malanczuk peter - confidentiality and third-party participation in arbitration

Speech

CONFIDENTIALITY AND THIRD-PARTY

PARTICIPATION IN ARBITRATION

PROCEEDINGS UNDER BILATERAL

INVESTMENT TREATIES*

Peter Malanczuk**

* The article is based on a paper presented at the “International Conference on Bilateral Investment

Agreements: Protection, Promotion and Development of International Investment”, organized by

Department of Investment Services, Ministry of Economic Affairs and, Co-organizers: LCS &

Partners and Asian Center for WTO & International Health Law and Policy, College of Law,

National Taiwan University (ACWH), in Taipei, Taiwan, 28-29 November 2007. ** C.V. Starr Professor of Law, Peking University School of Transnational Law; former Dean &

Chair Professor, School of Law, City University of Hong Kong; Foreign Arbitrator HKIAC,

CIETAC, Beijing Arb Com, Guangzhou Arb Com; www.malanczuk.com;

[email protected].

184 1(2) CONTEMP. ASIA ARB. J. 183 [2008

I. INTRODUCTION

By the end of 2006 the number of bilateral investment treaties (BITs)

reached 2,573. In addition, there were 2,651 double taxation treaties (DDTs)

and 241 other international investment agreements (IIAs), such as free

trade agreements (FTAs) that include binding obligations concerning the

admission and protection of foreign investment.1 The UNCTAD World

Investment Report 2007 has characterized this “increasingly complex and

diverse patchwork” as follows:

Among its key characteristics are its universality, in that nearly

every country has signed at least one IIA, and its atomization, in

that no single authority coordinates the overall structure or the

content of the thousands of agreements that constitute the system.

Moreover, it is multilayered with IIAs existing at the bilateral,

regional, sectoral, plurilateral and multilateral levels; it is also

multifaceted with some IIAs including not only provisions on

investment, but also – in some cases more extensively – rules on

related matters such as trade in goods and/or services, or

intellectual property protection.2

One interesting feature is that a number of developing countries have

become both host and host countries for foreign direct investment. 27% of

all BITs, almost 700 treaties, have now been concluded among developing

countries. China, Egypt and the Republic of Korea belong to the top 10

signatories of BITs globally.

Modern BITS and IIAs not only provide for state-state dispute

settlement procedures, but also for investor-state dispute settlement

procedures giving individual investors or private entities direct standing to

bring claims against the host state for alleged breaches of obligations under

the treaty.3 By the end of 2006, the total number of known treaty-based

investor-state dispute settlement cases increased to 259.4

1 See United Nations Conference on Trade and Development [hereinafter UNCTAD], Oct. 16,

2007, World Investment Report 2007: Transnational Corporations, Extractive Industries and

Development, at 16-19, U.N. Sales No. E.07.II.D.9. 2 Id. at 17. 3 See Peter Malanczuk, State-State and Investor-State Dispute Settlement in the OECD Draft

Multilateral Investment Agreement, 3(3) JOURNAL OF INTERNATIONAL ECONOMIC LAW 417 (2000);

Peter Malanczuk, International Law Provisions for the Protection of Foreign Investment, in

FOREIGN INVESTMENT – ITS SIGNIFICANCE IN RELATION TO THE FIGHT AGAINST POVERTY,

ECONOMIC GROWTH AND LEGAL CULTURE 79-145 (Rudolf Dolzer, Matthias Herdegen & Bernhard

Vogel eds., 2006); RUDOLF DOLZER & CHRISTOPH H. SCHEUER, PRINCIPLES OF INTERNATIONAL

INVESTMENT LAW (2008). 4 UNCTAD, supra note 1, at 18.

2008] 1(2) CONTEMP. ASIA ARB. J. 183 185

More than 50% of all such cases (161) were brought before the

International Centre for the Settlement of Investment Disputes (ICSID).

Other venues were:

– UNCITRAL Arbitration Rules 65 cases

– Stockholm Chamber of Commerce 18

– International Chamber of Commerce (ICC) 4

– ad hoc arbitration5 4

– Cairo Regional Centre 1

It is unclear where the remaining six cases have been filed.

Furthermore, UNCTAD provides the following useful information:

Most of the cases (42%) involved the services sector (including

Electricity distribution, telecommunications, debt instruments,

water services and waste management), 29% were related to

mining and oil and gas exploration activities, and another 29%

concerned the manufacturing sector. At least 70 governments – 44

of developing countries, 14 of developed countries and 12 of

South-East Europe and the CIS-faced investment treaty

arbitration, with Argentina topping the list (42 claims), followed

by Mexico (18), the United States and the Czech Republic (11

each). In terms of substance, in 2006 arbitration tribunals

rendered significant awards relating to IIA provisions on most-

favoured-nation (MFN) treatment, fair and equitable treatment,

expropriation, the “umbrella clause”, and a “state of necessity”

exception.6

In recent debates on procedural issues of international arbitration, the

issue of the confidentiality of proceedings (whether expressly provided or

implied) and the participation of third (non-disputing) parties have been in

the forefront. The discussion has focused on treaty-based investment

arbitration cases where states are parties as defendants because of the

public interest aspects involved and demands raised for transparency from

civil society. This paper will address these issues in the following by

discussing the general meaning of the principle of confidentiality in arbitral

proceedings and looking in particular at access to information, publicity of

documents and the submission of amicus briefs and participation in

hearings by third parties.

II. FLEXIBILITY OF ARBITRATION PROCEEDINGS

5 It is unclear how the statistics provided by UNCTAD differentiate between “ad hoc arbitration”

and arbitration under the UNCITRAL Rules, as the latter are specifically designed for ad hoc

arbitrations. 6 UNCTAD, supra note 1, at 18.


As a starting point it should be noted that, in contrast to domestic court

litigation, international arbitration proceedings are generally more flexible

leaving much discretion to the arbitral tribunal how to shape and schedule

the proceedings, provided certain elementary principles of due process are

observed.7 In this sense, Article 15(1) of the 1976 UNCITRAL Arbitration

Rules states: “Subject to these Rules, the arbitral tribunal may conduct the

arbitration in such manner as it considers appropriate, provided that the

parties are treated with equality and that at any stage of the proceedings

each party is given a full opportunity of presenting his case”.

This flexible approach is reflected in the UNCITRAL Notes on

Organizing Arbitral Proceedings which confirm that arbitration rules

usually give arbitral tribunals broad powers in deciding on the conduct of

arbitral proceedings. The arbitration rules of the ICSID Convention and

ICSID Additional Facility are based on the same philosophy, although they

are more detailed on the procedures for the arbitration than the UNCITRAL

Arbitration Rules. They contain express provisions enabling the tribunal to

determine any issue of procedure not covered by the rules or agreed upon

by the parties.8

III. THE PRINCIPLE OF CONFIDENTIALITY

One of the most frequently cited advantages of arbitration, as distinct

from public court proceedings, is that private arbitration proceedings and

the award rendered in such proceedings are normally confidential, unless

the parties agree otherwise.9

Apart from other perceived advantages,

7 See ALAN REDFERN ET AL., LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION

264 (2004), noting: “An international arbitration may be conducted in many different ways. There

are no fixed rules of procedure. Rules of arbitration often provide an outline of the various steps to

be taken; but the detailed regulations of the procedure to be followed are established either by

agreement of the parties or by directions from the tribunal – or a combination of the two.” 8 See Convention on the Settlement of Investment Disputes between States and Nationals of Other

States [hereinafter the ICSID Convention], art. 44, Oct. 14, 1966,

http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp (last visited Oct. 23, 2008). See Rules

Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the

International Centre for Settlement of Investment Disputes Schedule B Conciliation (Additional

Facility) Rules [hereinafter the ICSID Arbitration (Additional Facility) Rules], art. 35, Apr. 10,

2006, http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp (last visited Oct. 23, 2008). 9 See generally Jan Paulsson & Nigel Rawding, The Trouble with Confidentiality, 11 ARB. INT’L

303 (1995); Michael Collins, Privacy and Confidentiality in Arbitration Proceedings, 11 ARB.

