Transparency in Investment Treaty Arbitration

Legal Tribune Online (LTO)  interviewed, in an article a couple of days ago, Moritz Renner of Humboldt University,Berlin, on the subject of transparency in investor treaty arbitration.

The main theme of LTO’s article is the lack of transparency of arbitration proceedings. Moritz Renner argues that the lack of transparency jeopardizes or even violates public interest. More precisely, he criticizes that there is no way to find out whether the arbitrators did take public interest into account when rendering the award. What he would like to see are procedural safeguards that make sure that public interest and public policy arguments are being heard.

The article in LTO, its name notwithstanding a German language online publication in association with SPIEGEL, was triggered by the investment treaty arbitration threatened by Swedish energy giant Vattenfall against the Federal Republic of Germany. The potential dispute arises as a result of Germany having opted out of nuclear power. Apparently, this would be an International Centre for Settlement of Investment Disputes (ICSID) arbitration.

As it happens, transparency in investment treaty arbitration was one of the topics of the 7th Frankfurt Roundtable on Investment Law and Investment Treaty Arbitration (Gesprächskreis Investitionsrecht und -schiedsgerichtsbarkeit) last month. Dr. Maurer of the Federal Ministry of Economics and Technology was one of the speakers. The ministry represents Germany in the UNCITRAL Working Group on transparency in treaty-based investor-state arbitration. Dr Maurer reported about the topics discussed in the working group and the progress that is being made. UNCITRAL is organizing the working group, but representatives of other relevant arbitral institutions are also involved.

The spectrum of ideas and concepts considered within the Working Group include ways in which third parties such as NGOs can be involved in proceedings – a topic that would be a total no go in any traditional arbitration environment.

But just see the ICSID press release on the live stream of the Public Hearing started today in the matter Railroad Development Corporation v. Republic of Guatemala, an investment treaty arbitration concerning a railroad concession contract in the Republic of Guatemala, to see what standards of transparency do apply under some treaties already today:

“A hearing on the merits in the above case will be transmitted live via internet feed from December 8, 2011 (TODAY) to December 16, 2011 (from 9:00 a.m. – 5:00 p.m. EST). On Saturday, December 10, 2011 the hearing will be transmitted from 3:00 p.m. – 7:00 p.m. EST and on Sunday, December 11, 2011 from 2:00 p.m. – 6:00 p.m. EST. The live streaming is being made available pursuant to Article 10.21.2 of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA).”

I have been watching it for a couple of minutes – the Public Hearing is simultaneously translated from English to Spanish and vice versa.

The Frankfurt Roundtable on Investment Law and Investment Treaty Arbitration is an annual event, organised by Alfred Escher of Escher Rechtsanwälte and Jan K. Schäfer of Allen & Overy.


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