Department of Law
Spring Term 2019
Master Programme in Investment Treaty Arbitration
Master Thesis 15 ECTS
Investment Treaty Arbitration and
Transparency
Transparency, confidentiality and the public interest in
international investment disputes
ABSTRACT
Investment treaty arbitration has borrowed a number of elements from commercial arbitration, including confidentiality. The scope of confidentiality in investor-state arbitrations can make it hard for amicus curiae to participate in the arbitral proceedings.
The rules regarding transparency in investor-state arbitration relates, among others, to access to information and documents, third-party participation and the publication of awards. Transparency in investor-state arbitrations is also related to changes in legislation that could affect the investor. Changes in legislation is a way of adapting to new circumstances as changes in government or an attempt to prevent health issues or fulfilling environmental goals in the interest of the public.
The possibility of amicus curiae participation and submissions make it possible for the public to affect what information the tribunal have in cases where public interests are discussed. Tribunals have, when they have found that the public interest is not only general, decided to allow amicus curiae submissions even without the consent of the parties. They have allowed such submissions in cases where the amicus curiae could enlighten the tribunal or provide additional information about the merits.
There is no binding case law in arbitration. Since the tribunal only have jurisdiction in the particular case, awards cannot be binding in other disputes. The lack of case law can lead to a lack of predictability for both investors and states. It has led to fewer changes in domestic regulation, the phenomenon is called the “chilling effect” and refers to states who make less changes (including changes in the interest of the public) in an attempt to avoid a violation of the FET standard.
LIST OF ABBREVIATIONS
BIT Bilateral treaty
ECT Energy Charter Treaty
FET Fair and equitable treatment
FTA Free Trade Agreement
FTC NAFTA Free Trade Commission
ICC International Chamber of Commerce
ICSID International Centre for Settlement of
Investment Disputes
NAFTA North American Free Trade Association
NGO Non-governmental Organization
SCC Stockholm Chamber of Commerce
UNCITRAL United Nations Commission on
International Trade Law
TABLE OF CONTENT
ABSTRACT ... 3
LIST OF ABBREVIATIONS ... 6
1. INTRODUCTION ... 10
1.1 PROBLEM OBJECTIVE ... 12
1.2 METHODOLOGY AND LIMITATIONS ... 13
1.3 DISPOSITION ... 14
2. TRANSPARENCY, CONFIDENTIALITY AND THE PUBLIC INTEREST ... 16
2.1 FACTUAL BACKGROUND ON INVESTMENT TREATY ARBITRATION ... 16
2.2 CONFIDENTIALITY ... 18
2.3 TRANSPARENCY ... 19
2.4 LEGAL INSTRUMENTS OF TRANSPARENCY ... 21
2.5 PUBLIC INTEREST IN INVESTMENT-TREATY ARBITRATION ... 25
2.6 AMICUS CURIE BRIEFS AND THIRD-PARTY PARTICIPATION ... 27
2.7 THE BALANCE BETWEEN TRANSPARENCY, CONFIDENTIALITY AND THE PUBLIC INTEREST ... 32
3. TRANSPARENCY AND PREDICTABILITY IN INVESTMENT DISPUTES ... 35
3.1 LEGITIMATE EXPECTIONS OF THE INVESTOR ... 35
3.2 PREDICTABILITY AND THE STATES CHANGES IN LEGISLATION... 36
4. CONCLUDING REMARKS ... 39
1. Introduction
Confidentiality is often mentioned as one of the positive aspects of arbitration. The participating parties do not have to care about what information become public during the dispute, as it might have become during a dispute in courts. In investment disputes between a foreign investor and the host-state however, the public interest is generally higher than in commercial disputes.
The public interest in investor-state arbitrations have increased in recent years. The interest is especially high in those disputes regarding environmental issues, public health and finance.1 The fact that the state is involved in the dispute makes the
confidentiality aspect of arbitration controversial since the costs of the dispute and the award is paid out of state funds.2 The states involvement, and the fact that public
interests are often discussed, generate an invocation to access information and to participate as amicus curiae. The question is to what extent the public interest in the dispute can affect the parties wish for confidentiality.
Different sets of arbitration rules have different rules about transparency in the disputes, and the parties’ autonomy to choose the law is thus important since the idea of arbitration is built on consent. The rules regarding transparency in investor-state arbitrations relates, among others, to access to information and documents, third-party participation and the publication of awards.3
Transparency in investor-state arbitrations is also related to changes in legislation that could affect the investors legitimate expectations. Changes in legislation is a way for the state to adapt to new circumstances as changes in government or
1 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 9.
2 Gagain, M., Kinnear, M., Obadia, E., “Chapter 6. The ICSID approach to publication on
information in investor-state arbitration”, The Rise of Transparency in International Arbitration (JurisNet 2013), p. 108.
3 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
attempts to prevent health issues or fulfilling environmental goals in the interest of the public.4
Predictability in the legal environment is part of the legitimate expectations of the investor. Predictability means transparency, good governance of the state and fair and equitable treatment of investors.5 The state is supposed to be transparent
regarding all public policy, legal rules, statutory requirements and regulations that could affect investors. To be transparent in these aspects is meant to help the investor to have a reasonable idea about the legal climate in the state. That includes the possibility to know what kind of laws, policies and regulations the state had at the point of the investment. The information is important for the investor as the investors investment could be affected by the laws. The states transparency in this area provides a predictability which can attract foreign investors to invest in the states territory, while an unpredictable legal climate could have opposite effect.6
The legitimate expectiations of the investor is based on the legal environment as it was at the time of the investment. However, since states have the right to change the law as part of their souveignty the changes in legislation creates a dilemma. To do the change in the interest of the citizens, and risk a dispute with an investor who´s investment was affected by the change, or keep the legislation as it was as a way of providing a stable legal environment for foreign investors.
This study aim to enlighten to what extent the public interest is greater than the parties yearn for confidentiality and to what extent the transparency aspect of investment-treaty arbitration affect predictability in investor-state arbitrations.
4 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 148.
5 Nadakavukaren Schefer, K., “Article 1. Scope of application”, Transparency in international
investment arbitration (Cambridge University Press 2015), p. 43.