INT’L 321 (1995); Hans Smit, Confidentiality in Arbitration, 11 ARB. INT’L 337 (1995); Patrick

Neill, Confidentiality in Arbitration, 12 ARB. INT’L 287 (1996); Andrew Rogers & Duncan Miller,

Non-Confidential Arbitration Proceedings, 12 ARB. INT’L 319 (1996); Yves Fortier, The

Occasional Unwarranted Assumption of Confidentiality, 15 ARB. INT’L 131 (1999); Edward Leahy

& Carlos J. Bianchi, The Changing Face of International Arbitration, 17(4) J. INT’L ARB. 19

(2000); Hans Bagner, Confidentiality – A fundamental Principle in Commercial Arbitration?, 18(2)

J. INT’L ARB. 243 (2001); Olivier Oakley-White, Confidentiality Revisited: Is International

Arbitration Losing one of its Major Benefits?, 1 INT. A.L.R. 29 (2003); L. Yves Fortier & Stephen

L. Drymer, Third-Party Intervention and Document Discovery, 4(3) J. WORLD INV. 473-79 (2003);


arbitration is thought to enable parties to privately settle a dispute with a

final and binding outcome without “washing dirty linen in the public”.

In reality, however, the principle of confidentiality is less clearly

established than generally thought. National laws have different approaches.

Even the UNCITRAL Model Law on International Commercial Arbitration

refrains from laying down a provision on the controversial question of the

publication or confidentiality of awards and left this to the parties or the

arbitration rules selected by the parties.10

Most arbitration rules, however,

do have specific provisions on the confidentiality or the publication of

awards and there is a body of case law in various jurisdictions confirming

confidentiality, unless the parties agree otherwise.11

Again there are

exceptional cases and even conflicting decisions among Common Law

jurisdictions.

The UNCITRAL Notes on Organizing Arbitral Proceedings have some

useful observations in this connection:

There is no uniform answer in national laws as to the extent to

which the participants in an arbitration are under the duty to

observe confidentiality of information relating to the case.

Moreover, parties that have agreed on arbitration rules or other

provisions that do not expressly address the issue of

confidentiality cannot assume that all jurisdictions would

recognize an implied commitment to confidentiality.12

Therefore, generally speaking, it is important for parties going into an

international arbitration to be aware of the need to discuss and to lay down

in writing any agreement on confidentiality. This aspect has been

Andrew Tweeddale, Confidentiality in Arbitration and the Public Interest Exception, 21(1) ARB.

INT’L 59 (2005); Loukas A. Mistelis, Confidentiality and Third Party Participation: UPS v.

Canada and Methanex v. United States, in INTERNATIONAL INVESTMENT LAW AND ARBITRATION:

LEADING CASES FROM THE ICSID, NAFTA, BILATERAL TREATIES AND CUSTOMARY

INTERNATIONAL LAW 169 (Todd Weiler ed., 2005). See further the recent comparative study by

LOH SZE ON QUENTIN & EDWIN LEE PENG KHOON, CONFIDENTIALITY IN ARBITRATION: HOW FAR

DOES IT EXTEND? (2007) and Christina Knahr, Transparency, Third Party Participation and

Access to Documents in International Investment Arbitration, 23(2) ARB. INT’L 327 (2007). 10 For the background in the debate of the Model Law Working Group, see generally Secretariat of

the Untied Nation Commission on International Trade Law [UNCITRAL], UNCITRAL Model Law

on International Commercial Arbitration: note by the Secretariat, U.N. Doc. A/CN.9/207 (May 14,

1981) ; HOWARD M. HOLTZMANN & JOSEPH E. NEUHAUS, A GUIDE TO THE UNCITRAL MODEL

LAW ON INTERNATIONAL COMMERCIAL ARBITRATION: LEGISLATIVE HISTORY AND COMMENTARY

845 (1989). 11 See JULIAN D. M. LEW ET AL., COMPARATIVE INTERNATIONAL COMMERCIAL ARBITRATION 660-

61 (2003) and Christopher To, Confidentiality in Arbitrations, in LEGAL DISCOURSE ACROSS

CULTURES AND SYSTEM 75 (Vijay K. Bhatia, Christopher N. Candlin & Jan Engberg eds., 2008). 12 United Nations Commission on International Trade Law [UNCITRAL], UNCITRAL Notes on

Organizing Arbitral Proceedings, ¶31, U.N. Doc. A/CN.9/423 (Oct. 4, 1996).


particularly emphasized in the context of NAFTA Chapter 11 arbitration

proceedings:

In the Chapter 11 context, tribunals generally urge the parties to

devise a mutually acceptable confidentiality order if agreement is

possible, failing which the tribunal will impose an order. An

agreement on confidentiality usually addresses the type of

information that will be confidential, the extent of confidentiality,

exceptions to confidentiality, who may have access to

confidential information, under what conditions and for what

purpose access may be had, and what procedures will be used to

ensure confidentiality.13

There have been a number of cases under NAFTA that have dealt with

such issues in considerable detail (for example, Ethyl v. Canada; Metalclad

v. Mexico; S.D. Myers. Inc. (U.S.) v. Canada; Pope & Talbot Inc. v.

Canada; Feldman (U.S.) v. Mexico; The Loewen Group Inc. et al. (Can.) v.

United States; and Methanex Corp. (Can.) v. United States).

Without being able to go into the details of these cases, some general

statements of the tribunals on the principle of confidentiality are of interest.

For example, in Metalclad v. Mexico the tribunal clarified that while it may

be appropriate to restrict public comments, there was no general principle

of confidentiality applicable to the proceedings:

There remains nonetheless a question as to whether there exists

any general principle of confidentiality that would operate to

prohibit public discussion of the arbitration proceedings by either

party. Neither the NAFTA nor the ICSID (Additional Facility)

Rules contain any express restriction on the freedom of the parties

in this respect. Though it is frequently said that one of the reason

for recourse to arbitration is to avoid publicity, unless the

agreement between the parties incorporates such a limitation,

each of them is still free to speak publicly of the arbitration. It

may be observed that no such limitation is written into such major

arbitral texts such as the UNCITRAL Rules or the draft Articles

on Arbitration adopted by the International Law Commission . . . .

