Transparency in Investment Arbitration: Entry into Force of the Mauritius Convention
On 18 April 2017, Switzerland became the third UN Member State to ratify the 2015 United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration (“The Mauritius Convention”). The Mauritius Convention reaffirmed the 2014 UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (UNCITRAL Rules) and extended their applicability across all new investment arbitrations (ICSID, SCC, UNCITRAL, etc.).
According to Article 9, the Convention would enter into force six months after the third UN Member State ratification. Therefore, following Switzerland’s ratification, the UNCITRAL Rules will apply to all treaty-based investment arbitrations registered after 18 October 2017.
The initiative for transparency in investment arbitration initially came as an answer to the backlash against investment arbitration, namely the argument that important State interests cannot be adjudicated in private. The UNCITRAL Rules incorporated procedural provisions which try to make investment arbitrations more easily accessible to the public (publication of arbitration documents, access to hearings, amicus curiae submissions, etc.) [see our previous reporting on the rules]. Taken as a whole, they could significantly alter a traditional feature of investment arbitration, confidentiality.
However, whether the UNCITRAL Rules can actually introduce transparency in investment arbitration and address the proclaimed problem is uncertain. Indeed, a number of features hint that this might have been a flamboyant, but rather hollow, political move. First, the UNCITRAL Rules apply only to treaty-based investment arbitrations, excluding those under national laws or contracts. Second, several broadly drafted provisions ensure that parties may still exclude “confidential or protected” information from the public.
In addition, while initially enthusiastic, States seem unwilling to participate in the Mauritius Convention. Following Switzerland’s ratification, only three States are now full parties (Mauritius, Switzerland and Canada), while eighteen remain mere signatories.
According to Article 2(2) of the Mauritius Convention, which relates to the unilateral offer of application of the UNCITRAL Rules, the “UNCITRAL Rules on Transparency shall apply to an investor-State arbitration, whether or not initiated under the UNCITRAL Arbitration Rules, in which the respondent is a Party that has not made a reservation relevant to that investor-State arbitration under article 3(1), and the claimant agrees to the application of the UNCITRAL Rules on Transparency”. In light of this, it will be interesting to observe if and to what extent parties will be willing to apply the Mauritius Convention and introduce transparency in investment arbitration.