Transparency in international arbitration is a concept that’s becoming quite popular day by day. Not only does it make the procedures more reliable, but accessing information also becomes more accessible. Transparency is linked to good governance. It is also integral to the rule of law. With that being said, the first question that might come to your mind is how can transparency in international arbitration be so popular when dispute resolution is kept private in arbitration, especially when international commercial law is concerned. Arbitration itself is known to be personal and confidential. Now, discussing the importance of transparency in international arbitration, here are some details you need to know.
Transparency and its Advantages
Transparency in international arbitration has certain advantages. The third parties can get to measure the weight of the case that will go through arbitration. Now, who are these third parties? Internationally, NGOs or non-governmental organizations are considered third parties. They can put forth their opinions to have a perspective on the case.
Transparency helps to build cases in international arbitration that can work as a guideline for issues that might come up in the future. It can also help in setting a precedent. Organizations, with the help of transparency, can give reasons for the decisions they come up with. Article 11(4) of the ICC Rules went through an amendment so that this much transparency can be attained. Arbitration is a process in which dispute resolution is kept private. However, transparency can help in the posting of summaries while the parties will stay anonymous.
Transparency in International Investment Arbitration
When transparency is maintained in international investment arbitration, there are a lot of associated advantages since dispute resolution between states and foreign investors is concerned. Since clarity is born, the issues can be of public interest.
Cases that can invite public interest can include issues like health, the environment, and the state’s natural resources. All these issues have a direct link with the general public, and if good governance needs to be maintained, transparency should be kept in the cases at hand.
Confidentiality and its Risks
In contrast with the advantages that transparency in international arbitration provides, certain risks are associated with confidentiality in the process. When there is confidentiality, it is considered to be similar to secrecy. This implies that scrutiny is not carried out in arbitration cases.
As confidentiality can lead to the violation of principles of procedure, it is considered to be potentially dangerous. According to experts, confidentiality in international commercial arbitration can prove to be efficient as well as encouraging.
When the details of a case are disclosed, there is a risk of sensitive information getting leaked. The competitors can use the secrets to their advantage. With that being said, confidentiality can lead to incorrect and unethical decisions. Aside from that, confidentiality can also cause the law not to be fully used.
When the arbitration is not transparent, the case information will not be apparent to the judges or the arbitral institutions. This will lead to overlooking things that are vital to the case. This is considered quite a sensitive issue as far as international commercial law is concerned. International commercial arbitration is known to resolve trade disputes between traders from different countries. Therefore, confidentiality is much valued in the process. Legal scholars think the cases should be disclosed to the public unless the disputing parties decide not to make them public.
Method for Effective Transparency
If it needs to be effective, transparency must be maintained at every stage of the case proceedings. The procedure starts with making the public aware of the dispute. The written and procedural documents must then be revealed to the public.
Next, they have to be offered access to open hearings and allowed to participate as a third party known as amicus curiae. The individual elements are not considered enough to maintain transparency. As a result, they all need to be taken together.
Transparency in international arbitration has a host of benefits to offer. Of course, the nature of the dispute resolution is private, and openness should be allowed to maintain the balance between transparency and confidentiality.