[That] having been said, it still appears to the Tribunal that it

would be of advantage to the orderly unfolding of the arbitral

process and conducive to the maintenance of working relations

between the Parties if during the proceeding they were both to

limit public discussion of the case to a minimum, subject only to

13 MEG N. KINNEAR ET AL., INVESTMENT DISPUTES UNDER NAFTA – AN ANNOTATED GUIDE TO

NAFTA CHAPTER 11 1120-29 (2006).


any externally imposed obligation of disclosure by which either

of them may be legally bound.14

Another interesting general statement on the notion of a general

obligation of confidentiality can be found in an Order of the tribunal in the

S.D. Myers. Inc. (U.S.) v. Canada case:

Whatever may be the position in private consensual

arbitrations between commercial parties, it has not been

established that any general principle of confidentiality exists in

arbitration such as that currently before this tribunal. The main

argument in favour of confidentiality is founded on a supposed

implied term in the arbitration agreement. The present arbitration

is taking place pursuant to a provision in an international treaty,

not pursuant to an arbitration agreement between disputing parties.

There is no direct contractual link between the disputing

parties in the present case, and there is no arbitration agreement

between them. In the absence of an established general principle

it is necessary to examine the treaty itself and the UNCITRAL

Rules, which apply to the arbitration proceedings by election of

Myers exercising its right under Article 1120 of the NAFTA, as

well as the Tribunal’s previous procedural orders.15

A further view confirming that there is no general obligation of

confidentiality was expressed by the tribunal in the Loewen v. United States

case:

[I]n an arbitration under NAFTA, it is not to be supposed that, in

the absence of express provisions, the Convention or the Rules

and Regulations impose a general obligation on the parties, the

effect of which would be to preclude the Government (or the

other party) from discussing the case in public, thereby depriving

the public of knowledge and information concerning government

and public affairs.16

IV. ACCESS TO DOCUMENTS AND INFORMATION IN

ARBITRATION

14 Metalclad Corp. v. Mexico, ICSID (W. Bank) ARB(AF)/97/1, ¶13 (Oct. 27, 1997). 15 S.D. Myers, Inc. (U.S.) v. Canada, UNCITRAL, Procedural Order No. 16, ¶¶8-9 (May 13, 2000). 16 The Loewen Group, Inc. & Raymond L, Loewen (Can.) v. United States, ICSID (W. Bank)

ARB(AF)/98/3, Decision on Hearing of Respondent’s Objections to Competence and Jurisdiction,

¶26 (Jan. 5, 2001).


Following the above line of decisions of NAFTA tribunals dealing with

confidentiality issues, on 31 July 2001 the NAFTA Free Trade Commission

issued a Note of Interpretation in accordance with Article 1131(2) which in

part addressed access to documents and information in arbitration

proceedings:

Having reviewed the operation of proceedings conducted

under Chapter 11 of the North American Free Trade Agreement,

the Free Trade Commission hereby adopts the following

interpretations of Chapter 11 in order to clarify and reaffirm the

meaning of certain of its provisions:

A. Access to documents

1. Nothing in the NAFTA imposes a general duty of

confidentiality on the disputing parties to a Chapter 11 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 11 tribunal.

2. In the application of the foregoing:

a. In accordance with Article 1120(2), the NAFTA Parties

agree that nothing in the relevant arbitral rules imposes a general

duty of confidentiality or precludes the Parties from providing

public access to documents submitted to, or issued by, Chapter 11

tribunals, apart from the limited specific exceptions set forth

expressly in those rules.

b. Each Party agrees to make available to the public in a

timely manner all documents submitted to, or issued by, a Chapter

11 tribunal, subject to redaction of:

i. confidential business information;

ii. information which is privileged or otherwise protected

from disclosure under the Party's domestic law; and

iii. information which the Party must withhold pursuant to

the relevant arbitral rules, as applied.

c. The Parties reaffirm that disputing parties may disclose to

other persons in connection with the arbitral proceedings such

unredacted documents as they consider necessary for the

preparation of their cases, but they shall ensure that those persons

protect the confidential information in such documents.

d. The Parties further reaffirm that the Governments of

Canada, the United Mexican States and the United States of

America may share with officials of their respective federal, state

or provincial governments all relevant documents in the course of


dispute settlement under Chapter 11 of NAFTA, including

confidential information.

3. The Parties confirm that nothing in this interpretation

shall be construed to require any Party to furnish or allow access

to information that it may withhold in accordance with Articles

2102 or 2105.17

Article 2102 deals with national security issues and clarifies, inter alia,

that a party is not required “to furnish or allow access to any information

the disclosure of which it determines to be contrary to its essential security

interests”.18

Article 2105 addresses “Disclosure of Information” and states:

“Nothing in this agreement shall be construed to require a Party to furnish

or allow access to information the disclosure of which would impede law

enforcement or would be contrary to the Party’s law protecting personal

privacy or the financial affairs or accounts of individual customers of

financial institutions.”

V. PUBLICATION OF AWARDS

From the view point of transparency and the development of

precedents － on which other courts and tribunals may wish to place

persuasive value － the publication of awards is highly desirable.19

The

practice of the Iran-US Claims Tribunal which officially publishes all

awards and major decisions in the Iran-US Claims Tribunal Reports,

however, is an exception.20

Most arbitration rules do not require the publication of awards without

the consent of both parties. Article 32(5) of the UNCITRAL Rules simply

states: “The award may be made public only with the consent of the

parties.”

17 Pettigrew welcomes NAFTA Commission’s initiatives to clarify Chapter 11 provisions No. 116,

http://w01.international.gc.ca/MinPub/Publication.aspx?isRedirect=True&publication_id=378614

&Language=E&docnumber=116 (last visited Oct. 28, 2008). 18 North American Free Trade Agreement [hereinafter NAFTA], art. 2102.1(a), Jan. 1, 1994,

http://www.nafta-sec-alena.org/DefaultSite/index_e.aspx?DetailID=177#A2102 (last visited Oct.

28, 2008). 19 See Colin Y.C. Ong, Confidentiality of Arbitral Awards and the Advantage for Arbitral

Institutions to Maintain a Repository of Awards, 1(2) ASIAN INTERNATIONAL

ARBITRATION JOURNAL 168-180. 20 See Peter Malanczuk, The Iran-United States Claims Tribunal in The Hague - Some Reflections

on a Unique Institution of International Dispute Settlement Moving Towards the End of its Work,

in: Volkmar Götz/Peter Selmer/Rüdiger Wolfrum (eds.), Liber amicorum Günther Jaenicke-Zum

85. Geburtstag. (Vol. 135. Beiträge zum ausländischen öffentlichen Recht und Völkerrecht, Max

Planck Institute for Comparative Public Law and International Law, Jochen Abr. Frowein/Rüdiger

Wolfrum eds.). Berlin/Heidelberg/New York: Springer-Verlag, 1998, pp. 221-238.


The UNCITRAL Rules were designed for one-off ad hoc arbitrations.

Their use by the Iran-US Claims Tribunal led to the first great test of in

practice. As the Iran-US Claims Tribunal with a case-load of some 4,000

claims was a unique form of semi-institutionalized arbitration, it was

necessary, however, to modify the UNCITRAL Rules in a number of

respects for this particular enterprise, an enterprise that Richard B. Lillich

by the way once described as the most significant one in arbitral history.21

The Tribunal Rules of Procedure modified paragraph 5 of Article 32 of

the UNCITRAL Rules as follows:

All awards shall be made public, except that upon request of one

or more arbitrating parties, the arbitral tribunal may determine

that it will not make the entire award public, but will make public

only portions of the award from which the identity of the parties,

other identifying facts and trade or military secrets have been

deleted.

