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Problems and Questions Encountered in Relation to Confidentiality in Arbitration

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Confidentiality in International Commercial Arbitration

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Abstract

When one reflects on the concept of confidentiality in arbitration, there are many parameters and questions to be considered prior to reaching any conclusions. The main questions to be posed and answered can be grouped as follows: What are the advantages and disadvantages of arbitration? Is confidentiality an advantage of arbitration or not and for which reasons? What is the main purpose of arbitration? How does confidentiality relate to the purpose of arbitration?

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Notes

  1. 1.

    Such as, for example, the UK or Malaysia.

  2. 2.

    See, for example, rule 9 of the Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.

  3. 3.

    Such as, for example, Australia and the United States.

  4. 4.

    Esso Australia Resources Ltd. & Others v. Plowman, 183 C.L.R. 10, 128 A.L.R. 391 (1995); United States v. Panhandle Eastern Corp., 118 F.R.D. 346 (D. Del. 1988).

  5. 5.

    Article 34 of the International Arbitration Rules of the International Centre for Dispute Resolution (ICDR), a division of the American Arbitration Association, calls for the arbitrator and the administrator to maintain the confidentiality of arbitration proceedings and the award.

  6. 6.

    Laeuchli (2007, p. 84).

  7. 7.

    Abu Dhabi Gas Liquefaction Co. v. E. Bechtel Corp., (1982) 2 Lloyd’s Rep. 425, 427.

  8. 8.

    Daly (2007, pp. 124–125).

  9. 9.

    Such as for example the Rules of Arbitration of the International Chamber of Commerce (ICC).

  10. 10.

    International Bar Association (IBA) 1999 Rules on the Taking of Evidence in International Commercial Arbitration, Article 9.

  11. 11.

    Buhler (2002, p. 380).

  12. 12.

    Stouthuysen (2006, pp. 146–147).

  13. 13.

    For example as a fiduciary.

  14. 14.

    For instance see: Rules of Arbitration of the International Chamber of Commerce, Appendix I, Article 6 and Appendix II, Article 1; Rules of the London Court of International Arbitration, Article 30; International Centre for Dispute Resolution (American Arbitration Association) International Arbitration Rules, Article 34; World International Property Organization Arbitration Rules, Articles 73–76; Swiss Rules of International Arbitration, adopted by the Chamber of Commerce and Industry of Zurich in 2004, Article 43; Swiss Rules of International Arbitration, adopted by the Chamber of Commerce and Industry of Geneva in 2004, Article 43; Arbitration Rules of the German Institution of Arbitration (DIS), Section 43; Arbitration Rules of the Singapore International Arbitration Centre, Rule 34.6; Hong Kong International Arbitration Centre Domestic Arbitration Rules, Article 26; Rules of the International Commercial Arbitration Court that the Chamber of Commerce and Industry of the Russian Federation, Article 11; ACICA Arbitration Rules, Article 18.

  15. 15.

    A number of institutions have rules that do not refer to confidentiality. For instance: the United Nations Commission on International Trade Law International Arbitration Rules; the Arbitration Rules of the International Centre for Settlement Investment Disputes (ICSID); the ICSID Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules); the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce; the International Arbitral Centre of the Austrian Federal Economic Chamber’s Rules of Arbitration (Vienna Rules); the China International Economic and Trade Arbitration Commission (CIETAC) Arbitration Rules.

  16. 16.

    Scholars such as Thomson CR and Finn AMK; See Thompson and Finn (2007, pp. 78–79) who have suggested a form of confidentiality clause that can serve as a basis for discussion and negotiation when confidentiality is important to the parties. Their starting point is that any confidentiality clause must comply with the applicable law in the relevant jurisdiction. The general part of the proposed text of such a confidentiality clause is as follows: Draft Confidentiality Agreement: Subject to any applicable and overriding law and duty, the parties agree for themselves and any persons or companies under their control and direction that any arbitration conducted under the authority of this agreement will be private and confidential, and all documents, evidence, orders and awards, whether electronic or otherwise, will be kept private and secret and will not be disclosed to persons who are not participating in the arbitration proceeding. This obligation continues during the course of the proceeding and thereafter unless all parties otherwise agree. If a party concludes that its legal duty requires disclosure of such material, it will give the opposing party notice of its intention to disclose before making any such disclosure. If the opposing party will not consent to the disclosure, the parties agree that the question of whether there is any applicable and overriding law and duty in relation to the material under consideration will be presented for decision to the arbitrator who is appointed under this agreement. The parties agree to be bound by the ruling of the arbitrator whose decision will be final and binding. The arbitrator may determine the timing, nature and extent of disclosure. The parties agree that any failure to abide by the decision of the arbitrator may give rise to a claim for an injunction.

  17. 17.