6 Brown, J., G., International Investment Agreements: Regulatory Chill in the Face of Litigious
1.1 Problem objective
The two following questions are important in regard to investment treaty arbitration because states who are signees to different international treaties are all risking to affect foreign investments when they change their domestic legislation or policy. The public interest in investor-state arbitration is generally higher in commercial arbitration, and the interest have increased during recent years.
It is important for the future of investment treaty arbitration that the states find a balance between the protection of foreign investors and their own citizens. If the public lose faith in their government because of lack of transparency in arbitral proceedings, it could have a negative effect on the future of international arbitration.
This study investigates the two following research questions:
• To what extent does public interest outweigh confidentiality in investment disputes?
• To what extent does transparency affect predictability in investment disputes when it comes to changes in domestic legislation made in the interest of the public?
The second question is also related to transparency in investment disputes, but in relation to the legitimate expectations for the investor and predictability for the state. Investment disputes involve states and are often related to changes in domestic legislation made in the interest of the host states citizens. The new legislation might, however, affect foreign investors negatively, making the state vulnerable to claims based on international treaties. The lack of transparency in investment disputes results in less clarity for the state regarding what certain changes would lead to, which in turn can lead to a regulatory chill. 7
The fact that the state does not always know what the consequenses might be when changes in policy affect foreign investors, can result in fewer changes in public legislations.8 The question aim to answer to what extent transparency regarding
information, documents and awards can affect the predictability when it comes to the effects of changes in legislation.
1.2 Methodology and limitations
This study involves a discussion of transparency, public interest and the legitimate expectations of the investor. The study is based on international treaties, bilateral treaties (BITs) and international and domestic law. The study of legal sources is then informed by case law and research of different legal journals and doctrine. These sources are important to gain an understanding of the legal issue and the ongoing debate on transparency. The legal doctrine will be the prime source to explain different legal definitions and concepts and the case law will be the main source to explain the use of thus concepts.
The arbitration agreement sometimes provide rules about transparency and/or confidentiality, and is also the legal basis for the tribunals jurisdiction. The
7 See Brown, J., G., International Investment Agreements: Regulatory Chill in the Face of Litigious
Heat? (2013) in Western Journal of Legal Studies, vol. 3 (1), pp. 8-9, changes in legislation can lead
to arbitration which can cause a regulatory chill because the state does not want to bear to cost of compensating the investor. Risking going to arbitration, without knowing what the costs might be, can result in less changes in the states legislation in an attempt to avoid the arbitration.
8 Brown, J., G., International Investment Agreements: Regulatory Chill in the Face of Litigious
arbitration agreement is included in conventions, treaties and BITs, which make them important to this study. Domestic and international law are also important to research since they include rules about arbitration proceedings. Previous awards will be used in order to gain an understanding on how a tribunal can use prior awards during the proceedings and in their reasoing regarding amicus curiae briefs and third-party participation.
The study is limited to focus on international investment disputes between foreign investors and their host state. Commercial arbitration and intra-EU arbitrations are thus not discussed. The focus will be on the specific legal concepts; transparency contra confidentiality, public interest and the legitimate expectations of the investor. Other legal concepts mentioned in the different sources are not addressed. The study is also limited to focus on transparency in the arbitration proceeding and not transparency in regard to state signing of international treaties. Transparency is a broad concepts in investment treaty arbitration, however, the study will focus on two main parts of transparency; third-party participation and predictability for the state in changes of legislation that could affect foreign investors. The reason the study is limited to those specific parts of transparency is because they are the most relevant in answering the problem questions.
1.3 Disposition
This study is divided into four chapters. Following this introduction, the second chapter examines the first research question. The chapter includes a factual background on investment treaty arbitration and the concepts transparency, confidentiality and public interest. These concepts are explained together with the authors own analysis of the problem and then discussed in relation to each other.
2. Transparency, confidentiality and the public interest
Transparency, confidentiality and public interest are all related to investment treaty arbitration. The elements of investment treaty arbitration are similar to those in commercial arbitration.9 Confidentiality without public disclosure to protect
information and reputation are often mentioned as some of the advantages of commercial arbitration as opposed to court proceedings.10 The public interest in
investor-state arbitration stems out of the involvement of the state, and the fact that such disputes often refer to public interests such as human rights and sustainable development.11 This chapter includes a short factual background on investment
treaty arbitration, followed by an explanation of the concepts transparency, confidentiality and public interest. The concepts will be analyzed in relation to each other in order to find out what kind of public interest is needed for confidentilaty to be outweighed by transparency, i.e. what kind of interest is needed for the tribunal to decide that transparency to the public is more important than the parties wish to keep the dispute confidential.
2.1 Factual background on investment treaty arbitration
Investment treaty arbitration has existed a long time, but the phenomenon begun to evolve in a faster pace that gained fraction, as part of the globalization in the finance, trade and investment areas, after the second world war.12 The objective
with investment treaties is to address typical risks of foreign investments to provide stability and predictability for the investor.13 To understand the process of
investor-state arbitration, and thus the complicated relationship between public interest and confidentiality it is important to understand the process of investment treaty
9 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 8.
10 Ibid, pp. 8–9. 11 Ibid, p. 9.
12 Hobér, K., Selected Writings on Investment Treaty Arbitration (Studentlitteratur 2013), p. 15. 13 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
arbitration, i.e. what investment treaty arbitration is and why investor and states use it as a dispute settlement mechanism instead of going to courts.
When the state provides protection for international investors, they also promote their own territory as a good place to make investments, i.e. a reason for a state to sign an international treaty is to get international investors to make investments in their territory.14 The treaty provides safety and protection for the investor by giving
the investor a possibility to go to arbitration instead of domestic courts. International arbitration as a dispute settlement mechanism is thus generally seen as less partial towards the state.15 Treaties are a way for states to promote growth
and long-term investments, an example on this is the Energy Charter Treaty (ECT), where article 2 establish that the purpose of the treaty is “to promote long-term cooperation in the energy field”.
