Ratification of Convention on Transparency in Treaty-Based Investor-State Arbitration continues

On 2 October 2018 Gambia became the fifth nation to ratify the United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration (the Mauritius Convention), joining Canada, Mauritius, Switzerland and Cameroon. Eighteen other countries,(1) including the United States, have signed the Mauritius Convention but have not yet ratified it.

UNCITRAL rules on transparency

The convention entered into force on 18 October 2017, after Switzerland became the third country to ratify the treaty. The convention is a tool by which parties express their consent to be bound by the United Nations Commission on International Trade Law (UNCITRAL) Rules on Transparency in Treaty-Based Investor-State Arbitration for treaties that were entered into force before the UNCITRAL Rules on Transparency (ie, on 1 April 2014).

In short, the UNCITRAL Rules on Transparency "shall apply to investor-State arbitration initiated under UNCITRAL Rules" pursuant to a treaty entered into on or after 1 April 2014, unless specifically agreed otherwise. Therefore, the convention applies only to arbitrations between an investor and a state (or a regional economic integration organisation, like the European Union) "conducted on the basis of an investment treaty concluded before 1 April 2014". Under the convention, the UNCITRAL Rules on Transparency would apply to any investor-state arbitration, not just those that are initiated under these rules.

Parties can make reservations excluding from the application of the Mauritius Convention certain treaties, sets of arbitration rules or arbitrations to which they are a respondent at any time; however, such reservations take effect twelve months after they are notified to the secretary-general of the United Nations.

The UNCITRAL Rules on Transparency state, among other things and subject to certain exceptions (eg, for confidential or protected information) that:

  • the name of the disputing parties, the economic sector involved and the treaty under which the claim is made must be made public (Article 2);
  • certain documents – including the notice of arbitration, the statement of claim, statement of defence, written statements and submissions by the disputing parties, hearing transcripts, orders, decisions and awards – must be made public (Article 3);
  • the tribunal may allow or solicit third persons and non-disputing parties to the treaty to make submissions within the scope of the dispute with certain restrictions (Articles 4 and 5); and
  • hearings must be public (Article 6).

Between the current five parties to the convention, only three(2) bilateral treaties are affected by it:

  • the 1994 Gambia-Switzerland treaty;
  • the 2000 Mauritius-Switzerland treaty; and
  • the 1964 Cameroon-Switzerland treaty.

No arbitrations subject to the convention have yet been initiated under these treaties. However, if the current signatories to the convention were to ratify it, at least an additional 39 bilateral and multilateral treaties would become subject to the convention, unless expressly reserved.(3)

Gambia's ratification came just after 1 October 2018, when Canada, Mexico and the United States agreed to limit the investor-state dispute resolution mechanism in the New North American Free Trade Agreement (US-Mexico-Canada Agreement).

Endnotes

(1) Australia, Belgium, Benin, Bolivia (Plurinational State of), Congo, Finland, France, Gabon, Germany, Iraq, Italy, Luxembourg, Madagascar, the Netherlands, Sweden, Syrian Arab Republic, the United Kingdom, the United States. See "Status", the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, UNCITRAL, www.uncitral.org/uncitral/en/uncitral_texts/arbitration/2014Transparency_Convention_status.html.

(2) The Mauritius-Cameroon Bilateral Investment Treaty was signed in 2001 but has never been entered into force.

(3) Gambia-Netherlands, Switzerland-Benin, Switzerland-Bolivia (Plurinational State of), Switzerland-Congo, Switzerland-Syrian Arab Republic, Mauritius-Belgium-Luxembourg Economic Union, Mauritius-Congo, Mauritius-Finland, Mauritius-France, Mauritius-Germany, Mauritius-Madagascar, Mauritius-Sweden, Mauritius-United Kingdom, Cameroon-Belgium Luxembourg Economic Union (BLEU), Cameroon-Germany, Cameroon-Italy, Cameroon-Netherlands, Cameroon-United Kingdom Cameroon-United States, Benin-BLEU, Bolivia-BLEU, Madagascar-BLEU, Benin-Germany, Benin- Netherlands, Benin-United Kingdom, Bolivia (Plurinational State of)-Italy, Bolivia (Plurinational State of)-United Kingdom, Congo-Germany, Congo-Italy, Congo-United Kingdom, Congo-United States, France-Madagascar, France-Syrian Arab Republic, Gabon-Germany, Gabon-Italy, Italy-Syrian Arab Republic, Luxembourg-Madagascar and Sweden-Madagascar.

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