Introduction

The Spanish Arbitration Club (the “CEA”) was born in 2005 as a non-profit association dedicated to promoting and developing arbitration in the Spanish and Portuguese languages. In less than 15 years, its work and openness transcended all borders and currently has partners in 43 countries. We can say, without fear of being wrong, that the CEA became an international organization that is growing by leaps and bounds, thanks to the openness of its governing bodies. In Costa Rica, the CEA Chapter widely promotes arbitration, through the dissemination and academic discussion of countless issues that arise in the practice of international arbitration, which by its very nature, moves with the speed demanded by the International Trade.

Recently, the CEA presented to the world its new  Code of Good Arbitration Practices (C.BB.PP) , whose study shows that it is the result of a profound analysis of the real situation of international arbitration, its pros and cons, to conclude with a series of recommendations aimed at giving legitimacy to arbitration, so that it works and is recognized as a reliable justice administration system.

It is no secret to anyone that we are facing a crisis of confidence, which encompasses the entire justice system, both public and private. There is a real need to reinforce the legitimacy of the arbitration system, in an increasingly integrated world, with new players, a clear internationalization of commercial relations and of the legal profession.

The C.BB.PP is a set of soft regulations, also known as “ soft law ”, which means that they are not binding, but rather voluntary. They have the virtue of being written in the Spanish language, which has greatly facilitated their dissemination in all Spanish-speaking countries. However, on the Club's website, the Code is available in five other languages, a translation work that we applaud because it is the true way of internationalizing the created instrument.

 The new Code aims to raise 4 standards of behavior for all those involved, direct or indirect, in arbitration. These standards, which we can well call principles, are independence, impartiality, transparency and professionalism. [2]  Each of them translates into rules of conduct that the Club has considered necessary to achieve confidence in the system.

 Trust, an essential element of credibility in the proposal of the C.BB.PP, is defined by the Dictionary of the Royal Spanish Academy as: “ Firm hope that one has of a person or thing”; For its part, "trust" is understood as:

 "Wait firmly and safely", "order or put in the care of someone some business or other thing", "deposit in someone with no more security than good faith and the opinion one has of him...". [3]

In legal terms and in the context of the C.BB.PP, these definitions translate into legal certainty. Thus, we assume that the trust that users may have in the arbitration system depends on the conduct of each of the actors that participate in it. That is why the Code deals with making recommendations for arbitral institutions, arbitrators, party lawyers, experts and arbitration financiers.

Said recommendations are developed in section B of the Code and its form of practical application can be found in the proposal for the Model Arbitration Regulation of the CEA. “… This proposal is a consequence of the results of the investigation carried out, which revealed that the diversity of regulations, with different solutions to similar situations, end up “undermining confidence in the arbitration procedure ”. [4]  In this way, the Model Arbitration Rules join the efforts of the world community to harmonize the rules of international arbitration.

These notes will focus on the study of the standard of conduct called "transparency" by the C.BB.PP. Before studying the provisions of the Code, it is necessary to mention that, as several authors have pointed out, transparency did not have a specific definition in the legal system, some have defined it  "... as the absence of confidentiality... or... limited confidentiality … ” [5] , and nowadays, it is a widely used term, especially in matters related to the activity of governments and the public interest.

In arbitration, the term was coined in investment arbitration, in which its definition and scope have been highly controversial, due to its repercussions on the public interest; This has triggered a large number of controversial interpretations and regulations, such as the right of third parties to know what is happening in an ongoing arbitration process, the possibility that these third parties participate in the process and the publication of the award. This is not a recent discussion, and that participation has already been discussed by arbitral tribunals, without a unanimous position being achieved, [6]  and we also see it in international treaties. [7] 

In the field of global politics and the administration of public justice, vast definitions of transparency have been made, some serve as a guide for the private field by directing transparency as the principle to create an environment that provides trust and security. In this sense, we can cite the following meanings:

“… the principle of transparency finds its way by generating an environment of  trust, security and openness  between the Government and the human community. Transparency is part of the material content of democracy and is crystallized in the publicity of the acts of authorities and officials ”. [8]  