All arbitrations, both commercial and those between an investor and a state, are based on consent to solve a dispute by arbitration, i.e. party autonomy.16 Professor
Kaj Hobér explains the term party autonomy as the party’s free choice of law governing the contract.17 The same reasoning can be applied to the state’s
ratification of conventions and treaties – the states acts as sovereign entities when deciding whether or not to sign a treaty.18 That means that the state can choose the
law by ratifying certain conventions and rules such as the International Centre for Settlement of Investment Disputes (ICSID convention) and North American Trade Agreement (NAFTA).
In commercial arbitration, the arbitration is based on an agreement between the two parties, in investment disputes the arbitration agreement is included in a treaty.19
14 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 7.
15 Ibid.
16 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 254.
17 Hobér, K., International Commercial Arbitration in Sweden (Oxford University Press 2011),
p. 40.
18 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 23.
19 Hobér, K., International Commercial Arbitration in Sweden (Oxford University Press 2011), p.
An investor-state dispute is a dispute between an investor and the state where the investor has made an investment. For such an arbitration to take place, it needs to be established that the arbitral tribunal has jurisdiction to hear the dispute and render a decision. To do that, the dispute has to be covered by an arbitration agreement, the parties have to be covered by a treaty and the merits of the case have to be included in the protection of the treaty.
2.2 Confidentiality
In cases where a tribunal have to decide whether the public interest of an investor-state dispute is more important than the parties request for confidentiality, the idea about confidentility in arbitration is important. Confidentiality and transparency are not necessarily opposites, but can co-exist in the same arbitration.
The idea of investor-state arbitration is similar to commercial arbitration.20
Confidential proceedings and a non-partial tribunal being two of the similarities. Confidentiality is a general rule when it comes to arbitration.21 In commercial
arbitration, confidentiality is one of the advantages the parties enclose when deciding to use arbitration as dispute settlement instead of the courts.22
Confidentiality in investment disputes are most of all connected to information. Information about the parties, the dispute, the publication of the award and third-party participation and submissions.23
There is no absolute rule on confidentiality in arbitration.24 A confidential
arbitration proceeding mean that no non-participating parties are allowed to take part of the arbitration proceedings unless the parties agree otherwise.25 The idea is
20 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 8.
21 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
treaty arbitration, vol. 5 (4) BRICS Law Journal 114-138 (2018), p. 116.
22 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 8.
23 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
treaty arbitration, vol. 5 (4) BRICS Law Journal 114-138 (2018), p. 116.
24 Sali., R., “Chapter 4. Transparency and confidentiality: How and why to publish arbitration
decisions”, The Rise of Transparency in International Arbitration (JurisNet 2013), pp. 73.
that no other parties can take part of documents, submissions or attend the hearing.26
However, there are always some (needed) exceptions. Companies might need to show the award to a parent company or go to court to have the award enforced. Both of these situations would breach the confidentiality rule if the award would be strictly confidential.27
2.3 Transparency
Transparency in investment treaty arbitration is related to several aspects of international investment law as well as the investment treaty arbitration procedure. Expropriation, fair and equitable treatment, compensation, full protection and security, third-party participation, access to information and documents and publication of awards are all related to transparency.28 This study, however, will
focus on transparency in relation to the latter three; thirdparty participation, access to information and documents and the publication of awards. The relation to transparency stems from predictability for investors and the public interest in state activity. By providing the investors with all relevant rules and legislations, future awards and to be transparent regarding possible changes in legislation, the investor have a way of predicting the business climate in the future. Third-party participation (amicus curiae) is a way for non-disputing parties to access a dispute and possibly affect the outcome by submitting amicus curiae briefs.
The investor-state arbitration is, as explained above in chapter 2.1, a dispute settlement mechanism which is meant to make sure that the investor does not have to use domestic courts in the host state. This is a way for the state to ensure foreign investors a certain standard of protection.29 Since the dispute is not settled in court,
the same laws regarding transparency are not applicable. In Sweden for example, all court proceedings and decisions are made available to the public in accordance
26 Hobér, K., Selected Writings on Investment Treaty Arbitration (Studentlitteratur 2013), p. 28. 27 Tweeddale, A., Confidentiality in Arbitration and The Public Interest Exception (2005) in
Arbitration International, vol. 21 (1). p. 59.
28 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
treaty arbitration, vol. 5 (4) BRICS Law Journal 114-138 (2018), p. 117.
29 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
with the principle of public access to official records.30 Arbitration proceedings and
arbitral awards are, however, not part of the official records with public access, and are thus not covered by this principle.31
With respect to third-party participation, access to information and documents and the publication of awards, transparency means that the dispute is made available to participate in by non-disputing parties.32 This is done by: a) publishing information
about the dispute, i.e. letting the public know there is a request for arbitration against the state and what the claims are, b) letting the public know what information the parties have submitted to the tribunal, c) letting other parties than the disputing parties attend hearings and submit additional information to the tribunal and d) the publication of the award.33 Transparency does not necessarily
mean that there is no confidentiality at all but can be used to make sure there is enough public access to a dispute to safeguard the public interest.34
Transparency regarding state acitivity is seen as a requirement of good governance of the state.35 For a state to be transparent, the state should publish all documents
and avoid secrecy in its administration. In international law, transparency requires the state to publish all legal rules, statutory requirements and regulations that could have an affect on investors.36 This is seen as a requirement because the investor
should be able to have a stable legal climate. Transparency regarding regulations that could have affect for investors is a way of letting the investor know what kind
30 The principle of public access to official records and the freedom of speech are regulated in the
Instrument of Government (1974:152), the Freedom of Press Act (1949:105) and in the Public Access to Information and Secrecy Act (2009:400). In article 1 (1) of the Public Access to Information and Secrecy Act, it is stated that the principle of public access to official records means that all public files and records of public authorities are official documents available to the public unless there are specific reasons to make them confidential. Those specific reasons are regulated in article 2 (2) and are related to national security, public economic interest, preventing or prosecuting crime, keeping personal and economic circumstances private etc.
31 Oldenstam, R., Andersson, F., Monell, C., Ragnwaldh, J., Foerster, A., Ringquist, F., Guide till
kommersiell tvistlösning: tvistlösningsmetoder och klausuler i svenska och internationella avtal, (3d
ed. Mannheimer Swartling Advokatbyrå 2017), p. 88-89.
