Source: https://iisd.org/itn/2010/09/23/the-transparency-requirement-in-the-new-uncitral-arbitration-rules-a-premonitory-view/
Timestamp: 2019-04-22 11:18:52+00:00

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In October, State delegations are expected to discuss the issue of transparency in the UNCITRAL Rules of Arbitration. Ignacio Torterola, ICSID Liaison at the Argentine Embassy in Washington, DC, and Argentine Delegate to the UNCITRAL Working Group II, explains why greater openness would benefit the investment arbitration system.
Working Group II (WGII) of the United Nations Commission on International Trade Law (UNCITRAL), tasked with revising the Commission’s Arbitration Rules, met at United Nations headquarters in February 2008. The working group examined the possibility of introducing rules on transparency and access to information in cases in which a State is a party to an UNCITRAL Rules arbitration, further to the initiative spearheaded by non-governmental organizations (NGOs) that included the Centre for International Environmental Law (CIEL) and the International Institute for Sustainable Development (IISD). Despite a growing movement within the WGII to obtain the necessary consensus, the call for a discussion on the issue of transparency was ultimately rebuffed. However, the working group agreed to re-visit the question separately, once it finished revising the ‘generic’ Arbitration Rules. The proposal submitted at that time received the leading support from two delegations in particular: Argentina and Canada. The Investment Treaty News Quarterly has asked me to comment on the reasons for the Argentine delegation’s support of that initiative. What follows are my personal views on the matter.
The passage of time between the failed attempt of February 2008 to promote transparency and the upcoming Working Group meeting in October 2010 has had a positive bearing on the inclusion of transparency requirements in the UNCITRAL Arbitration Rules. During the intervening period, the arbitration community has developed an increased appreciation of the type of interests involved in State arbitration proceedings. In addition, there is now a greater understanding that access to decisions contributes to developing a body of case law that brings more certainty to the (investment) arbitration system. For these and many other reasons set out below, I venture to conclude that the WGII will approve transparency and public participation requirements for the new UNCITRAL Arbitration Rules at its October 2010 meeting. However, the scope of these requirements remains to be determined.
At the first session of WGII deliberations for revising the 1976 UNCITRAL Arbitration Rules, the working group determined that a generic approach would be used, which refrained from reflecting the concerns of specific types of arbitration. This spirit, which was approved by the delegations, explains many of the conclusions subsequently adopted by the WGII and included in the Arbitration Rules.
Nevertheless, it was impossible to overlook certain defining characteristics of different types of arbitration and these progressively gained ground in the delegates’ debate. One of the prominent topics in this debate was the presence of States as respondents in investment disputes.
Whereas the wording of this requirement suggests complete autonomy from any type of arbitration system, its main purpose-further to a proposal by the Argentine Delegation and seconded by the Chilean Delegation, followed by the other delegations-was to exempt investment arbitration from the application of the new rules until they were specifically incorporated into a Bilateral Investment Treaty (BIT) negotiated after 15 August 2010, especially since it was not yet clear at the time of its adoption (February 2008) what direction the working group would take in its deliberations on certain outstanding issues. Additionally, this requirement removed pressure from the delegations of having to consider such potentially distinct realms as commercial arbitration and investment arbitration.
However, given that Article 1(2) contains a specific requirement that applies to investment arbitration, there could be a complementary rule that sets out certain requirements on transparency and public participation that could also be applied specifically to investment arbitration. Such a rule would not affect any of the various types of commercial arbitration and would give investment arbitration a distinguishing characteristic which, in my view, is necessary.
In short, the deliberation (and approval) of transparency and public participation rules for the (new) UNCITRAL Arbitration Rules is in line with the WGII mandate.
Investment arbitrations involve issues that potentially affect the public interest. Most modern democratic States have obligations regarding access to information by their citizens. Under such legislation, as in the case of the Argentine Republic (outlined below), the publication of certain government proceedings is a legal obligation, not the head of State’s decision. The regulatory framework clearly establishes the constitutional principle of public participation in government proceedings and the right of access to public information pursuant to Article 1, Articles 33, 41, 42 et. seq. of Chapter Two of the Argentine National Constitution-which establishes new rights and guarantees-and Article 75(22), which is a listing of International Human Rights Treaties to which constitutional status has been granted. I suspect that every delegate from each of the WGII member countries could add similar regulatory requirements regarding transparency of, and public participation in, government proceedings from each of their countries.
