The Advisory Centre on International Investment Law (ACIIL) and the Potential Conflict of Interest Situations It Could Encounter

PREVIEW

This paper discusses a select number of conflict of interest situations that could arise in the context of establishing the Advisory Centre on International Investment Law (ACIIL), one of the reform options which is currently on the agenda of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III.  The situations will be explored from three different perspectives: first, if the Centre only represented States; second, if the Centre represented States and small and medium-sized enterprises (SMEs); and third, the standard conflict of interest that might generally arise.  The paper proposes solutions for each instance of conflict within the context of the ACIIL, based on the experiences drawn from an existing assistance mechanism, notably the Advisory Centre on WTO Law (ACWL), other international organizations, as well as rules of professional conduct for lawyers in the private sector.

I.  INTRODUCTION

The creation of an  Advisory Centre on International Investment Law (hereafter, ACIIL) has been proposed as one of the reform options discussed in the UNCITRAL Working Group III in response  to various concerns regarding investor-State dispute-settlement (ISDS) proceedings. The Centre would contribute to the improved legitimacy of the ISDS regime by providing better access to justice.  There are many issues to be decided before an ACIIL can be established. These have been discussed elsewhere.   For the purpose of this paper, it is therefore assumed that the ACIIL would focus on services relating to full legal representation, provide hands-on training on defense for government officials, act as a focal point for collecting, organizing, compiling, and disseminating information, and ensure that its work would not duplicate that of other organizations. These assumptions are based on the preliminary discussions in the UNCITRAL Working Group III and working papers prepared by the UNCITRAL Secretariat as will be elaborated on below.

This paper will also assume that the ACIIL would be established as an independent intergovernmental organization with a Governing Board and full-time professional staffs, financed primarily by voluntary contributions from donor countries.  It is also assumed the ACIIL would provide support and assistance for legal defense in ISDS disputes, in this manner avoiding duplication of services currently provided by other organizations.  Although most States providing comments on the UNCITRAL Secretariat’s initial draft provisions envision the ACIIL’s service as focused on developing countries, the proposal has also been made that small and medium-sized enterprises (SMEs) should also benefit from its services.  In this overall context, this paper focuses on the possible conflict of interest stemming from this proposal.

Naturally, any potential conflict of interest will depend on the decisions taken on the aforementioned factors relating to the establishment of the ACIIL: namely, the scope of its services, beneficiaries, financing mechanism,  and whether the beneficiaries of the ACIIL would be a) only States (developing countries and least developed countries (LDCs)), or b) also under-resourced investors, particularly SMEs.  Accordingly, this paper focuses on the possible conflict of interest that might arise under both a) and b) scenarios.  Although such a  conflict of interest is not of the type that generally occurs in a law firm setting and may not amount to a conflict of interest per se, it could involve policy issues to which the Centre would be sensitive and that could compromise its credibility.  This potential conflict of interest would therefore need to be addressed as a policy matter upon the establishment of the Centre.

This paper will begin by describing the conflict of interest if the ACIIL were to provide legal representation only to States (Part II), if the ACIIL were to provide legal representation to both States and SMEs (Part III), and last, will discuss select, standard competing interests that could generally arise (Part IV).

In elaborating on the possible competing interests, each subsection will start out with a general description of a conflict, followed by example(s) of the conflict that could arise.  The paper will then illustrate how the conflict is dealt with by the Advisory Centre on WTO Law (hereafter, ACWL), and by other international organizations, or law firms.  Finally, the paper will propose solutions the ACIIL could undertake.  The discussion herein covers all the conflict-of-interest situations mentioned in the UNCITRAL Secretariat Working Papers (A/CN.9/WG.III/ WP.212 and A/CN.9/WG.III/WP.212/Add.1).