" The concept of judicial transparency refers primarily to the  visibility of the institution and its submission to public scrutiny , as essential features of a democratic judiciary that respects the constitutional order " . [9]

 “ The scope of the principle of transparency is critical for the opening of justice …” (…) “…In general, the scope of this principle is extremely broad, considering, among others, a means to achieve objectives such as  legitimation  and accountability. accounts… ” [10]

That said, the study of the C.BB.PP reveals three important issues regarding transparency; the first is that there is no "pure and hard" concept of transparency; the second, the Code expressly develops transparency rules and confidentiality rules, and lastly, the Code does not distinguish between commercial arbitration and investment arbitration.

Based on the aforementioned, the C.BB.PP departs from these discussions, and refers to transparency as one of the vehicles identified as generators of trust in the arbitration system, an essential basis of legitimacy.

In the subsequent sections we will see the duties of transparency that the Code imposes on the participants in an arbitration process.

The duty of transparency for arbitrators

In the case of arbitrators, the need for transparency became the driving force behind best practice recommendations [11] , both for the process of their appointment and for the regulation of their duties and powers.

Due to the foregoing, the duties of impartiality and independence are carefully regulated, a new duty of abstention is added, and the already well-known duty of disclosure. Regarding the latter, recommendation No. 84 of the C.BB.PP includes an exhaustive list of 31 questions that the arbitrator must ask himself, this in order to define the matters that he must reveal. Said questionnaire has the clear purpose of promoting the transparency of the arbitrators, translated as their obligation to provide information, a duty that is extended in recommendation No. 86 to the law firm to which the arbitrator belongs. Some of the time periods indicated, for example, 10 years to investigate circumstances, seem excessive; however, this will have to be analyzed by those who wish to incorporate these rules in their arbitrations.

Regardless of what has been said, certainly, if the arbitrators fulfill their mission in an impartial and independent manner, they allow -in large part- the recognition of arbitration as a true system of justice. [12]

The duty of transparency for lawyers on behalf of

 A reliable justice system, with legal certainty and other claims of the C.BB.PP is inseparable from the fulfillment of Probity Duties by the lawyers who represent the parties. This has been a struggle for years to make people understand that a good defense is one that is made by raising the flag of truth, and not one that superimposes the client's interests, even if they are contrary to the truth and, consequently, lead to the lawyer to betray probity.

It is for this reason that the recommendations on the duties of lawyers seek the creation of a harmonized standard of ethical rules that contain inalienable values, and that will be binding for all lawyers regardless of their origin. In probity we see transparency. These rules, in the words of their own editors, are inspired by the principles of decency, integrity and honesty; In addition, they hope that the lawyers ensure that the process is conducted in an expeditious and efficient manner.

A very similar effort was made by the International Bar Association (IBA) in 2013, when it issued the Guidelines on the behavior of party lawyers in international arbitration. However, many of us applaud and support them, the regulations have not had the support or the desired application, by any of the participants in the arbitration process.

The duty of transparency of the experts

For their part, the recommendations on the duties of experts, there is a broad development of the duties of objectivity, independence and disclosure. To comply with the latter, which is an element of transparency, the experts must also answer an extensive questionnaire of 15 questions, before making their disclosures. The reinforcement of the duties, seeks to increase the probative value of the expert opinion, reinforcing the objectivity and independence of the experts' judgments; regardless of whether they are experts appointed by the parties or by the court.

As for the funders

Finally, regarding the controversial issue of third parties that finance arbitration processes, the Code chose to impose on the parties the duty to reveal the existence and identity of the financier, when it is linked to the result of the arbitration.

 

Transparency in arbitration institutions

The existence and operation of arbitration institutions is regulated in the First Section of the Recommendations; but we have reserved its study for the end, because it is here where transparency and confidentiality are regulated in greater detail and rigor.