34(5) An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty, to protect or pursue a legal right or in relation to legal proceedings before a court or other competent authority.
The previous Rule 32(5) established that an award could only be made public with the consent of the parties. The new Rule 34(5), following the model adopted by the London Court of International Arbitration (LCIA), introduces the possibility of an award being made public, along with the agreement of the parties, because it reflects a legal duty that affects most modern States.
Specifically, the new requirement set out in Article 34(5) reflects the legal duty that some parties to the arbitration may have pursuant to legal obligations unrelated to the arbitration. For example, and mentioned above, States may have legal obligations of access to information and public participation in government proceedings.
Lastly, national court proceedings are generally open to the public and, as a result of legal action filed in support of the arbitration, in particular to enforce an award, an arbitral decision may end up being submitted to the national justice system, thereby becoming information available in the public domain.
The UNCITRAL Arbitration Rules have been successfully applied around the world since they were adopted in 1976. The rules have been used in countless ad hoc arbitrations and incorporated by arbitral institutions as their rules of procedure. The Rules have also been effectively applied in the public realm, having been adopted as arbitration rules by the Iran-US Claims Tribunals, which has much to do with the reputation they currently enjoy.
The public nature of the Iran-US Claims Tribunal decisions created a body of case law that provides a benchmark for elucidating the application of the 1976 UNCITRAL Rules and which has been used to study and establish a system for the application of the Rules. To that end, Caron & Caplan & Pellonpää, in one of the most cited works on the Rules, suggest that the study of the application of the UNCITRAL Rules is due, to a great extent, to the public nature of the Iran-US Claims Tribunal proceedings.
Moreover, historically, the practice of tribunals hearing matters related to States acting with ius imperii (sovereignty) powers has always been public. This concept was applied to 19th century arbitration tribunals and to the prolific work of the International Court of Justice and its predecessor, the Permanent Court of International Justice.
Similarly, most of the bilateral commissions that settled monetary disputes in the past against sovereign States in the realm of diplomatic protection, such as the Mexico-United States Claim Commission, and subsequently under other specially designed mechanisms, such as the UN Compensation Commission and the Iran-US Claims Tribunals, published their awards, some well before the current concern for transparency of government proceedings.
The ICSID Convention prevents an award from being published without the consent of the parties (Article 48(5) of the ICSID Convention). However, starting in around 2000, and in connection with the advent of widespread Internet use, arbitral decisions began to become available publicly on websites, even without the consent of the parties.
This practice not only affects ICSID decisions, but also proceedings under other rules, especially UNCITRAL cases. This is why a commentator can state that certain information, such as “the existence of the arbitration, the parties, the legal representatives, and the composition of the arbitration Tribunal” finds its way in the public domain.
Early on in the life of investment arbitrations, tribunals had to focus their attention on dealing with access to information and third-party participation in the arbitration process. This issue came up particularly in NAFTA Chapter 11 arbitrations. In Metalclad v. Mexico, the Tribunal determined that neither NAFTA nor the ICSID Additional Facility Rules contained any express restriction on the freedom of the parties to make public documents related to arbitration proceedings. In Loewen v. USA, the Tribunal held that imposing a general confidentiality obligation in arbitration involving State parties was not desirable in that it would restrict public access to information related to issues of government and the public interest.
1. Nothing in the NAFTA imposes a general duty of confidentiality on the disputing parties to a Chapter Eleven arbitration, and, subject to the application of Article 1137(4), nothing in the NAFTA precludes the Parties from providing public access to documents submitted to, or issued by, a Chapter Eleven tribunal.
In Methanex v. USA the Tribunal had to deal with issues of transparency that differed from those in Metalclad and Loewen; specifically on the participation of amicus curiae briefs in arbitration proceedings. Generally speaking, the Tribunal’s findings in Methanex, relying on Article 15 of the UNCITRAL Arbitration Rules, are similar to those subsequently adopted by the Tribunal in another NAFTA Chapter 11 case: UPS v. Canada. While these two decisions are addressed together in this article for purposes of expediency, each has their own particular characteristics.
Nevertheless, despite these differences, in both cases the Tribunals determined that they had the authority to accept and consider amicus curiae briefs under the broad powers given to them by Rule 15 of the UNCITRAL Arbitration Rules.