32 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 286.
33 Euler, D., Gehring, M., Scherer, M., “Introduction”, Transparency in International Investment
Arbitration (Cambridge University Press 2015), p. 5.
34 Ibid.
35 Nadakavukaren Schefer, K., “Article 1. Scope of application”, Transparency in international
investment arbitration (Cambridge University Press 2015), p. 43.
36 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
of changes might happen and how those changes could affect the investors investment.
2.4 Legal instruments of transparency
Many international investment-related instruments, including international agreements such as NAFTA, the ICSID rules and the United Nations Commission on International Trade Law Transparency rules (UNCITRAL Transparency rules) include specific rules on transparency in the investment dispute, third-party participation and publication of awards.37 However, not all arbitrations follow these
rules. As a matter of fact, most treaties offer at least two different sets of rules.38
Depending on the treaty, a possibility of ad hoc arbitrataion might exist. An ad hoc arbitration means that the arbitration is not regulated under an institution such as ICSID, the International Chamber of Commerce (ISCC) or the Stockholm Chamber of Commerce (SCC). Most institutional arbitrations are reffereed to ICSID while most ad hoc arbitrations use the UNCITRAL rules.39 However, some ad hoc
investor-state arbitrations use treaty-based rules.40 That means that the rules are
specific to the agreement of the specific treaty and the parties are thus free to choose the scope of transparency or confidentiality of the arbitraion.41
37 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
treaty arbitration, vol. 5 (4) BRICS Law Journal 114-138 (2018), p.117.
38'Dispute Settlement Provisions in International Investment Agreements: A Large Sample
Survey' (Oecd.org, 2012)
<http://www.oecd.org/investment/internationalinvestmentagreements/50291678.pdf> accessed 18 May 2019. p. 5.
39 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 241 and 'Dispute Settlement Provisions in International Investment Agreements: A Large Sample Survey' (Oecd.org, 2012)
<http://www.oecd.org/investment/internationalinvestmentagreements/50291678.pdf> accessed 18 May 2019. Figure 4, p. 19.
40 'Dispute Settlement Provisions in International Investment Agreements: A Large Sample
Survey' (Oecd.org, 2012)
<http://www.oecd.org/investment/internationalinvestmentagreements/50291678.pdf> accessed 18 May 2019. Figure 4, p. 19.
41 Sali., R., “Chapter 4. Transparency and confidentiality: How and why to publish arbitration
An arbitraion under the ICSID arbitration rules is always transparent to some extent. The Secretary-General of ICSID is obligated to publish information about the dispute in accordance with article 22 of the ICSID convention. The mandatory information includes the very existence of the dispute, who the parties are, who sits in the tribunal, the nature of the dispute and the progress of the arbitration.42 The
parties are free, but not obligated to, to publish information. They can publish documentation, their pleadings and the award if the other party agree to have the award published.43 Rule 48 (4) of the ICSID convention states that the Centre is not
allowed to publish the award in full without permission from both participating parties. The ICSID centre is, however, obligated to publish excerpts of the tribunals reasoning even without the parties’ consent.44 When it comes to third-party
participation in arbitral proceedings, rule 32 (2) in the ICSID convention states that it is up to the parties to decide whether or not they want to allow amicus curiae to take part of the hearings and rule 37 (2) states that the tribunal can allow amicus curiae briefs if both parties’ consents. The ICSID convention has existed since 1965 and entered into force in 1966. It aims to promote economic development by providing the investor with a favourable investment climate.45
Article 1126 (13) of the NAFTA rules on transparency includes a requirement for the NAFTA Secretariat to maintain a public register of arbitration claims. Annex 1137.4 of the NAFTA rules states that if the disputing party is Canada or the United states of America, the award may be published by either one of the participating parties. However, if Mexico is involved in the dispute, only Mexico is allowed to publish the award.46
Investments by investors in the territory of another ratifying party are regulated in chapter 11 of NAFTA. The chapter does not have a preamble with its purpose but
42 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 287 and McLachlan C., Shore, L., Weiniger, M., International Investment
Arbitration (Oxford university press 2017), p. 66.
43 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 287.
44 McLachlan C., Shore, L., Weiniger, M., International Investment Arbitration (Oxford university
press 2017), p. 66.
45 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 238.
46 IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor
the tribunal in the Metalclad v Mexico found that there were three different objectives which are relevant in the interpretation of chapter 11. These are; a) to increase transparency in government regulations and activity, b) to substantially increase investment opportunities and c) to ensure a predictable commercial framework for investors. The tribunal in the S.D Myers decision found that chapter 11 also included an environmental objective which is expressed in the preamble to the NAFTA agreement.47
The purpose of the UNCITRAL rules is to provide a procedural framework that parties can choose to govern their dispute.48 The UNCITRAL rules on transparency
in investor-state arbitration are somewhat generous in transparency aspects, especially after the Mauritius convention entered into force in 2015.49 Article 2 of
the UNCITRAL Transparency rules states that all arbitrations under the UNCITRAL rules shall be made available to the public. The information made public includes the name of the disputing parties, which economic sector is involved and under which treaty the claim is being made. Article 2 states that information during the dispute, such as the notice of arbitration, the response to the notice, the statement of claim and defence, as well as written submissions by both the parties and amicus curiae briefs, transcripts of the hearing and the award. Some limitations are made in article 7, among those exceptions are confidential information such as business information and private information. The tribunal may, in accordance with article 4 and 5 of the UNCITRAL Transparency Rules, allow submissions by amicus curiae after consulting with the parties, but permission from the parties is not a requirement for accepting amicus curiae briefs. Article 6 of the UNCITRAL Transparency rules states that even the hearing is available to the public in arbitration proceedings under the UNCITRAL rules. Exceptions are when there is a need to protect confidential information as described in article 7 of the UNCITRAL Transparency rules.
47 IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor
rights (International Institute for Sustainable Development 2001), pp. 17-18.
48 Nadakavukaren Schefer, K., “Article 1. Scope of application”, Transparency in international
investment arbitration (Cambridge University Press 2015), p. 32.
