Rules: Uncitral's Arbitration Revision Will Get Transparency Makeover (Web)

Two Uncitral observer organizations appeared to get what they asked for two weeks ago when the UN commission’s main body agreed that its arbitration rules should be revised to provide for transparency in investor-state arbitrations.

In February, the United Nations Commission on International Trade Law’s Working Group II, which is revising the rules, rejected calls for transparency rules, asking the governing body, the Uncitral Commission, to rule on applicability.

Arbitrations conducted under the 32-year-old rules often are held in secret, accommodating the private parties that generally use the rules.  But Uncitral arbitrations rules are used in disputes involving governments, which implicate public policy and human rights–well beyond the originally intended commercial use.

The June 27 reversal by the Uncitral Commission is a victory for two organizations supporting transparency revisions, the Center for International Environmental Law, a Washington, D.C.-based nonprofit that uses international law and institutions “to protect the environment, promote human health, and ensure a just and sustainable society,” and the International Institute for Sustainable Development, a Canadian nonprofit policy research institute based in Winnipeg, Manitoba. 

The organizations proposed that Uncitral open up investor-state arbitrations in a paper originally published last September that can be found here:  www.iisd.org/pdf/2008/investment_revising_uncitral_arbitration_dec.pdf

The Uncitral Working Group met in February to work on what will be the first update of the 1976 arbitration rules.  But the transparency proposals stalled until the Commission’s move late last month.

Among other things, the observer organizations proposed amending the rules to include the disclosure of pleadings; public hearings, and published awards.

Now, after the generic Uncitral rules are revised by the Working Group, it will tackle the transparency issue.  In a July 3 press release, the Center for International Environmental Law states that the Uncitral delegates from the United Kingdom, the United States, and Canada, as well as Argentina, Mexico, and Uganda, led the moves to allow increased public participation in investor-state arbitrations.  Last month, the Canadian government filed a paper with the Uncitral Commission strongly backing more transparency.  That paper can be found here:  http://daccessdds.un.org/doc/UNDOC/GEN/V08/543/30/PDF/V0854330.pdf

The environmental group also notes in its press release that though the transparency rules will be considered separately, the Uncitral Commission permits the transparency work to begin immediately, and it “is therefore still a possibility that the transparency rules can be adopted as one package with the generic rules.

A discussion of the main Uncitral arbitration rules under revision consideration can be found here:  www.whitecase.com/idq/winter_2008_ca1_1/.  The Working Group will reconvene in September; the revision work is expected to last until next year, at least, with effectiveness dates two or three years away.

–Russ Bleemer,  Editor, Alternatives