BITs and Transparency
The current system of international investment law has been criticised for a lack of transparency. The main concern is that topics of public interest should not be decided without the knowledge and influence of citizens who are potentially affected. In domestic law, it seems obvious that, for example, constitutional courts hear all cases in public and publish the verdicts. In contrast, international investment arbitrations are characterised by a high amount of confidentiality, despite the fact that these arbitrations are usually concerned with issues similar to those heard in constitutional courts. Often, cases that are not administered by ICSID are not registered anywhere. Consequently, the exact number of investment arbitration cases is not even known. While the proponents of increased transparency have very strong arguments, this chapter argues that transparency comes at a cost. At the core of the argument lies the functioning of international law and the fact that reputational losses are not zero but negative-sum to the parties. It will become clear why parties, apart from the desire to protect business secrets, often prefer confidentiality and under which circumstances it might be reasonable to allow for confidentiality. The aim of this chapter is in no way to disavow the merits of transparency and indeed, in many cases if not most, a balancing of arguments will result in favour of transparency. Yet, also in these cases, it will be seen that transparency comes with costs that should not be neglected.
KeywordsDispute Settlement International Tribunal Arbitral Tribunal Constitutional Court Bilateral Investment Treaty
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