The Participation of Amicus Curiae in Investment Treaty Arbitration

Written by Shreya R. Boke and Sankalp Mirani, the authors are law students currently pursuing BA.LLB from Maharashtra National Law University, Aurangabad.

Introduction

Involvement of a non-disputing party in resolving a disagreement between disputing parties has led to the development of amicus curiae, which has had a significant impact within the ambit of arbitration. The word ‘Amicus Curiae’ is a term derived from Latin that means ‘friend of the court’.^[1] It is also known as a ‘non-disputing party’, specifically in international investment arbitration, it is the participation of a third party who intervenes in the proceedings to assist the arbitral tribunal with specific aspects of the case. 

An Amicus Curiae is a non-disputing and non-interested party who is permitted to participate in arbitration proceedings to a limited extent in order to independently assist the arbitral tribunal with their expertise and knowledge in certain niche aspects of the subject matter. Governmental or non-governmental organization (NGO) alliances, commercial enterprises, individuals, indigenous communities, or international organizations can all serve as amicus curiae.^[2]

Amicus Curiae is increasingly being used in private and confidential disputes to settle disagreements between the parties.  Growing concern among the public regarding the validity and accountability of the system has followed the rise of arbitration in the international legal order's dispute settlement process. ^[3] 

In recent times, however, it has become quite evident that the law is in a state of flux. In particular, the notion of amicus curiae has been added with the introduction of Investor-State arbitration in the latter part of the 20th century, when they use their knowledge and expertise to assist the court for the purpose of justice. 

In many ways, investment treaty law has become an independent area, partly due to the rapid growth of investment treaty arbitration during the past ten years. Rapid improvements in the sector have been facilitated by the continuous proliferation of bilateral investment treaties (BITs) and free trade agreements (FTAs) with investment chapters, as well as by the frequently highly thorough justification provided in an increasing number of arbitral rulings. Such a transition brings various changes in adjudication.^[4] 

Third-Party Participation In Investment Arbitration

Investment treaty arbitration, commonly referred to as Investor-State dispute resolution, is a potent weapon that enables foreign investors to file a claim against a host State directly in response to certain unfavourable actions by the host State.

The concept of amicus curiae has been widely evaluated earlier; the concept was highly criticised and was subject to rejection. Amicus requests have a long list, which includes standing as a party, leave to submit written submissions, access to case documents, to take part in court hearings, make oral submissions, respond to the questions, to review memorials, and declare observer status. Subsequently, changes have taken place in subsequent cases, which result in the amendment. 

In the case of Methanex Corporation V. United States of America, the tribunal dismissed a claim for compensation of $970 million by Canadian corporation Methanex Corporation against the United States under the investor-state arbitration provisions of Chapter 11 ("Investment") of the North American Free Trade Agreement (NAFTA). The case of Methane and UPS has become a landmark judgment determining the involvement of amicus curiae.^[5]

The Methane x UPS^[6] cases recognised the admission of amicus curiae submissions, but held that they had no power to add third parties other than disputants to the arbitration. They allowed third parties to participate as amici curiae and submit written briefs. The final decision on acceptance was determined with the parties' consultation on the proceedings' merits. 

The Methane Tribunal accepted amicus submissions from the IISD and Earth Justice with the consent of the disputing parties. The UPS Tribunal granted amicus curiae submissions but rejected the petitioner's request for submissions related to arbitration or jurisdictional matters. The Glamis case followed, involving Aboriginal rights issues, mining claims, and environmental protection concerns.

At first, amicus curiae submissions were rejected, but in later cases, they began to accept them, and various amendments took place either in the agreement or in the Rules, etc. In order to address any potential imbalances, changes have been made to the North American Free Trade Agreement (NAFTA), the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), the ICSID Arbitration Rules, and the United Nations Commission on International Trade Law \(UNCITRAL) Arbitration Rules.

In recent times, in the year 2019, the Working Group recognised third-party participation in investor-state dispute settlement (ISDS) as a matter that needs discussion when the Working Group discusses potential reform alternatives at its 37th session.^[7]

During the discussion, a number of points regarding this matter were brought up, including: 

1. That third-party participation would improve the representation and consideration of relevant interests in the context of the dispute; and 

2. That such participation would support consideration of other issues, such as environmental protection, human rights protection, and investor obligations. ^[8]

   
   

The Working Group's accomplishments during its 38th session, 2020 as well as the Secretariat's assistance, were recognised by the Commission.⁹ The Secretariat's outreach initiatives and consultations to promote transparency in the group's operations were acknowledged by the Commission. 