It is interesting to compare this with the approach adopted by ICSID.

Under Article 48(5) of the ICSID Convention, ICSID is not allowed to

publish an award without the consent of the parties. A similar provision is

to be found in Article 53(3) of the ICSID Arbitration (Additional Facility)

Rules. ICSID frequently obtains such consent from the parties and makes

the text available on the ICSID website and also prints it in the ICSID

Review – Foreign Investment Law Journal. If one party refuses to agree to

the publication of the award, the other party may submit the award for

publication by other sources such as International Legal Materials, the

ICSID Reports or the Journal du Droit International. It appears that this

practice is actively encouraged by the ICSID Secretariat.22

If ICSID does not have the consent of both parties, the Centre is

nevertheless required to proceed as follows under the 2nd sentence of

Article 48(4) of the ICSID Rules of Procedure for Arbitration Proceedings:

“The Centre shall, however, promptly include in its publications excerpts of

the legal reasoning of the Tribunal.” The wording “shall” in this case

means that the obligation is now mandatory. This is the result of an

amendment proposed by the ICSID Secretariat in 2004/2005 view of the

increasing number of cases filed with the Centre.23

21 See Peter Malanczuk, Mixing Legal Cultures in International Arbitration: The Iran-United States

Claims Tribunal, in: Vijay K. Bhatia, Christopher N. Candlin & Jan Engberg (Editors), Legal

Discourse across Cultures and System: Hong Kong University Press 2008, 35-51. 22 ICSID Secretariat, Possible Improvements of the Framework for ICSID Arbitration, at 7-8 (Oct.

22, 2004). 23 See ICSID Secretariat, Suggested Changes to the ICSID Rules and Regulations, at 9 (May 12,

2005).


NAFTA does not have many provisions dealing with the

confidentiality of proceedings.24

As far as the publication of the award is

concerned Article 1137(4) and Annex 1137.4 provide that if Canada or the

United States is the disputing party, either side has the right to make the

award public. The situation is different in cases involving Mexico.

According to the annex, in such cases the applicable arbitration rules

determine the issue. If these rules are the ICSID Rules, then the provisions

already described above are relevant. If the UNICTRAL Rules apply, then

Article 32(2) mentioned above is pertinent.

It must be pointed out, however, that in practice all three parties of

NAFTA have meanwhile endorsed the principle of transparency of NAFTA

proceedings under Chapter 11. As noted by one recent commentary: “As

such, awards and other related documents, including pleadings and

correspondence with the tribunals, are now widely available to the public.

Indeed all three NAFTA Parties now maintain detailed websites, making

available documents relating to NAFTA arbitrations, including awards.”25

VI. PRODUCTION OF EVIDENCE AND DOCUMENTS REQUIRED

FROM THIRD PARTIES

Generally speaking, international commercial arbitration gives

relatively limited scope to document production requests. Redfern and

Hunter note the following in this connection:

There is no practice of automatic discovery in international

commercial arbitration. The unusual practice is to limit document

production as much as possible to those documents that are

strictly relevant to the issues in dispute and necessary for the

proper resolution of those issues. There is no tradition of practice

of the wholesale (or “warehouse”) production of documents.

Furthermore, most arbitral tribunals apply the principle of

“proportionality” － that is, they will limit the scope (and thus the

expense) of document production to an extent that is reasonable in

the context of the amount in dispute and the relative significance

of the issues in respect of which document production has been

requested.26

With respect to third parties, it is clear that arbitral tribunals generally

lack the power to compel third parties to produce documents or evidence

24 For a good summary see KINNEAR ET AL., supra note 13, at 1120-27. 25 Id. at 1137-39. 26 REDFERN ET AL., supra note 7, at 299, 297-304. For a discussion of NAFTA practice see

KINNEAR ET AL., supra note 13, at 1120-35.


for proceedings to which they are not a party. If such third parties do not

agree to take part in the arbitral proceedings voluntarily, the only avenue

available to the disputing parties is to have recourse to the local courts for

assistance.27

But let us consider the reverse situation of third parties wishing to

submit opinions, documents or evidence in arbitral proceedings to which

they are not a party.

VII. SUBMISSIONS BY THIRD PARTIES (AMICUS CURIAE BRIEFS)

There has been considerable discussion in international arbitration and

other international dispute settlement fora, including the WTO, on the role

of non-disputing parties, such as NGOs, including industry associations, or

university professors, to make submissions and otherwise participate as

amicus curiae (“friend of the court”) in proceedings.28

Significant developments have occurred in recent years in NAFTA

Chapter 11 arbitrations. They have been preceded by similar developments

in the WTO and it can be assumed that there has been some cross-

fertilization between WTO and NAFTA proceedings regarding the amicus

participation issue. The development in the WTO, however, has resulted in

far less clarity so far than the corresponding one under NAFTA.

Within the WTO framework the Dispute Settlement Understanding

(DSU) and the Working Procedures for Appellate Review are both silent on

this point.29

As regards the practice that evolved since 1998, it is useful to

distinguish between amicus submissions in panel proceedings, on the one

hand, and such submissions in the appellate procedure, on the other.

As to panel proceedings, Article 13 of the DSU provides panels with

broad authority to seek information from any relevant source. Furthermore,

Article 12.1 DSU authorizes panels to add to or depart from the Working

Procedures in Appendix 3 to the DSU. In the US-Shrimp case, the

Appellate Body held in 1998 that these provisions allow panels to accept

27 See Thomas H. Webster, Obtaining Evidence from Third Parties in International Arbitration, 17

ARB. INT’L 143, 143-162 (2001). For practice under NAFTA (Waste Management II case and

Methanex Corp. (Can.) v. United States), see KINNEAR ET AL., supra note 13, at 1120-150. 28 See generally Steve Charnovitz, Two Centuries of Participation: NGOs and International

Governance, 18 MICH. J. INT’L L. 183, (1997); LEW ET AL., supra note 11, at 169-199; Debra P.

Steger, Amicus Curiae: Participant or Friend? The WTO and NAFTA Experience, in EUROPEAN

INTEGRATION AND INTERNATIONAL COORDINATION: STUDIES IN HONOUR OF CLAUS-DIETER

EHLERMANN 419, 419-450 (Armin von Bogdandy et al. eds., 2002); Ruth Teitelbaum, Privacy,

Confidentiality and Third Party Participation: Recent Developments in NAFTA Chapter Eleven

Arbitration, 2(2) THE LAW AND PRACTICE OF INTERNATIONAL COURTS AND TRIBUNALS 249,

(2003). 29 See WTO Disputes – Dispute Settlement CBT – Participation in dispute settlement proceedings –

Ami –, http://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c9s3p1_ (last visited

Oct. 10, 2008).


and consider or to reject information and advice, even if submitted

unsolicited.30

But the Appellate Body also made it clear that panels are

under no obligation whatsoever to accept and consider such briefs. Thus,

there is no legal right of third parties to have their views heard by a WTO

panel.

