In a subsequent request for participation as amicus curiae, the tribunal found that it could not open up the hearings to the petitioners without the parties' consent:

Although the Tribunal, as the Petition asserts, does have certain inherent powers with respect to arbitral procedure, it has no authority to exercise such power in opposition to a clear directive in the Arbitration Rules, which both Claimants and Respondent have agreed will govern the procedure in this case. While the Methanex cases [sic] (a NAFTA cases [sic] under UNCITRAL Arbitration Rules) cited by Petitioners did indeed involve public hearings, both claimants and respondents in those cases [sic] specifically consented to allowing the public to attend the hearings. The crucial element of consent by both parties to the dispute is absent in this case. 28

Subsequent to this case, the ICSID Secretariat suggested changes to the ICSID Rules and Regulations which would expressly provide for submissions by non-disputing parties. 29 These and other changes were made to the ICSID Rules and Regulations in 2006. Rule 37 now provides: 30

(2) After consulting both parties as far as possible, the Tribunal may allow a person or a State that is not a party to the dispute (hereafter called the ‘non-disputing party’) to file a written submission with the Tribunal. In determining whether to allow such a filing, the Tribunal shall 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 proceeding 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 a matter within the scope of the dispute;

(c) the non-disputing party has a significant interest in the proceeding.

The Tribunal shall ensure that the non-disputing party submission does not disrupt the proceeding, unduly burden or unfairly prejudice either party, and that both parties are given an opportunity of presenting their observations on the non-disputing party submission.

Rule 32 was also changed to give more power to the tribunal to decide whether or not to open up the proceedings: 31

(2) Unless either party objects, the Tribunal, after consultation with the Secretary-General, may allow other persons, besides the parties, their agents, counsel and advocates, witnesses and experts during their testimony, and officers of the Tribunal to attend or observe all or part of the hearings, subject to appropriate logistical arrangements. The Tribunal shall for such cases establish procedures for the protection of proprietary or privileged information.

end p.733

In addition, Rule 48 which relates to the publication of the award was amended ‘to facilitate the prompt release of excerpts, by making their early publication mandatory, and clarify the wording of the provision’. 32 Rule 48 now provides:

(4) The Centre shall not publish the award without the consent of the parties. The Centre shall, however, promptly include in its publications excerpts of the legal conclusions of the Tribunal.

Accordingly, it is evident that not only ICSID but also ICSID tribunals and the parties involved, particularly State parties, have recognized the need for transparency and public participation in investment arbitrations due to the nature of the disputes and the various public interests with which they may be concerned.

(ii) ICSID Additional Facility

The ICSID Additional Facility provides for arbitration in the circumstance where only the State of the investor or the respondent State is a party to the ICSID Convention. In those circumstances, the ICSID Convention and Rules do not apply but the Arbitration (Additional Facility) Rules do apply. The ICSID Arbitration (Additional Facility) Rules are very similar to the ICSID Rules of Procedure quoted above. For example, Rule 39(2) of the Arbitration (Additional Facility) Rules (as amended in 2006) is identical to Rule 32(2) of the ICSID Rules. According to these rules, the tribunal may allow other persons besides the parties to observe all or part of the hearings. Rule 41(3) of the Arbitration (Additional Facility) Rules and Rule 37(2) of the ICSID Arbitration Rules are also identical; both allow submissions from non-disputing parties. In addition, the relevant parts of Rule 53(3) of the Arbitration (Additional Facility) Rules and 48(4) of the ICSID Arbitration Rules are identical. Under these rules, both ICSID tribunals and Additional Facility tribunals may not publish the award rendered in a dispute without the consent of both of the parties.

The Arbitration (Additional Facility) Rules provide for registration of arbitration disputes in much the same way as the ICSID Arbitration Rules. According to Articles 3 and 4, a request for arbitration is made to the Secretariat, who then registers the request in the Arbitration (Additional Facility) Register and dispatches to the parties a notice of registration. This process is similar to the process laid out in the ICSID Arbitration Rules. Another similarity between the two sets of rules regards publication of case documents and awards, although practice under the rules varies. Neither set of rules calls for the publication of documents, but in both instances, some orders and awards are published. ICSID publishes case documents on its website of arbitrations under the Convention but not the Additional Facility. However, Additional Facility cases under NAFTA are published on other websites containing NAFTA information.

end p.734

(iii) United Nations Commission on International Trade Law (UNCITRAL)

The UNCITRAL Rules were approved by the General Assembly of the United Nations in its Resolution of 15 December 1976. The Rules have been widely used in various forms of international commercial arbitrations and in investment arbitrations in recent years.

