PARTICIPATION OF AMICUS CURIAE IN INVESTMENT TREATY ARBITRATIONS

-Sakshi Garg*

Honourable Mention, 1st RGNUL Arbitration Essay Writing Competition

In the race of globalization and development, the world has changed its original ways of functioning. This impact can also be seen in the legal world where the disputes may no longer be resolved in courts. Alternate processes now exist which can resolve legal disputes without leading them into the vicious cycle of lengthy litigation and escaping the conundrum of jurisdiction. On a global level, arbitration has increased its reach many folds as even the states are now opting for it in the form of Investment Treaty Arbitrations. Parallel to this development, the ambit of locus standi has expanded, offering third parties a chance to get involved in the dispute and help reach a fair decision. Breaking the wall between these two worlds would force us to bring Amicus Curiae towards Investment Treaty Arbitrations. This article tries to trace the increased participation of Amicus Curiae in Investment Treaty Arbitrations while also highlighting the issues which are holding it back. The article would also delve into the scope of participation and would attempt to remove the barricades lying in the path of higher participation.  

INTRODUCTION

Arbitration as a mode of Alternate Dispute Resolution (“ADR”) is often viewed as a private proceeding, conducted only for the parties involved, identifying the importance of privacy in commercial deals. However, when we move beyond commercial arbitration towards treaty arbitration, it is realized that arbitral award affects not just the parties involved in the dispute but other stakeholders as well.  When a state gets involved in any kind of legal dispute, the people are inadvertently left to face the implications of the decision.[1] If the people who would ultimately bear the burden of an unfavorable award don’t get a chance to raise their voices, the decision may not be fair to them. The modern world boasts of democracy in every form and thus its presence must also be seen in Investment Treaty Arbitrations where one award could create ripples in the lives of many.[2]

IDENTIFYING THE BASIS FOR SUCH A CLAIM

Restricted participation of Amicus Curiae in commercial arbitration is based on privacy and confidentially but Investment Treaty Arbitrations don’t suffer from this limitation. Despite the private nature of arbitration, the involvement of the state as a party makes the process more public and less private to such an extent that transparency of the process is demanded. For example, if an investment treaty award forces the state to compensate the other party, the burden of fulfillment would lie upon the heads of the citizens living in that state.[3] In such a scenario, it would be against the principles of natural justice to not allow a voice to them. In light of this, multiple petitions were filed in cases of international arbitrations wherein the ambit of participation of Amicus Curiae was demanded to be increased.[4]

TRACING THE DEVELOPMENT

The relevance of Amicus Curiae was identified quite early in the case of Methanex Corporation v. USA,[5] wherein it was contended that Amicus Curiae must also be allowed to submit oral and written submissions and participate in the proceedings.[6] The primary contentions of the petitions were based on equitable decisions and securing the rights of the persons. However, keeping the scope limited, only the written submission of the Amicus Curiae was accepted to be part of the arbitration. This stand was reiterated in UPS v. Canada[7] and was based on the argument that it was beyond the tribunal’s power to accept representations from third parties. Against this, it was submitted[8] that Article 31 (3) (c) of the Vienna Convention on the Law of Treaties[9] allows tribunals to follow general rules of law and generally most nations in their municipal decisions allow participation of third parties. Since the tribunal accepted such arguments only in parts, North American Free Trade Agreement (“NAFTA”) now at least accepts written submission by the Amicus Curiae.

From a legislative perspective, there are several rules which support participation, however, the said participation is limited. The International Centre for Settlement of Investment Disputes (“ICSID”), which is a major player in the league of International Treaty Arbitrations provides us with ICSID Arbitration Rules, 2006[10] wherein these issues have seen some consideration. Initially, in the case of the Aguas Del Tunari v. Republic of Bolivia,[11] ICSID expectedly rejected the claims of Amicus Curiae. Subsequently, Rule 37(2)[12] was introduced in 2006 which then allowed participation of Amicus Curiae subject to some conditions. The scope here is quite limited though, as in most cases only written submissions by Amicus Curiae are allowed that too after consultation with both the parties. The only relief is that the consultation may not be binding[13] and the tribunal may accept the written submission despite objection by the parties as done in Biwater v Tanzania.[14]

The last condition of the rules requires our special attention which allows only those parties who have the interest to make submissions. The rule makes both the conditions – expertise and interest to be the essentials of Amicus Curiae’s participation. This not only moves away from the traditional definition of Amicus Curiae i.e. friend of court,[15] but also disables the tribunal from accepting submissions from experts which could help them reach a better decision. Here, it must not be ignored that the conditions given in Rule 37 are illustrative and not exhaustive,[16] allowing arbitrators to impose more limitations. Even United Nations Commission on International Trade Law (“UNCITRAL”) has a quite narrow approach to this subject[17] despite its open averments in support of ADR.[18] Emphasizing the privacy aspect of arbitration, UNCITRAL is quite reluctant to accept the participation of Amicus Curiae considering that the involvement of a third party goes against the basis of arbitration.