Although the Appellate Body later confirmed this view several times,

many states, however, especially developing countries, continue to argue

strongly that the DSU does not authorize panels to accept and consider

amicus curiae submissions. Concerned about the impact on resources in the

need to respond to amicus submissions and about the perceived danger of

politicizing cases, they insist that WTO disputes can involve only Members

of the WTO and that there is no room for non-parties such as NGO to

participate. In view of the highly contentious status of the issue, only few

panels have so far actually accepted and considered unsolicited amicus

briefs.

Most amicus submissions appear in proceedings of the Appellate Body.

In the aforementioned US-Shrimp case, the Appellate Body clarified that

amicus briefs prepared by NGOs that are attached (for example as exhibits)

to submissions by a government (as appellant or appellee) will be treated as

integral part of the submission by the government who is considered to be

responsible for the content.31

In the US-Lead and Bismuth II case, in 2000 the Appellate Body then

dealt with unsolicited amicus briefs it receives directly. It stressed that there

was no right to have the submission considered, thus leaving the matter

entirely to the discretion of the Appellate Body.32

The Appellate Body

based its view on its power under Article 17.9 DSU to adopt procedural

rules, provided they do not conflict with the DSU or the covered

agreements.33

It concluded that it would have the authority to accept and

consider any information it considers relevant and helpful in deciding upon

an appeal, including amicus briefs that are unsolicited.

One year later in the EC-Asbestos case in 2001, the Appellate Body

expected a large number of amicus submissions and worked out, restricted

to that appeal case only, an additional procedure under Rule 16(1) of the

Working Procedures with a number of criteria for amicus submissions. But

after reviewing the applications for leave to file amicus briefs, the

30 See Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp

Products, ¶¶ 105-08, WT/DS58/AB/R (Oct. 12, 1998). 31 Id. ¶¶89, 91. 32 See Appellate Body Report, United States – Imposition of Countervailing Duties on Certain Hot-

Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, ¶¶ 40-41,

WT/DS138/AB/R (May 10, 2000). 33 See id. ¶ 43.


Appellate Body rejected all applications.34

The adoption of the additional

procedure nevertheless caused anger among WTO Members. The majority

of Members speaking at a specially convened meeting of the WTO General

Council on 22 November 2000 stated it was unacceptable that the

Appellate Body would accept and consider amicus briefs.35

However, this was not the end of the matter, as the Appellate Body did

not change its mind. In the EC-Sardines case in 2002,36

a WTO Member

state that had not been a third party in the earlier panel proceedings filed an

amicus brief with the Appellate Body in the appeal case. Admission as a

third party on the appellate level without having participated as third party

on the panel level was not possible. However, the Appellate Body invoked

its contested authority to receive amicus briefs from private individuals or

NGOs and argued it was equally entitled to accept such a submission from

a WTO Member. In the end, it decided not to consider the submission. So

far, in contrast to some panels, the Appellate Body has not considered any

unsolicited submission from a third party. This may be different in some

case in the future.

The development in NAFTA, in view of its limited membership (US,

Canada and Mexico) and driven by the consensus of the US and Canada,

went much further. It started with the Methanex Corp. (Can.) v. United

States (UNCITRAL) case and the Decision of the Tribunal of 15 January

2001 on Petitions from Third Persons to Intervene as “Amici Curiae”37

In

this case the US and Canada were supporting the admission of the two

amici briefs, while Mexico argued that Chapter 11 only provided for

participation by disputing parties and the NAFTA Parties alone. Mexico

argued that amicus was a feature of common law domestic systems but not

of civil law systems. It would also give strangers to the arbitral proceedings

more rights that the NAFTA Parties enjoyed. The latter are restricted to

address a question of interpretation of the NAFTA under Article 1128.

Methanex was also against admitting the amici briefs with four arguments:

(1) As hearings had to be held in camera under the

applicable UNCITRAL Rules (unless otherwise agreed by the

parties), documents prepared for the hearing also had to be

34 See Appellate Body Report, European Communities – Measures Affecting Asbestos and

Asbestos-Containing Products, ¶¶ 52-55, WT/DS135/AB/R (Mar. 12, 2001). 35 See WTO General Council, Minutes of Meeting Held in the Centre William Rappard on 22

November 2000, WT/GC/M/60 (Jan. 23, 2001). 36 See Appellate Body Report, European Communities – Trade Description of Sardines, ¶¶ 164-67,

WT/DS231/AB/R (Sep. 26, 2002). 37 Methanex Corp. (Can.) v. United States, UNCITRAL, Decision of the Tribunal of on Petitions

from Third Persons to Intervene as “Amici Curiae”. For a summary see KINNEAR ET AL., supra

note 13, at 1120-62.


confidential. Amici could not have access to such documents or

the hearing;

(2) UNCITRAL Rules were procedural rules and as such

could not be invoked to grant amici a substantive right to

participate in the proceedings;

(3) The public interest, claimed by the amici, was

sufficiently represented by the non-disputing NAFTA Parties

under Article 1128; and

(4) The cost of proceedings would increase considerably if

amici participation would be permitted.

With reference to Article 15 of the UNCITRAL Rules the Tribunal

stated it had the power to accept amicus briefs, but found it had no

authority to provide the amici with the documents generated in the

arbitration. It further held it also did not have the authority to allow amici

to attend oral hearings.

In the later UPS v. Canada case, the tribunal concluded in October

2001:

The Tribunal declares that it has the power to accept written

amicus briefs from the Petitioners. It will consider receiving them

at the merits stage of the arbitration following consultation with

the parties, exercising its discretion in the way indicated in this

decision and in accordance with relevant judicial practice. In all

other aspects, the Petitions are rejected.38

In 2003 the tribunal gave further directions. The amici briefs were

limited to a maximum of 20 pages and no evidence was to be attached.

New issues could not be introduced and the scope of the case as defined by

the parties could not be extended. The tribunal’s decision on admission

would be based on whether written amicus briefs provided additional

assistance to the assistance provided by the parties. Confidential

information would not be accessible to amici.39

Soon thereafter, the Free Trade Commission issued the following

statement:

STATEMENT OF THE FREE TRADE COMMISSION ON NON-

DISPUTING PARTY PARTICIPATION (7 OCTOBER 2003)

38 See United Parcel Svc. of Am. Inc. (U.S.) v. Canada, UNCITRAL, Procedural Directions for

Amicus Submissions (Apr. 4, 2003); United Parcel Svc. of Am. Inc. (U.S.) v. Canada, UNCITRAL,

Direction of the Tribunal on the Participation of Amici Curiae (Aug. 1, 2003). 39 See United Parcel Svc. of Am. Inc. (U.S.) v. Canada, (UNCITRAL), Decision of the Tribunal on

Petitions for Intervention and Participation as Amici Curiae (Oct. 17, 2001).


A. Non-disputing party participation

1. No provision of the North American Free Trade

Agreement (“NAFTA”) limits a Tribunal’s discretion to accept

written submissions from a person or entity that is not a disputing

party (a “non-disputing party”).

2. Nothing in this statement by the Free Trade Commission

(“the FTC”) prejudices the rights of NAFTA Parties under Article

1128 of the NAFTA.

3. Considering that written submissions by non-disputing

parties in arbitrations under Section B of Chapter 11 of NAFTA

may affect the operation of the Chapter, and in the interests of

fairness and the orderly conduct of arbitrations under Chapter 11,

the FTC recommends that Chapter 11 Tribunals adopt the

following procedures with respect to such submissions.