The UNICTRAL Rules were adopted by the Iran-US Claims Tribunal established under the Algiers Accords in 1981 to deal with the claims of US nationals against Iran, Iranian nationals against the USA, and claims of each State against the other, following the seizure of the American Embassy in Tehran in 1979 and the detention of American hostages. Thus, the Rules have been considered, interpreted and applied by the Iran-US Claims Tribunal and its various chambers in a number of cases.

The UNCITRAL Rules are also one of the two options available under NAFTA. Some NAFTA tribunals have been constituted under these Rules. An unknown number of BIT cases have also been governed by the UNCITRAL Rules, such as Lauder v the Czech Republic , 33CME Czech Republic BV v The Czech Republic , 34Link-Trading Joint Stock Company v Moldova , 35 and Saluka BV v The Czech Republic . 36

There is not necessarily an institution overseeing or administering an UNCITRAL arbitration, as is noted above. The parties to a dispute may or may not choose to have an established institution, such as ICSID, administer the arbitration according to the UNCITRAL Rules. Under Article 15 of the UNCITRAL Rules, a tribunal has the inherent power to conduct the arbitration in the manner it considers appropriate:

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.

Article 15 has been adopted in Articles 18 and 19(2) of the UNCITRAL Model Law and is considered to be one of the essential ‘hallmarks’ of international arbitration according to the travaux pr?paratoires. 37 As the Methanex tribunal acknowledged:

Article 15(1) of the UNCITRAL Arbitration Rules grants to the Tribunal a broad discretion as to the conduct of this arbitration, subject always to the requirements of procedural equality and fairness towards the Disputing Parties. 38

end p.735

The tribunal also stated:

Article 15(1) is intended to provide the broadest procedural flexibility within fundamental safeguards, to be applied by the arbitration tribunal to fit the particular needs of the particular arbitration. 39

Similarly, the NAFTA tribunal in the UPS case described Article 15 as follows:

It does two critical things. First, it gives the arbitral tribunal power to conduct the arbitration in an appropriate manner. That power is essential to the very process of dispute settlement by way of arbitration and might be thought to be inherent even if not expressly stated. Secondly, in its two sets of limits it recognises both the fundamental procedural rights of the parties to a fair proceeding, natural justice or due process, and the other particular requirements of the rules. 40

These two NAFTA tribunals recognized that the inherent power of the tribunal under Article 15 is wide enough to accept submissions from non-parties as amicus curiae (though both tribunals acknowledged that Article 15 did not give them the power to add non-disputing parties to the arbitration). 41 As the UPS tribunal stated in relation to the powers of Article 15:

Those powers are limited to matters of procedure and they are constrained by other relevant rules and NAFTA provisions and by the principles of equality and fairness. They cannot be used to turn the dispute the subject of an arbitration into a different dispute, for instance by adding a new party to the arbitration. Rather, the powers are to be used to facilitate the Tribunal's process of inquiry into, understanding of, and resolving, that very dispute which has been submitted to it in accordance with the consent of the disputing parties. 42

After referring to the practice of the Iran-US Claims Tribunal, the World Trade Organization (‘WTO’), and the International Court of Justice (‘ICJ’), the Methanex tribunal found that Article 15(1) was broad enough for it to accept amicus submissions. 43 Similarly, the UPS tribunal found:

Is it within the scope of article 15(1) for the Tribunal to receive submissions offered by third parties with the purpose of assisting the Tribunal in that process? The Tribunal considers that it is. It is part of its power to conduct the arbitration in such manner as it considers appropriate. As the Methanex Tribunal said, the receiving of such submissions from a third person is not equivalent to making that person a party to the arbitration. That person does not have any rights as a party or as a non-disputing NAFTA Party. It is not participating to vindicate its rights. Rather, the Tribunal has exercised its power to permit that person to

end p.736

make the submission. It is a matter of its power rather than of third party right. The rights of the disputing Parties are not altered (although in exercise of their procedural rights they will have the rights to respond to any submission) and the legal nature of the arbitration remains unchanged. 44

The UPS tribunal emphasized that:

The power of the Tribunal to permit amicus submissions is not to be used in a way which is unduly burdensome for the parties or which unnecessarily complicates the Tribunal process. 45

The tribunal then went on to identify some of the specific consequences of accepting amicus submissions, such as the limitation on the length of the submissions, the inability of third parties to call witnesses, such that disputing parties do not need to cross-examine them, and the ability of the disputing parties to respond to the amicus submissions. 46

