THE AUTHOR:
Taimoor Raza Sultan, Arbitration Attorney at Sultan & Sultans Law Chambers (SSLC)
Introduction
Transparency has emerged as one of the most prominent responses to the legitimacy crisis of Investor–State Dispute Settlement (“ISDS”). For decades, investment arbitration has been governed by the principle of confidentiality, adhering to the norms of private commercial arbitration despite its profound public interest aspect. Investor–State disputes typically involve the exercise of regulatory authority, including measures related to public finances, environmental policy, public health, and other areas of public policy, yet historically they were resolved behind closed doors. This tension between the procedural privacy of ISDS and public implications of disputes it adjudicates has drawn widespread criticism from States, civil society, and scholars alike.
The UNCITRAL Rules on Transparency in Treaty-based Investor–State Arbitration (2013) (“Rules”) and the Mauritius Convention on Transparency (2014) (“Convention”) constitute a notable endeavor to reconcile this tension. Australia’s ratification of the Convention in 2017 appeared to place it among the leading proponents of transparency reform in ISDS. In theory, it aimed to make transparency a binding procedural obligation rather than treating it merely as a matter of consent.
The article argues, however, that Australia’s experiment with arbitral transparency proves to be largely ineffective because its implementation significantly depends on the parties’ consent, which can undermine or limit the disclosure obligations. To put it another way, confidentiality in ISDS has not been eliminated, it has merely been repackaged.
Transparency and ISDS in Australia Before the Mauritius Convention
Australia, prior to adopting the UNCITRAL transparency framework, adhered to a strong presumption of confidentiality in both commercial and treaty-based arbitrations. Article 23C of the International Arbitration Act (1974) (“IAA”), provided for default confidentiality protections in ISDS proceedings seated in Australia, unless otherwise agreed by the parties, or the tribunal authorized disclosure under limited statutory exceptions.
Nevertheless, confidentiality, as an inherent feature of arbitration, came under greater scrutiny, especially after Philip Morris Asia Ltd v. Commonwealth of Australia, in which a legal challenge to Australia’s Tobacco Plain-Packaging Act (2011), though affecting public health regulation, was litigated largely in secrecy with limited public disclosure. The case exposed functional deficiencies in ISDS confidentiality, serving as a rallying call for transparency in such matters. At that time, transparency in Australian ISDS practice depended either on the choice of the disputing parties or the discretion of the tribunals. There was no statutory obligation to publish pleadings, open hearings, or allow third-party participation. Transparency existed, at best, as an exception to confidentiality rather than its substitute.
The Promise of the Mauritius Convention
Although the Convention and Rules collectively constitute the UNCITRAL transparency framework, the Convention was specifically formulated to address the key limitations of the Rules. The Convention seeks to ensure automatic application of Rules to pre-2014 treaties (Article 1(1), and all ISDS proceedings, including those initiated under non-UNCITRAL arbitration rules, such as ICSID (International Centre for Settlement of Investment Disputes), ICC (International Chamber of Commerce) etc. (Article 2(1) & (2), which would otherwise fall outside the scope of Rule 1(1) of Rules.
Following ratification, Australia accordingly amended Article 22(3) of the IAA in 2018 to exclude ISDS proceedings from the statute’s confidentiality regime. The amendment ensured Australia’s domestic legal compliance with its international commitments, particularly by increasing public oversight of ISDS cases.
However, the convention’s heavy reliance on party autonomy renders it ineffective in achieving its full potential.
Party Autonomy as the Structural Weakness
Opt-outs and Reservations: Transparency by Design, Not by Force
Rule 1(1) permits the State parties to exclude the application of Rules by mutual agreement. Similarly, the Convention, through Article 3, permits the exclusion of transparency obligations to:
- Specific investment treaties;
- Arbitrations conducted under non-UNCITRAL rules; or
- Arbitrations where the reserving State is the respondent.
Although, the opt-out mechanism is supposed to accommodate state sovereignty, the provisions underscore that transparency is a concession rather than a fundamental obligation. Notably, a State may conveniently evade public scrutiny, especially as respondents, when it is most needed, allowing selective confidentiality for politically sensitive cases.