49 The United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, i.e.
The state is, as explained above in chapter 2.1, free to choose if they want to ratify treaties and conventions. To ratify rules the state would like to be applicable in arbitration proceedings is a way to reassure predictability in future disputes and thus provide a more stable environment for foreign investors.50 However, when agreeing
on the terms of a treaty or convention, the state is also bound by those rules for future disputes and it is the investor who chooses which rules to apply when the investor requests for arbitration (as long as the treaty provides options).51 Therefore,
it is important that the state only agrees to those terms that they can accept in the future. As an example, Mexico has not agreed on the same terms of transparency in the NAFTA agreement as Canada and the United states and is thus not bound by the same transparency rules in annex 1137.4 in the NAFTA agreement as the other two.
This is a way for a ratifying party to an international agreement such as NAFTA to exercise their party autonomy by choosing a more limited law but still receive the benefits of signing an agreement. The benefits being the more stable and predictable business environment that would attract foreign investors. This is relevant in the discussion on transparency in investor-state arbitration and public interest because the states possibility to only ratify parts of international agreements, as Mexico has done, is a way to keep the benefits of an international agreement but still keep parts of the investor-state arbitration confidential.
It is not only the state who is bound by the rules that they have ratified. In most treaties, it is stated that the investor, in case of a dispute, can submit their request for arbitration to an arbitration institute or to an ad hoc-arbitration. Treaties often include several choices of rules, and the investor is thus the one who choose which rules they want to use. An example of a treaty with several different arbitration rules to choose from, is the ECT. Article 26 (2) (b) and (c) of the ECT says that as long as the requirements of article 26 (1) is fulfilled, the investor can request arbitration
50 Hobér, K., International Commercial Arbitration in Sweden (Oxford University Press 2011),
p. 40.
51 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
under article 26 (4) (a) ICSID, (b) UNCITRAL or (c) the ICC. The possibility to choose which rules the investor wants to apply to the dispute provides the investor with the possibility to choose how transparent they want the dispute to be, since ICSID and UNCITRAL does not have the same standard of transparency.
When appliying specific rules about transparency, and espceially rules providing more transparency of the dispute as the UNCITRAL transparency rules, it helps levelling the “playing field” between the state and the investor.52 Investor-state
arbitration is said to be bias to the investors advantage as the state is the one who are risking their reputation if the investor would request for arbitration behind closed doors. If that would be the case, the investor would be able to bring their claim without the public knowing the facts, and the state would bear the reputational consequences. However, the same concept can be applied to states who wants to keep their alleged illegal behaivour secret.53 If there is none, or little possibility for
states and investors to keep their dispute behind closed doors, it could benefit future trade as states who does not want to bear the repututional consequences might engage in less unfair behavour towards investors.
2.5 Public interest in investment-treaty arbitration
Disputes regarding the environment and human rights are typical investor-state arbitrations where public interests are discussed. A Non-government organization (NGO) publication explain the disputes as “creating public problems while enhancing public rights”.54 This means that while the state enhances the rights of
the public, it creates problems at the same time since violating investors rights might lead to less economical growth and less sustainable development.55
52 Euler, D., Scherer, M., “Conclusion: The Rules as a swing of the pendulum?”, Transparency in
International Investment Arbitration (Cambridge University Press 2015), p. 352.
53 Ibid, p. 353.
54 IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor
rights (International Institute for Sustainable Development 2001).
55 Ibid and 55 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in
The public interest in investor-state arbitration is related to the states involvement and that the disputes often relate to public interests.56 The states involvement means
that state funds may be used to cover arbitration costs and to compensate the investor in case the award require the state to do so.57 The issue of the dispute can
relate to, among others, public policy, environment, human health and finance.58
Public interest and public participation in investor-state arbitration is a part of good governance of the state in matters that affect policy making and public finance.59
The idea is that the public only would accepts awards as legitimate if they were able to retain information during the proceedings and particate as amicus curiae.60
Delaney and Barstow Magraw explains it as the publics acceptence of investor-state arbitration comes with transparency and the publics possibility to submit amicus curiae briefs and gain information about the process.61 The publics participation
would allow them to have an influence in governmental actions regarding public interests.
The state will not be able to protect all public interests in the dispute, which is why the public, or representatives for different public interests, requests for participation. The idea is to provide the tribunal with more information and increase the public involvement in disputes regarding public interests.62
56 Delaney, J., Barstow Magraw, D., “Procedural Transparency” in Muchlinski, P., et al (eds.) The
Oxford Handbook in International Investment Law (Oxford University Press, 2008), p. 756.
57 Gagain, M., Kinnear, M., Obadia, E., “Chapter 6. The ICSID approach to publication on
information in investor-state arbitration”, The Rise of Transparency in International Arbitration (JurisNet 2013), p. 108.
58 Nadakavukaren Schefer, K., “Article 1. Scope of application”, Transparency in international
investment arbitration (Cambridge University Press 2015), p. 43. and IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor rights (International Institute for
Sustainable Development 2001), p. 2.
59 Nadakavukaren Schefer, K., “Article 1. Scope of application”, Transparency in international
investment arbitration (Cambridge University Press 2015), p. 43.
60 Ibid.
61Delaney, J., Barstow Magraw, D., “Procedural Transparency” in Muchlinski, P., et al (eds.) The
Oxford Handbook in International Investment Law (Oxford University Press, 2008), p. 753.
62 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
2.6 Amicus curie briefs and third-party participation
Third-party participation, non-disputing parties or amicus curiae, as they are also called, means people or organizations who wants to participate in an arbitration without being one of the disputing parties. These third-parties are generally civil society groups, NGOs, trade groups or associations who have an interest in the dispute.63 The non-participating parties can represent the public in cases where
public interests are discussed in the dispute. The third-party is a non-disputing party who want to submit additional information.
Transparency during the dispute make it possible for non-disputing parties to submit additional information regarding the dispute, even if the hearing is generally closed to the public.64 Amicus curiae means “a friend to the court” and an amicus
curiae brief is a submission to the court (or arbitral tribunal) regarding legal arguments and/or recommendations made by a non-participating party to the dispute.65
The idea of letting non-disputing parties take part of the arbitration proceedings and submit additional information is to help the tribunal by adding another perspective to the dispute. The amicus curiae can provide expertise about the merits of the case that the tribunal is lacking, or enlighten certain information that might not be considered as important without the non-disputing parties perspective.66 To admit
amicus curiae is also a way of reassure that the public interest is fulfilled, and that the state have a good governance.