The Iran-US Claims Tribunal recognized that there might be a need for the State of the claimant or even other private parties to make submissions in an arbitration. Thus, the tribunal added a note to Article 15:

The arbitral tribunal may, having satisfied itself that the statement of one of the two Governments—or, under special circumstances, any other person—who is not an arbitrating party in a particular case is likely to assist the arbitral tribunal in carrying out its task, permit such Government or person to assist the arbitral tribunal by presenting oral or written submissions. (Note 5)

Both the Iranian and US governments applied to be joined as respondents or submitted amicus curiae briefs in cases before the Iran-US Claims Tribunal. 47 Private parties in some cases, such as the United States v Iran Case A/17, applied to be permitted to participate; but reportedly there were few such applications and most were rejected. 48 Other than these applications, this provision was not widely used before the tribunal with respect to written submissions.

The UNCITRAL Rules abide by the general rule that hearings are to be held in camera, unless the parties agree otherwise. Article 25(4) provides:

Hearings shall be held in camera unless the parties agree otherwise. The arbitral tribunal may require the retirement of any witness or witnesses during the testimony of other witnesses. The arbitral tribunal is free to determine the manner in which witnesses are examined.

end p.737

Note 5 to Article 25 adopted by the Iran-US Claims Tribunal provides that: 49

Notwithstanding the provisions of paragraph 4 of Article 25, the arbitral tribunal may at its discretion permit representatives of arbitrating parties in other cases which present similar issues of fact or law to be present to observe all or part of the hearing in a particular case, subject to the prior approval of the arbitrating parties in the particular case. The Agents of the two Governments are permitted to be present at pre-hearing conferences and hearings.

It was common for the agents of the non-disputing government to make oral statements to the tribunal. 50 The Methanex tribunal confirmed that under Article 25 petitioners of amicus briefs could not attend the hearings unless the parties consented otherwise. 51 In that case, the parties later gave their consent to public hearings.

The UNCITRAL Rules also incorporate the general principle in international commercial arbitration that information regarding the award be kept private. Article 32(5) provides: ‘The award may be made public only with the consent of both parties.’ This provision was amended by the Iran-US Claims Tribunal, because of the need for transparency due to the considerable importance of the tribunal's work, the involvement of the governments of Iran and the United States, and the public interest. Note 5 to Article 32 provided:

All awards and other decisions shall be made available to the public, except that upon the request of one or more arbitrating parties, the arbitral tribunal may determine that it will not make the entire award or other decision public, but will make public only portions thereof from which the identity of the parties, other identifying facts and trade or military secrets have been deleted.

The parties thus may request a tribunal to keep the award confidential, as happened in some cases, usually where the award records a settlement on agreed terms; but such a request can also be rejected. A number of different reasons were provided by the tribunal or dissenting arbitrators, but the only consistent theme seemed to be the need for awards to be public in accordance with Note 5. 52

In 2006, UNCITRAL decided that Working Group II (Arbitration) should give priority to revising the UNCITRAL Rules. 53 This process was under way as this chapter went to press (April 2007), with two meetings of Working Group II having occurred. At the second of these meetings (February 2007), Working Group II agreed to consider the issues of transparency and public participation as they arise with respect to arbitrations to which States are parties, after the first reading of the rules. 54

(iv) International Chamber of Commerce (ICC)

end p.738

The International Chamber of Commerce ( ‘ICC’) is one of the oldest organizations conducting international commercial arbitration. The ICC was established in 1919 and the ICC International Court of Arbitration (‘ICC Court’) was established in 1923. The ICC Court administers arbitrations conducted under the ICC Rules, the current version of the Rules being applicable from 1 January 1998.

One of the main perceived advantages of ICC arbitration is that the proceedings before the tribunal and the ICC Court are confidential. As outlined below, hearings are not public and awards are not published. Although the ICC considered incorporating a provision that arbitrations are confidential, particularly given recent decisions in the US, Australian, and Swedish courts, 55 it ultimately rejected this suggestion. The Working Party could not reach a consensus on the appropriate wording of the principle, finding that the previous acceptance of the principle was increasingly being questioned. 56 Thus, the principle of confidentiality, although widely recognized as being a fundamental principle of ICC arbitration, is an implied principle only. The 1998 Rules did, however, add a provision protecting confidential information. Article 20(7) states that: ‘The Arbitral Tribunal may take measures for protecting trade secrets and confidential information’.