THE BARRIERS TO PARTICIPATION

The primary reason behind the limited participation and reluctance towards it, is the possibility of multiple submissions[19] in the name of Amicus Curiae and frivolous claims which may secretly support one of the parties. The low credibility of Amicus Curiae and their lack of independence is often claimed as a general excuse to limit participation. Even though these concerns may be well-founded, they can’t be made the sole basis of denying the people the right to be heard. The idea to have an entirely independent Amicus Curiae is also not well-founded in the view of the author as the same cannot be established. In cases of disputes, there would always be a side which the Amicus Curiae or even the tribunal may seem to favor,[20] or in some cases, the Amicus Curiae may even be related to either of the parties but this should not in itself be ground to deny participation.[21] The existing relationship between parties and Amicus Curiae certainly creates prejudice but the effect of same can be neutralized if the submission of Amicus Curiae is based on the legal dispute and facts rather than on the parties which are involved.

Fruitless interventions by parties may look like an impediment but the same can be taken care of through a rigorous scanning process. This may, however, lead to cost issues, which act as a huge barricade.[22] Arbitration itself is quite an expensive process to go through to settle disputes and if in addition to this, the parties are forced to bear the extra costs due to third party participation and related delays[23], it may make it less fair and attractive. Further, such delays and intervention without prior consent would undermine the reasons for opting for arbitration and may go against the basic principles of arbitration, one such being consent. Arbitration is primarily based on mutual consent[24] of the parties to resolve a dispute beyond traditional courts but if without their consent, another party is added to their dispute who could impact the award which would be binding only on the primary parties, the process may deviate from established norms.

The idea of third-party intervention also endangers the sovereignty of nations that have agreed for arbitration. There is a possibility that states may act as a third party to disputes of other states and in this regard try to impose their decisions thus indirectly usurping the sovereignty of states which may not be accepted by most states.[25] Lack of accountability for the rejection of claims may further encourage the tribunals to reject third-party claims without even giving them due consideration.[26]

TRYING TO BRIDGE THE GAP

Currently, the participation of Amicus Curiae is largely restricted to written submissions like in NAFTA, which may even require additional conditions to be fulfilled like in ICSID. The author however believes that mere acceptance of written submission may not amount to a fair representation. In the absence of examination of the written submission, in ordinary law, the value that such evidence holds is quite low. Thus, even though these written submissions are being accepted, it won’t be improbable that no real emphasis is being laid on them.[27] Involving Amicus Curiae beyond written submission is thus required which also would also contribute to the transparency of the process which is long demanded. Participation of Amicus Curiae in oral submissions and allowing them access to documents would make the process effective and transparent. They must be allowed to access evidence filed by the parties so that they can present their submissions after taking into consideration such evidence. However, for implementation, rules must be made so that such transparency may not affect the parties adversely. For example, information regarding the acceptance of claims by an insurance company may be private and its transparency may force the company to lose its competitive advantage. This could be done by allowing access to certain type of documents or by allowing access only after a Non-Disclosure Agreement is signed.

Further, tying the hands of the tribunal by not allowing the participation of experts who may not have an interest in the dispute would deprive the tribunal of looking at the dispute from different angles and exploring different areas of thought. In the absence of an expert viewpoint, the tribunal may remain in dark over important considerations of the dispute. This may prove to be detrimental to fair decision-making. Thus, the tribunal must be given the luxury to involve expert third parties in the dispute for their expert opinion even in absence of specific interest. The limitation to participation that may be deemed necessary is the presence of public interest in the dispute. If participation is sought by Amici Curiae themselves, it may be rendered compulsory that the participation is due to the existence of public interest as done by the FTC Statement.[28] This would enable public interest to be fairly represented and at the same time avoid frivolous intervention by third parties. Public interest however must be distinguished from Specific interest as mentioned in ISCID as the third party may not have a direct interest in the dispute yet seek to represent the public interest while not even being an expert.[29]

Considering all aspects, tribunals could be allowed to invite expert third parties and also to accept the participation of third parties in the public interest. Once the authenticity of the parties is assessed and only the ones with legitimate claims are identified, those parties should be allowed maximum participation i.e. in form of oral submissions and presence during hearings. Allowing limited participation in such form would also address the cost concerns. In light of privacy, however, they could sign confidentiality agreements. Further, if the tribunal rejects a submission, a reason must be given for such rejection to ensure accountability and credibility. An opportunity to challenge such rejection could also be provided. This would ensure that tribunals not only accept the participation but also consider them during decision making. The participation must be restricted to the disputes of law so that sovereignty of any country involved in the dispute is not harmed.

