The Position of Transparency in the Recent Developments of Arbitration Based on Investment Treaties

Document Type : Scientific research

Authors

• Moein Foroughi ¹
• hamid reza nikbakht ²

¹ بلوار ناصر حجازی ، خیابان بهار جنوبی،

² professor at Shahid Beheshti University

https://doi.org/10.22067/economlaw.2023.74761.1138

Abstract

Today, the arbitration regime for dispute settlement based on international investment treaties faces many challenges. One of the most obvious concerns is the lack of transparency in this regime, which has become the subject of differences in theories in recent years. This issue is so serious in some theories that it points the inherent principles of confidentiality and privacy of arbitration, and on the other hand, it has undermined the stability, reliability and predictability of international investment arbitration, and ultimately challenges the legitimacy of this system.
In recent years transparance has been put under scrutinies by different relevant authorities to be rectified and improved. This article focuses on the Investor-State arbitration, while examining the various forms of transparency in the international investment arbitration process, and evaluates the latest developments regarding transparency in arbitration based on investment treaties. Then, by examining the potential risks of transparency and its ultimate goals, it proposes a series of strategies to adapt the process of procedural transparency reforms to achieve its goals. These solutions should be considered gradually in this kind of arbitration in order to clarify the continuity and persistence of transparency in international investment arbitration proceedings and, at the same time, maintain privacy and confidentiality advantage in arbitration.

Keywords

• Transparency
• Confidentiality
• Investment Agreements
• International Investment Arbitration
• Transparency Risks
• Public Interest

References

1.  