Prior to their revision in 2006, the arbitration rules of the International Centre for the Settlement of Investment Disputes (ICSID)-which were drafted specifically to regulate the specific issue of investment arbitration, thus allowing some form of participation and transparency-determined that hearings were to be held in camera and that only the parties, their agents, counsel and advocates, witnesses and experts could attend. Pursuant to this requirement, the Tribunal in Aguas del Tunari v. Bolivia denied the petition by an interest group to take part in the arbitration proceedings, determining that it did not have the power to authorize this participation without the consent of both parties.
The Tribunal in Aguas Argentinas S.A., Suez (AASA), Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. and AWG v. The Argentine Republic allowed amicus curiae participation, although it denied the petition to have access to and attend the arbitration hearings. The Tribunal outlined the amici participation in detail and determined-as the Tribunals had done in Methanex and UPS-that the amici’s presentations had to have the potential of assisting the Tribunal in determining a factual or legal matter in the dispute. Moreover, the Tribunal sought to exercise its powers in such a way as to minimize any additional burden on the parties and the defence proceedings.
The similarly composed Tribunal, in Aguas Provinciales de Santa Fe, S.A, Suez, Socieded General de Aguas de Barcelona S.A. and Interaguas Servicios del Agua v. Argentine Republic,denied the petitioners’ participation as amici because they did not qualify as amicus curiae pursuant to the conditions set out in the aforementioned case.
In 2006, the ICSID Secretariat completed an overarching amendment of the ICSID Arbitration Rules. The Secretariat, along with the working group formed to carry out the amendment and other seasoned practitioners consulted in this undertaking, determined that the topics of “transparency and third-party participation” were among the issues requiring revision in the Arbitration Rules to address new needs arising in a growing number of cases, as well as those involving arbitration brought pursuant to a treaty.
(c) the non-disputing party has a significant interest in the proceeding.
(4) The Centre shall not publish the award without the consent of the parties. The Centre shall, however, promptly include in its publications excerpts of the legal reasoning of the Tribunal.
The Tribunal in Biwater Gauff was the first to apply the new ICSID rules regarding transparency and access to information. The Tribunal had before it two separate issues: (1) publication of the arbitration documents submitted by the parties to the arbitration (and third-party access to them) and, (2) participation of non-disputing parties (amicus curiae) in the proceedings.
The Tribunal allowed the amici submissions insofar as it considered there was a public interest in the dispute and that the participation of the non-disputing parties (amici) would result in greater acceptance of the arbitration outcome and assist the Tribunal in meeting its obligations. However, the Tribunal denied participation of the amici in the hearing or their access to the arbitration documents.
For some time now, it has been suggested that arbitral decisions should have some form of publicity. By arbitration decisions, I refer not only to publishing investment arbitration decisions, but of all types of arbitral decisions, including those of a strictly commercial nature. The reason for this is simple: the publication of arbitral decisions creates a body of case law that enhances the quality and consistency of arbitral decisions and generates greater certainty in users-not just those who frequently use this mechanism, but rather a broader public that has discovered the value of arbitration and yet remains wary about the ‘secrecy’ shrouding proceedings, potentially turning them into a quasi-obscure process. The arbitration developments of the past decade show that publication gives more certainty to the system and precludes future inefficiencies and contingencies for the parties involved. Moreover, it raises the professional standards to be met by arbitrators in their decisions.
[t]he publication of arbitration awards would … identify the real advantages of arbitration: specialist and expert arbitrators operating on the international level. The development of an arbitral case law would give to arbitration a greater certainty than that presently existing, with respect to the probable attitude of the arbitrators, and would facilitate the commercial world’s knowledge and acceptance of the lex mercatoria. This would almost certainly obviate many recurring problems presented to arbitrators and would influence the negotiating attitudes and commercial decisions of businessmen. Above all, the systematic publication of arbitration awards would show that not only is arbitration an alternative to national courts as a system of dispute settlement, but it would prove conclusively that arbitration is the most appropriate forum in which to resolve disputes arising out of international commerce.
Mourre identifies certain aspects that bear consideration. He maintains that a system is required in order to publish as many cases with as few omissions as possible. Only the availability of a sufficiently large number of cases will lead to the emergence of a body of arbitral case law. Access to other arbitral decisions would improve the quality of new arbitral decisions and would help to clearly identify the fundamental legal principles underlying the arbitration hearing process. Lastly, Mourre stresses the importance of disclosing the names of arbitrators for their own reputation and credibility, and to give greater or lesser weight to decisions (as well as greater certainty and consistency to the arbitration system.).
