Third party intervention in investment arbitration: Tribunal admits NGO submissions in Gabriel Resources' claim against Romania concerning mining project

The Tribunal in Gabriel Resources v Romania recently issued an order (the Order) in response to an application (the Application) made by three Romanian NGOs, as non-disputing parties, for participation and an amicus submission (the Submission) in an ICSID arbitration under the Canada-Romania BIT (the BIT). Gabriel Resources' allegations of breach of the BIT arise in relation to a proposed open pit mining development in Roşia Montană, Romania (the Project) which was not implemented.

The Tribunal granted the Application in part, admitting only certain sections of the Submission to the extent that they referred to factual issues within the specific knowledge of the Applicants and in relation to the interests which the Applicants claim to be protected.  However, the Tribunal denied admission to arguments on the law, as well as references to or reliance on testimonies which could not be tested by cross-examination. The Tribunal also rejected the NGOs' request to attend and participate in the oral hearing.

The Tribunal's analysis of the conditions relevant to an application by non-disputing parties – and its approach of considering each section of the Submission in relation to those conditions (rather than the Submission as a whole) - provides a significant contribution to jurisprudence in this area. The application in Gabriel Resources is also consistent with a general increase in such third party interventions, particularly in disputes which touch on issues of public interest, such as environmental protection, public health measures, labour standards, cultural rights and/or human rights.  Such a trend is likely to continue with civil society becoming more active in this context.

The Applicants and the reasons for the application

In its Submission, the three Applicants (Alburnius Major, an NGO based in Roşia Montană, Greenpeace Romania, and the Independent Center for the Development of Environmental Resources (ICDER)), were described as: "well-established Romanian non-governmental organizations (NGOs), who collectively work to protect the interests of local families in the Roşia Montană and Bucium regions, as well as to protect the region's environmental resources and historical monuments". The Application and Submission were filed on the Applicants' behalf by the Center for International Environmental Law (CIEL), ClientEarth and the European Center for Constitutional and Human Rights (ECCHR). The Tribunal was prepared to accept that the Submission was that of the Applicants and not those of the organisations which had prepared the Application and Submission.

The Application stated that it was filed to address issues alleged to arise from the Project, including: the destruction of cultural heritage; depletion of tourism value by irreversible transformation of the valley; concerns that the Project would not lead to sustainable development of the local area or benefit to the local community; environmental and health risks; and social concerns including those arising from displacement of communities. It was argued that separately and jointly these concerns presented matters of public interest on which the Applicants had a unique perspective.

The Tribunal's analysis

The Tribunal found "the most important factor for it to permit the participation of the amici is the preservation of the public interest, if any", noting that, "[i]n this connection, the Tribunal may limit the scope of a non-party submission to ensure that it does not exceed the appropriate purpose or the purpose which is important for the Tribunal". It considered that, under Rule 37(2) of the ICSID Arbitration Rules (the Rules) and Part III(4), Annex C of the BIT, it enjoyed "a degree of discretion" in determining the Application, even if one of the parties objected to the Application. It then analysed the Application and the Submission against each of the non-exhaustive conditions for participation included in those provisions:

1. Assisting the tribunal; in relation to the legal issues, the Tribunal was not convinced that the Application would bring "a perspective, particular knowledge, or insight that is different from that of the disputing parties" (Part III(4)(a), Annex C of the BIT, Rule 37(2)(a) of the Rules). Further, whilst the Applicants may have a particular knowledge of factual issues, if the Submission was admitted, the various testimonies relied on in it could not be considered or admitted to the proceedings because they could not be tested via cross-examination (Order, Paragraph 60).
2. Addressing a matter within the scope of the dispute; for the most part the Submission did satisfy this requirement, although legal issues in the Submission were addressed by, or within the expertise of, the parties.
3. Significant interest in the arbitration; the Tribunal agreed with the Applicants that it was not relevant that the outcome of the arbitration would not result in implementation of the Project, if the outcome of the arbitration could nonetheless impact on wider interests. However, the Tribunal concluded that the specific applicants did not prove more than a general interest in the proceeding, "let alone a significant interest in representing or protecting those they claim to be representing", and that "there may be concerns as to whether the Applicants have a significant interest in the proceedings". The Tribunal's view on this point was "especially reinforced" by the Applicants' reference to the Tribunal's decision being an important "signal for future investors attempting to abuse the protection offered by BITs". The fact that the Applicants had not proven a significant interest in the arbitration was not, however, fatal to the Application.
4. Public interest in the subject-matter of the arbitration; non-implementation of the Project was not determinative of this question – the Tribunal still had to ask itself "whether it is possible that its decision will affect inter alia the individuals or entities mentioned in the Application". It concluded that there was a public interest in the subject matter of the arbitration which may be impacted by the outcome, but the Application was granted only with respect to the parts of the Submission that did not (i) deal with legal matters and matters outside the competence of the Applicants; and (ii) refer to or rely on testimonies.
5. Integrity of the proceedings: the Tribunal concluded that its decision to admit the Submissions only in part avoided disrupting the proceedings and that neither party was unduly burdened nor unfairly prejudiced by the Submissions as permitted to be filed.

Access to the hearing

Part III, Annex C of the BIT provides that a tribunal that grants leave for a non-disputing party to file a submission is not required to address the submission and neither is the non-disputing party entitled to make "further submissions in the arbitration". Access to hearings and documents by non-disputing parties fell within the general provisions of the BIT which governed public access to hearings and documents.  The Applicants were therefore permitted to observe the hearing in the same way as the public at large, consistent with the Tribunal's earlier order regarding public access to the hearing.

Comment

Non-disputing party participation in investor-state arbitration raises difficult questions as to how a tribunal can balance a number of competing considerations, including: confidentiality; transparency; concerns as to equality of participation; cost; the need for efficient proceedings; and the risk of additional politicisation of the dispute. Further, whilst the Tribunal did not consider that the conditions for non-disputing party participation in the Rules and the BIT must all be satisfied, it appeared to take the view that the conditions operated to prevent non-disputing party participation from being used as a vehicle to push a broader agenda or to make submissions on matters on which the parties (in this case, the State) were able to address. This approach is reflected in its decision to admit only part of the Submission.

Even where a tribunal considers that civil society participation is justified, it may also need to determine the scope of that participation. Depending on the treaty and the arbitration rules governing the procedure, this could range from granting leave to submit a written submission only (as in this case), through being granted opportunity to respond to  specific questions put to the non-disputing party by the tribunal, to being able to actively participate in the hearing. A tribunal may also have to decide the extent to which they may have access to the documentary record.

The ruling will be of interest to investors, States and prospective intervenors / amici alike.  However, whilst ICSID Rule 37(2) (and in this case, the relevant BIT), provides a framework for considering whether non-disputing party submissions should be admitted, the application of each of the conditions will be different in each case depending, among other things, on the nature of the public interest considerations and the identity of the prospective amici.

For further information please contact Andrew Cannon, Partner, Hannah Ambrose, Senior Associate, or your usual Herbert Smith Freehills contact.