Case-by-Case Consent and Procedural Bargaining
Although the Convention intends to eliminate the consensual adherence to transparency contained in Rule 1(2) for treaties concluded before 2014, its impact remains conditional and limited. Where one or both of the treaty parties have not ratified the Convention, or a reservation is made under Article 3, transparency obligations do not apply. In such a case, the application of Rules to a particular arbitration, arising from a pre-2014 treaty, continues to depend on the agreement between the disputing parties under Rule 1(2)(a), or between the treaty parties under Rule 1(2)(b). Similarly, the application of Rules to arbitrations conducted under non-UNCITRAL rules requires the express consent of the parties under Rule 1(9). The selective case-by-case application of transparency produces inconsistent standards and discourages the implementation of over-the-board transparency.
Such a consent-based framework may also turn a binding transparency obligation into a bargaining chip. At the outset of an arbitration, procedural negotiations are frequently characterized by asymmetry in party positions. For instance, investors, especially repeat players, may influence procedural considerations, including confidentiality, and States that are cautious about political exposure, sensitive information, or regulatory chill may acquiesce.
Normative Incoherence Between the Mauritius Convention and the UNCITRAL Transparency Rules
Although the aim of both the Convention and Rules is to mandate transparency in ISDS proceedings, the incoherence between the two generates uncertainty and fragments the framework.
The Convention under Article 2(1) automatically applies the Rules in pre-2014 investor-State arbitrations, irrespective of the rules of the arbitral proceedings, as long as both treaty parties have ratified the Convention and made no reservation. However, the Rules under 1(1) are automatically applicable only to arbitrations conducted under the UNCITRAL Arbitration Rules and arising from treaties concluded on or after 2014, provided the parties have not agreed otherwise. In all other cases, including pre-2014 treaties and post-2014 non-UNCITRAL proceedings, the application of the Rules, under 1(2) and (9), is not automatic and is subject to the express agreement of the parties.
This incoherence leads to varying standards of transparency and consequently unequal access to the public, despite involving identical regulations, e.g., health regulations, environmental policy. For instance, a pre-2014 BIT under ICSID, with both states ratifying the Convention without reservation, mandates the automatic application of the Rules, whereas a similar post-2014 ICSID-only FTA dispute remains confidential absent the parties’ choice.
Transparency Replaced, or Rebranded?
Transparency in ISDS has neither been made absolute nor mandatory. In other words, confidentiality has been preserved for states that, despite a public-interest dimension, do not want disclosure. The issue is further aggravated by tribunal discretion under Rule 7. Even though Rules 7(6) & (7) emphasize that disclosure must be exceptional, tribunals, in accordance with Rule 7(3), have broad discretion regarding what constitutes confidential information, or a threat to procedural integrity. For instance, in Biwater Gauff v. Tanzania, the tribunal withheld disclosure of documents or any other information submitted by the parties during proceedings, even though ICSID had no general confidentiality requirement. The tribunal justified the order as it would lead to public exposure and media attention that might potentially prejudice the dispute, even if not causing actual harm. Such a conservative approach may conflict with the broader obligations of transparency expected of governments and businesses.
Furthermore, the term ‘confidential business information’ used in Rule 7(2)(a) suffers from a defined meaning which may enable extensive redactions of commercial strategies, like pricing, expansion plans, supply chain details, etc. Clause 7(2)(c) further permits respondent States to invoke domestic secrecy laws to withhold information that is integral to regulatory decision-making. States may justify non-disclosure of their domestic policies and internal deliberations in the name of national security, tax secrecy, or cabinet confidentiality – allowing opacity in disputes that directly implicate public interest. Additionally, Rule 7(4) diminishes transparency by treating a negotiable concession as a default obligation rather than a negotiable concession. It allows a party, whose confidentiality claim is rejected, to withdraw the document from the record instead of submitting its redacted version. Once withdrawn, the document can neither be relied upon by the tribunal nor made available to the public.
