{"id":2634,"date":"2026-02-23T11:22:39","date_gmt":"2026-02-23T11:22:39","guid":{"rendered":"https:\/\/alrashidi.law\/?p=2634"},"modified":"2026-05-06T13:45:40","modified_gmt":"2026-05-06T13:45:40","slug":"united-nations-convention-on-transparency-in-treaty-based-investor-state-arbitration","status":"publish","type":"post","link":"https:\/\/alrashidi.law\/en\/united-nations-convention-on-transparency-in-treaty-based-investor-state-arbitration\/","title":{"rendered":"United Nations Convention on Transparency in Treaty-based Investor-State Arbitration"},"content":{"rendered":"

If confidentiality has been, and continues to be, one of the most important advantages that has led parties in the business and commercial community to select arbitration as a means of dispute resolution under international commercial law to settle their disputes, and has been the source of its strength and attractiveness, then it is. in truth, a reason for the growing demand by claimants and investors in view of the optimal guarantee it provides for the course and outcome of their investments, and for the protection of their technical and strategic data, especially their economic data (1).<\/span><\/p>\n

However, treaty-based investor-state arbitration involves consequences and effects that impact the public interests of the peoples of those States, particularly because compensation awarded to the investor, who always prefers confidentiality in arbitration, is paid from the State Treasury. The international arena has witnessed some States suffering significant losses in this regard.<\/span><\/p>\n

Accordingly, it became the right of the peoples of those States to demand public access to arbitration proceedings, and voices began to rise calling for transparency in treaty-based investor-state arbitration. Based on this, the United Nations Commission on International Trade Law (UNCITRAL), in its forty-first session, decided to address the issue of transparency in treaty-based investor-state arbitration. In its forty-sixth session, UNCITRAL adopted the Rules on Transparency in Treaty-based Investor-State Arbitration, and the United Nations General Assembly approved them on 16\/12\/2013 (2).\u00a0<\/span><\/p>\n

The Convention aims to serve as an instrument through which parties to investment treaties concluded before 1 April 2014 may express their consent to the application of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (\u201cRules on Transparency\u201d or \u201cRules\u201d).<\/span><\/p>\n

The Rules on Transparency are a set of procedural rules intended to make information regarding arbitration proceedings between investors and States, arising from investment treaties, accessible to the general public.<\/span><\/p>\n

With respect to investment treaties concluded before 1 April 2014, the Rules apply in circumstances that include the agreement of the parties to the relevant investment treaty to apply them. The Convention serves as an effective and flexible mechanism to record such agreements.<\/span><\/p>\n

Investment Treaty<\/b><\/h2>\n

Paragraph 2 of Article One of the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration defines the <\/span>investment treaty<\/span><\/i> as:<\/span><\/p>\n

\u201cA bilateral or multilateral treaty, including any treaty commonly referred to as a free trade agreement or an economic integration agreement or a framework or cooperative agreement in the field of trade and investment or a bilateral investment treaty, which contains provisions regarding the protection of investments or investors and grants investors the right to resort to arbitration against the contracting parties to that investment treaty.\u201d<\/span><\/p>\n

Treaty-based Arbitration<\/b><\/h2>\n

Treaty-based arbitration refers to arbitration resorted to by contracting parties in an investment treaty when one party breaches the obligations contained in that treaty, in order to claim compensation in accordance with the standards of such protection, and it grants foreign investors the possibility of bringing claims against host States before international arbitral tribunals (3).<\/span><\/p>\n

Scope of Application of the Convention<\/b><\/h2>\n

\u201cThis Convention applies to investor-State arbitration and arbitration between investors and regional economic integration organizations conducted pursuant to an investment treaty concluded before 1 April 2014 (investor-State arbitration).\u201d This means that the Rules do not apply to investment disputes in which both parties are investors \u2014 whether natural or private legal persons \u2014 even if their States are parties to investment treaties. Rather, one party to the investment dispute must be a State or one of its public bodies as a party to the treaty, and the other party must be an investor belonging to a State that is party to the treaty.<\/span><\/p>\n

Both parties to the dispute may be States, provided that both are parties to the investment treaty and that the subject matter of the dispute concerns investment (4).<\/span><\/p>\n

The Rules on Transparency also apply to disputes arising under treaties concluded before 1 April 2014 when the parties to the treaty concerned, or the disputing parties, agree to apply them.<\/span><\/p>\n

The Rules also apply to disputes arising under treaties concluded on or after 1 April 2014 (\u201csubsequent treaties\u201d) when investor-State arbitration is commenced under the UNCITRAL Arbitration Rules, unless the parties agree otherwise.<\/span><\/p>\n

The Rules on Transparency may also be used in investor-State arbitration proceedings commenced under arbitration rules other than the UNCITRAL Arbitration Rules, and in ad hoc proceedings (5).<\/span><\/p>\n

Paragraph 1 of Article Two of the Convention provides, with respect to the application of the UNCITRAL Rules on Transparency, that:<\/span><\/p>\n

\u201c1- The UNCITRAL Rules on Transparency shall apply to any investor-State arbitration where the respondent is a Party that has not made a reservation in this regard under subparagraph 1(a) or subparagraph 1(b) of Article 3, and where the claimant is of a State Party that has not made a reservation in this regard under paragraph 1(a) of Article 3, whether or not the arbitration is commenced under the UNCITRAL Arbitration Rules.\u201d<\/span><\/p>\n

If the UNCITRAL Rules on Transparency do not apply in accordance with the above provision of paragraph 1 of Article Two, then the UNCITRAL Rules on Transparency shall apply to investor-State arbitration if the respondent has not made a reservation pursuant to paragraph (1) of Article Three of the Convention, and provided that the claimant agrees to the application of the UNCITRAL Rules on Transparency, whether or not the arbitration is commenced under the UNCITRAL Arbitration Rules (6).<\/span><\/p>\n

Where the UNCITRAL Rules on Transparency apply pursuant to paragraphs (1) and (2) of Article Two, the most recent version of those Rules shall apply, and the respondent shall not have a reservation to them pursuant to paragraph (2) of Article Three of the Convention (7).<\/span><\/p>\n

However, the Convention does not apply the sentence contained in paragraph (7) of Article One of the UNCITRAL Rules, which states:<\/span><\/p>\n

\u201cWhere there is a conflict between the Rules on Transparency and the treaty, the treaty shall prevail,\u201d<\/span><\/p>\n

with respect to transparency in investor-State arbitration claims commenced under paragraph \u201c1(8).\u201d<\/span><\/p>\n

The claimant may not avoid the application of the UNCITRAL Rules on Transparency by invoking the Most-Favoured-Nation clause in order to render the UNCITRAL Rules on Transparency applicable in circumstances where they would not otherwise apply absent such invocation (9).<\/span><\/p>\n

The Convention sets out in Articles Three and Four the reservations that may be made by the parties.<\/span><\/p>\n

Why is there a growing demand for transparency in investor-state arbitration, despite the traditional importance of confidentiality for protecting technical and strategic economic data?<\/b><\/h2>\n

Confidentiality is traditionally valued in arbitration because it protects an investor’s technical and strategic data, specifically economic information, and is seen as providing an optimal guarantee for the course and outcome of investments.<\/span><\/p>\n

Despite these advantages, the demand for transparency has grown due to the following factors:<\/span><\/p>\n