Amicus Curiae in International Investment Arbitration

Note: this entry is a continuation of the entry about the Participation of Amici Curiae in NAFTA Chapter Eleven Cases.

By Andrea K. Bjorklund (March 22, 2002)

What Value Can The Proposed Amici Add

The question of the movant’s interest must inevitably be bound up with the substantive knowledge or expertise the proposed amici can offer in a particular case. Amicus submissions may be on issues of fact or law on which the amicus can add information that the parties cannot. Judge Richard Posner, criticizing the duplicative and opinion-oriented nature of most amicus briefs, suggested in a strongly worded opinion that an amicus be permitted to participate in only three circumstances: “when a party is not represented competently or is not represented at all, when the amicus has an interest in some other case that may be affected by the decision in the present case …, or when the amicus has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide.”(Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1063 (7th Cir. 1997)) The latter circumstance, and perhaps in rare cases the second, is the most likely to be invoked to support amicus participation in Chapter Eleven proceedings.

The Methanex tribunal set forth an additional factor that might be at issue in several NAFTA cases: the public interest in the arbitration, including the substantive issues inherent in the subject matter of the arbitration and the benefit to the process as a whole of a public perception of greater openness and transparency. While reading this criterion too broadly would support opening all NAFTA tribunals to amicus submissions, “the substantive issues inherent in the subject matter of the arbitration” may dictate greater openness to amicus participation in cases involving environmental measures that may be viewed as having a widespread influence on the public good. Canadian courts have also cautioned against relying on a generalized public interest criterion to support intervention. “There are few, if any, actions which do not, to some degree, affect the public interest. A wish to further that interest does not justify an intervention in an action between others.”(Borowski v. Minister for Justice of Canada, 1983 A.C.W.S.J. LEXIS 20168, **45 (24 February 1983) (quoting TAS Comm. Sys. Ltd. v. Newfoundland Tel. Co., 22 C.P.C. 97, 99 (1981))).

The tribunal would also need take into account added burdens and costs on both disputing parties, and, in circumstances in which those would fall more heavily on the one party in the case, adopt appropriate procedures for diminishing that problem, such as requiring all amici to file a joint brief.

Miscellaneous Procedural Requirements

Any NAFTA procedures governing the submission of briefs should follow generally the same lines as those used in U.S. or Canadian courts. Proposed amici should have to identify themselves, their interest in the particular case, and what expertise they can offer, whether factual or legal, that will assist the tribunal to resolve the case. This information should be included in the motion to participate as amicus, if such a motion is required. In the event that the procedures permit amici to file without tribunal permission so long as they obtained the consent of the parties, the information should be included in the motion itself. Any procedures drawn up by the Parties should also require amici to disclose any affiliations they may have with parties in the cases or with other entities that are funding their attempt to participate in a particular arbitration. Finally, although they may not wish to use this privilege, the parties to the proceedings should be able to challenge the qualifications of proposed amicus.

The procedures should set forth timelines inviting the submission of amicus briefs at predictable stages in the proceedings, e.g. 10 or 20 days after the filing of the parties’ memorials in those cases including reply and rejoinder memorials. This would give each party the opportunity to respond to issues raised by amici in its reply or rejoinder, respectively, without the added burden of filing additional submissions. The procedures could oblige each tribunal to set forth a timetable for filings that would be conveyed to the public through some readily available media, like the NAFTA Secretariats’ webpages. The Asbestos Appellate Body issued procedures inviting the submission of amicus briefs, but that invitation went only to those NGOs registered with the WTO. To forestall criticism, any such “invitation” should be more widely distributed. Potential channels for such distribution would include the NAFTA Parties’ websites.

The submission should include a précis detailing the petitioner’s interest in the case and why the proposed submission complements rather than replicates the arguments of the parties to the proceeding. This requirement assumes that amici will have access to the memorials of the parties; see “access to information,” infra. Should the aspiring amici not have access to the memorials, strict enforcement of the nonduplication requirement would likely raise protests of unfairness. Furthermore, the amici’s briefs should be of limited length.

Domestically, in courts that place page limits on their briefs, amici sometimes cooperate with the party whose side they support in order to effectively extend the pages of argument submitted to the court. In the NAFTA arbitrations, where there are generally no page limits, cooperation for this reason would be unlikely to occur. However, parties may still wish to cooperate with amici in order to maximize the effectiveness of their arguments; some positions may be more palatable to arbitrators coming from an ostensibly neutral or self-interested third party rather than from one of the arbitrating parties. In order to ensure that amici are not recruited allies, or at least to ensure that their status as such is clear, disclosure requirements such as those set forth in U.S. court practice would be helpful. The U.S. Supreme Court Rules require amici to indicate “whether counsel for a party authored the brief in whole or in part and [] identify every person or entity, other than the amicus curiae, its members, or its counsel, who made a monetary contribution to the preparation or submission of the brief.”

