24th Annual IBA Arbitration Day, 2023 - Keynote address: Transparency

Lucas Mejias 
TozziniFreire, São Paulo

The keynote speaker of the 24th annual IBA Arbitration Day was Fernando Mantilla-Serrano. He delivered an interesting speech about the promises and perils of transparency in international arbitration.

Fernando kicked off by addressing the positive connotations of transparency. He explained that the need for transparency is obvious so that the practice of international arbitration would not be viewed with suspicion in the public eye. The main issue in the transparency debate, however, is that it tends to remain theoretical.

Fernando submitted that the search for transparency should necessarily conduct to a positive goal. In practical terms, it could sometimes be perceived negatively. Transparency leads to a need for high publicisation, possibly jeopardising one of the main characteristics of international arbitrations: confidentiality. To look transparent, arbitrators end up disclosing everything, even clearly irrelevant matters.

Fernando invited the arbitration community to focus on a rational and objective analysis of transparency in the context of arbitration.

According to Fernando, transparency only became a trendy topic in recent years and probably for reasons other than ensuring a safe dispute resolution mechanism. Fernando recalled how, back in the 1990s when he started practising arbitration, no-one talked about transparency and no-one felt that arbitration was in danger.
 
It was academics and journalists, professionals with practically little if any experience in arbitration law and practice, who first placed the topic of transparency on the agenda of international arbitration fora in relation to certain NAFTA investor-state arbitrations.

Transparency became trendy from that point onwards to the extent that, in 2014, UNCITRAL released its Rules on Transparency in Treaty-based Investor-State Arbitration (the 'Rules on Transparency') to provide a certain level of concreteness to the growing desire for transparency.

The Rules on Transparency addressed the publication of decisions, the publication of submissions, the conduct of public hearings, and the intervention of third parties in international arbitration, among other matters.

Fernando wondered why international arbitration needed so desperately to walk this path. He considered that this sudden need for transparency was the product of a desperate call for consistency and legitimacy in international arbitration, as well as to gain the trust of civil society, in response to the backlash to arbitration.    

Fernando asked the audience if transparency was the right medicine for this illness. He was of the view that the call for publication of arbitral awards was already out there, for the purpose of creating a 'common law' of international contracts, well before the legitimacy of arbitration was being questioned.

Fernando reminded the audience that the ICC has been publishing abstracts of arbitral awards since 1990 and wondered if that was enough as opposed to full publication. He asked those from the audience who would be in favour of full publication to raise their hand (a bunch of practitioners), and then asked who would agree with publicising awards relating to a matter in which they were the client, and who would instruct their client to agree with the publishing of its awards (much fewer people).

He reminded the audience that the ICC started publishing its awards in 2021 and, from that time on, approximately only 2.5 per cent of awards were effectively published, so although there was a sudden call for legitimacy, practitioners were still not willing to waive confidentiality with regard to the awards in which they were involved.

Fernando approached the end of his speech by wondering if we are better off today in terms of legitimacy than we were in the 1990s. He claimed that arbitration practitioners were more focused on their own needs (eg, avoiding certain criticism over how arbitration is practised – including their natural preference for confidentiality),  than those of the parties (eg, having a safe and trustworthy dispute resolution mechanism).

Fernando finally reminded the audience that the transparency debate is here to stay. In his view, what fulfilled the promise and legitimacy of arbitration was practitioners working on being better lawyers and arbitrators rather than using transparency as a marketing tool. That is the expectation of the parties with regards to arbitrators, lawyers, and institutions, and this is how international arbitration will retain legitimacy.