Background

Since the late-2000's, investor-State dispute settlement has faced a discontent from States, leading them to reject the investment arbitration mechanism. This rejection takes roots in the perception of unfairness and one-sidedness of the mechanism due, in particular, to the lack of transparency. The Mauritius Convention, adopted by the UN General Assembly in 2014 and in force since 2017, is designed to correct the lack of transparency by applying the UNCITRAL rules on transparency to arbitrations under investment treaties concluded before 1 April 2014.

Key takeaways

By giving the go ahead to the ratification of the Mauritius Convention, the EU has sent a unequivocal message that it applies the UNCITRAL Transparency Rules for investor-State disputes under its pre-existing investment treaties, such as the Energy Charter Treaty. These UNCITRAL Transparency Rules apply without the need to renegotiate or amend the 'old' treaties.

The Mauritius Convention requires parties to investor-State disputes to:

• Make available to the public their written submissions, awards issued by the arbitral tribunal, as well as expert reports and witness statements filed in the proceedings upon request by a person to the arbitral tribunal.
• Publish information on the names of the parties, the economic sector involved and the treaty under which the dispute has arisen.

Under this convention, an arbitral tribunal, may, after consultation with the parties, allow a third party having an interest to file a written submission with the arbitral tribunal regarding a matter within the scope of the dispute.

Similarly, hearings for the presentation of evidence or for oral arguments should be held in public.

However, this transparency is subject to exceptions, in particular with respect to confidential or protected information (e.g., confidential business information, information protected against being made available to the public under the treaty, in case the disclosure of information would impede law enforcement, etc.).

Advantage of transparency in investor-State disputes

Transparency brings several advantages to the investor-State dispute settlement mechanism:

• Transparency might help to cure inconsistency between arbitral awards and increase predictability. As a matter of fact, if the proceedings and the awards are public, the work of the arbitral tribunal may be the subject of in-depth analysis. This may encourage arbitrators to explain clearly when resolving a legal issue in a way that differs from other arbitral tribunals before them.
• Transparency might allow third parties to take into consideration all the arguments put forward by the parties and to make informed amicus brief and to raise general public's concerns on the proceedings.

Transparency might provide more information to the general public and allow it to follow the case and scrutinize the outcome. This is an advantage on court proceedings where there is, broadly speaking, no publication of documents, such as submissions.

What's next?

The EU's ratification may encourage further member state accessions. The Mauritius Convention could thus apply to more than 1,200 investment treaties involving EU member states. This may bring an arbitral proceedings under 'old' treaties between an investor, national of a ratifying EU member state or another ratifying State and a Convention EU member state or another Convention State within the scope of the UNCITRAL Rules on Transparency.