B. Procedures

1. Any non-disputing party that is a person of a Party, or that

has a significant presence in the territory of a Party, that wishes to

file a written submission with the Tribunal (the “applicant”) will

apply for leave from the Tribunal to file such a submission. The

applicant will attach the submission to the application.

2. The application for leave to file a non-disputing party

submission will:

(a) be made in writing, dated and signed by the person filing

the application, and include the address and other contact details

of the applicant;

(b) be no longer than 5 typed pages;

(c) describe the applicant, including, where relevant, its

membership and legal status (e.g., company, trade association or

other non-governmental organization), its general objectives, the

nature of its activities, and any parent organization (including any

organization that directly or indirectly controls the applicant);

(d) disclose whether or not the applicant has any affiliation,

direct or indirect, with any disputing party;

(e) identify any government, person or organization that has

provided any financial or other assistance in preparing the

submission;

(f) specify the nature of the interest that the applicant has in

the arbitration;

(g) identify the specific issues of fact or law in the arbitration

that the applicant has addressed in its written submission;

(h) explain, by reference to the factors specified in paragraph

six, why the Tribunal should accept the submission; and

(i) be made in a language of the arbitration.


3. The submission filed by a non-disputing party will:

(a) be dated and signed by the person filing the submission;

(b) be concise, and in no case longer than 20 typed pages,

including any appendices;

(c) set out a precise statement supporting the applicant’s

position on the issues; and

(d) only address matters within the scope of the dispute.

4. The application for leave to file a non-disputing party

submission and the submission will be served on all disputing

parties and the Tribunal.

5. The Tribunal will set an appropriate date by which the

disputing parties may comment on the application for leave to file

a non-disputing party submission.

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:

(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.

8. The Tribunal will render a decision on whether to grant

leave to file a non-disputing party submission. If leave to file a

non-disputing party submission is granted, the Tribunal will set an

appropriate date by which the disputing parties may respond in

writing to the non-disputing party submission. By that date, non-

disputing NAFTA Parties may, pursuant to Article 1128, address

any issues of interpretation of the Agreement presented in the

non-disputing party submission.

9. The granting of leave to file a non-disputing party

submission does not require the Tribunal to address that

submission at any point in the arbitration. The granting of leave to

file a non-disputing party submission does not entitle the non-


disputing party that filed the submission to make further

submissions in the arbitration.

10. Access to documents by non-disputing parties that file

applications under these procedures will be governed by the

FTC’s Note of July 31, 2001.

The FTC guidance laid down in this statement was subsequently

applied by the panel in the Methanex case in 2004 in dealing with

submissions made by the International Institute for Sustainable

Development, Bluewater Network, Communities for a Better Environment

and the Center for International Environmental Law, Earth Justice.40

The NAFTA experience had a profound impact on the development of

ICSID, which led to significant changes in 2006 which will be briefly

discussed in the following. In a Discussion Paper dated 22 October 2004

the ICSID Secretariat made reference to “two recent investor-to-State

arbitrations” governed by the UNCITRAL Arbitration Rules (apparently

the aforementioned NAFTA cases Methanex and UPS) in which “the

tribunals confirmed that they had broad authority to accept and consider

submissions from third parties.”41

Noting that ICSID arbitral proceedings

had not yet “yielded similar precedents”, the Discussion Paper proposed the

following innovations:

There may well be cases where the process could be strengthened

by submissions of third parties, not only civil society

organizations but also for instance business groups or, in

investment treaty arbitrations, the other States parties to the

treaties concerned. It might therefore be useful to make clear that

the tribunals have the authority to accept and consider

submissions from third parties. This could be done by

amendments of ICSID Arbitration Rule 34 and Article 41 of the

Additional Facility Arbitration Rules, regarding evidence. The

amendments could set out conditions for the submissions － for

example, as to financial and other disclosures by aspiring friends

of the court － or more flexibly leave such conditions for

determination by the tribunals in each case.42

For ICSID arbitrations in which the date of consent to arbitration is 10

April 2006 or later, an amendment to ICSID Arbitration Rule 37, dealing

40 See KINNEAR ET AL., supra note 13, at 1120-66, with references also to the 2005 Glamis Gold

case. 41 ICSID Secretariat, supra note 22, ¶ 13. 42 Id.


now both with “visits and inquiries” as well as “submissions by non-

disputing parties” laid down the following new approach:

(2) 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.

The first case to apply these amendments made to the ICSID

Arbitration Rules was Biwater Gauff (Tanzania) Ltd. v. United Republic of

Tanzania with two Orders issued in 2006 and 2007.43

The Tribunal covered

the public availability of hearing minutes, party-submitted material and

communications, orders and awards, and other issues. If there was no

agreement between the parties on confidentiality, the Tribunal found that

ICSID arbitrations were not under a general rule requiring either a general

obligation of confidentiality or transparency. (“No General Per se Rule”).44

But it did note that the amendments made to the ICSID Arbitration Rules

concerning amicus briefs and the attendance of third parties at hearings

“clearly reflect an overall trend in this field towards transparency”.45

These

Orders deserve a much more detailed analysis, but this is beyond the scope

of the present paper and the time-limits for its presentation.

43 Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID (W. Bank) ARB/05/22,

Procedural Order No. 3 (Sep. 29, 2006); Biwater Gauff (Tanzania) Ltd. v. United Republic of

Tanzania, ICSID (W. Bank) ARB/05/22 , Procedural Order No. 5 (Feb. 2, 2007). 44 Procedural Order No. 3, supra note 43, ¶ 121. 45 Id. ¶ 122.


VIII. CONFIDENTIALITY OF HEARINGS AND PARTICIPATION OF

THIRD PARTIES

Article 25(4) of the UNCITRAL Rules provides: “Hearings shall be

held in camera unless the parties agree otherwise. The arbitral tribunal may

require the retirement of any witness or witnesses during the testimony of

other witnesses. The arbitral tribunal is free to determine the manner in

which witnesses are examined.”

“In camera” clearly means that hearings are to be confidential, unless

the parties agree otherwise. This has been recognized in many instances by

arbitral tribunals. However, whether documents related to hearings, such as

transcripts and submissions are also confidential is not quite clear and even

NAFTA Chapter 11 tribunals, for example, have not always adopted a

consistent position on this matter.46

Again it was NAFTA that took a leading role as regards the issue of

open hearings. At the same time when the NAFTA Free Trade Commission

adopted its guidance on non-disputing parties participation (and the format

of notices of intent) on 7 October 2003, Canada and the US published

similar individual declarations on open hearings in NAFTA Chapter 11

arbitrations. Canada, for example, said:

Having reviewed the operation of arbitration proceedings

conducted under Chapter 11 of the North American Free Trade

Agreement, Canada affirms that it will consent, and will request

the consent of disputing investors and, as applicable, tribunals,

that hearings in Chapter 11 disputes to which it is a party be open

to the public, except to ensure the protection of confidential

information, including business confidential information. Canada

recommends that tribunals determine the appropriate logistical

arrangements for open hearings in consultation with disputing

parties. These arrangements may include, for example, use of

closed-circuit television systems, Internet webcasting, or other

forms of access.47

Mexico joined the agreement between Canada and the US on open

hearings at the following meeting of the Free Trade Commission on 16 July

2004.48

46 See the overview given in KINNEAR ET AL., supra note 13, at 1120-58. 47 Statement of Canada on Open Hearings in NAFTA Chapter 11 ARBITRATIONS,

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/open-

hearing.aspx?lang=en (last visited Oct. 238, 2008). 48 See NAFTA Free Trade Commission Joint Statement – Decade of Achievement,

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/JS-

SanAntonio.aspx?lang=en (last visited Oct. 28, 2008).


