CYIL vol. 11 (2020)

ONDŘEJ SVOBODA CYIL 11 (2020) addition, it provides an evidence that corporations may consent to arbitration voluntarily as evidence of a commitment to RBC and CSR. The model of the Bangladesh Accord could be followed in other areas as its preamble admits that it “could possibly be expanded to other related industries beyond” the garment industry. 33 While the Bangladesh Accord uses the UNCITRAL Arbitration Rules, originally designed for purely commercial disputes, the recent initiative has led to the creation of arbitration rules for disputes focused specifically on business and human rights – the Hague Rules on Business and Human Rights Arbitration. An expert team composed of practicing lawyers and academics and under leadership of the former ICJ Judge Bruno Simma started its work in February 2017. The Draft of the Hague Arbitration Rules was published in June 2019 and after broad public consultation the final version was launched in December 2019. The Hague Rules are based on the UNCITRAL Arbitration Rules, with modifications needed to address certain issues likely to arise in business and human rights disputes. 34 Their development is designed to mitigate the judicial remedy gap in the UNGP in human rights claims by affected persons as well as contractual human rights claims which can arise out of commercial contracts, such as supply contracts, that incorporate obligations to comply with human rights standards. As such, the Hague Rules may help address the “investor obligation deficit” in the current investment treaties and influence the drafting of future ones. 35 Arbitration is based on party consent. In this regard, the drafters of the Hague Rules contemplated three options for establishing consent to arbitration: (i) contracts imposing human rights-related obligations on business enterprises (e.g., employment, supply, or service contracts), or arbitration clauses broad enough to cover non-contractual human rights claims; (ii) later agreements to submit a dispute to arbitration; or (iii) multilateral, independent agreements, like the Bangladesh Accord. 36 For some commentators, it is unlikely that companies will voluntarily agree to arbitrate. 37 However, it could be set as a condition for a MNE to get various forms of support from governments, for instance in the context of public procurement, trade diplomacy, export credits, or subsidies. Another incentive for MNEs to consent to arbitration could be based on ‘governance’ considerations – being in better position to influence the process, e.g. of the appointment of the arbitrator and agreement with the claimants on the applicable procedural and substantive law rules. nytimes.com/2013/05/23/business/legal-experts-debate-us-retailers-risks-of-signing-bangladesh-accord.html [accessed 26 April 2020]. 33 It appears that the International Olympic Committee has started using a similar mechanism recently as host countries must abide by human rights standards, with possible enforcement provided by the Court of Arbitration for Sport. See also SALMINEN, J. The Accord on Fire and Building Safety in Bangladesh: A New Paradigm for Limiting Buyers’ Liability in Global Supply Chains. American Journal of Comparative Law , 2018, Vol. 66, No. 2, p. 449. 34 There is already a precedent when in 2001, the PCA modelled the Optional Rules for Arbitration of Disputes Relating to the Environment and/or Natural Resources on the UNCITRAL Arbitration Rules to address the particular needs of environmental dispute resolution. 35 DAUTAJ, Y. Roll Out the Red Carpet: The Hague Rules on Business and Human Rights Arbitration are Finally Here! Kluwer Arbitration Blog , 26 December 2019. 36 International Arbitration of Business and Human Rights Disputes: Elements for consideration in draft arbitral rules. Model clauses, and other aspects of the arbitral process. Prepared by the Drafting Team of the Hague Rules on Business and Human Rights Arbitration, November 2018. 37 MUSA, S. The Hague Rules on Business and Human Rights Arbitration: Noteworthy or Not Worthy for Victims of Human Rights Violations? Kluwer Arbitration Blog , 5 May 2020.

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