The Secretariat's webinars and events on dispute avoidance, treaty interpretation, and the creation of a global instrument on ISDS reform were also recognised by the commission after the COVID-19 conference. The committee also talked about how crucial it is for outside parties to get involved in conflicts, emphasising the chance for accurate interpretation and legal resolutions.^[9]

Rights and Liabilities of the Third Party

This increase in involvement by amici curiae expanded when the Commission of the European Union (EU) was afforded amicus curiae participation rights in AES v. United States^[10], and the European Union (EU) was granted amicus curiae participation rights. Electrabel v. Hungary^[11]. In each case, the Commission aimed to because it considered power purchase agreements that were executed by Hungary, arguing that those arbitrations were illegal under EU law in the claimants' favour. Both the Commission was given amicus curiae status by tribunals, which allowed it to submit written communications.^[12]

Depending on the court or tribunal that an amicus curiae intends to appear before, its function in international law varies. International courts and tribunals have variedly granted amici curiae absolutely no access to their chambers or given them complete third-party rights to participate through their distinct procedural rules. If we see the applicability of amicus curiae, it seems in the following ways:

NAFTA ( North American Free Trade Agreement)

The North American Free Trade Agreement, a highly significant trilateral trade and investment agreement in North America, was signed in 1994. Since then, the three member countries—the United States, Canada, and Mexico—have experienced a significant change in their commercial relationships as a result of this agreement. The investment chapter, Chapter 11, is particularly important. 

The provision of a practical procedure for the settlement of conflicts between a foreign investor and the host government is one of Chapter 11's key goals. In order to achieve this, it offers a vehicle via which private parties may bring an arbitration case against the host state before an international tribunal, such as, for instance, the International Convention for the Settlement of Investment Disputes, or ICSID ^[13]

Nothing in the NAFTA imposes a general duty of confidentiality prohibiting the parties from making documents submitted to or issued by a Chapter Eleven Tribunal public, the NAFTA. The Free Trade Commission (FTC) stated in an Interpretation it issued in 2001. This was done to make it clear that, "apart from the limited specific exceptions set forth expressly in the relevant arbitral rules," "nothing in the NAFTA" imposes such a duty.  The Tribunal came to the decision that while it could accept amicus curiae arguments, it did not have the power to allow petitioners access to the documents or to attend hearings. The Tribunal found that Article 15(1) of the UNCITRAL.

The rules state that as long as the parties are treated respectfully, "the arbitral tribunal may conduct the arbitration in any manner it considers appropriate." equality, the freedom to consider amicus curiae submissions, and that each party is given the opportunity to fully clarify its case at any stage during the proceedings. The non-disputing party's contribution, by offering a viewpoint, particular information, or insight different from that of the disputing parties, would assist the Tribunal in determining a factual or legal problem linked to the arbitration. 

1. The non-disputing party's submission would cover topics relevant to the controversy; and 

2. The side that is not in dispute has a stake in the issue.

3. The arbitration's subject matter is of public interest.

   
   

ICSID Arbitration Rules:

The ICSID Tribunals have embraced the NAFTA Tribunals' procedure concerning amicus curiae contributions. The ICSID Arbitration Rules are frequently used as a procedural guide in the majority of Investor-State arbitration cases. Even before the 2006 ICSID Arbitration Rules were adopted, amicus curiae briefs raised a significant problem before the ICSID tribunal on a number of occasions. These issues were initially brought up before the tribunal. In the most well-known case, Aguas del Tunari v. Bolivia, the tribunal had rejected all of the petitioners' petitions based on the following three factors.^[14]

The tribunal decided that it lacked the authority to approve the petitions because they were "beyond the power" and were. Second, the petitioners and the opposing parties did not reach an understanding about the acceptance of amicus curiae comments. As a result, the Tribunal decided that the petitioners' application could not be granted. Not least, the Tribunal emphasised that it is "never less our duty to follow the structure and requirements of the instruments that control this case" in terms of the treaties.The ICSID panel came to a different conclusion in the subsequent instances, Aguas Argentinas and Aguas Provincials. The tribunal found that it had the power to consider amicus curiae submissions in accordance with Article 44. As long as the petitioners could prove to the satisfaction of the Tribunal that they have the knowledge, experience, and independence necessary to provide support in relevant circumstances.^[15]

Later, in 2006, the subsequent adjustment was made, and the new rules specified that "after consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute" to "file a written submission before the Tribunal regarding a matter within the scope of the dispute." The Aguas Argentinas Tribunal adopted the following three requirements, which the Tribunal shall take into account while deciding whether to accept or reject the submissions from nondisputing parties: The submissions should meet the following criteria: 

1. They should help the tribunal decide a factual or legal issue, and they should also bring a fresh viewpoint or insight that differs from that of the disputing parties; 

2. The submissions' subject matter should be relevant to the dispute; and 

3. The non-disputing parties should have a sizable stake in the outcome of the proceedings.^[16]

In addition to that, the Tribunal shall ensure equal opportunity for the parties to convey their observation. Similar to this, if the conflict affects the public interest as a whole, it becomes crucial to take this into account and admit an amicus curiae^[17].