Third-party participation and amicus curiae briefs give the third-party a possibility to submit additional information regarding a dispute where they have an interest in
63 El-Hosseny F., Vetulli, E., Amicus Acceptance and Relevance: The Distinctive Example of Philip
Morris V. Uruguay (Netherlands International Law Review 2017), p. 79.
64 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 287.
65 'Amicus Curiae Brief' (Ecchr.eu, 2019) <https://www.ecchr.eu/en/glossary/amicus-curiae-brief/>
accessed 18 May 2019.
66 Dimsey, M., 'Article 4. Submission by a third person', Transparency in international investment
the outcome.67 The advantages of accepting non-participating parties to access and
submit information is to assist the tribunal by giving them another perspective than the parties have supplied. The amicus curiae can provide the tribunal with expertise and facts that the tribunal would not know without the third-party’s submission.68
The tribunal in the Suez and Vivendi v Argentina arbitration said that:
“The factor that gives this case particular public interest is that the investment dispute centers around water distribution and sewage systems of a large metropolitan area … given the public interest in the subject matter of this case, it is possible that appropriate non-parties may be able to afford the tribunal perspectives, arguments, and expertise that will help it arrive at a correct decision”.69
Both the ICSID rules, UNCITRAL and NAFTA have rules regarding non-disputing parties.70 NAFTA released a statement regarding non-disputing party
participation.71 The statement says that none of the articles of NAFTA limits the
Tribunal to accept written submission from non-disputing parties, and that it is up to the Tribunals discretion if they want to accept those submissions or not. The statement also includes a procedural order of how those submissions shall be submitted.72
In ICSID arbitrations, it is up to the tribunal to decide whether or not a non-disputing party is to be allowed to submit an amicus curiae brief. Article 37 (2) of the ICSID arbitration rules states that:
67 Hobér, K., Selected Writings on Investment Treaty Arbitration (Studentlitteratur 2013), p. 29. and
Söderberg, E., Investment Treaty Arbitration and Transparency - is Transparency in Investment
Treaty Arbitration good or bad for the Investor? (2019).
68 Delaney, J., Barstow Magraw, D., “Procedural Transparency” in Muchlinski, P., et al (eds.) The
Oxford Handbook in International Investment Law (Oxford University Press, 2008), p. 778-779.
69 Suez and Vivendi v The Argentine Republic, Order in response to a petition for transparency and
participation as amicus curiae, 19 May 2005, para 19.
70 Hobér, K., Selected Writings on Investment Treaty Arbitration (Studentlitteratur 2013), p. 29 and
McLachlan C., Shore, L., Weiniger, M., International Investment Arbitration (Oxford university press 2017), p. 67.
71 NAFTA Free Trade Commission (FTC). Statement of the Free Trade Commission on
non-disputing party participation. (2004) and Söderberg, E., Investment Treaty Arbitration and Transparency - is Transparency in Investment Treaty Arbitration good or bad for the Investor?
(2019).
72 Ibid, article A and B and Söderberg, E., Investment Treaty Arbitration and Transparency - is
“After consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute (in this Rule called the ‘non-disputing party’) to file a written submission with the Tribunal regarding a matter within the scope of the dispute. In determining whether to allow such a filing, the Tribunal shall consider, among other things, the extent to which: (a) the non-disputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the proceeding by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties; (b) the non-disputing party submission would address a matter within the scope of the dispute; (c) the non-disputing party has a significant interest in the proceeding.
The Tribunal shall ensure that the non-disputing party submission does not disrupt the proceeding or unduly burden or unfairly prejudice either party, and that both parties are given an opportunity to present their observations on the non-disputing party submission.”73
The tribunal in the Suez v Argentina laid down criteria’s for accepting third-party submissions. These were 1) appropriateness of the subject-matter of the dispute, 2) suitability of the amicus curiae and 3) the procedure of the non-disputing party’s submission.74
In the ICSID case Biwater Gauff v. United Republic of Tanzania, the tribunal accepted five non-disputing parties to submit amicus curiae briefs. The tribunal stated that the amicus curiae would not have access to documents provided by the parties in the dispute but that they were allowed to submit one submission each.75
The case related to public interests, and the tribunal stated that the five non-disputing parties provided a “useful contribution” to the tribunal since their view on the subject matter differed from the two disputing parties.76 The tribunal based
73 Article 37 (2) of the ICSID Arbitration rules.
74 Suez, Sociedad General de Agues de Barcelona, S.A., and InterAguas Servicios Integrales del
Agua, S.A. v The Argentina Republic, Order in Response to a petition for participation as amicus curiae, 17 March 2006, para. 17 and McLachlan C., Shore, L., Weiniger, M., International
Investment Arbitration (Oxford university press 2017), p. 67.
their decision on allowing such amicus curiae on the reasoning of the tribunal in the Methanex v. United States of America case. The Methanex tribunal explained the acceptance of the submissions:
“there is an undoubtedly public interest in this arbitration. The substantive issues extend far beyond those raised by the usual transnational arbitration between commercial parties. This is not merely because one of the Disputing Parties is a State: there are of course disputes involving States which are of no greater general public interest than a dispute between private persons. The public interest in this arbitration arises from its subject-matter, as powerfully suggested in the Petitions. There is also a broader argument, as suggested by the Respondents and Canada: the ... arbitral process could benefit from being perceived as more open or transparent; or conversely be harmed if seen as unduly secretive. In this regard, the Tribunal’s willingness to receive amicus submissions might support the process in general and this arbitration in particular, whereas a blanket refusal could do positive harm”.77
The respondent, Methanex, opposed any participation by amicus curiae and referred to it as a breach of privacy and confidentiality in the arbitration process.78
The tribunal decided to allow amicus curiae briefs but to decline amicus curiae oral arguments based on the fact that the parties did not give consent.79
In the Apotex v USA arbitration, a Canadian lawyer wanted to assist the arbitral tribunal by providing them with “the proper interpretation” of NAFTA. The tribunal considered the submission and used NAFTAs Free Trade Commission (FTC) statement as a guide:
6. In determining whether to grant leave to file a non-disputing party submission, the Tribunal will consider, among other things, the extent to which:
77 Methanex v. United States of America (UNCITRAL Arbitration), Decision on Petitions from Third
Persons to Intervene as Amici Curiae of 15 January 2001, para. 49.