   1. Andrew Newcombe and Lluís Paradell, Law and Practice of Investment Treaties (Kluwer Law International, The Netherlands, 2009), ch. 1.
   2. Anne Peters, ‘The Transparency Turn of International Law’ (2015) 1 The Chinese Journal of Global Governance.
   3. Anthea Roberts, ‘Power and Persuasion in Investment Treaty Arbitration: The Dual Role of States’, American Journal of International Law, Vol. 104, p. 179 (2010).
   4. Argen, R. D. (2015). Ending Blind Spot Justice, Broadening the Transparency Trend in International Arbitration. Brooklin Journal of International Law, Vol. 40, Issue 1, p.11.
   5. Bahmaei, M., Bastani Namaghi, R. (2020). The Principle of Party Autonomy and Its Exceptions in the Taking of Evidence in International Commercial and Investment Arbitration. International Law Review, 37(63), 73-110.
   6. Berger, K. P., "The International Arbitrators' Application of Precedents", 9 Journal of InternationalArbitration, 5 (1992), p 19
   7. Biwater Gauff (Tanzania)Ltd. v. United Republic of Tanzania, Procedural Order No. 3, ICSID Case No. ARB/05/22, [hereinafter Biwater No. 3].
   8. Biwater Gauff (Tanzania)Ltd. v. United Republic of Tanzania, Procedural Order No. 3, ICSID Case No. ARB/05/22, paras. 32-33.
   9. Bovens, M., "Public Accountability", in Ferlie, Ewan. Laurence E. Lynn, Jr. & Christopher Pollitt (eds), The Oxford Handbook of Public Management., Oxford: Oxford University Press, 2005,p.184-187.
   10. Brigitte Stern, 'The Intervention of Private Entities and State as "Friends of the Court" in WTO Dispute Settlement Proceedings", in PATRICK F.J. MACRORY ET AL, THE WORLD TRADE ORGANIZATION: LEGAL, ECONOMIC AND POLITICAL ANALYSIS, 2005 at pp. 1427, 1456
   11. Charles N Brower and Sadie Blanchard, ‘What’s in a Meme? The Truth about Investor-State Arbitration: Why
       It Need Not, and Must Not, Be Repossessed by States’ (2013) 52 Columbia Journal of Transnational Law 689,
   12. Claudia Reith, ‘Enhancing Greater Transparency in the UNCITRAL Arbitration Rules - A Futile Attempt’ (2012) 2 Yearbook on International Arbitration, p.300.
   13. De Brabandere E, (ed.), Gazzini T, (ed.), Kent A, (Ed.). Public Participation and Foreign Investment Law: From the Creation of Rights and Obligations to the Settlement of Disputes. Brill, 2021, Chapter 3 Public Participation and Investment Treaties: towards a New Settlement?,.P. 48-52 & Chapter 8, PP. 148-172.
   14. Delaney, Joachim, and Daniel Barstow Magraw. ―Procedural Transparency.‖ The Oxford Handbook of International Investment Law. Ed. Peter Muchlinsky, Federico Ortino, and Christoph Schreuer. Oxford: Oxford University Press (2008), p.150.
   15. Elizabeth Figueroa, Transparency in Administrative Courts: From the Outside Looking In, 35 Journal
       of the National Association of Administrative Law Judiciary,2015 , p. 8. Available at:
   16. Elizabeth Fisher, ‘Transparency and Administrative Law: A Critical Evaluation’ (2010) 63 Current Legal
       Problems, pp. 275-277.
   17. Gabriele Ruscalla, Transparency in International Arbitration: Any (Concrete) Need to Codify the Standard?, Groningn Journal GRONINGEN J. OF INT’L Law, vol. 3(1): Int’l Arbitration and Procedure, 1-26,. L. (2015)), https://grojil.files.wordpress.com/2015/05/grojil_vol3-issue1_ruscalla_.pdf
   18. Gary B Born and Ethan G Shenkman, ‘Confidentiality and Transparency in Commercial and
       Investor-State International Arbitration’ in Catherine A Rogers and Roger P Alford (eds), The Future of Investment
       Arbitration (Oxford University Press 2009) 32
   19. Gus Van Harten, Martin Loughlin, Investment Treaty Arbitration as a Species of Global Administrative Law, European Journal of International Law, Volume 17, Issue 1, February 2006, pp. 143–147, https://doi.org/10.1093/ejil/chi159
   20. https://core.ac.uk/download/pdf/144226963.pdf, last access at 9 April 2021.
   21. https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1583&context=naalj
   22. Jason Webb Yackee, ‘Do Bilateral Investment Treaties Promote Foreign Direct Investment? Some Hints from Alternative Evidence’, Virginia Journal of International Law 51 (2011), p. 397
   23. Jeswald Salacuse, "Is There a Better Way?, Alternative Methods of Treaty-Based Investor-State Dispute Resolution", Vol. 31, Issue 1, article 6, Fordham Int'l L.J. 2007,pp. 167-170. Available at:
   24. Jonathan Fox, ‘The Uncertain Relationship between Transparency and Accountability’ (2007) 17 Development
       in Practice 663, 665, 668.
   25. Marilyn Strathern (2000) The Tyranny of Transparency, British Educational Research Journal, 26:3, p.313;
   26. Meg Kinnear and Aisaatou Diop, "Use of the media by Counsel in investor-State arbitration",(ICCA Congress Series No.13,2006), p.49. Available at: http://www.itd.or.th/wp-content/uploads/2019/09/Annex-6-Meg-Kinnear-Aissatou-Diop-Transparency-Use-of-the-Media-by-Counsel-in-Investor-State-Arbitration-2010.pdf , Last access at 9 April 2021.