The Code is based on the fact that the arbitration institution that adopts the CEA Model Arbitration Regulations will be able to increase predictability and thus legal certainty for users. [13]

For arbitration institutions, the obligation to ensure the application of the principles of impartiality, professionalism and economy is imposed; in the context of its fundamental task of “ ensuring due process and justice in awards ”. [14]

A very transparent institutional operation is proposed, with guiding principles and an internal structure that, without a doubt, will generate good governance; It is worth highlighting the repeated mention that all procedures carried out by government bodies must be transparent and inclusive. [15]  In addition, the institution must have a binding Code of Ethics for all members and employees.

Custody of information, data protection and confidentiality

In the recommendations of the internal operation of the arbitral institutions numbers 39, 40 and 41 of the C.BB.PP, everything related to the custody of information and data protection is ordered, with crystal clarity.

The institution will have a Confidentiality Manual “… that ensures the confidentiality of the documents and information provided to the procedure. The members of the bodies and the staff will sign a confidentiality undertaking ”.

To carry out research and study projects related to arbitration, researchers may access the files, after signing a confidentiality agreement; without this relieving the institution of its obligation regarding the protection of personal data.

The institution will implement mechanisms to protect the personal data processed under its responsibility, and for this, it must implement technical and organizational measures that guarantee the security, confidentiality and protection of the data, so as to prevent unauthorized access or use of information. [16]

Consequently, it is clear that the process that is processed by applying the study rules will be confidential, even if the parties have not provided for it in their contracts; except for the award, as we will see later.

It is clear that a process processed with these rules will be -expressly- confidential. On the other hand, we find the following 5 recommendations that refer to transparency.

Recommendations numbers 60 to 64 refer to Transparency. It is a section divided into three main topics, all related to access to information that the C.BB.PP qualifies as public: (1) the content of the web page, (2) the list of arbitration procedures and ( 3) publicity of the awards.

The website of the arbitral institution

Every arbitration institution must have a web page and in it it will publish information on its structure and operation, including the following:

a) Contact details and links;

b) Its history and general description:

c) The characteristics, nature and scope of the services it offers, and the languages ​​in which it provides them;

d) Its Statutes and all regulations or recommendations on its governance regime: its Code of Ethics, its Confidentiality Manual and Internal Regime Regulations;

e) The bodies that comprise it, the names of the people that comprise them, their respective curricula vitae, the assignment of functions and responsibilities of each body and the procedures for electing its members. As well as the duration of their mandates;

f) The names of the people who sponsor conferences and events organized by the Arbitration Institution, and the amounts paid by said sponsors in the last five years;

g) The Arbitration Rules;

h) The tariffs and fees of the arbitrators, together with a calculator that facilitates the calculation;

i) The annual accounts and management reports for the last five years;

j) Detailed statistics on the matters it administers and the appointments of arbitrators, differentiating by age, gender and origin.

Reading the list of information shows the application of a high standard of transparency; the precise regulation on the exact content that the page must have is broad enough for there to be confidence in the arbitration institution and I do not see anything that it would not publish.

List of arbitration procedures

Recommendations numbers 61 and 62 contain the rules on the publicity of the list of cases managed by the institution and the publicity of the award; in both cases, the reference to the parties must be anonymized, but the names of the arbitrators and lawyers will be public; even when the Court has considered that there are relevant reasons justifying confidentiality. In this case, the institution can publish an anonymized summary or “an expurgated extract of the awards”, keeping the name of the arbitrators and the lawyers.

It will also be published: the position occupied by each arbitrator and the method of designation; challenges and their results; the names of the administrative secretaries; the names of the attorneys for the party; the type of contract, the applicable law, the language and the place of arbitration; the date of commencement of the arbitration, the date of issuance of the preliminary record or first procedural order and the date of the award; and when the award has been issued, its text if it is public or the reasons for its confidentiality, but following the indications of the following section.

Consequently, users of arbitration will have broad access to information, and will be able to carry out many studies, statistics and evaluations, such as, without it being an exhaustive list: measure the duration of each of the stages of the process; the most appointed arbitrators; the rotation of referees and the diversity among them; the rotation and diversity of administrative secretaries; the types of contracts that most go to arbitration; the favorite venues chosen by the parties, among many others.

