1. CURRENT LEGAL ISSUES IN ECT CASES: TRANSPARENCY ICSID-SCC-ECS Joint Conference: 20 Years of the Energy Charter Treaty PEDRO CLAROS ALEGRÍA Partner, Cuatrecasas, Gonçalves Pereira Paris, March 7, 2014

2. 22 INDEX Current Legal Issues in ECT cases: TRANSPARENCY I.Preliminary remarks: transparency vs. confidentiality in international arbitration II. 2013 UNCITRAL Rules on Transparency III.Incorporation of the 2013 UNCITRAL Rules on Transparency to ECT cases A. When the parties so agree B. When the Parties so agree

3. I. PRELIMINARY REMARKS: TRANSPARENCY VS. CONFIDENTIALITY IN INTERNATIONAL ARBITRATION  Confidentiality has been traditionally mentioned as one of the key features of international commercial arbitration  However, it has been qualified or denied in case law  Esso Australia Resources Ltd. et al. v. Plowman (High Court, Australia, 1995)  A.I. Trade Finance Inc. v. Bulgarian Foreign Trade Bank Ltd. (Bulbank) (Svea Court, Sweden, 1999)  Investment arbitration implies that a State may be held liable for breaches of obligations towards foreign investors under domestic law (contract, law on foreign investment) or international law (BITs, MITs [ECT], investment chapters in FTA). Transparency is a feature.  Public knowledge of investment arbitration proceedings may be relevant for the public interests at stake:  Scrutiny of public policies (regulatory powers) adopted by the host State (Methanex v. USA)  Compliance of foreign investors with legal provisions (Inceysa Vallisoletana v. El Salvador)  Protection of human rights (Chevron v. Ecuador): - “Effective remedies of asserting claims and enforcing rights” (Art. II(7) USA-Ecuador BIT) - “Right to an effective remedy” (Art. 13 European Convention on Human Rights)  Reason why the State has to allocate money in the national budget to honour an award (ČSOB v. Slovakia) 33

4. I. PRELIMINARY REMARKS: TRANSPARENCY VS. CONFIDENTIALITY IN INTERNATIONAL ARBITRATION Current trend in investor-State dispute settlement (arbitration): more transparency  ICSID: -Publication of basic case information since its inception (annual reports, website) -Currently more information on the status of the proceedings -Rule 37(2) (2006): submissions of non-disputing parties Suez, Agbar and Vivendi v. Argentina Biwater Gauff (Tanzania) v. Tanzania - Publication of awards, decisions and orders (or at least the legal reasoning of the tribunal or commission)  NAFTA (Chapter XI) -Methanex v. USA: open hearings; amicus submissions permitted -Public knowledge of pleadings and hearings transcripts  European Union - Key role in UNCITRAL during the negotiations on the Rules on Transparency - Transparency and accountability to be included in new international instruments (chapters in FTAs, BITs): a. draft CETA agreement with Canada (first instrument) b. draft TTIP agreement with the United States of America (most probable) c. Further agreements (Singapore, India, China) to be confirmed 44

5. II. 2013 UNCITRAL RULES ON TRANSPARENCY  Applicable to Treaty-based claims in investment arbitration, not to Contract-based or domestic law-based claims, in relation to disputes arising under “future” treaties (i.e., concluded after April 1, 2014) or under “existing” treaties in some cases (for example, ECT)  Make publicly available substantial information about investment treaty cases:  Publication of information at the commencement of arbitral proceedings (Article 2)  Publication of documents (Article 3)  Hearings (Article 6)  Exceptions to transparency (Article 7): Confidential or protected information Integrity of the arbitral process  Repository of published information: Secretary General of the United Nations or an institution named by UNCITRAL (Article 8) Allow for submissions by non-parties: Third person (amicus curiae) (Article 4) Non-disputing Party to the treaty (intervention) (Article 5) 55

