AMICUS CURIAE AND TRANSPARENCY IN INTERNATIONAL INVESTMENT ARBITRATION

-Debleena Ray*

Honourable Mention, 1st RGNUL Arbitration Essay Writing Competition

INTRODUCTION –

Over the years with the meteoric growth in international investment arbitration, there has also been a rise in tribunals becoming gradually acquiescent regarding the involvement of interested third parties as amici curiae who are “friends of the court.”

Although commercial arbitration upholds the values of strict confidentiality and privacy protection of the parties involved, recent studies show that in many investment arbitration disputes related to non-commercial issues which concern societal interest such as human rights, environmental conservation, labour laws, public health and hygiene etc, people prefer transparency and thus, broader participation of an independent third party i.e. amicus curiae. As amicus participation has been equated with more openness, it is worth taking a critical evaluation of their role in the arbitration proceedings so that international investment arbitration is not accused of ignoring elemental principles of democracy.

EVOLUTION OF INVESTMENT ARBITRATION –  

To properly scrutinize the role of third parties, a thorough grasp over the concept of investment arbitration is very essential. Broadly there are two categories of cross-border financial dispute resolution – international commercial arbitration that usually settles disputes arising out of internal commercial agreements between private parties. In India, international commercial arbitration is defined as a means of dispute resolution where at least one of the parties is either a foreign citizen or a company incorporated outside India or is a non-Indian government[1]. On the other hand, international investment arbitration concerns disputes related to international investment agreements which usually count different states as parties[2]. The arbitral panel utilizes a number of sources to decide on these disputes – International Investment Agreements (IIAs) which typically contain the regulations laying down the conduct of host countries towards foreign investors, Free Trade Agreements (FTAs), international customs and practices, general legal principles, judicial precedents, writings of academics and scholars etc. The rise in investment disputes led many to condemn the secrecy over the process, the unavailability of correct information regarding the investment agreements, and most importantly, the public’s lack of ability to participate in such proceedings and have their voices heard. All these valid concerns culminated into calls for economically independent amicus curiae participation as representative of the public.[3]

AMICUS CURIAE PARTICIPATION –

The traditional institution of amicus curiae dates back to the 13th century practice of allowing a ‘bystander’ in English common law courts to impart relevant expertise and knowledge including recommendations, even though he might not have been a lawyer. For instance, Coxe vs. Phillips was the first case to permit amicus submission representing third party interests. Even in France, the Paris Bar’s President served as an amicus to provide his opinion “within the court on a general topic that may impact several disputes and that often relates to a subject giving rise to debates within the society.”[4] Presently, civil society organizations, NGOs, international bodies regularly participate in the interests of just and fair procedures with the purpose to bring to the tribunal’s attention the collateral effects and consequences originating from the dispute.

Over the years, the procedure to admit amicus curiae in investor-state disputes has become much easier due to a number of favourable legislations. In 2006, following the Methanex case[5], Statement of the Free Trade Commission on Non-Disputing Party Participation was brought out by the North America Free Trade Agreement (NAFTA) which grants discretionary power to the tribunal to accept written submissions from a non-disputing party[6]. However, before admitting such submissions, the tribunal must take into consideration several factors – whether the subject matter of the arbitration is a public interest issue, how the amicus curiae submission will benefit the tribunal with its expertise on the subject matter, the extent to which the amicus has legitimate interest in the arbitration and the means through which the dispute matters will be addressed, the possibility of amicus participation causing overburdening or unfairly prejudicing the disputing parties.

One of the major arbitral institutions dedicated to investment disputes internationally is the International Centre for Settlement of Investment Disputes (ICSID), established in 1966, and aimed at promotion of global investment. After the 2006 Suez/Vivendi case[7] where various NGOs argued for third party submissions as the case involved public interest concerns, ICSID laid down three main considerations that a tribunal must take into account before allowing such participation – firstly, whether the arbitration subject matter contained issues that would warrant third party involvement; secondly, if the non-disputing party’s experience, independence and expertise show that it would properly act as amicus curiae and lastly, whether the procedural aspects of the amicus submissions are set in such a manner that rights of the disputing parties are not violated[8].

