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Executive Summary

Although the rules governing investment arbitration have historically emphasised the confidentiality of the proceedings, there has recently been a move toward greater transparency. Two of the more significant developments are the new UNCITRAL Rules on Transparency and the Mauritius Convention, which provide for greater public disclosure of many elements of arbitral proceedings.

1.0 Introduction

Investment arbitration has its roots both in international commercial arbitration and in international diplomacy, both of which, for a variety of reasons, prize confidentiality. At the same time, the public nature of the disputes subject to investment arbitration means that there is a public interest in favour of transparency.

There may be good reasons to favour confidentiality in the conduct of an investment arbitration proceeding, including the protection of sensitive business or competitive information; insulating witnesses and arbitrators from public pressure; and allowing for the more efficient resolution of disputes. On the other hand, the reasons for favouring transparency are also numerous: transparency may contribute to the legitimacy of the proceedings and the result; it may allow citizens to observe and participate in matters affecting the public interest; and it may be required under a respondent government’s freedom of information laws.

This tension between confidentiality and transparency has existed throughout the history of investment arbitration. However, recent developments are moving international investment arbitration in the direction of greater transparency.

2.0 Rules on Transparency

As recently as 2010, the UNCITRAL Arbitration Rules provided in Article 28(3) that “[h]earings shall be held in camera unless the parties agree otherwise” and in Article 34(5) that an award “may be made public with the consent of all parties…”. While these provisions did not establish that all elements of an UNCITRAL arbitration would be confidential, they reflected a position favouring confidentiality unless agreed otherwise. On 1 April 2014, the “UNCITRAL Arbitration Rules 2013” entered into effect. In Article 1(4) they incorporate the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration.

The UNCITRAL Rules on Transparency and the corresponding Mauritius Convention — a multilateral agreement intended to encourage the application of these Rules — represent a new paradigm for transparency in the conduct of investment arbitrations.¹ Among other things, the Rules provide for the publication of initial information upon the filing of a case (Art. 2); the publication of pleadings and other documents (Art. 3); amicus submissions by third parties who are not otherwise involved in the proceedings (Art. 4); and a default in favour of public hearings, except where confidential information may be disclosed (Art. 6). These transparency measures are subject to

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certain limited exceptions, such as for the protection of confidential business information; sensitive law enforcement or security information; or confidentiality necessary to protect the integrity of the arbitral process (Art. 7).

While the Rules by their terms only apply to arbitrations arising from treaties concluded after 1 April 2014, the parties to an arbitration (claimant and respondent) can consent to their application or partial application. In addition, the states that are party to investment agreements concluded prior to 2014 can agree to the application of the Rules on Transparency to disputes arising from those investment agreements. This is what the Mauritius Convention seeks to do. Following the Convention’s entry into force in April 2017, all states ratifying it are bound by the Rules on Transparency in any proceedings to which they are party. This is true regardless of whether or not the arbitration was initiated under the UNCITRAL Arbitration Rules (Art. 2.1).

The Mauritius Convention and the UNCITRAL Rules on Transparency — combined with the move in more recent investment agreements to include greater transparency measures in the instruments themselves — demonstrate the move toward greater transparency in investment arbitration.²

The following are a few practical considerations that investors should consider regarding transparency in investment arbitration:

• Before filing an arbitration, consider any transparency provisions that may be prescribed by the applicable arbitral rules or treaties.
• Transparency rules may only require public disclosure of certain elements of the proceedings (e.g., pleadings but not exhibits). Evaluate the extent to which documents and filings are subject to public disclosure.
• Parties may in some cases alter any default rules on either confidentiality or transparency by consent; therefore consider whether to seek agreement with the opposing party on confidentiality/transparency issues.
• Evaluate the risks that any confidential or proprietary business information may be disclosed and consider what steps you may need to take in order to protect such information during the arbitral proceedings.

Notes

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