The investor-state dispute resolution process has been a long standing target for critics. Many of these critics concentrate on the lack of transparency demonstrated in the system; Indeed investor-state dispute resolution proceedings are often held in a confidential manner, where not only the public cannot follow or participate in the proceedings, but also, at least on some occasions, viewing the awards granted in these disputes is not permitted. The importance of such a webcast therefore lies first and foremost in the enhanced transparency it provides. It is, after all, only fair that the public be allowed (and able) to follow any legal proceedings in which tax payers’ money is on the line. Furthermore, investment disputes in the past have dealt with important issues such as the supply of drinking water, the enlargement of nature reserves, the disposal of toxic waste and the regulation of polluting gasoline additives. The public’s interest in following these legal proceedings is obvious.

It is important to note however, that as the proverb says, one swallow doesn’t make a summer. First, this is merely one case. Whether it will become a ‘trend’ is yet to be seen. Secondly, the specific webcasted proceedings were governed by the Dominican Republic – Central American Free Trade Agreement (CAFTA-DR), a rather unique agreement[3] in which Article 10.21 stipulates that hearings shall be open to the public. Most investment agreements do not include such provisions. Furthermore, it could also be argued that the novelty of this case is purely technological, as the instruction to conduct open hearings is not new in itself.

There is however, some level of importance in this new development. First, the legal text of the CAFTA-DR (like the text existing in the U.S. and Canada model treaties) is ‘passive’ by nature: the hearings need only be ‘open to the public’. Nothing in this text’s language requires the parties to actively ‘deliver’ the hearings to the public’s homes. An active approach, such as the one presented by the parties to the Pac Rim Cayman dispute, does not only passively permit the public to attend the hearings, but also actively makes the hearings readily accessible to the general public, wherever it may be. The parties’ decision to allow such an active approach could possibly serve as precedence, a creation of a new standard with regard to transparency in investment disputes, one that others may decide to adopt in future disputes.

Secondly, introducing states to such a possibility may lead to the future adoption of ‘active’ transparency obligations in international investment treaties. If the usage of webcasting technology becomes an accepted ‘trend’, receives positive feedback from the public and can be easily (and cheaply) implemented, states may choose to include similar requirements in their future investment treaties.

Thirdly, the use of such technology by international investment tribunals might help to improve the somewhat damaged reputation of the investor-state dispute resolution system. While it is not clear how many people are likely to actually use this newly acquired possibility (it would be interesting to know how many people actually listened to these 12 hours of recorded legal proceedings), having the option to do so remains crucial. As mentioned above, the field of international investment law is under heavy criticism. Many consider it to be a closed, western, commercially oriented system. Some even named it “the law of greed”.[4] Several states have denounced the ICSID convention (Bolivia, Ecuador), while others may intend to do so (Venezuela). Besides its above mentioned effects, the use of online streaming could serve in this respect as a ‘PR tool’, a visible step toward the alleviation of these critiques. The public image of the investor-state dispute resolution system would only gain from such a trend, and so would the legitimacy of this system.

There seems little doubt that adopting the webcasts technology in investment disputes can, at least potentially, bring about some benefits. It is important to note, however, that increasing the system’s publicity could also be used in order to create political pressure upon both arbitrators and parties.[5] State parties, for example, can engage public opinion to bring pressure on arbitrators in environmental cases. This, in the long term, would create unfavourable investment climate.

By webcasting an investment dispute to the open public, the investor-state dispute resolution system is distancing itself from the closed and secretive reputation it has gained. It will be interesting to see the full effects this change will carry – whether this enhanced publicity will be used in order to politicize disputes, whether it will affect the system’s reputation and legitimacy, or whether it will have no influence at all. After all, who in his right mind would like to watch 12 hours of legal proceedings?

[2] Though some technical problems currently exist. See online: ICSID http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame&FromPage=Announcements&pageName=Announcement60

[3] Similar provisions can be found in Article 19 of the Norwegian Draft Model BIT, Article 38 of the Canadian Model BIT, Article 29 of the U.S.A Model BIT.

[4] M. Sornarajah, “A Law for Need or a Law for Greed?: Restoring the Lost Law in the International Law of Foreign Investment” (2006) 123 Int. Environ. Agreements 329.

