INTERNATIONAL INVESTMENT LAW

International Investment Law



International Investment Law

It is a well known fact that arbitration is a private process: this fact leads many to consider arbitration a confidential process. The implication is that what proceeds in the arbitration will not only be kept private between the parties but will remain absolutely confidential. The existence, extent, and the bases of confidentiality in international commercial arbitration are a matter of scholarly debate and occasionally the focus of decisions of arbitration Tribunals and state courts. (Ruggie 2009:15-20)

However, in the case of Pearl GmbH the issue of confidentiality has different dimensions in the context of international investment and trade disputes. The participation of states, state entities, subdivisions and agencies of states in international disputes can be a matter of general public interest and shift the emphasis from privacy and confidentiality to knowledge and accountability.

Knowledge implies the use of specialist expertise in the form of amicus briefs and consequently limited confidentiality, while accountability more or less mandates the publication of awards and arbitration at even the interim stages of procedure. (Ruggie 2007:35-59)

In Metalclad v Mexico the arbitration Tribunalestablished under NAFTA Chapter noted that neither the NAFTA nor ICSID Additional Facility Rules contained any express limit on the parties' freedom to publicise information divulged during the arbitration. In Loewen v USA the Tribunalstated that a general duty of confidentiality in arbitration involving a State party would be undesirable, as it would restrict public access to information relating to government and public matters.

However, a specific duty not to disclose specific documents filed in the arbitration was nonetheless found.

Most recent FTAs typically provide for transparency of proceedings, that hearings can be open to the public, and submissions and documents exchanged in the arbitration shall be made public, save for particularly protected confidential information. In this way a new dynamic is becoming common practice, at least as far as the United States is concerned. (Pfaff 2007:74-95)

Tribunals have mainly relied on Article 15(1), which empowers a Tribunalto conduct the proceedings between the parties as it deems appropriate, but with a clear understanding of the paramount consideration of equality in treatment of the parties. The real issue is whether NGOs or other amici can be considered experts for the purpose of the arbitral proceedings, in which instance Article 15(2) could be of relevance and have amici classified as specific experts. It has been suggested in this respect that governments should sponsor NGOs. Such a suggestion appears to be a paradox, to the extent the government are called upon to support NGOs; as such sponsorship may raise concerns about the independence of such organisations. What is essential for governments is to allow for civil society organisations to emerge and develop and accept such private initiatives. (Peterson 2005:45-56)

Apart from their interest in the issues raised in the Claimant's original statement of claim, these organisations were searching for a legal platform which would provide a more effective platform than that which the NAFTA Parties had already provided: a non-binding investigative process run by under-funded, tri-partite ...