Transparency, arbitration and BIT’s – A complicated threesome
4 Judith Spiegel
Private International Law - Kilaw - - Kuwait International Law School
Abstract
-Arbitration and transparency is a tense couple. Both the State and the Investor may (and usually do) have an interest in confidentiality, which is often a reason parties opt for arbitration. Until very recently, the institutional arbitration rules indeed had confidentiality as the default setting. Nowadays however, there is a trend towards more transparency. The confidential nature of State-Investor arbitration became under scrutiny because these disputes frequently concern the public interest (public health, environment, tax payers money etc.) whereas there are little or no opportunities for the public to participate. Hence, most arbitration institutes have reacted to the trend with various transparency initiatives, thus slowly changing the default settings. ICC courts may now for example, publish awards in their entirety no less than 2 years after their notification. UNCITRAL went even further. Does that mean that arbitration becomes less attractive (or necessary even) as a means of dispute resolution? No, not yet. In most cases parties still have the full freedom to avoid or opt out of these transparency initiatives. However, there may be another complication for those who wish to maintain maximum confidentiality. Often forgotten, but lurking around the corner, are the BIT’s. What role do these Bilateral Investment Treaties play in transparency-issues? Considering the fact that BIT’s by nature interfere into the individual investment contracts, this is an often forgotten angle worth exporing. Art. 9 of the Dutch-Kuwaiti Bilateral Investment Treaty of 2001 for example, states that if parties choose arbitration, they have to submit their dispute to either ICSID or UNCITRAL. In other words, the BIT wants to dictate how the individual contracts are filled in. So, what if modern BIT’s start prescribing transparency? Can a BIT directly - by stating in the BIT that arbitration MUST be transparent -, or indirectly - by directing parties to arbitration institutes and rules that do not allow them to opt out from transparency – influence parties’ choices? Or can parties contract around treaty rules? Case law regarding the legal relationship between BIT’s and the investment contracts is inconsistent und unclear. On the one hand: treaty goes before contract. On the other: the ratio of the BIT is to protect investors. These and other transparency issues in state-investor relations are dealt with in this paper. To that end, recent developments in transparency legislation or regulations are discussed, including new relevant transparency initiatives in arbitration. Why were the adopted, and are they effective? The history of the BIT and the new generation of BIT’s are discussed, as is the overriding academic question: what is the exact relationship between the BIT and the State-Investor agreement? This question is not only relevant for transparency-related questions, but is in general an issue that has been hovering over the market for a long time now. It fits into the third theme of the Annual Conference perfectly and deserves more attention, especially in the light of recent transparency initiatives in arbitration.
Keywords
-Transparency, arbitration and BIT’s - A complicated threesome