78 IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor
rights, (International Institute for Sustainable Development 2001), p. 98.
(a) the non-disputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the arbitration by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties;
(b) the non-disputing party submission would address matters within the scope of the dispute;
(c) the non-disputing party has a significant interest in the arbitration; and
(d) there is a public interest in the subject-matter of the arbitration.
7. The Tribunal will ensure that:
a. any non-disputing party submission avoids disrupting the proceedings; and
b. neither disputing party is unduly burdened or unfairly prejudiced by such submissions.80
The tribunal decided to decline the lawyer’s submission as well as another submission made by a group saying that they were “new financial alternative services to build a more ethical legal framework for the global pharmaceutical market”. The tribunal stated that the submissions did not fulfil the criteria in article 6 and 7 of the FTC statement and that the submissions thus could not be accepted.81
The tribunal also stated that the significant interest in article 6 (c) is not fulfilled if the amicus curiae only can show a general interest in the dispute. A significant interest is when the non-disputing party can show that the “outcome of the arbitration may have a direct or indirect impact on the rights or principles the applicant represents and defends”.82
The tribunal in the Eco Oro v Colombia arbitration also declined submission by amicus curiae. Six different NGOs wanted to submit information under annex 831 of the Colombia-Canada Free Trade Agreement (FTA) and rule 37 (2) of the ICSID
80 NAFTA Free Trade Commission (FTC). Statement of the Free Trade Commission on
non-disputing party participation. (2004).
81 McLachlan C., Shore, L., Weiniger, M., International Investment Arbitration (Oxford university
press 2017), p. 69.
82 Apotex Holdings Inc. and Apotex Inc. v USA, Procedural order on the Participation of the
arbitration rules.83 The submissions to the tribunal included statements on “human
rights, and particularly the right to live in a healthy environment”. However, the tribunal stated that the issues raised by the NGOs did not fall within the scope of the arbitration, that the submissions by the NGOs would not be to any assistance and that the NGOs did not have a significant interest in the dispute.84
2.7 The balance between Transparency, confidentiality and the
public interest
It is important to remember that even if both ICSID, NAFTA and UNCITRAL have rules about transparency in investment treaty arbitration, many of the transparency-rules require both parties consent to publication before anything can be published. As stated above in chapter 2.4; Mexico has to agree before an award where Mexico was a participating part is published, in ICSID arbitrations, both parties need to consent before the award is published in full and they are free to choose for themselves whether or not they want to publish information about the dispute.
Under the UNCITRAL rules, the tribunal needs to consult with the parties before allowing third-party participation which gives the parties a possibility to submit information they think necessary to avoid amicus curiae. Since the idea of arbitration is built on consent, it is important to remember that the parties are the ones who chooses the rules – if a state does not want transparency, they wont ratify rules which will make transparency to the public an obligation. If the investor does not want transparency – they will (if the possibility exists in the treaty) choose the rules with less obligations on transparency.
In order for non-disputing parties to know there is a dispute between an investor and the state and what the dispute is about, there need to be a scope of transparency. If the dispute is not announced, and none of the parties nor the institution publish
83 Eco Oro Minerals Corp. v Republic of Colombia, procedural order No. 6 Decision on
non-disputing parties’ application of 18 February 2019, para. 8.
any information about the dispute – there is no possibility for amicus curiae since any third-party who could have an interest would not know the dispute existed.
However, in transparent arbitrations where there are non-disputing parties who have an interest in the dispute they have a possibility to take part of it. What the non-disputing party have to show is that their interest is not general but that the outcome of the case does have a direct or indirect affect for them. Of course, different rules in different proceedings affect the possibilities of amicus curiae participation but in those cases the ICSID rules are applicable, the tribunals have clearly stated that the non-disputing applicant have to provide information which could help the tribunal or that the outcome of the case would have an impact for the amicus curiae.85
When it comes to the balance between transparency, confidentiality and public interest in investor-state arbitration it is important to remember that the state is in fact one of the parties. As investment arbitration have borrowed elements from commercial arbitration, it does have a general scope of confidentiality as a result.86
The Methanex v United States of America case have had a great impact on the view of amicus curiae participation, as it resulted in allowing such particaption and transparence without the parties consent. The arguments by the tribunal were to fulfil the public interest and that to decline the submissions would potentially hurt the case.87
The fact that the tribunal in the Methanex case found that the public interest was more important to fulfil than to honor the request of confidentiality of the parties show that there are cases where the public interest outweighs the confidentiality. The reasoing of the tribunal in the Suez Vivendi v Argentina case provides the same conclusion – under certain circumstances the public interest is more important than
85 See Eco Oro Minerals Corp. v Republic of Colombia, procedural order No. 6 Decision on
non-disputing parties’ application of 18 February 2019, para. 8. and Biwater Gauff v. United Republic of
Tanzania. Award rendered on July 24, 2008.
86 Euler, D., Gehring, M., “Public interest in investment arbitration”, Transparency in International
Investment Arbitration (Cambridge University Press 2015), p. 8.
87 Methanex v. United States of America (UNCITRAL Arbitration), Decision on Petitions from Third
confidentiality. The third-party participation is, however, not only used in order to provide the public with information, but a way for the tribunal to gain more information about the dispute than provided by the disputing parties.
3. Transparency and predictability in investment disputes
As mentioned before in chapter 2.1, good governance and transparency in investment disputes are related to the states transparency regarding all legal rules, statutory requirements and regulations that could have an affect on investors.88
The predictability includes a stable legal and business environement and is part of the investors FET as their legitimate expectations.89 Tribunals have explained that
the legitimate expectations of the investor is based on the legal framwork as it was at the time of the investment.90 But what happens when the state wants to make a
change in legislation in the interest of their citizens? How do the state know what changes in legislation that affect foreign investors could lead to? This chapter will include a short explanation about the legitimate expectations of the invetstor, followed by discussions on the public interest and predictability for the state in changes in legislation.
