The European Union welcomes the agreement reached on 9 July 2014 on a new United Nations convention to strengthen transparency in investor-state disputes.
The Convention on Transparency in Treaty-based Investor-State Arbitration will make it easier to apply the UN's transparency rules to investor-state dispute settlement (ISDS) carried out under existing investment treaties.
'Improving transparency in ISDS is crucial,' said EU Trade Commissioner Karel De Gucht, welcoming the development. 'Yesterday's agreement shows that more and more countries are committed to transparency in ISDS. It also shows that we can improve existing investment treaties by working together.'
Last year, the United Nations General Assembly adopted a set of new rules for the conduct of arbitration proceedings which make such dispute settlement procedures much more transparent. The public will have access to the documents submitted, hearings will be open to the public, and interested parties will be able to make submissions to the proceedings.
The EU played a key role in drawing up these new transparency rules in the responsible Working Group of the UN Commission on International Trade Law (UNCITRAL). The EU will also be the main funder of the repository, the system by which documents are made publicly available on the internet.
The new transparency rules apply to investor-state dispute settlement in treaties concluded after 1 April 2014 and which contain a reference to the UNCITRAL arbitration rules. However, they do not apply automatically to existing investment treaties, such as the more than 1300 bilateral investment treaties concluded by EU Member States or to the Energy Charter Treaty to which the EU has been a party since 1998.
The new UN Convention approved this week will make it much easier to apply transparency rules to existing treaties. As a framework convention, it will allow countries and regional economic integration organizations like the EU to declare their willingness to apply the transparency rules to cases brought under their existing investment treaties. The more countries and organisations adhere to the Convention, the more the rules will apply to the more than 3000 investment agreements currently in force worldwide, including the Energy Charter Treaty. This means the convention will make it faster and easier to improve transparency of investor-state arbitration than a one-by-one renegotiation of the existing investment treaties.
The convention will now go for final adoption within the UN system and will be open for signature in March 2015.