Document Type

Discussion Paper

Publication Date

2019

Abstract

The Hague Rules on Business and Human Rights Arbitration provide a set of procedures for the arbitration of disputes related to the impact of business activities on human rights. The Hague Rules are based on the Arbitration Rules of the United Nations Commission on International Trade Law (with new article 1, paragraph 4, as adopted in 2013) (the “UNCITRAL Rules”), with modifications needed to address certain issues likely to arise in the context of business and human rights disputes. Each article is accompanied by a commentary, which includes background on the drafting of various provisions in the Rules, explaining in particular the reasons for possible deviations made from the UNCITRAL Rules. The Commentary may be useful in interpreting and applying the Rules, but it is not part of the Hague Rules.

As with the UNCITRAL Rules, the scope of the Hague Rules is not limited by the type of claimant(s) or respondent(s) or the subject-matter of the dispute and extends to any disputes that the parties to an arbitration agreement have agreed to resolve by arbitration under the Hague Rules. Parties could thus include business entities, individuals, labor unions and organizations, States, State entities, international organizations and civil society organizations, as well as any other parties of any kind. Equally, the Hague Rules purposefully do not define the terms “business,” “human rights” or “business and human rights.” For the purposes of the Hague Rules, such terms should be understood at least as broadly as the meaning such terms have under the UN Guiding Principles on Business and Human Rights. However, in the vast majority of cases, no definition of these terms should be necessary at all.

The Hague Rules have been conceived as a uniform set of rules. However, considering the breadth of the scope of potential disputes that may be arbitrated under the Hague Rules, parties may exercise their discretion to modify or opt out of certain provisions that do not respond to their needs in the dispute at issue. Certain Model Clauses annexed to the Hague Rules have been developed in this respect.

Like the UNCITRAL Rules, the Hague Rules do not address the modalities by which the parties may consent to arbitration nor the content of such consent. As with all arbitration, proper and informed consent remains the cornerstone of business and human rights arbitration. Such consent can be established before a dispute arises, e.g., in contractual clauses, or after a dispute arises, e.g., in a submission agreement (compromis). The Model Clauses found in the Annex to the Hague Rules may provide potential parties with options for expressing their consent to arbitration in various contexts and instruments. The Hague Rules also do not address enforcement of arbitral awards, which are governed by national laws and various treaty obligations, including in most cases the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Lastly, the Hague Rules do not address other modalities for ensuring compliance with an award, such as monitoring by intergovernmental institutions, non-governmental organizations or multi-stakeholder initiatives.

Although the Hague Rules attempt to lower barriers to access to remedy, arbitration under these Rules is meant to be employed where it is reasonable to presume that all parties have a minimum of resources at their disposal to cover the basic costs of the arbitration and their own representation, either by themselves or through a “legal aid” system, contingency funding or an agreement on the asymmetric distribution of costs and deposits between the parties.

Comments

Reproduced with permission. Copyright 2019 The Hague: Center for International Legal Cooperation.

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