The United Nations Commission on International Trade Law (“UNCITRAL”) Rules on Transparency in Treaty-based Investor-State Arbitration (“Transparency Rules”) came into effect on April 1, 2014. UNCITRAL adopted the Transparency Rules in July 2013, after three years of negotiations by the UNCITRAL Working Group on Arbitration. The Transparency Rules are intended to enhance public access to information about investor-state arbitrations, in recognition of the public interest in investor- state disputes where state policy is often at issue. The Transparency Rules will automatically apply to arbitrations conducted under the UNCITRAL Rules of Arbitration that are commenced under treaties concluded after April 1, 2014. The Transparency Rules will apply in arbitrations under previously concluded treaties only if the disputing parties or the states parties to the treaty agree to their application. Disputing parties may also choose to apply the Rules in other institutional or ad hoc proceedings. Information to be made public pursuant to the Rules will be maintained by UNCITRAL and made available to the public via a Transparency Registry available on the UNCITRAL website.1
We highlight below some of the key provisions of the Transparency Rules that may be of interest to parties considering using the Transparency Rules and others.
Articles 3, 7 and 8 – Access to Documents and the Transparency Registry
Under Article 3 of the Rules, documents to be published include all pleadings; all statements and submissions by disputing parties and non-disputing third-parties; hearing transcripts; and orders, decisions and awards rendered by the tribunal. Expert reports and witness statements are to be made available upon request. Article 7 provides for certain limitations on the publication requirement where issues of confidential or protected information are concerned. However, it is the tribunal, in consultation with the parties, that will make any determinations concerning the existence of confidential information that needs to be protected and what protections are appropriate. For example, the tribunal may order documents published with certain redactions or other protections in place. Where the tribunal declines to order a document withheld, or orders that it be published only with redaction, the party that introduced the document into the record may voluntarily withdraw it from the record rather than permit its public disclosure. In addition, Article 7(5) provides that no respondent state shall be required to make public any information the disclosure of which “it considers to be contrary to its essential security interests,” an exception that seems likely to lead to disagreements between claimants and respondents if invoked. Articles 7(6) and 7(7) also permit the tribunal to “restrain or delay” the publication of information if disclosing it could undermine the integrity of the arbitral process, such as by causing impediments to further gathering of evidence or creating a risk of witness intimidation or harassment.
In order to facilitate public access to such information, Article 8 provides that the Secretary-General of the UN, or an institution to be named by UNCITRAL, will function as the repository of published information pursuant to the Transparency Rules. As noted above, UNCITRAL has created an online Transparency Registry with a searchable database for ease of access to this information.
Article 6 – Public Access to Hearings
In a notable departure from the practice in investor-state arbitrations outside the context of those conducted under some free trade agreements, Article 6(1) provides that all hearings held for purposes of presenting evidence or oral argument shall be public. The arbitral tribunal is obliged to make necessary arrangements to facilitate public access through options such as video links and other tools, as has been done in recent years in arbitrations under NAFTA or CAFTA, for instance. Hearings may nevertheless be held partially in private to the extent necessary to protect confidential or protected information. They may also be held in private if the tribunal determines, in consultation with the parties, that providing public access to the hearings is not feasible for logistical reasons.
Articles 4 and 5 – Third-Party Submissions
The arbitral tribunal has the discretion, after consulting with the parties, to allow written submissions from third parties who wish to address matters within the scope of the dispute. In determining whether to allow such submission, Article 4 requires the tribunal to take into account whether the third party has a “significant interest” in the dispute, as well as the extent to which the submission would assist the tribunal in reaching its determination as to a specific fact or legal issue by providing a point of view that is different from those of the parties.
Article 5 permits non-disputing states parties to the treaty to make submissions on issues of treaty interpretation as a matter of right, as some states have done recently in the CAFTA context. As with other types of third-party submissions, third-party submissions from non-disputing states should provide a point of view that does not merely endorse the position of one or the other of the parties, and in particular, Article 5(2) cautions that such submissions should not be used to support the claim of a state’s investor in a way that would be “tantamount to diplomatic protection.” Moreover, where either type of third-party submission is concerned, the tribunal must ensure that the submissions do not “disrupt or unduly burden the arbitral proceedings, or unfairly prejudice any disputing party.”
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Insofar as they encapsulate a number of issues raised in recent years concerning the legitimacy and efficacy of investor-state arbitration as a means of settling investment disputes, the Transparency Rules provide a useful new tool for the continued development of this area of law. By providing public access, not only to awards and decisions, but also to the parties’ written and oral pleadings and evidence, they will further contribute to the elaboration of consistent practices and a jurisprudence constante that will no doubt provide greater certainty for parties on both sides of such disputes. Moreover, by allowing input from interested third parties, the Rules strengthen the legitimacy of investor-state arbitration for resolving what are often very contentious and public high-value disputes that implicate, not only private rights, but the public policies of host states. The Transparency Rules are thus well-placed to provide a key contribution to the evolution of investor-state arbitration.