The ICC Rules incorporate the general principle that the tribunal has the power to conduct the arbitration in an appropriate manner and in accordance with due process. Article 15 provides:

1. The proceedings before the Arbitral Tribunal shall be governed by these Rules and, where these Rules are silent, by any rules which the parties or, failing them, the Arbitral Tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration.

2. In all cases, the Arbitral Tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case.

The ICC Rules do provide that the hearings of the tribunal are to be private unless the tribunal and parties decide otherwise. Article 21 provides:

3. The Arbitral Tribunal shall be in full charge of the hearings, at which all the parties shall be entitled to be present. Save with the approval of the Arbitral Tribunal and the parties, persons not involved in the proceedings shall not be admitted.

It is generally accepted in ICC arbitrations that in order to maintain the privacy of the hearing, all documents prepared for or produced at the hearing must be kept confidential. The privacy of the arbitration is even considered to be the basis of the confidentiality of the entire arbitration proceedings. Thus, even though the ICC chose not expressly to provide for the confidentiality of ICC

end p.739

arbitrations, this principle is still considered to be one of the main advantages of ICC arbitration. As a former Secretary-General of the ICC has stated:

It became apparent to me very soon after taking up my responsibilities at the ICC that the users of international commercial arbitration, i.e. the companies, governments and individuals who are parties to such cases, place the highest value upon confidentiality as a fundamental characteristic of international commercial arbitration. When enquiring as to the features of international commercial arbitration which attracted parties to it as opposed to litigation, confidentiality of the proceedings and the fact that these proceedings and the resulting award would not enter into the public domain was almost invariably mentioned. 57

Confidentiality in ICC arbitrations has been protected by the English courts, as described below, and to an even greater degree by the French courts. In one case, the Paris Court of Appeal rejected an application to challenge an ICC award made in France on the basis that the mere application violated the principle of confidentiality of the arbitration. 58 Whilst the ICC publishes excerpts of awards without disclosing the identity of the parties, it can still be said that confidentiality is the basis upon which the ICC oversees and administers international commercial arbitrations.

(v) London Court of International Arbitration (LCIA)

Following the erosion of the principle of confidentiality by some arbitral tribunals and some national courts, the London Court of International Arbitration (‘LCIA’) introduced in January 1998 an express obligation of confidentiality. Article 30 states:

30.1 Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain—save and to the extent that disclosure may be required by a legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.

30.2 The deliberations of the Arbitral Tribunal are likewise confidential to its members, save and to the extent that disclosure of an arbitrator's refusal to participate in the arbitration is required of the other members of the Arbitral Tribunal under Articles 10, 12 and 26.

30.3 The LCIA Court does not publish any award or any part of an award without the prior written consent of all parties and the Arbitral Tribunal.

end p.740

In May 2006, the LCIA Court and Board voted to publish the LCIA Court's decisions on challenges to arbitrators. However, it appears from the LCIA's report that this decision was not due to an increased need for transparency or public participation in international investment arbitration disputes. The decision came after a ten-year study 59 which reviewed practices and procedures in dealing with challenges in the LCIA as well as other institutions, including the ICC, AAA, and the SCC. The study noted that the International Bar Association Guidelines on Conflicts of Interest in Commercial Arbitration represent a useful attempt to bring greater clarity and consistency in dealing with these conflicts, but that, unfortunately, many institutions are non-committal in their approach to the guidelines. The Court and Board have agreed to publish the Court's decisions on challenges to arbitrators. 60

(d) The NAFTA Response

NAFTA came into force on 1 January 1994, creating a free trade area between Canada, Mexico, and the USA. Chapter 11 of NAFTA focuses on investment and provides for arbitration ‘before an impartial tribunal’ 61 to resolve disputes between investors and NAFTA parties. Chapter 20 of NAFTA provides for arbitration between NAFTA parties. Significant concerns about transparency and public participation in this process did not arise until after NAFTA was negotiated, 62 but since that time, the NAFTA parties have responded to these concerns in a variety of ways. The following discussion focuses on Chapter 11 arbitrations.

Chapter 11 tribunals are governed at the first level of analysis by the provisions of NAFTA as well as a collection of related laws, rules, and interpretations. The NAFTA Free Trade Commission has issued interpretations and statements relating to transparency and public participation that are binding on all NAFTA Parties. 63 NAFTA Parties have also committed themselves to unilateral or joint actions when the Commission has not reached agreement on an issue, as described below.