The Trial and the issues in it

The central idea of The Trial was to follow the trail of Basanti's death and the Orissa privatisation failure to arbitration in Washington through capturing a mash up of real arbitration cases from the International Centre for the Settlement of Investment Disputes (ICSID). In situations like this where a multinational company like BEW has a asset such as its water collection contract in Orissa cancelled it is often protected by a Bilateral Investment Treaty (BIT), which allows for binding arbitration to work out a solution. It's a sort of legal insurance policy. In terms of turning this into a play the problem was that even though the issues being dealt with were really important, controversial and provocative, and a trial should have a natural tension, the original drafts were wordy, boring and overly legalistic despite redraft after redraft cutting into the text. At that point, Alan decided to represent more of a sense of how he felt about these arbitration hearings and particularly how he felt when reading the transcripts of the arbitration hearings, so an ICSID hearing is portrayed in The Trial as if it is a group of children playing a made up game (you can read more about the problems developing The Trial for performance in the "Lawyers on spacehoppers" section below).

In terms of the issues, ICSID arbitration hearings are extremely controversial, with a wealth of criticisms represented here including:

The set up of the play as a circus, with children playing at being lawyers and judges, is also part of the critique of these hearings as simply making it up as they go along. It also intentionally suggests, given that just 15 arbitrators (all from the EU, US and Canada) have sat in 55% of all known investment treaty dispute hearings, that a small clique are involved in these important hearings. In terms of real world cases, The Trial is a mashup of three water privatization arbitration hearings relating to events in Bolivia, Argentina and Tanzania, plus an ongoing mining arbitration dispute in Costa Rica.

Indira although she loses the spacehopper race at the beginning quickly becomes the focus of The Trial as she rebels against the system. The point of the race is again not a frivolous one. While historically the win ratio for companies versus the government failry even, historical ratios are misleading. This is because although the ICSID has existed since 1965, there were few cases until 1996, when Bilateral Investment Treaties that exploded in the post Soviet period began triggering disputes. Since that explosion, the ratio has become more squewed in favour of the companies to stand at a 70% win ratio for companies in recent years. That is why none of the characters want to represent the Indian government. Alfons outlines the rules at the beginning – the most important of which is that only those with spacehoppers get to speak. Again, this is not a frivolous matter, but represents the exclusion of the public from this hearing, a matter Indira returns to again and again.

The first real item for the hearing is Indira’s objection to Alfons as President because of a conflict of interest, as BEW is a client of his law firm. Alfons, as President, considers the matter and dismisses it. Although slightly exaggerated for focus here, conflicts of interest like this are not uncommon in arbitration hearings even in some of the most high profile and controversial cases. Indira then turns to the issue of the arbitration hearing being an illegitimate forum – that is it has no jurisdiction to decide on this matter. The Indian government has no investment treaty with the UK that allows international arbitration. However, BEW has moved some companies in its group to Holland, to allow it to claim Dutch nationality and allow it to claim under a Dutch treaty with India. What seems an obviously manipulative act is allowed by Alfons. BEW is Dutch. Again this reflects decisions of real world ICSID arbitration on this matter. Therefore, the Indian government is bound to have the matter decided in Washington despite the fact the water concession granted to BEW clearly states that local law applies.

At this point, there is a comic intervention by phone from an external power inspired by the General from Dastardly and Muttley. This is intended to represent public pressure on the ICSID to allow public access. Alfons reluctantly reads a submission to the hearing from Amnesty International. The issue of public access, affected community representation and accountability has formed a major part of the criticism of the ICSID system, as it has been secretive and unaccountable for much of its history despite the significant public impact of its decisions. Its more recent compromise has been to allow, since 2007, limited submissions from affected parties called amicus briefs.

In this case, Amnesty International raises the human rights of the affected community. Peter responds that the hearing will take no account of these human rights issues unless it is required to in the investment treaty, and this Dutch investment treaty does not require it. Again, this reflects the way investment arbitration hearings treat human rights and environmental issues as matters of contract. Water as a human right or human rights abuse generally, is irrelevant here. The other issue raised is the often made point that the government, here the Indian government, represent the public interest and so no more public access or accountability is needed. However, governments do not necessarily care about the affected community in arbitration cases as the affected community may be a minority community or a community it is politically hostile to. Amnesty Internation makes the point in its submission that a compensatory monetary award to the company is likely to reward human rights abuse and mean a double punishment for the affected community as the water investment needed will be even more unlikely to come from the government.

After the Amnesty International intervention, the main issue is dealt with, and it looks as though BEW will win. Indira points out that BEW is having its cake and eating it: it can through its complex and moving group structure, simultaneously deny liability for the actions of BEW India, and become Dutch to directly claim compensation for the loss of BEW India’s assets. Peter replies that, yes, it can do all these things. Shortly after this, when The Trial was performed on stage, the audience usually intervened and took over the hearing. Surprisingly, this often did not change the outcome, as the audience found it hard to escape the role and rules of the arbitration hearing even though it was in a fictional context. That was perhaps the most remarkable outcome from The Trial.

The system of investment arbitration was built in the 1960s for a world that looked very different from ours. For companies and some governments, primarily the US, it still represents the best way to deal with these disputes. In the original rehearsal script for The Trial, Alfons, the President of the hearing, gave a judgement which was subsequently cut for time reasons. It went:

"ALFONS: Ahem. ‘This arbitration process has been set up to fulfill an important role in protecting investors from powerful states like India. That is its job. This may not be popular but it is a vital part of ensuring that much needed investment flows into the developing world. Governments, both developed and developing, have the option of including human rights provisions in investment treaties. In most cases, as here, they have not done so. Additionally if they are unhappy to use international arbitration they can opt out and suffer the negative consequences for economic development.’

INDIRA: The Indian government did opt out.

PETER: Boo Hoo. We Nederlandse.

ALFONS: Ahem. ‘All this is not to say we do not care about the vulnerable but we take the view that protecting investors against powerful governments has the greater positive effect of lifting millions out of poverty. This sometimes looks callous in human rights terms but it is for the greater good. [Beat] In this matter we find for BEW."