Report No. 260
H. Article 14.8. Transparency in arbitral proceedings.
(i) Analysis and comment:
5.8.1 The United Nations Commission on International Trade Law (UNCITRAL) Rules on Transparency in Treaty-based Investor-State Arbitration came into effect on 1 April 2014. Indian treaty arbitrations are subject to UNCITRAL arbitration rules as per Article 14.7(i) and consequentially, this Article appears to have been included to bring Indian treaty arbitrations in consonance with internationally acceptable rules.93 This is a most welcome change as investment treaty arbitrations are usually concluded in secrecy with little information.
93 Even though this transparency requirement has been included in the 2015 Model, apparently in consonance with the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration ('the Mauritius Convention'), it is relevant to note that India is not as yet a signatory to this treaty. (UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, 2014, available at: http://www.uncitral.org/pdf/english/texts/arbitration/rules-on-transparency/Rules-on-Transparency-E.pdf
5.8.2 However, it is recognized that the disclosure of certain documents especially during the pendency of the dispute might prejudice the legal rights of the parties. This is particularly relevant in the context of 14.8(i)(b), which requires that pleadings and other written submissions on jurisdiction and the merits submitted to the tribunal, including submissions by a Non-disputing Party under Article 14.8(iv), must be made available to the public.
5.8.3 Article 14(8)(iv) provides that a non-disputing Party may make oral and written submissions to the tribunal regarding treaty interpretation. However, if there is a dispute between Parties on treaty interpretation or application, it maybe referred to arbitration if it cannot be settled within 6 months, according to Article 15.1(i).
Thus, there is a conflict between these provisions, and if there exists a conflict in the interpretations provided by the States, presumably the Investor-State arbitration will have to be paused until it is resolved under Article 15. The capacity to submit such interpretations therefore causes confusion and may be used as a means of exercising soft diplomatic protection. It is suggested that Article 14.8(iv) be removed, and Article 14.8(ii)(b) be amended appropriately.
5.8.4 Certain other concerns regarding transparency in arbitral proceedings may require to be considered. For instance, there is ambiguity as to the stage at which documents relating to the investment dispute are to be made public. Further, it is suggested that there may be clarity as to whether the obligation on the Respondent Party to make public all the documents relating to the dispute includes any submitted by the other Party.
The responsibility of making logistical arrangements to facilitate public access to the hearings is placed upon the arbitral tribunal according to Article 14.8(ii)(b). However, there might be challenges in the practical execution of this provision, as the tribunal envisioned under the 2015 Model is an ad hoc tribunal, which need not necessarily have the administrative capacity to make such arrangements.