I can only concur with the views set out in the paragraph above.
UNCITRAL Rules on Transparency and Access to Information should not be seen as radical issue, but rather as a necessary evolution that gives the UNCITRAL Arbitration Rules, when applied to arbitration proceedings involving State parties, the same level of transparency found in other arbitration systems. Moreover, as described above, these Rules would be merely aimed at regulating (and doing so from a proper perspective) an already de facto situation. If arbitration practice was already prepared in 2008 to accept transparency requirements in UNCITRAL State arbitration and if the issue had already developed to the extent set out in the 2006 ICSID Arbitration Rules and found in detailed organization by the Tribunals in Methanex, UPS and Suez, the situation has only evolved more favourably toward including these requirements as a complementary chapter in the UNCITRAL 2010 Arbitration Rules.
It is therefore this author’s opinion that at its next meeting in October 2010, the WGII will find itself in a situation whereby the issue is not whether to include an additional section governing transparency and third-party participation in State arbitrations-an issue that should have a positive outcome given the evolution of arbitration practice to which I have referred above-but rather to determine the scope and level of this transparency and access to information.
Author: Ignacio Torterola is an Argentine lawyer. He has been a member of the Argentine Diplomatic Corps since 2000. In 2003, he began representing the Argentine Ministry of Foreign Affairs and the Attorney General’s Office (PTN) in cases related to that country’s economic and social crisis. The opinions expressed herein are those of the author and should not be construed as reflecting the views of the Argentine government or any of its Ministries or agencies. The author gratefully acknowledges all those who provided feedback, suggestions and contributions for this article-especially Ronan McHugh, Mariana Lozza, Ariel Martins, Alejandro Turyn, Mona Davies and Diego Gosis; the final responsibility for the content of this article, however, is his alone.
 Following the lead of Argentina and Canada other Delegations also supported some form of transparency and third party participation, particularly the Delegations from Chile, Colombia, Honduras, Mexico, Norway, Paraguay, Switzerland, Uganda, US and Venezuela, among others.
 The position of the Argentine Delegation at the February 2008 meeting was to support the creation of a register of investment cases initiated under the UNCITRAL Arbitration Rules. This same body would keep a record of UNCITRAL Tribunals’ decisions. We were not required to make our position known with regard to the other CIEL and IISD proposals, since none of them received the minimum consensus required for WGII deliberation. The Register of cases and decisions came close to receiving the necessary consensus for approval. Furthermore, in this author’s view, the fact that amicus curiae submissions have been widely accepted in practice should also facilitate the deliberation and approval of that part of CIEL and IISD’s proposals.
 The author represented the Argentine Attorney General’s office before WGII in the meetings of September 2007, February 2008, September 2009, February 2010, and when the Rules were adopted in July 2010. The opinions expressed herein are personal and do not necessarily represent the beliefs to the Republic of Argentina, its government or its agencies.
 This is the case for the Permanent Court of Arbitration (PCA) in The Hague, the Cairo International Commercial Arbitration Center, the American Arbitration Association (AAA), the International Center for Dispute Resolutions(ICDR) of the AAA, and the Hong Kong Arbitration Center. Many more prestigious international institutions have also chosen to use the UNCITRAL Arbitration Rules — with a few specific variations — to administer their arbitration disputes.
 ” … the experience of the Iran-US Claims Tribunal with its wide range of cases remains central to understanding the UNCITRAL Rules. The Tribunal has more than any other body grappled with the application of these Rules. Moreover, the Tribunal’s practice, unlike that of many other arbitral bodies, is public, thereby making it possible to draw lessons from that practice …” Caron & Caplan & Pellonpää. The UNCITRAL Arbitration Rules. A Commentary. Oxford Commentaries on International Law. 2008, page 9.
 Andrea, Gattini. The UN Compensation Commission: Old Rules, New Procedures on War Reparations. EJIL, Vol. 13 No.1, 161 – 168 (2002).
 Caron & Caplan & Pellonpää. Op.Cit. page 9.
 Metalclad Corporation v. United Mexican States. Case No. ICSID ARB(AF)/97/1. (Lauterpacht- Civiletti-Siqueiros). Decision dated August 30, 2000, ¶13.