Australia is among the few states to have ratified the Convention, which significantly limits the effectiveness of its domestic transparency reforms in ISDS.
- Firstly, the Convention’s legal effect is contingent upon ratification either by both treaty parties or alternatively by the investor’s consent where the home state has not ratified. Since, the majority of Australia’s treaty partners have not ratified, the promise of transparency remains largely unfulfilled to the extent of non-ratifying states. As of late 2025, out of Australia’s 28 active (not terminated) ISDS instruments, including BITs and FTAs with 28 treaty partners, only Canada has ratified the Convention. However, by March 2026, even with the European Union’s expected ratification, this number might increase only to 6, leaving most disputes outside the transparency regime of the convention.
- Secondly, where Australia is the sole ratifying State, investor consent is required under Article 2(2) for the application of the Rules, giving investors a de facto veto over disclosure. Thirdly, it may also lead to asymmetrical transparency obligations, where Australia would potentially have disclosure obligations in certain disputes, and its investors would have no equivalent transparency protections in other jurisdictions
Australia’s domestic transparency reform also suffers from a jurisdictional limitation. Most ISDS proceedings involving Australia are not seated there, because the selection of a seat is primarily driven by the considerations of neutrality. However, if the treaties are not amended accordingly, arbitrations seated in jurisdictions less committed to transparency will significantly reduce the impact of such reforms. Instead, its effectiveness would depend more on tribunal practice and procedural enforcement.
Towards Realistic Solutions
The afore-mentioned shortcomings do not indicate the outright failure of the transparency framework, rather it exposes the limitations of a treaty-based reform dominated by party autonomy. Nevertheless, there are a few pragmatic solutions to address these problems and strengthen the transparency.
- Firstly, Rule 7 must be construed to promote procedural transparency of arbitration, in consistency with the overall object and purpose under Rule 1(6). The generic and vague assertions under domestic law should not be accepted. The reasoning in Merrill & Ring Forestry v. Canada, where the Canadian claim of ‘cabinet confidentiality’ was rejected for lack of specific identification and persuasive justification of any claimed privilege, offers a more appropriate model.
- Secondly, the decision of non-disclosure under Rule 7(6) & (7) should be restricted to exceptional circumstances. The tribunal should exercise its powers to define confidential information with absolute restraint, particularly the interpretation of phrases like ‘confidential business information’ in 7(2)(a), ‘essential security interests’ in 7(5), and ‘integrity of the arbitral process’ in 7(6) & (7).
- Thirdly, the existing framework should be amended to enhance transparency, particularly drawing inspiration from recent ICSID rule amendments, specifically Rule 62(3), which establishes a deemed consent mechanism providing for default publication of awards and decisions unless parties object to it within 60 days of its issuance.
The tribunal, even with the objection of the party, would not withhold the document but would nonetheless publish it with necessary redactions. It may, in practice, achieve broader disclosure than the consent-based transparency framework of UNCITRAL under Rule 7(4) of which the entire document may be withheld from the record of arbitral proceedings.
Finally, transparency must be considered as a public law obligation inherent to investor-state arbitration. Disputes that entail the exercise of sovereign regulatory powers cannot be treated as private matters merely because they are not subject to the traditional judicial scrutiny. The public interest aspect even requires disclosure despite no clear obligation in this respect.
Conclusion
Australia’s ratification of the Mauritius Convention represents a genuine and meaningful commitment to transparency in ISDS. Yet commitment alone is insufficient. As long as party autonomy retains the power to dilute, defer, or defeat transparency obligations, it will remain an illusion.
ABOUT THE AUTHOR
Taimoor Raza Sultan is an arbitration attorney from Pakistan, currently practicing at Sultan & Sultans Law Chambers (“SSLC”). He holds an LL.M. in International Commercial Arbitration from Stockholm University. He has experience in both domestic and international arbitration, focusing on investment treaty disputes, commercial arbitration, and enforcement of awards. His research interests include the intersection of arbitration and sovereign immunity, assignment of arbitral awards, and emerging trends in cross-border dispute resolution.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
