UNCITRAL Transparency Rules & Transparency Convention

UNCITRAL Transparency Rules & Transparency Convention

Dr Maxi SchererWilmer Cutler Pickering Hale and Dorr LLP

Queen Mary, University of London

Quest for Transparency• OECD Investment Committee 2005

• NAFTA Interpretative Statements 2001-2004

• Amendment of ICSID Rules 2006

• UNCITRAL Transparency Rules: adopted 11 July 2013,

entered into force 1 April 2014

• UNCITRAL Transparency Convention: adopted 10 December

2014, so far signed by 10 States (Canada, Finland, France,

Germany, Mauritius, Sweden, Switzerland, Syria, UK, US), not

entered into force yet

UNCITRAL Transparency Regime

I. Scope of Application of the Rules

II. Content of the Rules

Publication of Information about and Documents from the Arbitration

Submissions in the Arbitration by Third Persons and Non-Disputing Parties

Public Hearings

III. Assessment of the Rules and the Convention

Scope of Application

The application of the Rules depends on whether

the arbitration is governed by UNCITRAL

Arbitration Rules or not

the underlying investment treaty is concluded

before or on or after 1 April 2014

the Transparency Convention enters into force and

who will be Contracting States

UNCITRAL Arbitration Rules Apply

Art 1(1)&(2): Transparency Rules apply if

• arbitration classified as investor-State

• initiated pursuant to an investment treaty

• some form of consent to the Transparency Rules:

distinction according to when treaty was concluded

o On or after 1 April: automatic unless parties opt-

out (Art 1(1))

o Before 1 April: requires opt-in (Art 1(2))

No /Other Arbitration Rules Apply

Art 1(9): Transparency Rules apply if

• Arbitration is classified as investor-State

• Parties to the dispute have given express consent to

the Transparency Rules

Implications of Transparency Convention

• Convention offers two routes to extend the

application of the Rules to treaties concluded before

1 April 2014 (subject to possible reservations):

Respondent State and country of the investor are

signatories of the Convention (Art 2(1))

Respondent State has made a unilaterally binding

offer to arbitrate under the Rules and investor has

accepted the offer (Art 2(2))

Scope of Application: Summary

• UNCITRAL Arbitration Rules: TRapply automatically

• no or other arbitration rules: specific consent needed

Treaty concluded before 1 April

2014

• Host State and investor are from Convention contracting states

• Host State has made unilateral offer and investor has accepted

Treaty concluded on or after 1 April 2014

Publication of Information (Art 2)

At the outset of the arbitration

• Notice of arbitration communicated to the repository

• Repository publishes information about the proceedings

Name of the parties

Economic sector involved

Treaty under which claim is made

Publication of Documents (Art 3)

During the arbitration publication of documents

• Always Notice of arbitration, response, any other written submissions

Table listing the exhibits (NOT the exhibits)

Transcripts of the hearings (where available)

Orders, decisions, awards

• Upon request Expert reports and witness statements

• According to the tribunal’s discretion Exhibits and other documents

Submission by Third Person (Art 4)

• Definition third person

Not a disputing party

Not a non-disputing party to the treaty

• Written submission within scope of dispute

• Procedure

• Criteria to allow submission

Third person’s interest in the arbitration

Ability to assist the tribunal in fact/law finding

Does not disrupt or unduly burden the arbitration

Does not unfairly prejudice any disputing party

Submission by Non-Disputing Party (Art 5)

• Non-disputing Party to the treaty

• Submission

on issues of treaty interpretation

on other matters within the scope of the dispute

• Criteria to allow submission

Same as Art 4: see above

Avoid submissions that would support the claim of the investor in a manner tantamount to diplomatic protection

Public Hearing (Art 6)

• Principle: oral hearing is public

• Limitations:

o Need to protect confidential information or

integrity of the arbitral process: reference to Art 7

o Logistical reasons

Exceptions to Transparency (Art 7)

• All provisions subject to limitations of Art 7

• Confidential or protected information

Confidential business information

Protected under the treaty

Protected under the law of the respondent State

Protected under the lex arbitri

Protected under the rules applicable

Information that would impede enforcement

• Disclosure contrary to security interest of respondent State (Art 7(5))

Assessment of Transparency RegimeBENEFITS

• Provides a more democratic and accountable system

• Positively affects public’s assessment of investor-State

Arbitration

• Furthers consistent interpretation of treaties and

quality of reasoning of awards

• Creates a systemic approach (rather than treaty-by-

treaty- piecemeal approach)

Assessment of Transparency Regime

DOWNSIDES

• Uncertainty how successful Convention will be

• Uncertainty how Rules will be interpreted by tribunals

• Limited scope: only treaty-based arbitration

• Too much transparency ?

o need to preserve the efficacy of arbitration

o make sure all players prepared

Many thanks !Dr Maxi SchererPhD (Sorbonne), LLM (Cologne), MA (Sorbonne) (Hons)Wilmer Cutler Pickering Hale and Dorr LLP49 Park Lane, London W1K 1PS, [email protected] Mary, University of London, School of International Arbitration67-69 Lincoln's Inn Fields, London WC2A 3JB, UKSenior Lecturer in International Arbitration and EnergyDirector Queen Mary Paris LLM http://www.law.qmul.ac.uk/postgraduate/llmparis/index.htmlSSRN Author page: http://ssrn.com/author=2149379