CYIL 2012

CROSSING THE RUBICON: ON THE CORRELATION OF THE PRINCIPLE OF TRANSPARENCY… CROSSING THE RUBICON: ON THE CORRELATION OF THE PRINCIPLE OF TRANSPARENCY AND CONFIDENTIALITY OF ARBITRAL PROCEEDINGS WITHIN THE AREA OF INTERNATIONAL INVESTMENT ARBITRATION Does Investment Arbitration have the Credentials to trump the Principle of Confidentiality in Arbitration? Abstract: Confidentiality-supposedly a prerogative granted to all proceeding conducted under the headline of arbitration, no longer continues to be a trouble free principle offering the parties to the dispute a possibility to ensure a safe haven for keeping the eyes of the public out of their dispute. Confidentiality in the arbitral process is perceived in the investment arbitration world through many different perspectives. The most daring perspective is represented by a principle common to all modern democracies- the principle of transparency. According to the authors, the principle of transparency has for various reasons the credentials to shed new light on the clandestine notion of confidentiality. They intend to outline a scheme where the concept aiming to achieve entirely confidential arbitral proceedings within the sphere of investment arbitration has to be regarded as flawed. Although the interactions between confidentiality and transparency are resulting in frequent interferences, transparency in international arbitration has become a valid assumption that can cause a substantial shift in the confidentiality perception. The legal status of one of the parties to the dispute- the State does not allow to omit the fact that the public interest and scrutiny element asks for a broad disclosure and public knowledge about the decisions made by the state. The inconsistency of the confidentiality standard within the range of arbitration rules is having an impact on the whole concept of arbitration and, as it will be argued, on the case law within this area as well. Since the case law inconsistency is triggering the endeavour of ensuring the arrival of certain changes within various arbitration systems, one can expect that the new proposals can slowly build up a transparency- friendly environment. Consequently, it is impossible to eliminate the impact of the investor’s and state’s perceptions on the question whether to open to transparency arbitral proceedings involving foreign investment disputes. Whilst investors may fear the disclosure of business related information, governments are often reluctant to expose to public view any possible bad reputation statements or information that could put into the limelight any potential missteps made by the state. Zuzana Jahodníková – Ľudovít Mičinský

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