CONCLUSION

The advent of new forms of delivery of justice makes us analyze their ability to address all the related concerns. Investment Treaty Arbitrations have offered a great solution to disputes involving states which avoid jurisdictional and procedural issues to focus on the dispute but it still needs to adapt to all areas of resolution. Up till now, Amicus Curiae is limited to NGOs and other welfare organizations[30] that seek to secure the rights of the affected but in the coming years, this limitation may not stay in place. With increased judicial activism and awareness, it would be hard to keep public disputes from the sight of the public. Participation of Amicus Curiae is still considered to be an exception rather than a rule[31] which seems appropriate now, based on the frequency of the need for such participation, but in the future, the same can’t be assumed. Following the “margin of appreciation” doctrine laid down in the European Convention on Human Rights which provides discretion to courts to interpret certain laws for certain countries liberally, tribunals must be given enough leeway to balance public interest and treaty obligations.[32] Requisite amendments to increase participation may act to benefit of all and make the process fairer. The growth in this domain is certainly required.


*Sakshi Garg is a student at Campus Law Centre, University of Delhi. She can be emailed at 93sakshi22@gmail.com and is available on LinkedIn.

[1] Christian Schliemann, Requirements for Amicus Curiae Participation in International Investment Arbitration, 12, TLPICT, 365, 368 (2013).

[2] Barnali Choudhury, Recapturing Public Power: Is Investment Arbitration’s Engagement of the Public Interest Contributing to the Democratic Deficit, 41(3), VJTL, 775, 779 (2008).

[3] Choudhury, supra note 2 at 809.

[4] Schliemann, supra note 1 at 365.

[5] Methanex Corporation v USA, (2005) 44 ILM 1345. 

[6] Saravanan A & Dr. S.R. Subramanian, The Participation of Amicus Curiae in Investment Treaty Arbitration, 5(4) JCLS, 5, (2016).

[7] United Parcel Service of America Inc. v. Government of Canada, ICSID Case No. UNCT/02/1.

[8] Schliemann, supra note 1 at 365.

[9] Vienna Convention on the Law of Treaties, 1969, May 23, 1969, 1155 UNTS 331

[10] ICSID Arbitration Rules, (2006), <https://icsid.worldbank.org/resources/rules-and-regulations/convention/arbitration-rules> (Last Accessed May 22, 2022).

[11] Aguas del Tunari, S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3.

[12] ICSID Arbitration Rules, 2006, Rule 37(2).

[13] Guide For Potential Amici In International Investment Arbitration, University of Toronto, Faculty of Law and the CIEL, 13, (2014).

[14] Biwater Gauff (Tanzania) Ltd v United Republic of Tanzania, ARB/05/22, International Centre for the Settlement of Investment Disputes, (2008).

[15] Amicus Curiae, Britannica, <https://www.britannica.com/topic/amicus-curiae> (Last Accessed May 22, 2022).

[16] Guide For Potential Amici, supra note 13 at 14.

[17] Eugenia Levine, Amicus Curiae in International Investment Arbitration: The Implications of an Increase in Third Party Participation, 29(1), BJIL, 200, 204 (2011).

[18] Saloni Shukla, The Role Of UNCITRAL In The World Of ADR, Via Mediation Centre,  <https://viamediationcentre.org/readnews/MTE1Mg==/The-Role-of-UNCITRAL-in-the-World-of-ADR > (Last Accessed May 22, 2022).

[19] Nicolette Butler, Non‑Disputing Party Participation in ICSID Disputes: Faux Amici, NILR, 143, 148 (2019).

[20] Choudhury, supra note 2 at 820.

[21] Schliemann, supra note 1 at 380.

[22] Subramanian, supra note 6 at 4.

[23] Guide For Potential Amici, supra note 13 at 19.

[24] Jorge E. Viñuales, Human Rights And Investment Arbitration: The Role Of Amici Curiae, ILRCDIB (Colombia), 231, 254, (2006).

[25] Levine, supra note 17 at 205.

[26] Choudhury, supra note 2 at 820.

[27] Butler, supra note 19 at 152.

[28] Statement of the Free Trade Commission on non-disputing party participation, 2003, SICE, <http://www.sice.oas.org/tpd/nafta/commission/nondispute_e.pdf> (Last Accessed May 22, 2022).

[29] Schliemann, supra note 1 at 374.

[30] Levine, supra note 17 at 209.

[31] Choudhury, supra note 2 at 787.

[32] Yuval Shany, Toward a General Margin of Appreciation Doctrine in International Law, 16, EJIL, 907, 926 (2005).


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