The adaptability of international arbitration: Reforming the arbitration mechanism to provide effective remedy for business-related human rights abuses
| Author | Katerina Yiannibas |
| DOI | 10.1177/0924051918786626 |
| Date | 01 September 2018 |
| Published date | 01 September 2018 |
| Subject Matter | Articles |
Article
The adaptability of international
arbitration:Reforming the
arbitration mechanism to
provide effective remedy for
business-related human rights abuses
Katerina Yiannibas
Associate professor, Faculty of Law, University of Deusto, Spain. Lecturer-in-Law, Columbia University School of Law,
USA. Researcher, Globernance Institute for Democratic Governance
Abstract
This paper analyses the potential for international arbitration to provide effective remedy for
business-related human rights abuses. Since the proliferation of international arbitration, the
default arbitration mechanism as it stands has been contemplated by and large for the resolution
of cross-border commercial disputes where the primary interests are efficiency and finality.
However, there is evidence that human rights issues have emerged in international arbitration.
Accordingly, if arbitration is to be used in such cases, the mechanism must be adapted in light of
the particular issues that arise in the adjudication of human rights; the balance between trans-
parency and confidentiality, reprisals against victims and human rights defenders, collective
redress, financial assistance, the applicability of human rights standards. If proper procedures are
in place to contemplate the particular interests involved in cases where the substantive claims
involve human rights, the advantage of international arbitration is that it can provide direct
access in a neutral forum for holding companies accountable where national jurisdictions are
unavailable or difficult to access. This article begins by analysing the historical development of
international arbitration so as to demonstrate a pattern of adaptability and flexibility vis-a
`-vis the
subject matter of cross-border disputes. The article will then contemplate the potential of and
concerns for international arbitration, putting forward specific recommendations for reforms of
the international arbitration mechanism in cases where the substantive claims involve business-
related human rights abuses.
Corresponding author:
Katerina Yiannibas, Faculty of Law, University of Deusto. Lecturer-in-law Columbia University School of Law. Researcher,
Globernance Institute for Democratic Governance.
Email: katerina.yiannibas@globernance.org
Netherlands Quarterly of Human Rights
2018, Vol. 36(3) 214–231
ªThe Author(s) 2018
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/0924051918786626
journals.sagepub.com/home/nqh
NQHR
NQHR
Keywords
International arbitration, human rights, business-related human rights abuses, Permanent Court of
Arbitration (PCA), International Center for Settlement of Investment Disputes (ICSID), United
Nations Commission for International Trade Law (UNCITRAL)
1. Introduction
In a supply chain-based global business context where corporate actors are organised into separate
legal persons incorporated in different States with varying human rights standards, the protection
of human rights and the accountability of private actors for their abuse is a complex challenge. As
cases of business-related human rights abuses have emerged across the globe, so has the evidence
of victims’ difficulty to access effective remedy, both legally and practically.
1
Actions must be
taken to avoid a denial of justice and to provide uncomplicated access to remedy. The policy
framework for access to remedy for victims of business-related human rights abuses is set out in
the United Nations Guiding Principles on Business and Human Rights (UNGP), which was unan-
imously endorsed by United Nations Human Rights Council in 2011. The UNGPs clarify the
responsibilities of States, businesses and those affected by business-related human rights abuses.
2
One of the foundational principles of the UNGPs is that States must ensure effective access to
remedy for victims of business-related human rights abuses. As part of a comprehensive system for
remedy, the UNGPs recommend that States should take steps beyond ensuring the effectiveness of
domestic judicial mechanisms to address business-related human rights abuses.
3
In particular, this
includes facilitating access to both State-based and non-State-based non-judicial mechanisms.
4
Arbitration is a non-judicial mechanism, based on party consent, which provides a final and
binding resolution by one or more appointed arbitrators. If proper procedures are in place that take
into account the particular interests involved in cases where substantive claims concern business-
related human rights abuses, international arbitration can provide direct access in a neutral forum
where national jurisdictions are unavailable or difficult to access. Throughout history, various
cross-border adjudication challenges have emerged where foreign disputing parties are faced with
the absence of a central governing power and instead turn to a neutral forum for conflict resolution;
as exemplified in matters of war and disarmament, international commercial transactions, foreign
investor protection, and environmental protection. As such challenges emerged, arbitral process
adapted accordingly. An analysis of some of the key developments of the arbitration mechanism
demonstrates some of the limitations of process vis-a`-vis substantive law. Procedural rules can
only go so far to provide solutions for challenges that ultimately must be solved by substantive law.
On the other hand, developments in arbitral process have also illustrated that certain safeguards can
be given to parties while relevant substantive law develops. This paper explores the development
of the arbitral mechanism and the ways in which it adapted to cross-border adjudication challenges,
identifying which patterns of change would be best applied to the use of the mechanism in matters
concerning business-related human rights abuses. This paper then se ts out the ways in which
1. For background information and resources on business and human rights cases, see Business & Human Rights Resource
Centre accessed 14 May 2018.
2. United Nations Human Rights Council, ‘Guiding Principles on Business and Human Rights: Implementing the United
Nations Protect, Respect and Remedy Framework’ (UNDP) (2011) A/HRC/17/31.
3. UNGP Principle 25.
4. UNGP Principles 26, 27.
Yiannibas 215
To continue reading
Request your trial