Publication of the award

The publicity of the awards is contained in recommendations numbers 62, 63 and 64. The rule is that all the awards will be public and that the only thing that will remain confidential will be the names of the parties, which will be anonymized.

The names of the arbitrators and of the party's lawyers will always be public, even when it is considered that there are reasons to keep the award confidential; since, in that case, the arbitral institution may publish an anonymized summary or an expurgated extract of the award.

The possibility of having access to the awards, even if it is a summary or extract, will have many effects, for this work we will cite those that seem to us of immediate relevance. The first and most important effect is that the arbitrators will raise their quality standards in the study of the case, the interpretation of the evidence and the application of substantive law. The second is that the door is opened for the content of the awards to be studied and for it to serve as a reference in the study of law, as well as for the arbitrators themselves, when they wish to seek criteria expressed by colleagues in similar cases. From every point of view, there is good and advantage in the publicity of the awards.

Finally, recommendation 64 orders the expurgated publication and anonymizing the names of the parties and the arbitrators, of the reasoned decisions on disqualification and the substitution of arbitrators. It is glimpsed that these publications will define the grounds for the challenge in arbitration.

 In conclusion

In conclusion, the demanding disclosure and information obligations contained in the Recommendations of the C.BB.PP and the Model Arbitration Regulations of the CEA, proliferate the standard of transparency, together with independence and impartiality.

Transparency is immersed in the entire Code, there is a transparency within the process, which translates into the duties of disclosure and probity, which are present for the institutions, the arbitrators, the lawyers for the party and the experts. At the same time, there is an external transparency or aimed at third parties, which is understood as the duty to inform and the right to be informed, but since it is regulated it is not unrestricted, and has defined limits.

We conclude that the C.BB.PP of the CEA breaks with the differences between transparency and confidentiality, having taken on the difficult task of regulating both matters. Others have preferred to leave this work to the parties, under the principle of arbitration flexibility. [17]

 

Bibliography

United Nations Commission on Commercial Law. (2014). UNCITRAL Rules on Transparency in Treaty Investor-State Arbitration .

Abaclat and Others v. the Argentine Republic.  (2010). ICSID Case No. ARB/07/5 (Confidentiality Order 3) (International Center for the Settlement of Investment Disputes).

Bianchi, Andrea, and Anne Peters. (2014). Turning Mirrors into Windows? Reflections on Transparency in International Law . The journal of world investment & trade.

Biwater Gauff (Tanzania) Ltd.v. United Republic of Tanzania.  (2005). Case No. ARB/05/22 (International center for Settlement of Investment Disputes).

International Center for Settlement of Investment Disputes. (2019). ICSID Caseload – Statistics.  Washington DC: ICSID-World Bank.

Coe Jr., Jack J. (2006). Transparency in the Resolution of Investor-State Disputes—Adoption, Adaptation, and NAFTA Leadership.  Kansas: University of Kansas Law Review.

Due Process of Law Foundation. (2011). Manual for strengthening the independence and transparency of the Judiciary in Central America.  First edition.

ICSID Secretariat. (2018). Proposals for Amendment of the ICSID Rules—Consolidated Draft Rules.  Washington DC: International Center for Settlement of Investment Disputes.

Jimenez Gomez Carlos E. (2017). The foundations of open justice. XXII CLAD International Congress on State and Public Administration Reform, Madrid, Spain.

Kaufmann-Kohler, Gabrielle, and Michele Potesta. (2016). Can the Mauritius Convention serve as a model for the reform of investor-State arbitration in connection with the introduction of a permanent investment tribunal or an appeal mechanism?  Geneva: Geneva Center for International Dispute Settlement.

Kenny, William. (2016). Transparency in Investor-State Arbitration . Journal of International Arbitration 33 (5).

Linklaters. (2017). Commercial and Investment Arbitration . Linklaters. Madrid.