It may not come as a surprise that a few months later the Discussion

Paper of the ICSID Secretariat dated 22 October 2004 offered the following

insights on the desirability of open hearings:

14. The disputing parties, their counsel and other

representatives, and witnesses and experts called upon to testify at

hearings held by the tribunal, may attend the hearings. According

to the ICSID and Additional Facility Arbitration Rules, the

tribunal may allow other persons to attend the hearings only “with

the consent of the parties.”49

The notes published with the first

edition of the ICSID Regulations and Rules presented this

provision in the ICSID Arbitration Rules as reflecting an

implication in Article 48(5) of the ICSID Convention “that, as a

matter of principle, arbitration proceedings should not be

public.”50

However, as indicated earlier, Article 48(5) of the

Convention prohibits ICSID from publishing an award without

the consent of the parties. The notion that it connotes wider

confidentiality or privacy obligations, beyond those of ICSID

itself, is not supported by current arbitral practice.

15. Hearings open to the public have been consented to by the

parties in two cases administered by ICSID. The Centre has

successfully coped with the logistical challenges of hosting such

hearings. Some new investment treaties provide for open hearings

in all investor-to-State arbitrations under the treaties. It would

seem unwise simply to substitute such a blanket provision for the

existing provisions of the ICSID and Additional Facility

Arbitration Rules. Not all cases under those rules are treaty

arbitrations. On the other hand, the present provisions allow a

party to veto any wider attendance at hearings that might be

considered necessary or desirable not only by the other party but

also by the tribunal. The provisions concerned, ICSID Arbitration

Rule 32(2) and Article 39(2) of the Additional Facility Arbitration

Rules, might be amended so that the consent of both parties

would no longer be required for decisions of the tribunal to permit

additional categories of persons to attend the hearings or even to

open them to the public. Such amendments should require the

tribunal, before making the decisions, to consider the views of the

disputing parties, as well as those of the third parties concerned,

49 Rules of Procedure for Arbitration Proceedings [hereinafter Arbitration Rules], art. 32(2), Apr.

10, 2006, http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp (last visited Oct. 28, 2008); the

ICSID Arbitration (Additional Facility) Rules, supra note 8, art. 39(2). 50 Note C to ICSID Arbitration Rule 31 (now Rule 32) in ICSID Regulations and Rules, Doc.

ICSID/4/Rev. 1 (1968).


and to consult with the Secretariat of ICSID on the administrative

arrangements involved. The amendments should also make clear

the authority of the tribunal to prescribe the conditions (for

example, to protect proprietary information) of any wider

attendance at the hearings.

ICSID indeed amended its Rules in 2006. Article 32(2) of the ICSID

Arbitration Rules now provides:

Rule 32

The Oral Procedure

(1) The oral procedure shall consist of the hearing by the

Tribunal of the parties, their agents, counsel and advocates, and of

witnesses and experts.

(2) Unless either party objects, the Tribunal, after

consultation with the Secretary-General, may allow other persons,

besides the parties, their agents, counsel and advocates, witnesses

and experts during their testimony, and officers of the Tribunal, to

attend or observe all or part of the hearings, subject to appropriate

logistical arrangements. The Tribunal shall for such cases

establish procedures for the protection of proprietary or privileged

information.

(3) The members of the Tribunal may, during the hearings,

put questions to the parties, their agents, counsel and advocates,

and ask them for explanations.

The current formulation ensures that either party retains the power of

veto over admission of third parties to a hearing. An earlier draft version

suggesting that tribunals could open hearings even if a party objected was

quite rightly dismissed. Even if there is no objection, there is a duty of the

Tribunal to provide for procedures to protect proprietary or privileged

information.

IX. THE NEW 2004 US MODEL BIT AND RECENT US FREE

TRADE AGREEMENTS (FTAS)

The development in NAFTA described above not only led to changes

within the frame work of ICSID, but it is also reflected in the new 2004 US

Model BIT (which updated the 1994 version) and the latest generation of

Free Trade Agreements with investment protection provisions concluded

by the United States. The new US Model BIT clearly provides in Article 28

(“Conduct of the Arbitration”) as follows in paragraph 3: “3. The tribunal


shall have the authority to accept and consider amicus curiae submissions

from a person or entity that is not a disputing party.” Corresponding provisions can be found, for example, in the US-

Singapore FTA of 6 May 2003 (Article 15.19.3), the US-Chile FTA of 6

June 2003 (Article 10.19.3), the Dominican Republic-Central America-US

FTA of 5 August 2004 (Article 10.20.3) and the US-Morocco FTA of 14

June 2004 (Article 10.19.3).51

In view of the dominant role of environmental NGOs and other

advocacy groups in filing amicus briefs in international investor-state

disputes, investors are obviously not too happy with the new provisions and

asked to reverse the situation to that before the 2001 NAFTA Notes of

Interpretation.52

Finally, it is important to note that the new US Model Bit also contains

elaborate provisions on the openness of hearings in Article 29 which deals

with the transparency of proceedings.

Article 29: Transparency of Arbitral Proceedings

1. Subject to paragraphs 2 and 4, the respondent shall, after

receiving the following documents, promptly transmit them to the

non-disputing Party and make them available to the public:

(a) the notice of intent;

(b) the notice of arbitration;

(c) pleadings, memorials, and briefs submitted to the tribunal

by a disputing party and any written submissions submitted

pursuant to Article 28(2) [Non-Disputing Party submissions] and

(3) [Amicus Submissions] and Article 33 [Consolidation];

(d) minutes or transcripts of hearings of the tribunal, where

available; and

(e) orders, awards, and decisions of the tribunal.

2. The tribunal shall conduct hearings open to the public and

shall determine, in consultation with the disputing parties, the

appropriate logistical arrangements. However, any disputing party

that intends to use information designated as protected

information in a hearing shall so advise the tribunal. The tribunal

shall make appropriate arrangements to protect the information

from disclosure.

3. Nothing in this Section requires a respondent to disclose

protected information or to furnish or allow access to information

51 See Gilbert Gagné & Jean-Frédéric Morin, The Evolving American Policy on Investment

Protection: Evidence from Recent FTAs and the 2004 Model BIT, 9(2) J. INT’L. ECON. L. 357, 358

(2006). 52 See United States Subcommittee on Investment, Report of the Subcommittee on Investment

Regarding the Draft Model Bilateral Investment Treaty (Presented to: The Advisory Committee on

International Economic Policy) (Jan. 30, 2004).


that it may withhold in accordance with Article 18 [Essential

Security Article] or Article 19 [Disclosure of Information Article].