ICSID Convention amendment provides that, in order for a dispute to come within its jurisdiction, either the state party is a contracting state to the ICSID Convention or the non-state party is a national of a contracting state or both the parties have willingly submitted to the jurisdiction. Amicus curiae can submit documents that “would assist the tribunal in the determination of a factual or legal issue related to the proceedings by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties.”[9]

Amicus participation has also been provided for in the United Nations Commission on International Trade Law (UNCITRAL) Transparency Rules, adopted in 2013 which is similar to the NAFTA and ICSID regulations and is aimed at “the establishment of a harmonized legal framework for a fair and efficient settlement of international investment dispute, increasing transparency and accountability and promote good governance.” Prior to being allowed as amicus in the dispute, the third party must disclose requisite information as per Article 4(2) such as its connection to any of the disputing parties, details of its financial aid received from various sources, factual or legal issues to be addressed by it, extent of its interest in the dispute etc. The tribunal will only permit submission if the amicus is actually representing significant interests and will truly assist the tribunal in carrying out fair decisions[10].

RATIONALE FOR THIRD PARTY INVOLVEMENT–

Amicus curiae primarily provide the tribunal with “arguments, perspectives, and expertise that the litigating parties may not provide.”[11] Not only do they play a significant role in providing distinctive knowledge that the disputing parties themselves may not be qualified to impart, but they also enhance the quality of the arbitral award delivered on the basis of their superior knowledge relevant to the issue. Amicus curiae participation often leads to serious discussions and debate on issues of societal interest that have direct or indirect ramifications on national legislations and policies. Moreover, the public gain access to vital information concerning the investment agreements via third party involvement, which becomes all the more significant in cases where the disputing parties have acted unlawfully or in contrast to prevalent norms. Thus, the possible public scrutiny has a positive influence on the states and the investors to conduct their affairs as per the law. Also, participation of supranational bodies as third parties in international investment arbitration assists these arbitral panels to make globally consistent decisions which avoids the fragmentation of international law as well as prevents producing conflicting obligations of various national governments.

Initially, there was great reluctance to permit the participation of third parties as priority was granted to privacy and confidentiality – the two most important aspects of international arbitration. However, in investment arbitrations, with states as parties and the disputes majorly dealing with Bilateral Investment Treaties, there have been greater demands for third party involvement so as to lessen secrecy of the proceedings, with the ultimate aim of guaranteeing public trust as well as ensuring accountability of the state authorities.

The inclusion of amicus curiae is not a novel concept in the international legal system. The International Court of Justice, for instance, allows amicus curiae in specific and rare cases, such as third-party states giving their advisory opinion, voluntary submissions by NGOs, expert opinion provided by any authorized body, cases where legal interests of a foreign state is affected by the decision of the ICJ or where a convention/treaty has an impact on the interests of a third-party state[12]. The World Trade Organization’s Dispute Resolution Body (DRB), as well, have admitted a limited amicus curiae insertion by relying on Article 13 of the Dispute Settlement Understanding that states “Each panel shall have right to seek information and technical advice from any individual or body which it deems appropriate.”[13] The panel accepted NGO submissions in the infamous US Shrimp case[14], recognized amicus curiae participation in the US – Lead and Bismuth case[15], received third-party brief from another WTO member country in the EC Sardines issue, developed third party submissions process in the EC-Asbestos case and so on[16].

While admittance of amicus in investor-state arbitration is fairly simple, there have been concerns regarding the unfavourable consequences of such an involvement. Third party intervention not only escalates the costs of the proceeding for the parties involved but responding to and reviewing the submissions lengthen the entire arbitration suit. This negates the whole purpose of out-of-court arbitration which is a swift, cheap and efficient settlement of conflicts. For instance, the Glamis Gold case[17] took more than five years to conclude as the disputing parties had to address multiple document submissions of the amicus curiae. These issues of rising costs and long-lasting proceedings often affect the willingness of the parties to welcome such submissions. But, in majority of investment arbitrations, the tribunal is more empowered to approve amicus, thus overlooking one of the key attractive features of arbitration – consent and autonomy of the parties to the dispute. Requisite safeguarding of genuine commercial secrets is also a pressing issue affecting parties as confidentiality gets compromised when third parties gain access to crucial documents. Another concern is the non-partisan and unbiased nature of the amicus. Concealed interests and failure to properly disclose authentic information of the background of these third parties can hamper the fair nature of such arbitrations and so, thorough inquiry into the qualifications, funding details, members backgrounds etc are needed to avoid any doubts on the independence of the amicus. Additionally, scholars point out that a possible pitfall of such participation is “re-politicizing” of the dispute by the government’s critics which can drive investors to either suspend their investments in that country or even cancel future investments as a result of the negative political environment. Despite some of these potential disadvantages, third party participation is highly desirable as it “closes the gap between public substantive concerns and private procedural aspects, and enhances the procedural legitimacy of investment arbitration.”[18]