Maupin, Julie. (2013). Transparency in International Investment Law: The Good, the Bad, and the Murky . In Transparency in International Law, by Andrea Bianchi and Anne Peters. Cambridge University Press.

Merrill & Ring Forestry LP v. The Government of Canada.  (2006). (ICSID Case No. UNCT/07/1) (International Center for Settlement of Investment Disputes).

Notes of Interpretation of Certain Chapter 11 Provisions.  (2001). North American Free Trade Agreement (NAFTA Free Trade Commission, July 31).

Paulson, Jan, Petrochilos, Georgios. (2018). UNCITRAL Arbitration . Kluwer Law International.

Rodriguez de la Rosa, Luis Gabriel. (2012). The principle of transparency in the Colombian legal system and its connection with the right to freedom of expression in the inter-American human rights system.  Human Sciences Journal – Volume 9, No. 1. ISSN:0123-5826

Silva Romero, Eduardo. (2013). Confidentiality and transparency in international arbitration . Lima Arbitration 9.

 

[1] She is the founding partner of the firm Hulbert Volio Montero, located in San José, Costa Rica. She is a lawyer, arbitrator and mediator, with more than 25 years of professional practice. She is a specialist in International Arbitration, Civil and Commercial Liability, with the degree of International Expert in oral litigation in civil and commercial processes. University Professor of Private International Law and International Contracts. Andrea Hulbert is the President of the Arbitration Commission of the ICC Costa Rica; She is a member of: ICC Institute of World Bussines Law (Paris), the Chartered Institute of Arbitrators (London), the International Bar Association, the Spanish Arbitration Club, among others. She is part of the list of arbitrators of several international arbitration institutions, and has participated as an arbitrator in processes administered by the ICC,

[2]  C.BB.PP/CEA, p. 6.

[3]  Dictionary of the Royal Spanish Academy. Twenty-first edition (1992). Editorial Espasa Calpe SA, Madrid. p. 538.

[4]  C.BB.PP/CEA., p. 9.

[5]  Silva Romero, Eduardo. Confidentiality and transparency in international arbitration. Lima Arbitration No. 5

[6]  Example of arbitral tribunals that have analyzed the issue, without reaching a unanimous position, but rather exercising a case-by-case analysis (Abaclat and Others v. Argentine Republic 2010) (Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania 2005) (Merrill & Ring Forestry LP v. The Government of Canada 2006).

[7]  Its treatment is part of most Free Trade Agreements (FTAs); We can say that it began in 1994 with NAFTA, in which the issue of publishing the awards resulting from investment arbitration processes between the United States and Canada was introduced. Later, in 2001, the States that form part of this treaty welcome the well-known Notes on the interpretation of certain provisions of Chapter 11 and with this, they established the publication of the documents as a general rule. However, as the subject generates controversy, other proposals have been issued, always on investment arbitration, among them we have: the UNCITRAL Rules on the transparency of arbitrations (2013); the Mauritius Convention (2014) and the proposals to reform the ICSID rules and regulations (2016-2018).

[8]  Rodriguez de la Rosa, Luis Gabriel. (2012). The principle of transparency in the Colombian legal system and its connection with the right to freedom of expression in the inter-American human rights system.  Human Sciences Magazine – Volume 9, No. 1.

[9]  Due Process of Law Foundation. (2011). Manual for strengthening the independence and transparency of the Judiciary in Central America.  First edition.

[10]  Jiménez Gómez Carlos E. (2017). The foundations of open justice. XXII CLAD International Congress on the Reform of the State and Public Administration, Madrid, Spain, 14.

[11]  C.BB.PP/CEA. Statement of reasons, p. eleven

[12]  Ibid. p. 10.

[13]  C.BB.PP/CEA. p. 9.

[14]  Ibid. Explanatory memorandum, p. 7

[15]  Ibid. Recommendations 8, 21 and 33.

[16] Ibid, recommendations numbers 39, 40 and 41.

[17]  Silva Romero. Op cit.