6. II. 2013 UNCITRAL RULES ON TRANSPARENCY 66 BEFORE the Rules on Transparency (UNCITRAL Arbitration Rules 2010) AFTER the Rules on Transparency Publication of information  Do not directly address public access to procedural documents Article 34 (5) of the Arbitration Rules (2010): “An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty….”  Access to documents and arbitral awards Article 2 of the Rules on Transparency: Publication of information at the commencement of the arbitral proceedings: Name of the disputing parties, economic sector involved and treaty under which the claim is being made. Article 3 of the Rules on Transparency: Publication of documents: Notice of arbitration, response to the notice of arbitration, statement of claim, statement of defence, table listing all exhibits (not the exhibits themselves), submissions by non- disputing Party/ies and third persons, transcripts of hearings and orders, decisions and awards. Article 8 of the Rules of Transparency: Repository of published information: Secretary-General of the United Nations/institution named by UNCITRAL Submissions by amicus and Treaty parties --  Allow interested parties to make submissions/amicus curiae Article 4 of the Rules on Transparency: Submission by a third person Article 5 of the Rules on Transparency: Submission by a non- disputing Party to the Treaty (intervention) Open hearings Article 28 (3) of the Arbitration Rules (2010): “Hearings shall be held in camera unless the parties agree otherwise…”  Open hearings Article 6 of the Rules on Transparency: Hearings 1.“(…) shall be public. 2.Where there is a need to protect confidential information or the integrity of the arbitral process (…) the arbitral tribunal shall make arrangements to hold in private that part of the hearing (…)”

7. General remarks on ECT and its investor-State dispute settlement (ISDS) mechanisms  The ECT was signed on December 17, 1994 and entered into force on April 16, 1998 (i.e., concluded before April 1, 2014)  Pursuant to Article 26(4), if an investor chooses to bring a dispute to arbitration under the ECT against the host State, there are three/four possible venues: a)ICSID, including its Additional Facility; b)SCC; c)ad hoc arbitration under the UNCITRAL Arbitration Rules; or, even, d)any other previously agreed dispute settlement procedure (ICC, LCIA, etc.) pursuant to Article 26(2)(b) 77 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

8. Applicability to investor-State disputes under the ECT  Article 1(2) of the Rules on Transparency: “In investor-State arbitrations initiated under the UNCITRAL Arbitration Rules pursuant to a treaty concluded before 1 April 2014, these Rules shall apply only when: (a) The parties to an arbitration (the “disputing parties”) [the investor and the host State] agree to their application in respect of that arbitration; or (b) The Parties to the treaty or, in the case of a multilateral treaty [the ECT], the State of the claimant and the respondent State [i.e., in each case the home State and the host State], have agreed after 1 April 2014 to their application.”  In other words, the Rules on Transparency are applicable to an ECT investor-State arbitration: A.When the parties so agree B.When the Parties so agree 88 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

9. A. When the parties so agree A. UNCITRAL Arbitration Rules  Article 1(2) of the Rules on Transparency: “In investor-State arbitrations initiated under the UNCITRAL Arbitration Rules pursuant to a treaty concluded before 1 April 2014, these Rules shall apply only when: (a) The parties to an arbitration (the “disputing parties”) [the investor and the host State] agree to their application in respect of that arbitration;  Which UNCITRAL Arbitration Rules are relevant? i. 1976 ii. 2010 iii. 2013 Are the Rules on Transparency applicable only under the 2010/2013 Rules or also under the 1976 Rules? 99 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

10. A. UNCITRAL Arbitration Rules (cont’d)  The Rules on Transparency are technically an amendment to the 2010 UNCITRAL Arbitration Rules; new Article 1(4) to the 2010 Rules introduced by the Rules on Transparency: “For investor-State arbitration initiated pursuant to a treaty providing for the protection of investments or investors, these Rules include the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (“Rules on Transparency”), subject to article 1 of the Rules on Transparency.” nonetheless, they are open to be applied under other rules (even beyond UNCITRAL) as a stand-alone text  However, the 2010 UNCITRAL Arbitration Rules are not directly applicable to ECT arbitration proceedings; Article 1(2): “The parties to an arbitration agreement concluded after 15 August 2010 shall be presumed to have referred to the Rules in effect on the date of commencement of the arbitration, unless the parties have agreed to apply a particular version of the Rules. That presumption does not apply where the arbitration agreement has been concluded by accepting after 15 August 2010 an offer made before that date.”  10 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