    Contracting parties often assume that arbitration’s privacy denies the public access not only to arbitration hearings, but also information revealed during the hearings. These parties may then accept arbitration agreements without contracting for confidentiality. This, in turn, may negatively impact corporate parties expecting arbitration to shield their business information, as well as individuals who assume that personal information revealed in arbitration will remain secret.

  18. 18.

    Buys (2003, pp. 129–131); Schmitz (2006, p. 1211).

  19. 19.

    Schmitz (2006, p. 1211).

  20. 20.

    Goldhaber (2005); Schmitz (2006, p. 1214).

  21. 21.

    Ware (1999, pp. 706–726) distinguishing between private and government adjudication; Schmitz (2006, pp. 1214–1215).

  22. 22.

    Mentschikoff (1961, p. 846).

  23. 23.

    Schmitz (2006, pp. 1215–1216).

  24. 24.

    Sturges (1960, pp. 1032–1033); see also Schmitz (2006, pp. 1215–1216).

  25. 25.

    For example, the Supreme Court of the United States has emphasized this finality, and most other federal and state courts have followed suit. Courts have looked to the goals and functions of arbitration to guide them in reinforcing arbitration’s finality as necessary to guard its privacy, flexibility, and efficiency; See Brennan v. King, 139 F.3d 258, 266 n.7 (1st Cir. 1998); See Schmitz (2006, pp. 1217–1218); However, as far as English law is concerned, this last point is only true to a limited extent.

  26. 26.

    For example the English Arbitration Act 1996 only impliedly refers to the duty to observe and protect confidentiality.

  27. 27.

    Kouris (2005, pp. 134–135).

  28. 28.

    The commonly used American Arbitration Association (AAA) Commercial Arbitration Rules and Mediation Procedures, for example, do not address confidentiality of general arbitration proceedings. At most, some domestic arbitration rules require that arbitrators and administrators refrain from disclosing certain information or otherwise maintain some level of confidentiality. Similarly, international arbitration rules often go no further than requiring that arbitrators maintain limited levels of confidentiality in the processes they administer. The American Arbitration Association’s International Arbitration Rules, for example, provide for a presumption that hearings remain private, but that selected awards may be publicly available unless the parties agree otherwise. They also require the arbitrators, but not the parties, to maintain the confidentiality of arbitration proceedings and awards. The Internal Rules of the International Chamber of Commerce (ICC) similarly require arbitrators and administrators to maintain the “confidential nature” of their arbitral tribunals’ internal operations by refraining from disclosing evidence or information they learn through their participation in arbitration. These rules generally do not, however, restrict the parties’ rights to disclose such information. Moreover, most rules leave the meaning of “confidential nature” unclear; see Schmitz (2006, pp. 1219–1220).

  29. 29.

    AT&T Corp. v. Pub. Serv. Enters., Nos. CIV. A. 99-4975, CIV. A. 99-6099, 2000 WL 387738, at *2 (E.D. Pa. Apr. 12, 2000).

  30. 30.

    Omaha Indem. Co. v. Royal Am. Managers, Inc., 140 F.R.D. 398, 400 (W.D. Mo. 1991); City of Newark v. Law Dep’t, 760 N.Y.S.2d 431, 436–437 (N.Y. App. Div. 2003).

  31. 31.

    Schmitz (2006, p. 1222).

  32. 32.

    United States v. Panhandle Eastern Corp. 118 F.R.D. 346 (D. Del. 1988).

  33. 33.

    Cont’ship Containerlines, Ltd. v. PPG Industries, Inc. No. 00 Civ. 0194 RCCH BP, 2003 WL 1948807 (S.D.N.Y. Apr. 23, 2003).

  34. 34.

    United States v. Panhandle Eastern Corp. 118 F.R.D. 346 (D. Del. 1988).

  35. 35.

    Cont’ship Containerlines, Ltd. v. PPG Industries, Inc. No. 00 Civ. 0194 RCCH BP, 2003 WL 1948807 (S.D.N.Y. Apr. 23, 2003).

  36. 36.

    United States v. Panhandle Eastern Corp. 118 F.R.D. 346 (D. Del. 1988).

  37. 37.

    Cont’ship Containerlines, Ltd. v. PPG Industries, Inc. No. 00 Civ. 0194 RCCH BP, 2003 WL 1948807 (S.D.N.Y. Apr. 23, 2003).

  38. 38.

    Lawrence E. Jaffee Pension Plan v. Household International, Inc. No. Civ. A. 04-N-1228 (CBS, 04-X-0057), 2004 WL 1821968 (D. Colo. Aug. 13, 2004).

  39. 39.

    Urban Box Office Network v. Interfase Managers No. 01 Civ. 8854 (LTS) (THK), 2004 WL 2375819 (S.D.N.Y. Oct. 21, 2004).