 The Loewen Group Inc and Raymond L. Loewen v. United States of America. ICSID Case No. ARB(AF) 98/3. (Mason-Fortier-Mivka). Decision dated January 5, 2001. ¶26.
 Notes of Interpretation of Certain Chapter 11 Provisions (NAFTA Free Trade Commission, July 31, 2001).
 Methanex v. United States. UNCITRAL Case. (Veeder-Rowley-Reisman). Decision on Jurisdiction and Admissibility (August 7, 2002).
 United Parcel Service of America INC (UPS) v. Canada. UNCITRAL Case. (Keith-Fortier-Cass). Decision on Participation as Amici Curiae (October 17, 2001).
 Aguas Argentinas S.A., Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v. The Argentine Republic. ICSID Case ARB/03/19. (Salacuse-Kauffman-Kohler- Nikken).Response to a petition for Participation as Amicus Curiae; and AWG Group Ltd. v The Argentine Republic, UNCITRAL (UK/Argentina BIT).
 The Argentine Republic supported the participation of amici briefs in the hearings; however, as the claimants refused this participation, the Tribunal did not grant the petition of the NGOs. See also Aurelia Antonietti, The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rule. ICSID Review – FILJ, Vol. 21, No. 2, Fall 2006, page 6.
 Aguas Provinciales de Santa Fe S.A., Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A.. v. Argentine Republic. ICSID Case ARB/03/17. (Salacuse-Kauffman-Kohler-Nikken). Response to a petition for Participation as Amicus Curiae.
 Aurelia Antonietti, The 2006 Amendments of the ICSID Rules and Regulations and the Additional facility rules. Op. Cit. page 2. Antonietti states that “[w]ith the increased caseload of the Centre and the broadening of its jurisprudence, it became apparent over time that the ICSID Arbitration Rules needed amendments to adequately meet the needs of ICSID’s users, particularly in the context of proceedings under bilateral or multilateral investment treaties.” In fact, there had been complaints about the lack of transparency and the need was expressed to standardize current ICSID tribunal practice: “Changes were proposed to meet those requirements and to reflect current practices of the tribunals. The Secretariat consulted widely with and benefited from the participation of members of the Administrative Council, business association and civil interest groups, international arbitration experts and institutions around the world.” See Antonietti, Op. Cit. page 3.
 Aurelia Antonietti, Op. Cit. page 3. It is widely known that the ICSID was created for the resolution of investment disputes under contractual agreements. As a result, the facts argued in a current ICSID arbitration with State involvement can potentially have a much greater impact on the public interest than a specific commercial dispute arising under a contract.
 It should be noted that the new ICSID rules do not contain requirements regarding the publication of documents; the resolution of such matters must therefore rely primarily on any pertinent provisions in the arbitration agreement at issue.
 Biwater Gauff and United Republic of Tanzania. ICSID Case ARB/05/22. Procedural Order No. 5 of February 2, 2007 (Hanotiou, Born, Laundau), ¶¶ 47 et seq.
 When referring to case law, I am not saying that these decisions have to be precedent-setting, but rather simply a guide for purposes of creating a system that provides the best possible decision quality.
 This challenges the pace at which “arbitration institutions” publish their decisions.
 Mourre, Alexis. Precedent and Confidentiality in International Commercial Arbitration. The Case for the Publication of Arbitral Awards. In Precedent in International Arbitration. IAI Series, Yas Banitafemi, Editor, 2008.
 Julian D.M. Lew, The Case for the Publication of Arbitration Awards, in the Art of Arbitration – Essay on International Arbitration – Liber Amicorum Pieter Sanders 12 September 1912 – 1982, page 223, J.C. Schultsz and A.J. van den Berg eds. Kluwer, 1982.
 Julian D.M. Lew, The Case for the Publication of Arbitration Awards, in the Art of Arbitration – Essay on International Arbitration – Liber Amicorum Pieter Sanders 12 September 1912 – 1982, page 223 (J.C. Schultsz and A.J. van den Berg eds. Kluwer, 1982). Cited by Mourre, A. Op. Cit. page 223.
 Mourre, Op.Cit. page 48. In support of his position, Mourre cites Christian Larroumet in A propos de la Jurisprudence Arbitrale, Gaz. Pal. Dec.14, 2006.
 Mourre, Op. Cit. page 49.
 Mourre, Op. Cit. page 58.

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