3.1 Legitimate expections of the investor
The legitimate expectations of an investor is part of the FET standard which is included in most treaties. In article 10 (1) of the ECT it is stated that “Each Contracting Party shall, in accordance with the provisions of this Treaty, encourage and create stable, equitable, favourable and transparent conditions for Investors of other Contracting Parties to make Investments in its Area”. To create stable and transparent conditions for investors include the requirement for the state to have a stable legal climate for the investor.
88 Saravanan, A. and Subramanian, S. Transparency and confidentiality requirements in investment
treaty arbitration, vol. 5 (4) BRICS Law Journal 114-138 (2018), p. 115.
89 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 145.
90 See tribunals reasoning on legitimate expectations of the investor in National Grid v Argentina,
Award, rendered 3 November 2008, para. 173 and Dolzer, R. and Schreuer, C., Principles of
However, to change domestic legislation is a part of state sovereignty.91 The idea is
that the FET standard shall not prohibit states from adapting their laws as circumstances change, but the changes must be reasonable.92
The tribunal in Total v Argentina explained it as:
“changes to general legislation, in the absence of specific stabilization promises to the foreign investor, reflect a legitimate exercise of the host state´s governmental powers that are not prevented by a BIT´s fair and equitable treatment standard”.93
That means that the state is within its rights to change their law as part of the states governmental power, and that the states ratification of a treaty should not affect the states sovereignty to change their domestic laws.
3.2 Predictability and the states changes in legislation
Coherent case law is a good way to reassure predictability.94 In fact, tribunals often
use the reasoning from previous cases in the awards. However, previous awards are not binding precedent.95
In the ICSID case AES v Argentina, the tribunal said that:
“each tribunal remains sovereign and may retain, as it is conformed by ICSID practise, a different solution for resolving the same problem; but decisions on jurisdiction dealing with the same or very similar issues may at least indicate some lines of reasoning of real interest: this Tribunal may consider them in
91 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 148.
92 Ibid.
93 Total v Argentina, Decision on Liability, 27 December 2010, para. 164.
94 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 33.
order to compare its own position with those already adopted by its predessesors..”.96
Transparency of awards is a necessity in order to know what reasoing the tribunal used in their decision. In fact, if the award is not made public, it is impossible to use the reasoing of the tribunal as in other awards. The problem is when some awards regarding a certain question are published and some are not since it is not possible to have coherent case law and control if not all awards are public.
Some scholars have suggested that states may decide to not change their legislation because they do not want to risk going to arbitration.97 Many changes in legislation
are made in the interest of the public, especially those changes that relates to environment and public health. Changes in legislations can, however, affect foreign investors. In case a foreign investor have been affected by a change in legislation, the investor can request for arbitration under a treaty and ask for compensation as a result of the states violation of the FET.98
As the tribunal in the AES v Argentina said, the reason the case law is not binding is because every tribunal is their own souvereign. The tribunal is consituted for every specific arbitration proceeding and only have jurisdiction in that particular arbitration. That means that one tribunals reasoing cannot be binding for another dispute, since the tribunal does not have jurisdiction in that other dispute.99 The
tribunal is also only accountable to the disputing parties and not to anyone else, why parties in other disputes cannot hold a different tribunal than their own accountable for their decision.100
The result of this is that it is impossible to create binding precedent in investment treaty arbitration as the rules are today, and with that it follows that no state can
96 AES v Argentina, Decision on Jurisdiction, from April 26, 2015, para. 30.
97 Giest, A., Interpreting Public Interest Provisions in International Investment Treaties (2017),
Chicago Journal of International Law: Vol. 18 (1), art. 9, p. 336.
98 Hobér, K., Selected Writings on Investment Treaty Arbitration (Studentlitteratur 2013), p. 415. 99 Dolzer, R. and Schreuer, C., Principles of International Investment Law (2nd ed., Oxford Univ
Press 2012), p. 33-34.
100 Euler, D., Scherer, M., “Conclusion: The Rules as a swing of the pendulum?”, Transparency in
know for sure what certain changes in legislations might lead to, and no investor will know for sure that the laws regulating their investment will be the same forever. Canada, to provide an example, have had a regulatory chill after the NAFTA agreement came into force.101 A regulatory chill means that the state become
reluctant to act and enact laws in those areas where they might have to compensate the investor.102
101 IISD, Private Rights, Public Problems: A guide to NAFTA’s controversial chapter on investor
rights, (International Institute for Sustainable Development 2001), p. 33.
4. Concluding remarks
In regard to the first problem question “To what extent does public interest outweigh confidentiality in investment disputes?” there is no exact rule on when the public interest outweighs the scope of condifentiality in investor-state disputes. However, in those cases where the possibilty exists for transparency to outweigh the wish of confidentiality of the parties, there has to be a reason that the tribunal cannot decline, i.e. the interest of the amicus curiae cannot be merely general and the information must supply the tribunal with something new.
For the tribunal to rule on transparency versus confidentiality in investor-state arbitrations, the rules regarding that particular arbitration must provide them with the possibilty to do so. The tribunal in the Biwater v Gauff arbitration showed that article 37 (2) of the ICSID rules provides the tribunal with that possibilty.
For non-participating parties to take part of the dispute, there has to be a scope of transparency to begin with. An arbitration that no-one knows exists will not create such public interest that the tribunal will have many amicus curiae to discuss. In those cases where there is a public interest, however, the third-party participation will have to prove its impact on the dispute if the tribunal should allow it without the parties consent and the amicus curiae would only be allowed to submit additional information if the tribunal deemed the information valuable. For amicus curiae to be valuable, the infromation have to supply the tribunal with a new perspective, enlighten the importance of specific information or provide additional information on the merits. As stated above, the interest cannot be merely general. In order for the tribunal to allow the amicus curiae without the consent of the parties, the amicus curiae must show that it has a direct interest in the outcome and would be direct or indirectly affected. That means that a interest based on only a general public interest in state activity is not enough to outweigh the confidentiality in investor-state arbitration.
