Is Confidentiality in Arbitration a rule?

The confidentiality of arbitral proceedings has long been recognised by English law where the seat of arbitration is in England.

Typically, both the parties and the Tribunal are under implied duties to maintain confidentiality. This also applies to the documents disclosed or produced during the arbitration, and the award.

Nevertheless, the Arbitration Act 1996 does not contain any express rules or provisions on privacy and confidentiality seated in England, leaving this matter for the courts to resolve on “a pragmatic case-by-case basis”. [1]

While confidentiality is an implied obligation in English arbitration, there are exceptions to it.

Exceptions to the duty of confidentiality

• Agreement or consent of the parties to exclude confidentiality

The disclosure may be in the interests of the parties. That being said, the parties can expressly agree to limit the duties of confidentiality to permit the disclosure of an award for specified purposes. For instance, under the London Court of International Arbitration (LCIA) Rules, the parties must keep all awards and materials created for an arbitration confidential, unless the parties agree to publish an award.[2]

• Disclosure by the order of the court

The court in Ali Shipping Corp. v Shipyard Trogir indicated that one of the general exceptions to the broad rule of confidentiality is the order of the court.[3] Courts are in power to order disclosure of documents generated in arbitration when the disclosure is considered to be necessary for the fair disposal of the case.

• Disclosure is necessary in the interests of justice

In Teekay Tankers v STX, the disputes between STX and subsidiaries of Teekay had previously been referred to arbitration.[4] In proceedings before the court, Teekay Tankers referred to the arbitration awards and the arbitrator’s reasons. STX argued that this was a breach of confidentiality. The court held that the counterclaim by STX failed as the disclosure of the awards and arbitrator’s reasons fell within the “the interests of justice exception”. The reason for that was that Teekay Tankers “was advancing an arguable assertion, put forward in good faith, that what happened in the arbitrations could be relied upon for the purpose of TT’s estoppel/ abuse of process assertions, and because TT gave due warning to STX, sufficient to enable STX to take steps to maintain confidentiality to the extent that the court considered it appropriate”.[5]

• Confidentiality and public interest

The recent case concerned an application by Symbion Power (TCC) to set aside an arbitration under section 68 (2) of the English Arbitration Act, alleging serious irregularity.

Symbion argued that the judgment to be anonymous, however, the court decided against it. While under CPR 62.10 the arbitration claims should be heard in private, CPR 62.10 does not apply to the confidentiality of the judgments. The judge drew a distinction between a private hearing and the publication of a judgment, saying that: “There is a strong public interest in the publication of judgments, including those concerned with arbitrations, because of the public interest in ensuring appropriate standards in the conduct of arbitrations. That has to be weighed against the parties’ legitimate expectation that arbitral proceedings and awards will be confidential to the parties”.[6]

Therefore, it is important for the parties to bear in mind there is no absolute rule on confidentiality in arbitration. Nevertheless, such cases as Symbion Power LLC and Teekay Tankers demonstrate that English courts are willing to depart from the strict confidentiality rule only when there is a good reason (public interest, in the interests of justice).

How Gherson can assist

Gherson litigation team has considerable experience in not only making applications to funders but also has the experience to conduct your arbitration or litigation. If you have a potential claim, please contact us to discuss potential funding options.

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