Author: Kathleen Stanaro
| Jurisdiction: International |
Topics: Other |
Although tribunals have traditionally shied away from determining human rights issues,[1] there are many ways in which human rights concerns affect and may be affected by international arbitration. Where the terms of a contract dictate a broader jurisdiction, for example, “jurisdiction over all disputes concerning investments”, there is extensive room for arbitration tribunals to extend their reach to human rights concerns if they so choose.[2]
There are several circumstances where parties may desire to arbitrate human rights concerns. Where jurisdiction is present, parties to the tribunal may invoke human rights concerns either as a justification for their breach of contract or as a subject matter issue. Investors may cite human rights law to establish expected treatment by a State and damages for breach, while States may invoke noncompliance with human rights law to justify or mitigate their treatment of investors.[3] Where subject matter is the source of arbitration, businesses may prefer arbitration to avoid lengthy litigation and reputation damages.[4] Requiring suppliers to include arbitration clauses also gives businesses a tool for investigating human rights abuses in their chain without opening themselves up to extensive liability.[5] For victims, arbitration may be the only available venue to seek justice. [6]
It is also worth noting that human rights concerns are important to the success of the arbitration process itself. For example, reliable freedom from unjust imprisonment of arbitrators may influence the numbers of arbitrators willing to work in any given country. In October 2018, a Qatari criminal court sentenced three arbitrators to three years in prison for a seemingly regular decision to move the dispute to a more neutral jurisdiction. The President of the International Court of Arbitration at the time, Alexis Mourre, cautioned that this precedent may lead to the resignation or abstention of arbitrators for cases heard in Qatar or involving Qatari parties.[7] In this and similar manners, human rights guarantees may even be crucial to the arbitration process itself.
So, then, why do arbitrators shy away from determining human rights issues? The primary reason might be a lack of structural support. International arbitrators often lack the experience and sensitivity expertise in handling human rights concerns.[8] Additionally, for many businesses, the purpose of arbitration is expediency and/or privacy in resolving problems. Were human rights goals such as transparency and victim participation too dominating in arbitration, they might threaten the priorities of contracting parties. Parties might respond by restricting contracting terms to eliminate the consideration of any human rights issues in arbitration. To prevent this defensive business move, incorporators of human rights law into arbitration formal rules should be careful when mandating human rights mechanisms.
Recently, there does seem to be an international move towards recognizing and encoding the connection between business and human rights.[9] With respect to arbitration, there have been several signals of this recognition. In January, Canada created an independent group tasked with investigating human rights abuses linked to Canadian corporate activity abroad and assisting with disputes between affected communities and Canadian companies[10]. Even more significantly, the Hague has issued a grant to The Business and Human Rights Arbitration Working Group, with the purpose of creating a dispute resolution tool designed to address the problematic human rights gaps in the formal rules for international arbitration.[11] This project and, its produced rules, are expected to be approved mid-2019,[12] and upon approval will be offered to several international arbitration institutions for adoption.[13] Hopefully, these and other international movements are an indication that international arbitration, with the proper structuring, can be a strong tool for the human rights movement.
[1] Crina Baltag, Human Rights and Environmental Disputes in International Arbitration, Kluwer Arbitration Blog (24 July, 2018), http://arbitrationblog.kluwerarbitration.com/2018/07/24/human-rights-and-environmental-disputes-in-international-arbitration/.
[2] Id.
[3] Id.
[4] Claus Cronstedt et al., International Arbitration of Business and Human Rights: A Step Forward, Kluwer Arbitration Blog (16 November, 2017), http://arbitrationblog.kluwerarbitration.com/2017/11/16/international-arbitration-business-human-rights-step-forward/.
[5] Id.
[6] Id.
[7] Max Walters, Qatari conviction of arbitrators ‘deeply concerning’, says ICA chief, The Law Society Gazette (3 January, 2019), https://www.lawgazette.co.uk/law/qatari-conviction-of-arbitrators-deeply-concerning-says-ica-chief-/5068765.article.
[8] Claus, supra note 4.
[9] Julianne Hughes-Jennett et al., Arbitrating business and human rights disputes: uncharted territory, Practical Law Arbitration Blog (August 30, 2018), http://arbitrationblog.practicallaw.com/arbitrating-business-and-human-rights-disputes-uncharted-territory/.
[10] Viren Mascarenhas & Douglass Cassel, Top 10 Developments in Business and Human Rights in 2018, Law.com (8 January, 2019), https://finance.yahoo.com/news/top-10-developments-business-human-023057768.html.
[11] The Hague Rules on Business and Human Rights Arbitration, Center for International Legal Cooperation (last visited 2 February, 2019), https://www.cilc.nl/project/the-hague-rules-on-business-and-human-rights-arbitration/.
[12] Id.
[13] Julianne, supra note 9.