  40. 40.

    Urban Box Office Network v. Interfase Managers No. 01 Civ. 8854 (LTS) (THK), 2004 WL 2375819 (S.D.N.Y. Oct. 21, 2004).

  41. 41.

    Reuben (2006, pp. 1260–1268).

  42. 42.

    Dolling-Baker v Merrett, 1 W.L.R. 1205.

  43. 43.

    Dolling-Baker v Merrett, 1 W.L.R. 1205, at 1213.

  44. 44.

    Hassneh Ins. Co. of Israel v. Mew, 2 Lloyd’s Rep. 243.

  45. 45.

    Hassneh Ins. Co. of Israel v. Mew, 2 Lloyd’s Rep. 243, at 246.

  46. 46.

    Ali Shipping Corp. v. Shipyard “Trogir”, 1 Lloyd’s Rep. 643.

  47. 47.

    Dolling-Baker v Merrett, 1 W.L.R. 1205.

  48. 48.

    Hassneh Ins. Co. of Israel v. Mew, 2 Lloyd’s Rep. 243.

  49. 49.

    Reuben (2006, pp. 1260, 1274–1281).

  50. 50.

    Trackman (2002, p. 16).

  51. 51.

    Sacor Maritima SA v. Repsol Petroleo SA [1998] 1 Lloyd’s Rep. 518 (QBD (Comm)).

  52. 52.

    Ali Shipping Corp. v. Shipyard “Trogir”, 1 Lloyd’s Rep. 643 (A.C. 1998), Dolling-Baker v. Merrett [1991] 2 All E.R. 890. Following Dolling-Baker v. Merrett [1991] 2 All E.R. 890 the decisions in Hassneh Insurance Co. of Israel v. Mew [1993] 2 Lloyd’s Rep. 243, Insurance Co v. Lloyd’s Syndicate [1995]1 Lloyd’s Rep. 272 and in Ali Shipping Corporation v. Shipyard Trogir [1998] 1 Lloyd’s Rep. 643 reaffirmed the existence of an implied duty of confidentiality but recognised that it was subject to exceptions.

  53. 53.

    Nappert and Cooke (2003, pp. 43–44).

  54. 54.

    Department of Economic Policy & Development of the City of Moscow (DEPD) v. Bankers Trust Co. [2003] EWHC 1337; [2003] 1 W.L.R. 2885; Insurance Co v. Lloyd’s Syndicate[1995]1 Lloyd’s Rep. 272.

  55. 55.

    Hassneh Insurance Co of Israel v. Stuart J Mew [1993] 2 Lloyd’s Rep. 243.

  56. 56.

    Insurance Co v. Lloyd’s Syndicate[1995]1 Lloyd’s Rep. 272; Ali Shipping Corporation v. Shipyard Trogir [1998] 1 Lloyd’s Rep. 643.

  57. 57.

    Associated Electric & Gas Insurance Services Limited v European Reinsurance Company of Zurich [2003] UKPC 11, The Times, January 30, 2003.

  58. 58.

    Ali Shipping Corporation v Shipyard Trogir [1999] 1 W.L.R. 314.

  59. 59.

    Dolling-Baker v Merrett [1990] 1 W.L.R. 1205.

  60. 60.

    Nappert and Cooke (2003, pp. 43–44).

  61. 61.

    Ashford (2006, pp. 90–92).

  62. 62.

    Ashford (2006, p. 116).

  63. 63.

    Hodges (2007, p. 163).

  64. 64.

    Suovaniemi v Finland (Case No. 31737/96, February 23, 1999, European Court of Human Rights).

  65. 65.

    Hodges (2007, p. 164).

  66. 66.

    Hodges (2007, p. 163).

  67. 67.

    Findlay v United Kingdom [1997] 24 E.H.R.R. 221.

  68. 68.

    Hodges (2007, p. 164).

  69. 69.

    ASM Shipping Ltd of India v TTMI Ltd of England [2006] 1 Lloyd’s Rep. 375.

  70. 70.

    Paul Stretford v Football Association Ltd [2007] EWCA Civ 238 (March 21, 2007, CA).

  71. 71.

    Hodges (2007, pp. 168–169).

  72. 72.

    Hodges (2007, p. 169).

  73. 73.

    Reuben (2006, pp. 1260, 1299–1300).

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  1. Faculty of Law, University of Hamburg, Schlüterstraße 28, D-20146, Hamburg, Germany

    Dr. Kyriaki Noussia

  2. Max Planck Institute for Comparative and International Private Law, Mittelweg 187, D-20148, Hamburg, Germany

    Dr. Kyriaki Noussia

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Noussia, K. (2010). Problems and Questions Encountered in Relation to Confidentiality in Arbitration. In: Confidentiality in International Commercial Arbitration. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-10224-0_3

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