11. A. UNCITRAL Arbitration Rules (cont’d)  Any ECT arbitration under the UNCITRAL Arbitration Rules is, in principle, subject to the 1976 Rules  The Rules on Transparency may be nonetheless applicable:  If the parties (the investor and the host State), following the 1976 Rules for the conduct of the arbitration proceeding, agree to apply the Rules on Transparency  If the parties (investor and host State) agree to apply the 2010 Rules for the conduct of the arbitration proceeding with the Rules on Transparency  11 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

12. B. Other arbitration rules under ECT Article 26(4): ICSID (including Additional Facility) and SCC  Article 1(9) of the Rules on Transparency (Application in non-UNCITRAL arbitration) “These Rules are available for use in investor-State arbitrations initiated under rules other than the UNCITRAL Arbitration Rules or in ad hoc proceedings”.  Rules are flexible and provide for enough margin to the parties and the arbitral tribunals to agree on the applicability of the Rules on Transparency:  ICSID Convention, Article 44: “Any arbitration proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Arbitration Rules in effect on the date on which the parties consented to arbitration. If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question.”  SCC Arbitration Rules (2010), Article 46: “Unless otherwise agreed by the parties, the SCC and the Arbitral Tribunal shall maintain the confidentiality of the arbitration and the award.”  12 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

13. B. When the Parties so agree  24th Meeting of the Energy Charter Conference in Nicosia (December 2013): – Proposal by EC Secretary-General on incorporation of the UNCITRAL Rules on Transparency into the framework of ECT investor-State arbitrations (i.e., not only under UNCITRAL Arbitration Rules but also for ICSID and SCC) was discussed and generally welcomed – Further discussions to follow in 2014  Possible methods for the incorporation of the Rules into the ECT: Amendment to Article 26(4) ECT (ECT Article 42) ¾ of Contracting Parties for its entry into force Protocol to the ECT (ECT Article 33: “in order to pursue the objectives and principles of the Charter”) Applicable only to the Contracting Parties which consent to be bound by it UNCITRAL Draft Convention on transparency in treaty-based investor-State arbitration (VCLT Article 30)  13 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

14. B. When the Parties so agree  UNCITRAL Draft Convention on transparency in treaty-based investor-State arbitration, Article 3(1) (after second reading last February): “The UNCITRAL Rules on Transparency, as they may be revised from time to time, shall apply to any investor-State arbitration conducted pursuant to an investment treaty concluded before 1 April 2014, whether or not initiated under the UNCITRAL Arbitration Rules, in which the respondent is a Contracting Party that has not made a relevant reservation under articule 5(1)(a) or (b), and the claimant is of a Contracting Party that has not made a relevant reservation under article 5(1)(a)”  The Rules on Transparency would then be applicable if: - The Host State and the Home State of the claimant are Contracting Parties to the Convention; but also - The claimant agrees and the Host State is a Contracting Party (consent by the parties)  The Convention, if concluded by ECT’s Contracting Parties, would be applicable only inter partes  14 III. INCORPORATION OF THE UNCITRAL RULES ON TRANSPARENCY IN ECT INVESTOR-STATE ARBITRATION

15. THANK YOU FOR YOUR ATTENTION Este documento es meramente expositivo y debe ser interpretado conjuntamente con las explicaciones y, en su caso, con el informe elaborado por Cuatrecasas, Gonçalves Pereira sobre esta cuestión This document is merely a presentation and must be interpreted together with any explanations and opinions drafted by Cuatrecasas, Gonçalves Pereira on this subject Este documento é uma mera exposição, devendo ser interpretado em conjunto com as explicações e quando seja o caso, com o relatório/parecer elaborada pela Cuatrecasas, Gonçalves Pereira sobre esta questão