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].
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MALANCZUK Peter - Confidentiality and Third-Party Participation in Arbitration
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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,
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
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.
186 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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
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,
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);
2008] 1(2) CONTEMP. ASIA ARB. J. 183 187
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
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).
2008] 1(2) CONTEMP. ASIA ARB. J. 183 189
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).
190 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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
2008] 1(2) CONTEMP. ASIA ARB. J. 183 191
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
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.
192 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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).
2008] 1(2) CONTEMP. ASIA ARB. J. 183 193
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.
194 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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).
2008] 1(2) CONTEMP. ASIA ARB. J. 183 195
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.
196 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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.
2008] 1(2) CONTEMP. ASIA ARB. J. 183 197
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).
198 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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.
2008] 1(2) CONTEMP. ASIA ARB. J. 183 199
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-
200 1(2) CONTEMP. ASIA ARB. J. 183 [2008
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