A more difficult issue is whether tribunal ought to be required to consider the arguments and positions raised in amicus briefs if the tribunal permits the submission of the briefs. The ICSID arbitral rules require that the tribunals decide all arguments raised before them, but these rules are addressed to arguments raised by the parties, not by amici. ICSID Additional Facility Arb. R. 53(1); ICSID Convention Arb. R. 47(1)(i). The UNCITRAL Rules contain no such requirement.

Courts in the United States, which accept amicus briefs if neither party objects, do not necessarily consider the positions set forth in them. In NAFTA proceedings, permitting the arbitral tribunals to accept submissions of amicus briefs but to ignore their contents would likely lead to charges of an empty process that does not truly take into account the interests that aspiring amici have in the arbitration. Parties would also not know whether or not they had to address the arguments raised in the amicus briefs. The disputing parties, the NAFTA Parties, and the public interest would be best served by having tribunals accept only a limited number of briefs that fit rigorous criteria but requiring that the tribunals consider those briefs carefully.

Should a panel decline to exercise its discretion to accept amicus briefs, the disputing parties might consider retaining the ability to append the rejected submissions to their own memorials. While this procedure might be desirable as an alternative, establishing a regime that permitted NAFTA Parties, at their option, to attach certain amicus briefs to their submissions would be problematic. Parties would be under pressure to adopt all briefs submitted for their consideration, and might face adverse political consequences should they choose not to submit a certain NGOs brief. Furthermore, Parties might be obliged to set forth explicitly their views on the arguments contained in the briefs in order to satisfy a panel’s questions about whether, because the briefs are attached to the Party’s submission, they may be de facto presumed to represent the Party’s views.

The United States did this before the Shrimp/Turtle panel. The appellate body, which had decided to consider the briefs at that stage of the proceeding, requested that the United States identify which, if any, portions of the briefs that it had appended to its panel submission. The United States declined to adopt specifically portions of the briefs, stating only that it agreed with them to the extent they concurred with the argument set out in the main submission.(Shrimp/Turtle Appellate Body Rep. 86). However, the appellate body considered that attaching such material “renders that material at least prima facie an integral part of that participant’s submission.”(Shrimp/Turtle Appellate Body Rep. 89).

Ways in Which Amici May Seek To Participate

In addition to deciding whom to permit to participate as amicus, any procedures should address the degree to which amici may participate. In NAFTA cases, amici are likely to seek varying levels of access to the tribunals and to information about the proceedings. In Methanex, the parties seeking amicus status sought permission (1) to file an amicus brief, (2) to read the parties’ written pleadings, (3) to make oral submissions, and (4) to have observer status at oral hearings.(Methanex Decision 5) In other proceedings, amici may also seek to introduce evidence or to present and/or cross examine witnesses.

In the Canadian Federal Court, the proposed intervenors sought (1) to be served with all documents and evidence relevant to the proceedings; (2) to introduce evidence; (3) to conduct cross examination; (4) to make oral and written submissions; and (5) to have the right to appeal from any final decision. Attorney General of Canada v. S.D. Myers, Inc., 2001 F.C.T. 317 1 (11 April 2001).

As discussed above, the request to file an amicus brief can be fairly easily accommodated, provided that certain limiting procedures are in place. Those limiting procedures would work better should the amici have the ability to read the parties’ memorials, as discussed below. Making oral submissions and attending hearings are tied together; granting either of those privileges, even on an ad hoc basis, may raise certain problems.

First, the applicable arbitration rules specifically hold that hearings should be held in camera, unless the parties otherwise agree. While under the NAFTA the Parties may derogate from the applicable arbitration rules, it would be difficult to shoehorn such an explicit amendment into an “interpretation.” Amici in Methanex and UPS also requested permission to attend the hearings in those cases. Both tribunals rejected those requests. The Methanex tribunal accepted that UNCITRAL Arbitration Rule 25(4) required that hearings be in camera and that therefore third parties could not attend. Methanex Decision 42; UPS Decision 67 (without discussion). The ICSID Convention Rules and the Additional Facility Rules also restrict attendance at oral hearings. ICSID Additional Facility Arb. R. 39(2); ICSID Convention Arb. R. 32(2).

The Methanex tribunal implicitly rejected arguments that conferring the status of amicus on a party took that party out of the “third-party” category.(Methanex Corp. v. United States of America, Final Submissions of The International Institute for Sustainable Development (16 October 2000) 24 (arguing that “[t]he scope of who can be in camera depends on who has been authorized by the Tribunal to be in the room in an in camera session.”)).