CONCLUSION –

In the Methanex case, it was noted that in the investor-state type of dispute settlement, “a State is the Respondent, the issues have to be decided in accordance with a treaty and the principles of public international law and a decision on the dispute could have a significant effect extending beyond the two Disputing Parties.” Thus, third party participation becomes all the more necessary in such cases involving global consequences, according to scholars and experts, in order to prevent arriving at resolution outcomes through secrecy and covert decision making. By ensuring a level of transparency through the broader participation of third parties, amicus curiae improve the communication channels between the governments, the investors and civil society, thus, encouraging a systematized advancement of investment arbitration on a whole. All things considered, the presence of amicus curiae itself puts a genuine pressure on the arbitration panel to be fair and reasonable in not just delivering the awards but during the entire investment arbitral proceedings.


*Debleena Ray is a student at KIIT School of Law. They can be reached at debleenaray99@gmail.com,

[1] Vijay Srivastava, International Commercial Arbitration and Legal Issues in India, 1, Dehra Dun Law Review (2013).

[2] Epaminontas Triantafilou, A More Expansive Role for Amici Curiae in Investment Arbitration, Kluwer Arbitration Blog (May 27, 2022, 21:29), http://arbitrationblog.kluwerarbitration.com/2009/05/11/a-more-expansive-role-for-amici-curiae-in-investment-arbitration/.

[3] Maxime Somda, Protecting Social Rights Using the Amicus Curiae Procedure in Investment Arbitration: A smokescreen against third parties? INVESTMENT TREATY NEWS (Apr 23, 2019, 21:38) https://www.iisd.org/itn/en/2019/04/23/protecting-social-rights-using-the-amicus-curiae-procedure-in-investment-arbitration-a-smokescreen-against-third-parties-maxime-somda.

[4] Samuel Krislov, Amicus Curiae Brief: From Friendship to Advocacy, 72 The Yale Law Journal, 694, 699-702 (1963).

[5] Methanex Corporation vs. United States (2005) 44 ILM 1345.

[6] A. Saravanan, Participation of Amicus Curiae in Investment Treaty Arbitration, Journal of Civil and Legal Sciences (2016).

[7] Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. vs. Argentine Republic, (ICSID Case No. ARB/03/19)

[8] M. Zachariasiewicz, Amicus Curiae in International Investment Arbitration: Can it Enhance the Transparency of Investment Dispute Resolution?, 29, Journal of International Arbitration, 205, 216-217 (2012).

[9] Katia Fach Gomez, Rethinking the Role of Amicus Curiae in International Investment Arbitration 35 Fordham International Law Journal, 34-40 (2012).

[10] Sonia Martinez, Transparency Rules in Investment Arbitration, Kluwer Arbitration Blog ( Apr 8, 2021), http://arbitrationblog.kluwerarbitration.com/2021/04/08/transparency-rules-in-investment-arbitration-institutional-differences-and-prospects-of-standardisation.

[11] Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. vs. Argentine Republic, (ICSID Case No. ARB/03/19).

[12] Paula Almeida, The Role of Third Party Intervention and Amicus Curiae before ICJ, BRILL (Nov. 19, 2019) https://brill.com/view/journals/lape/18/2/article-p163_2.xml?language=e.

[13] Theresa Squatrito, Amicus Curiae Briefs in the WTO DSM: Good or Bad News for Non-state Actor Involvement? 17 World Trade Review, 65-89 (2018).

[14] Gregory Shaffer, The WTO Shrimp-Turtle Case (United States – Import Prohibition of Certain Shrimp and Shrimp Products) , 93, American Journal of International Law, 509 (1999).

[15] Isabelle Damme, Treaty Interpretation in the WTO Appellate Body, 21, The European Journal of International Law 32-44 (2010).

[16] Gerome, Amicus Briefs in WTO, LEXICON, https://smulexicon.com/2019/07/22/amicus-briefs-in-the-wto-an-uneasy-compromise/.

[17] Glamis Gold Ltd. vs. USA, IIC 380 (2009).

[18] Tomoko Ishikawa, Third Party Participation in Investment Treaty Arbitration, 59, International and Comparative Law Quarterly, 373 -376 (2010).


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