I WROTE in a recent column that former president Benigno Aquino 3rd and his solicitor general Florin Hilbay bent over to the water concessionaires’ demand to keep their arbitration suit against the government confidential, and therefore away from the prying eyes of the public.
When the Singapore-based arbitral panel’s ruling for Manila Water Co. Inc. became public a few weeks ago, it was so anomalous that President Duterte blew his top. He got so mad he threatened to throw in jail the oligarchs who owned Manila Water and Maynilad Water Services Inc.
Indeed, the arbitration by a mostly foreign arbitration panel was so scandalous that when it was made public, Filipinos were so outraged. Shamed so much by their greed, the water companies the other day announced that they are giving up the payments ordered by the two Singapore panels, P3.4 billion in the case of the Indonesian-controlled Maynilad Water and P7.4 billion for the Manila Water of the Ayalas.
But Hilbay wrote to his friends to claim that they had no choice since “the Uncitral rules mandate that the arbitration proceedings be confidential.” Hilbay claimed he was “fact-shaming” me on this.
Let’s do some real fact-checking.
The Uncitral, or the United Nations Commission on International Trade Law’s rules, adopted eventually by over 60 countries, govern arbitration between companies from different countries or between companies and governments. This was first adopted in 1976, and then amended in 2010 as well as in 2013. The Uncitral also issued in 2010 a template for adoption of the rules by countries, called the Uncitral Model Law on International Commercial Arbitration.
Nowhere in the rules can you find Hilbay’s claim that Uncitral mandated that the proceedings be confidential. You can read it yourself following this link: uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/arb-rules-revised-2010-e.pdf
I hope Hilbay has the balls to admit he was wrong, or to point to me the provisions the Uncitral rules that he claims mandates that arbitration proceedings and each parties’ submission are confidential.
He’ll try though to wriggle out of his lie by referring to two provisions in the Uncitral rules.
First is Article 28.3 that says: “Hearings shall be held in camera unless the parties agree otherwise.” “In camera” is Latin for “in the chambers,” and means that the public and press are not allowed to observe the hearings.
But this rule does not mean that the two parties’ “submissions” (claims and defenses), and even the minutes of the hearings are confidential.
Aren’t the 12-million water consumers entitled to know why the hell the Manila Water and Maynilad claimed P11 billion in losses from 2014 to 2018, when their financial statements showed they earned P67 billion for those years. Don’t we have the right to know if Hilbay did his job defending the Republic? After all, he was removed as solicitor general only in June 2016, more than a year after the arbitration were filed in March and April 2015.
The second provision which I bet Hilbay will use to wriggle his way out of his lie is the arbitral rules; Article 32.5, which says: “The award may be made public only with the consent of both parties.”
But we aren’t really that keen on getting the details of the award. We want to know how the water companies argued their case and if Hilbay did his job, if the proceedings indicate that he collaborated with the water companies so they’d win their cases.
A good liar makes it difficult for others to fact-check his fib. But in this case, one can find out if Hilbay is lying just with a few clicks of the keyboard. He’s a bad liar.
But is this just my own reading that Uncitral mandates total confidentiality in arbitration? Certainly not.
The paper “Confidentiality in Arbitration: From Myth to Reality,” published by Bär & Karrer, a renowned Swiss-based international law firm, pointed out: “The Uncitral rules do not provide for a general obligation of confidentiality binding on the parties: in particular, nothing is said about the confidentiality of the proceeding itself, the confidentiality of the materials exchanged by the parties, the minutes of the hearings, etc. It is therefore very difficult to ground an obligation of confidentiality binding on the parties when arbitration proceedings are governed by the Uncitral rules.
“The Uncitral Model Law on international commercial arbitration followed in whole or in part by many countries, contains no provision regarding confidentiality,” international arbitration law expert Marlon Meza-Salas wrote in the leading global blog on arbitration. He points out: “The Uncitral arbitration rules do not mention the subject, although Article 34.5 seems to recognize an implicit confidentiality of the award by requiring the consent of both parties so that it may be made public.”
“Most arbitration laws, including the Uncitral Model Law, do not contain provisions on the confidentiality of the proceedings. While some arbitration rules do contain confidentiality undertakings, others, such as the ICC Arbitration Rules, do not,” according to law research firms, accessed at https://www.trans-lex.org/970500.
I can go on and on citing so many papers by international law experts that prove that Hilbay is a liar when he claimed that Uncitral rules mandate confidentiality.
Another explanation for Hilbay’s lie is that the water firms’ lawyers told him the arbitration proceedings are confidential according to Uncitral, and he believed them.
If you’re a lawyer and you believe what other lawyers — especially the lawyers of the contending party — claim, you’re a very bad lawyer.
Hilbay is a bad liar, or a bad lawyer. Most probably both.