Procedural fairness in business and human rights arbitration

Abstract

In this paper, I examine the question of procedural fairness in business and human rights (BHR) arbitration. I begin by remarking on the growth in the popularity of such a form of arbitration and presenting a brief overview of the recent initiatives in the field. Next, I acknowledge the challenges in defining fairness in the arbitration’s context. As BHR arbitration is intended to complement other grievance mechanisms available to victims of business-related human rights abuses, pertinent guidance can be derived from the fundamental instrument in that area — the United Nations Guiding Principles on Business and Human Rights. Based on them, I choose to focus on procedural fairness and highlight its link with the arbitration’s legitimacy. The main thesis I present in the paper is that the assessment of procedural fairness of BHR arbitration requires an examination of how arbitration is perceived by its users as well as, considering the public interest implicated in BHR disputes, external stakeholders. Those two categories of actors will look into distinct aspects of arbitral procedure when evaluating its fairness. Parties to disputes will be interested in particular in the guarantees of impartiality of arbitrators and they will want the arbitral tribunal to ensure a level playing field and allow them to present their case on equal terms. Meanwhile, the external stakeholders’ perception of fairness will be shaped predominantly by the transparency of proceedings and opportunities for third party participation. I analyze the key initiative in BHR arbitration, the Hague Rules, demonstrating that while this project is relatively more successful in responding to the parties’ demands of fairness, it fails to accommodate properly the public interest. At the same time, I emphasize that in some instances reconciling the expectations of parties and external stakeholders will not be possible, especially when it comes to finding the right balance between transparency and confidentiality. I also warn against transformations in the arbitral procedure so far-reaching that it might start to resemble litigation, thus, losing qualities that have made it appealing to users in the first place.