Second, keeping hearings in camera may help to protect participants in the hearings. While the World Bank has security measures in place, thereby protecting participants in proceedings occurring at its premises, many arbitrations are held in unsecure locations, such as hotels or attorneys’ offices. Those latter options may be precluded should hearings be made public.

Third, inserting oral presentations by amici into the hearings would conceivably affect the orderly running of the hearing and add to the cost. Either parties would have to give up some of their time to the amici, which often happens in U.S. court, or the tribunal would have to add extra time to the hearing in order to consider the arguments posed by amici.

Notwithstanding these concerns, should the Parties wish to maintain the in camera rule, but leave open the possibility that amici could testify, the procedures could permit the tribunal to set aside one day of public hearings at which NGOs could testify.(See Steve Charnovitz, Participation of Nongovernmental Parties in the World Trade Organization, 17 U. Pa. J. Int’l Econ. L. 331, 355 (1996) (suggesting same procedure in WTO)).

Access to Information

An inescapable corollary issue to the participation of amici is the extent to which they have access to information in the proceedings. Permitting amicus participation, but limiting amici’s access to the parties’ arguments, will not allay criticism of the “secrecy” of the proceedings, nor will it enhance the probability of effective amicus participation that complements, rather than duplicates, the efforts of the parties.

Thus, access to information will be a key part of any institutionalized procedures for accepting amicus participation. In virtually all recent cases, the Statements of Claim and Defense have been public, or at least a public version has been made available. Access to these documents, however, is unlikely to be sufficient to permit informed amicus participation in the cases. First, the Statements of Claim and Defense do not always contain legal argument. Moreover, in ICSID Additional Facility cases, there is no statement of defense; thus, aspiring amici would not even have the benefit of knowing the respondent’s initial submissions on that issue. Second, parties’ arguments often change, sometimes subtly but sometimes more overtly, over the course of the proceedings. Access only to a Statement of Claim that was likely written at least six months before any memorial is filed would not give amici an up-to-date knowledge of the legal and factual issues currently relevant in the arbitration.

The NAFTA tribunals to have considered amicus participation have not authorized any special access to information for amici. The Methanex tribunal held that the amici would have no rights to receive any materials generated in the arbitration, except insofar as a member of the public might gain access according to the Consent Order regarding disclosure and confidentiality. The Methanex tribunal did not have to grapple with the ramifications of this decision, as nearly all materials in the Methanex case have been promptly released to the public.

The Methanex tribunal acknowledged that the question of whether Article 25(4) or some obligation of confidentiality implicit in arbitration required documents to be held in camera was a difficult one that it did not have to address given the consent order on confidentiality agreed to by the parties in that case.(Methanex Decision 43-46) Similarly, the UPS tribunal declined to address the issue at the time of its order on amicus participation, although it acknowledged that a distinction might be drawn between the privacy of the hearings and “the confidentiality or availability of documents.”(UPS Decision 68)

Aside from the in camera rule as to hearings discussed above, neither the UNCITRAL nor the ICSID Convention nor the Additional Facility Rules explicitly require confidentiality in arbitral proceedings. In fact, the commentary accompanying the original ICSID Rules makes clear that no obligation of confidentiality is imposed on the parties, as distinguished from the arbitrators. See ICSID Regulations and Rules Rule 30 cmt. F (1975) (“The parties are not prohibited from publishing their pleadings. They may, however, come to an understanding to refrain from doing so, particularly if they feel that publication may exacerbate the dispute.”). The language in the current counterparts to Rule 30 (ICSID Conv. Arb. R. 31 and ICSID Additional Facility Arb. R. 38) is identical in all pertinent respects.

Whether or not there is an obligation of confidentiality inherent in arbitration is one of the most discussed issues in international arbitration. Because the applicable rules are silent on the issue, and the emerging trend in arbitration practice generally is that no inherent obligation of confidentiality exists, particularly not in arbitrations involving sovereign entities,(See Esso/BHP v. Plowman, 183 C.L.R. 10 (1993); Commonwealth of Australia v. Cockatoo Dockyard Pty. Ltd., 36 N.S.W. L.R. 662 (1995)) issuing an “interpretation” that the NAFTA Parties did not expect all memorials to remain secret throughout the pendency of the proceedings would be easier to justify than issuing an “interpretation” that permits attendance at hearings in the face of an explicit rule to the contrary.

