the great majority of tribunals now accept that States are bound to respect transparency on the basis of FET,3 even in the context of NAFTA.4 The minority of tribunals that are reluctant to find that it is part of the FET are NAFTA tribunals.5
Uncertainty remains as to the possible customary value of the obligation of transparency. The majority of arbitral tribunals reject this possibility and rule that transparency can only be imposed in the context of the treaty-based FET standard and not on the basis of the customary-based minimum standard of treatment (in particular NAFTA tribunals)6 or customary law.7 Some tribunals have yet ruled otherwise.8
Saluka Investments BV v. The Czech Republic, PCA Case No. 2001-04, Partial Award, 17 March 2006, para. 307; Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 178; Charanne B.V. and Construction Investments S.A.R.L. v. Spain, SCC Case No. 062/2012, Final Award, 21 January 2016, para. 477; Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16, Award, 29 July 2008, para. 609; Olin Holdings Limited v. State of Libya, ICC Case No. 20355/MCP, Final Award, 25 May 2018, para. 320; Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Award, 22 September 2014, para. 570; LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 128; RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Responsibility and on the Principles of Quantum, 30 November 2018, para. 260; CMC Africa Austral, LDA, CMC Muratori Cementisti CMC Di Ravenna SOC. Coop., and CMC Muratori Cementisti CMC Di Ravenna SOC. Coop. A.R.L. Maputo Branch and CMC Africa v. Republic of Mozambique, ICSID Case No. ARB/17/23, Award, 24 October 2019, para. 424; RWE Innogy GmbH and RWE Innogy Aersa S.A.U. v. Kingdom of Spain, ICSID Case No. ARB/14/34, Decision on Jurisdiction, Liability, and Certain Issues of Quantum, 30 December 2019, para. 660.
Merrill & Ring Forestry L.P. v. The Government of Canada, ICSID Case No. UNCT/07/1, Award, 31 March 2010, para. 208; Metalclad Corporation v. The United Mexican States, ICSID Case No. ARB(AF)/97/1, Decision of the Supreme Court of British Columbia on the challenge by the Petitioner, 2 May 2001, para. 72.
Adel A Hamadi Al Tamimi v. Sultanate of Oman, ICSID Case No. ARB/11/33, Award, 3 November 2015, para. 399; Murphy Exploration & Production Company – International v. The Republic of Ecuador (II), PCA Case No. 2012-16, Partial Final Award, 6 May 2016, paras. 205-206; Rupert Joseph Binder v. Czech Republic, Final Award, 15 July 2011, para. 176.
II. Two possible uses
Transparency can be used in two was by arbitral tribunals in the context of FET:
Isolux Infrastructure Netherlands B.V. v. Kingdom of Spain, SCC Case No. V2013/153, Award, 12 July 2016, para. 764; SICAR v. The Kingdom of Spain, SCC Case No. 2015/063, Final Award, 15 February 2018, para. 646; Foresight Luxembourg Solar 1 S.À.R.L., et al. v. Kingdom of Spain, SCC Case No. 2015/150, Final Award, 14 November 2018, para. 361.
III. Content of the obligation of transparency
When included within FET, transparency imposes several obligations upon States. However, since transparency is a general standard meant to adapt itself to factual circumstances, the obligations stemming from it and that it imposes upon States may not be established in an exhaustive manner. Tribunals have held in recent case law that transparency includes:
Champion Trading Company and Ameritrade International, Inc. v. Arab Republic of Egypt, ICSID Case No. ARB/02/9 , Award, 27 October 2006, para. 164; LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 128.
Técnicas Medioambientales Tecmed, S.A. v. United Mexican States, ICSID Case No. ARB(AF)/00/2, Award, 29 May 2003, para. 154; LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 128; Olin Holdings Limited v. State of Libya, ICC Case No. 20355/MCP, Final Award, 25 May 2018, para. 322.
Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012, para. 7.79; InfraRed Environmental Infrastructure GP Limited and others v. Kingdom of Spain, ICSID Case No. ARB/14/12, Award, 2 August 2019, para. 469; Stadtwerke München GmbH and others v. Kingdom of Spain, ICSID Case No. ARB/15/1, Award, 2 December 2019, paras. 311-315; I.C.W. Europe Investments Limited v. The Czech Republic, PCA Case No. 2014-22, Award, 15 May 2019, para. 579; Anglo American PLC v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/14/1, Award, 18 January 2019, para. 462.
IV. Standard of proof
Not any lack of transparency may be sufficient to constitute a breach of FET as the threshold is quite high in that respect.19 Moreover, an allegation of breach of transparency must be assessed in light of the factual circumstances of each case.20 In particular, it must not lead to impose an excessive burden upon States which means and level of development may be taken into account.21
Mamidoil Jetoil Greek Petroleum Products Societe Anonyme S.A. v. Republic of Albania, ICSID Case No. ARB/11/24, Award, 30 March 2015, para. 660; Adel A Hamadi Al Tamimi v. Sultanate of Oman, ICSID Case No. ARB/11/33, Award, 3 November 2015, para. 399; RWE Innogy GmbH and RWE Innogy Aersa S.A.U. v. Kingdom of Spain, ICSID Case No. ARB/14/34, Decision on Jurisdiction, Liability, and Certain Issues of Quantum, 30 December 2019, para. 660.
V. Limit of transparency
Kotera, A., Regulatory Transparency, in Muchlinski, P., Ortino, F., and Schreuer, C. (eds.) The Oxford Handbook on International Investment Law, OUP, 2013.
de Nanteuil, A., International Investment Law, E. Elgar, 2020
Paparinskis, M., The International Minimum Standard of Fair and Equitable Treatment, Oxford University Press, 2014.
Reed, L., Consedine, S., Fair and Equitable Treatment: Legitimate Expectations and Transparency, in Kinnear, M., Fischer, G., Torres, L.F., Bidegain, M.U. (eds.), Building International Investment Law. The First 50 Years of ICSID, Kluwer, 2016.
Schill, S., Transparency as a Global Norm in International Investment Law, Kluwer Arbitration Blog, 2014.
Tudor, I., The Fair and Equitable Treatment Standard in the International Law on Foreign Investment, Oxford University Press, 2008.
Vasciannie, S., The Fair and Equitable Treatment Standard in International Investment Law and Practice, British Yearbook of International Law, Vol. 70, Issue 1, 2000, p. 99.
Weiler, T. Good Faith and Regulatory Transparency: The Story of Metalclad v. Mexico, in Weiler, T. (ed.), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law, Cameron May, 2005.