[5] See concerns made in this respect by Ives Fortier, “Investment Protection and the Rule of Law: Change or Decline?” Lecture given by L. Yves Fortier on March 17th 2009 at the British Institute of International and Comparative Law, online: ICCA <http://www.arbitration-icca.org/media/0/12392785460140/0732_001.pdf>at 15.

Why, therefore, do we need laws regulating or banning gambling? The fact that problem gambling is a myth takes care of a Hartian positivist/utilitarian justification. This leaves only Fuller and his “natural law”, which in this case amounts to antiquated Victorian morality. With such a foundation, I’d bet that today’s gambling laws are little different in substance from those of a hundred years ago.[1]

Such questions are all the more relevant today because of the rise of online gambling. Anyone who has watched movies on Megavideo knows that there are two rules: 1) there’s a 72-minute limit, and 2) popup ads for a certain gambling website – let’s call it “MartyMoker.com” – are ubiquitous. But are these kinds of betting sites legal? The truth is that in Canada today the answer is not entirely clear.

The situation is complex because online gambling by its nature involves cross-border transactions. It is clear that running an unregulated online casino from within Canadian territory would be illegal. But what about Canadians betting on websites based in other countries? At the present time, there seem to be no laws addressing this question. Internationally however, there are several models we could follow.

In the United States, prohibition is the rule. The 1961 Wire Act, which banned gambling using phone lines, has been used by the federal government as the basis for strong action against international gambling websites with American customers. The Unlawful Internet Gambling Enforcement Act updated the Wire Act and required financial institutions not to transfer funds to gambling sites. This led to the arrest of two Canadian heads of an “e-wallet” company which had transferred money from U.S. residents to online casinos. More recently, the Gibralter-based parent company of the aforesaid “MartyMoker” site paid over $100m to the U.S. government after admitting to targeting Americans in its advertising (though the Megavideo ads remain).

Clearly the American government’s efforts are misguided. Having sampled both interpersonal and internet-based gambling, I can attest that the latter is to be preferred. By providing your credit card number to an online gambling site, you only risk personal insolvency – which is much less painful for my thumbs than becoming indebted to a bookie. For this reason, the British approach – legalisation and regulation – is far more practical.

The 2005 UK Gambling Act made online casinos legal, with regulations to keep internet gambling free of crime, fair and open, and to protect minors and vulnerable adults. The British government has even attempted to work with other countries to draft a code of conduct for online gambling sites, though the U.S. did not participate in these talks. An approach similar to Britain’s has been adopted in other EU countries. But if Canada must choose a system, my personal recommendation is to follow the Caribbean nation of Antigua’s lead.

Antigua has made itself a haven for online casino corporations catering to Americans, who make up a majority of their customers despite the U.S. government’s policies. Furthermore, Antigua has actively stood up for the industry. In 2003 Antigua filed a complaint with the WTO against the U.S. for its anti-internet gambling laws, arguing that the laws in question were inconsistent with the U.S.’s obligations to allow for the free flow of goods and services. The American laws were upheld in a 2005 appeal as “necessary to protect public morals or to maintain public order”. However the WTO held that the American Interstate Horseracing Act, which allows for interstate electronic betting on horse races, creates a discriminatory policy, since equivalent international betting is prohibited. The U.S. has been ordered either to allow comparable international gambling (an International Law of the Seabiscuit?), to outlaw all electronic gambling equally, or to pay compensation to other WTO members. So far the U.S. has not implemented the WTO orders, and Antigua now seeks permission from the WTO to violate American intellectual property law as an enforcement mechanism.

Antigua’s openness to online gambling companies isn’t just logical from a legal standpoint, it’s good business. I myself have contributed several hundred dollars to the Antiguan economy just while writing this article. But if Canada followed Antigua’s lead in international electronic gambling, we could be the next E-Vegas! Just imagine: instant access to a wide variety of home-grown internet gambling operations, with all the corresponding social benefits…

In the meantime, if any burly fellows are asking around for someone of my description named Rusty Shackleford, I don’t know anything about it.

THAT'S ME WITH THE ORANGE HAT