The Mauritius Convention will come into force on 18 October 2017, with the aim of extending the reach of the United Nations Commission on International Trade Law (UNCITRAL) Transparency Rules (Transparency Rules).

The Transparency Rules took effect in 2014, and are intended to improve transparency in arbitrations between investors and states conducted under the UNCITRAL Arbitration Rules. The Transparency Rules include provisions for open hearings, the publication of documents and the opportunity for third parties to make submissions, whereas investor-state arbitrations under the UNCITRAL Arbitration Rules traditionally have elements of confidentiality.

However, the Transparency Rules only apply automatically to disputes arising from treaties concluded after 1 April 2014. For arbitrations commenced before this date, the Transparency Rules only apply if either the parties to the relevant treaty or the parties to the arbitration agree to their application.

According to KWM, the latter group could include over 3,000 bilateral investment treaties. The Mauritius Convention aims to extend the scope of the application of the Transparency Rules to all treaty-based investor-state arbitrations, irrespective of when they are concluded. 

KWM partners Alex Baykitch AM and Daisy Mallett participated in the negotiation of the Mauritius Convention and the Transparency Rules as part of the Australian government delegation.

“Investor-state arbitration has and continues to be the subject of scrutiny by governments and civil society around the world,” said Mr Baykitch.

“The involvement of a state as a party to an arbitration under an investment treaty is a matter of public importance.

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“Typically, investor-state arbitration poses significant potential liability to a state’s finances, and its citizens have an interest in understanding the nature of the dispute, which often involve allegations by the foreign investor of misconduct on the part of the state or one its officials.”

Ms Mallett said the Mauritius convention will give citizens the opportunity to engage directly in the arbitration of investor-state disputes.

“The widespread adoption of the convention should ensure that states and their citizens will have greater insights and understanding of the investor-state arbitral process, and the reasons why their government may be involved in one of these types of disputes,” she said.

“More importantly the convention, by extending the application of the Transparency Rules to investor-state arbitrations, will provide citizens of states involved in such a dispute with an opportunity to be directly involved in the arbitration by making submissions as an affected or interested third party.”

Former Commonwealth solicitor-general Justin Gleeson SC recently said Australian arbitrators are set to see dramatic changes in their practice.