☝️International Bar Association Publishes Recommendations on Third-Party Participation in Investment Arbitration

The Investment Arbitration Subcommittee of the International Bar Association (IBA) has published a report and recommendations on the participation of third parties (i.e., persons who are not direct parties to the dispute) in investment arbitration.

The report's findings are based on a study of 135 investment arbitrations conducted up to December 11, 2024.

🔘 A key trend is the significant increase in third-party participation applications over the past two decades, particularly between 2015 and 2019.

The report notes that third-party involvement can enhance the legitimacy and transparency of the process, as well as assist the arbitral tribunal in addressing issues affecting the public interest.

The report outlines two main areas for further work:

1️⃣ Developing clearer procedural requirements for third-party participation in the process – possibly including guidance on the limits of the arbitral tribunal's authority to invite third parties on its own initiative to submit applications to join the proceedings;

2️⃣ Developing provisions on procedural safeguards (in particular, confidentiality measures) to prevent third parties from disrupting the course of the proceedings.

Based on the study's findings, the IBA concluded that arbitrators generally have the authority to accept third-party applications, even if the relevant investment treaty or rules do not expressly provide for such a possibility. However, there is no uniform approach to how this authority is exercised, particularly with regard to disclosure of information and whether arbitrators may invite third parties to submit applications ex officio.

The IBA does not provide clear recommendations on the allocation of costs when a third party participates in the proceedings, acknowledging that arbitral practice remains inconsistent.

At the same time, the IBA considers that the approach to this issue may vary depending on whether the third party joined the proceedings voluntarily or was invited to participate by the arbitral tribunal or a party.

📎 The full press release is available here.

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