4. Any protected information that is submitted to the tribunal

shall be protected from disclosure in accordance with the

following procedures:

(a) Subject to subparagraph (d), neither the disputing parties

nor the tribunal shall disclose to the non-disputing Party or to the

public any protected information where the disputing party that

provided the information clearly designates it in accordance with

subparagraph (b);

(b) Any disputing party claiming that certain information

constitutes protected information shall clearly designate the

information at the time it is submitted to the tribunal;

(c) A disputing party shall, at the time it submits a document

containing information claimed to be protected information,

submit a redacted version of the document that does not contain

the information. Only the redacted version shall be provided to

the non-disputing Party and made public in accordance with

paragraph 1; and

(d) The tribunal shall decide any objection regarding the

designation of information claimed to be protected information. If

the tribunal determines that such information was not properly

designated, the disputing party that submitted the information

may (i) withdraw all or part of its submission containing such

information, or (ii) agree to resubmit complete and redacted

documents with corrected designations in accordance with the

tribunal’s determination and subparagraph (c). In either case, the

other disputing party shall, whenever necessary, resubmit

complete and redacted documents which either remove the

information withdrawn under (i) by the disputing party that first

submitted the information or redesignate the information

consistent with the designation under (ii) of the disputing party

that first submitted the information.

5. Nothing in this Section requires a respondent to withhold

from the public information required to be disclosed by its laws.

X. CONCLUSION

The analysis has shown that in investor-state arbitration there has been

a stronger move towards transparency and enhancing the participation of

third (non-disputing) parties with regard to submitting amicus briefs and

taking part in oral hearings. However, attempts have been made at the same

time to balance the promotion of transparency with the interest of parties to


protect security and sensitive business information. It is notable that this

development has been largely driven by the United States in Canada in the

context of NAFTA and the new US Model BIT and recent US FTAs. The

fact that ICSID has also amended its rules accordingly, in view of the

dominant use of ICSID for BIT based investor-state dispute settlement, is

likely to have an impact for other countries as well.


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Smit, Han (1995), Confidentiality in Arbitration, 11 ARBITRATION

INTERNATIONAL 337.

Teitelbaum, Ruth (2003), Privacy, Confidentiality and Third Party

Participation: Recent Developments in NAFTA Chapter Eleven

Arbitration, 2(2) THE LAW AND PRACTICE OF INTERNATIONAL COURTS

AND TRIBUNALS 249.

Tweeddale, Andrew (2004), Confidentiality in Arbitration and the Public

Interest Exception, 21 ARBITRATION INTERNATIONAL 59.

Webster, Thomas H. (2001), Obtaining Evidence from Third Parties in

International Arbitration, 17 ARBITRATION INTERNATIONAL 143.

Cases

Appellate Body Report, European Communities – Measures Affecting

Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, 12

March 2001.

Appellate Body Report, European Communities – Trade Description of

Sardines, WT/DS231/AB/R, 26 September 2002.

Appellate Body Report, United States – Import Prohibition of Certain

Shrimp and Shrimp Products, WT/DS58/AB/R, 12 October1998.

Appellate Body Report, United States – Imposition of Countervailing

Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products

Originating in the United Kingdom, WT/DS138/AB/R, 10 May 2000.


Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID (W.

Bank) ARB/05/22, Procedural Order No. 3, 29 September 2006.

Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID (W.

Bank) ARB/05/22, Procedural Order No. 5, 2 February 2007.

Metalclad Corp. v. Mexico, ICSID (W. Bank) ARB(AF)/97/1, 27 October

1997.

Methanex Corp. (Can.) v. United States, UNCITRAL, Decision of the

Tribunal of on Petitions from Third Persons to Intervene as “Amici

Curiae”.

S.D. Myers, Inc. (U.S.) v. Canada, UNCITRAL, Procedural Order No. 16,

13 May 2000.

The Loewen Group, Inc. & Raymond L, Loewen (Can.) v. United States,

ICSID (W. Bank) ARB(AF)/98/3, Decision on Hearing of

Respondent’s Objections to Competence and Jurisdiction, 5 January

2001.

United Parcel Svc. of Am. Inc. (U.S.) v. Canada, UNCITRAL, Decision of

the Tribunal on Petitions for Intervention and Participation as Amici

Curiae, 17 October 2001.

United Parcel Svc. of Am. Inc. (U.S.) v. Canada, UNCITRAL, Direction of

the Tribunal on the Participation of Amici Curiae, 1 August 2003.

United Parcel Svc. of Am. Inc. (U.S.) v. Canada, UNCITRAL, Procedural

Directions for Amicus Submissions, 4 April 2003.

WTO Documents

WTO General Council, Minutes of Meeting Held in the Centre William

Rappard on 22 November 2000, WT/GC/M/60, 23 January 2001.

UN Documents

Secretariat of the Untied Nation Commission on International Trade Law

[UNCITRAL], UNCITRAL Model Law on International Commercial

Arbitration: note by the Secretariat, U.N. Doc. A/CN.9/207 (1981).

UNCITRAL Notes on Organizing Arbitral Proceedings, 29th Sess., U.N.

Doc. A/CN.9/423 (1996).

United Nations Commission on Trade and Development (UNCTAD),

World Investment Report 2007: Transnational Corporations, Extractive

Industries and Development, U.N. Sales No. E.07.II.D.9 (2007).

International Conventions

Convention on the Settlement of Investment Disputes between States and

Nationals of Other States, 14 October 1966, http://icsid.worldbank.org

/ICSID/ICSID/RulesMain.jsp

North American Free Trade Agreement, 1 January 1994, http://www.nafta-

sec-alena.org/DefaultSite/index_e.aspx?DetailID=177#A2102


Rules Governing the Additional Facility for the Administration of

Proceedings by the Secretariat of the International Centre for

Settlement of Investment Disputes (Additional Facility) Rules, 10 April

2006, http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp

Rules of Procedure for Arbitration Proceedings, 10 April 2006,

http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp

Internet Sources

NAFTA Free Trade Commission Joint Statement – Decade of Achievement,

http://www.international.gc.ca/trade-agreements-accords-

commerciaux/agr-acc/nafta-alena/JS-SanAntonio.aspx?lang=en

Pettigrew welcomes NAFTA Commission’s initiatives to clarify Chapter

11 provisions No. 116, http://w01.international.gc.ca/

MinPub/Publication.aspx?isRedirect=True&publication_id=378614&L

anguage=E&docnumber=116

Statement of Canada on Open Hearings in NAFTA Chapter 11 arbitrations,

http://www.international.gc.ca/trade-agreements-accords-

commerciaux/agr-acc/nafta-alena/open-hearing.aspx?lang=en

WTO Disputes – Dispute Settlement CBT – Participation in dispute

settlement proceedings – Ami –, http://www.wto.org/english/tratop_e

/dispu_e/disp_settlement_cbt_e/c9s3p1_ e.htm#fnt3

Others

ICSID Secretariat, Possible Improvements of the Framework for ICSID

Arbitration, 22 October 2004.

ICSID Secretariat, Suggested Changes to the ICSID Rules and Regulations,

12 May 2005.

Note C to ICSID Arbitration Rule 31 (now Rule 32) in ICSID Regulations

and Rules, Doc. ICSID/4/Rev.1 (1968).

United States Subcommittee on Investment, Report of the Subcommittee on

Investment Regarding the Draft Model Bilateral Investment Treaty

(Presented to: The Advisory Committee on International Economic

Policy), 30 January 2004.