   27. Mollestad, CristofferNyegaard, See No Evil? Procedural Transparency in International Investment Law and Dispute Settlement (October 29, 2014). PluriCourts Research Paper No. 14-20, p. 79, Available at SSRN: https://ssrn.com/abstract=2516242;
   28. Mollestad, CristofferNyegaard, See No Evil? Procedural Transparency in International Investment Law and Dispute Settlement (October 29, 2014). PluriCourts Research Paper No. 14-20, p. 79, Available at SSRN: https://ssrn.com/abstract=2516242
   29. Patrick Wieland, ‘Why the Amicus Curia Institution Is Ill-Suited to Address Indigenous Peoples’ Rights before
       Investor-State Arbitration Tribunals: Glamis Gold and the Right of Intervention’ (2011) 3 Trade, Law and
       Development 334, 335, 340;
   30. Paulsson, J. & Rawding, N. (1995). the Trouble with Confidentiality. Arbitration International, Volume 11, Issue 3, .p.48.
   31. Peters, A. (2013). Towards Transparency as a Global Norm. In A. Bianchi & A. Peters (Eds.), Transparency in International Law (pp. 534-607). Cambridge: Cambridge University Press. doi:10.1017/CBO9781139108843.028
   32. Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-eighth session (New York, 4-8 February 2013) A/CN.9/765, Para 75,Article 7(3), Availabe at: https://undocs.org/en/A/Cn.9/765
   33. Ruth Teitelbaum, ‘A Look At the Public Interest in Investment Arbitration: Is It Unique?
       What Should We Do about It?’ (2010) 5 Publicist 54.
   34. Schefer, K. (2015). Article 1. Scope of application. In M. Wong & R. Hadgett (Authors) & D. Euler, M. Gehring, & M. Scherer (Eds.), Transparency in International Investment Arbitration: A Guide to the UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration (pp. 28-63). Cambridge: Cambridge University Press. doi:10.1017/CBO9781139939577.005, p. 33.
   35. SD Myers Inc v Canada (Procedural Order No 16 of 13 May 2000). Paragraphs 12 and 13.
   36. Shirlow, Esme and Caron, David D., The Multiple Forms of Transparency in International Investment Arbitration: Their Implications, and Their Limits (October 16, 2019). Thomas Schultz and Federico Ortino (eds), Oxford Handbook of International Arbitration (Oxford University Press, March 2020, Forthcoming), ANU College of Law Research PP.6 , Available at SSRN: https://ssrn.com/abstract=3470946.
   37. Shirlow, Esme, Three Manifestations of Transparency in International Investment Law: A Story of Sources, Stakeholders and Structures (January 14, 2020). Goettingen Journal of International Law, Vol. 8, No. 1, 2017, pp. 93–94. Available at SSRN: https://ssrn.com/abstract=3518923;
   38. Shirlow, Three Manifestations of Transparency in International Investment Law: A Story of Sources, Stakeholders and Structures (2017) 8(1) Goettingen Journal of International Law, (winner of the Goettingen Journal of International Law Essay Competition), pp. 74.
   39. Shkabatur, Jennifer, Transparency With(out) Accountability: Open Government in the United States (March 25, 2012). Yale Law & Policy Review, Vol. 31, No. 1, 2013, pp.119–120. Available at: SSRN: https://ssrn.com/abstract=2028656
   40. Thomas N Hale and Anne-Marie Slaughter, ‘Transparency: Possibilities and Limitations’ (2006) 30 Fletcher
       Forum of World Affairs 153, 154. Availble at: https://dl.tufts.edu/downloads/fn107888v?filename=g158bt47r.pdf ,
   41. Toby Major, CPTPP’s Investment Chapter: Progressive or a mere reiteration?, Submitted for LLB(Honours) Degree, Faculty of Law, Victoria University of Wellington, 2018,pp.20-21.
   42. Tomoko Ishikawa, ‘Third Party Participation in Investment Treaty Arbitration’ (2010) 59 International & Comparative Law Quarterl, p.402.
   43. UNCITRAL, ‘Report of Working Group II (Arbitration and Conciliation) on the Work of Its Fifty-Third Session (Vienna, 4-8 October 2010)’ (2010) UN Doc. A/CN.9/712 32.
   44. UNCITRAL, Reports of of Working Group III (Investor-State Dispute Settlement Reform) on the work of its 34th, 35th, 36th, 37th, 38th, 39th sessions, available at: https://uncitral.un.org/en/working_groups/3/investor-state
   45. UNCTAD Series on International Investment Policies for Development Investor-State Disputes: Prevention and Alternatives to Arbitration 2010, p. 13.
   46. Voermans, Wim, Judicial Transparency Furthering Public Accountability for New Judiciaries (2007). Utrecht Law Review, Vol. 3, No. 1, pp. 148-159, June 2007, 148, 150. Available at SSRN: https://ssrn.com/abstract=998249
   47. Yavari, A., Foroughi, M. (2021). A Legal review of recent developments in the investor- state dispute settlement regime of UNCITRAL (the Plan to Create International Permanent Bodies). Tehran Champer of Commerce, Industiries, Mines and Agriculture.
   48. Ziaei Bigdeli, M., Bagherzadeh, H. (2019). Theories of States' Compliance with International Law:A Question of Persuasion. International Law Review, 36(60), 7-34.