UNICITRAL:

The United Nations Commission on International Commerce Law (UNCITRAL), a subsidiary of the United Nations General Assembly, was established in 1966 with the overarching goal of fostering the progressive harmonisation and unification of the law of international commerce. A later change states that the application will be approved by the tribunal. Up until 2013, UNCITRAL had opposed amicus curiae. Even though it is at the court's discretion, if a third party or non-disputing party made an application, the court would allow it under those circumstances.^[18]

Certain requirements must be met, including the following: 

1. Submissions must be made in writing and include information on the third party, including its membership, goals, and activities.

2. Any additional information regarding the petitioner's relationships—direct or indirect—with any disputing parties; and 

3. Details regarding any financial or other support provided to the petitioner during the preparation of the submission.

Only if “it does not disrupt or unduly burden the arbitral proceedings, or unfairly prejudice any disputing party” will the tribunal allow the amicus statements from non-disputing parties. Additionally, the Tribunal guarantees that each contesting party has an equal opportunity to express their thoughts in their contributions. Investment treaty arbitration is a process for resolving disputes under public law that also "touches upon matters of public policy."  CONCLUSION:

Accepting amicus participation in investor-state arbitration has recently become a distinctive aspect of international law. The ICSID Arbitration Rules, the UNCITRAL Arbitration Rules, and Chapter Eleven of the NAFTA have all been amended. These changes are simply the first phase and have only slightly improved the jurisprudence of international investment law.

Due to NGO initiatives, third-party submission addition has grown to be a crucial issue that needs to be taken into account. Later, after appreciating the gravity of the circumstance, a change was made to allow Amicus Curiae to take part. The changes that have been made are generally beneficial in terms of the environment, although they are still relatively limited. Even though amicus curiae papers have been approved in a number of instances, it appears to be much more difficult to obtain transparency in the proceedings and the release of materials; as a result, the impact of third-party participation will likely be limited.

References

^[1] Blackaby, N. and Richard, C., Amicus Curiae: A Panacea for Legitimacy in Investment Arbitration, in Waibel, M., Kaushal, A., Chung, K.H.L. and Balchin, C. (eds.), Thamiciorganisationse Batorganisationocklash against Investment Arbitration, Kluwer Law, January 2010, p. 258.

^[2] Jaroslavsky        Pablo,    Amici    Curiae    in           Investment           Arbitration,               jusmundi,             3  October  2023, https://jusmundi.com/en/document/publication/en-amici-curiae-in-investmentarbitration#:~:text=Different%20persons%20and%20entities%20have,certain%20documents%20of%20the%20 case%3B&text=participate%20in%20or%20attend%20to,make%20written%20submissions

^[3] Eugenia Levine, Amicus Curiae in International Investment Arbitration: The Implications of an Increase in Third-Party Participation, Volume 29, Issue 1, BERKELEY.200, 201(2011).  

^[4] Chester Brown, Evolution in Investment Treaty Law and Arbitra,resulttion (1^st edition. 2011), pp 3-16.

^[5] Tomoko Ishikawa, The International and Comparative Law Quarterly, Vol. 59, No. 2 (APRIL 2010), pp. 373412.

^[6] Methanex Corporation V. United States of America, Decision of the Tribunal on Petitions from Third persons to Intervene as ‘amici curiae’, UNCITRAL Award, 15 January 2001. 

United Parcel Service of America Inc. v. Canada, UNCITRAL Award on Jurisdiction, 22 November 2002.

^[7] United Nations, United Nations Commission on International Trade Law, https://uncitral.un.org/. 

^[8] Id. At 7. ⁹ Id. At 7.

^[9] United Nation General Assembly, United Nations Commission on International Trade Law fifty-fourth session, Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-ninth session (Vienna,       5-9         October  2020),  https://uncitral.un.org/sites/uncitral.un.org/files/mediadocuments/uncitral/en/report_wg_iii_advance_copy.pdf.

^[10] AES v. United States, 547 F.2d 298.

^[11] Electrabel S.A. v. Republic of Hungary, ICSID Case No. ARB/07/19.

^[12] Lucas Bastin, Amici Curiae in Investor-State Arbitration: Eight Recent Trends, Volume 30 Issue 1(2014), pp 125. 

^[13] Folsom, Ralph H., "Principles of international litigation and arbitration" (2019). Faculty Books. 27. https://digital.sandiego.edu/law_fac_books/27.

^[14] Aguas del Tunari, S.A. v. Republic of Bolivia, ICSID Case No.Provinciales ARB/02/3. 

^[15] Suez, Sociedad General de Aguas de Barcelona S.A., and InterAgua Servicios Integrales del Agua S.A. v. The Argentine Republic, ICSID Case No. ARB/03/17. 

^[16] Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19.

^[17] Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22.

^[18] Id. At 16.