Benefits and Drawbacks to permitting submission of amicus briefs

The benefits of a more institutionalized structure are manifold. NAFTA Parties would allay the criticism that they condoned “undemocratic” and “secret” processes that undermine the public welfare.(See, e.g., Dierk Ullrich, No Need for Secrecy? — Public Participation in the Dispute Settlement System of the World Trade Organization, 34 U. British Colum. L. Rev. 55 (2000) (noting benefits of more open proceedings, including the generation of public trust in the system and support of the WTO and its activities in general)). Parties to arbitrations would not have to litigate the admissibility of amicus petitions in every case (although this benefit may be tempered to the extent parties choose to oppose the filing of a particular petition). Finally, NGOs may offer valuable perspectives and information to tribunals who otherwise would not be privy to those facts or arguments, and may be better positioned to make stronger arguments unhampered by domestic political or interest-balancing considerations.(See Charnovitz, supra note 42, at 352-53 (discussing benefits of NGO participation before the WTO). Charnovitz also notes that in some cases, given the separation of powers in governments, the executive branch may not mount a strong defense of a law of which it disapproves).

More negative ramifications may also result. Once such procedures were put into place, rescinding them would be extraordinarily difficult. The Parties might also face pressure to grant more concessions. Furthermore, the potential for inequality between NGOs representing developed and developing countries, mentioned above, is very real.

Another potential concern raised by giving NGOs the opportunity to participate as amicus is whether doing so effectively grants them more rights than the Parties. In one sense, it does not. NAFTA Parties have the right to make submissions under Article 1128 of the NAFTA, while amici are dependent on leave from the Tribunal. In another sense, however, permitting NGOs to submit amicus briefs on the merits would grant them a larger voice in the arbitrations, since Article 1128 submissions are limited to “issues of interpretation of the NAFTA.” Thus, if a Party submission exceeded 1128’s restriction to “issues of interpretation of the NAFTA,” whether by suggesting preferred interpretations of international law or by advocating a certain outcome, a tribunal may be able to reject it. Moreover, the right to make 1128 submissions may not be absolute; there could be limitations inherent in 1128 such that if a State Party submitted a paper late in the proceedings so that the parties to the case had no time to respond, or simply after the time period set by the arbitrators to accept such submissions, the arbitrators could reject the submission. A similar issue has been raised by critics of the WTO panels’ decision to accept amicus briefs; members must tell a panel within ten days of its establishment that they wish to participate as a third party, and members that did not participate at the panel stage may not participate in proceedings before the appellate body. Minutes of Dispute Settlement Body Meeting (27 July 2000) 74.

One way to solve this dilemma would be to permit NAFTA Parties to petition the tribunals to make amicus submissions in cases giving rise to issues in which the Parties have a specific interest and expertise beyond NAFTA interpretation. NAFTA Parties would thus be on a level playing field with NGOs insofar as filing amicus briefs were concerned. The problem with this solution is that it may effectively permit espousal in addition to the right of individuals to bring their own cases. Furthermore, to the extent that Article 1128 was meant to define the exclusive means by which other State Parties can participate in third-party proceedings, permitting States to assume amicus status effectively circumvents that provision’s limitation.

Another cost to permitting amicus participation is that many amici will attempt to lobby their governments to take certain actions or positions domestically. If they are unsuccessful, permitting them to make another attempt before a different tribunal will require the government effectively to respond twice. Moreover, it may very well lead to domestic constituencies publicly opposing the positions of the governments who supposedly represent their interests.(Cf. Philip M. Nichols, supra note 15, at 317 (“Allowing private parties that were not successful when values and goals were balanced at the national level to have standing before dispute settlement parties would create an irreconcilable dissonance for countries engaged in the delicate process of trade negotiation.”)) This may be an anomalous position for governments that theoretically represent the public interest for the majority of their inhabitants.

Finally, NGOs may have varied goals in filing briefs — they may wish to influence a tribunal’s decision, be cited by the tribunal, or demonstrate to their members that the leadership is representing their interests.(Kearney & Merrill, supra note 23, at 764-65). Permitting NGOs to submit amicus briefs may give those organizations influence in developing NAFTA jurisprudence. Well-organized NGOs are likely to have a coherent and consistent position on many recurring NAFTA issues. In similar situations domestically, amicus briefs are often used as a policy-making tool by government agencies and by interest groups such as the ACLU in the United States.(See, e.g., David S. Ruder, The Development of Legal Doctrine Through Amicus Participation: The SEC Experience, 1989 Wisc. L. Rev. 1167).

One final consideration is that, as noted supra at pages 2-3, amicus participation is also at issue in the World Trade Organization, both before the dispute settlement panels and the appellate body. Any approach to amicus participation taken in the NAFTA Chapter Eleven cases should be compatible with potential practices before the WTO.