Confidentiality is often regarded as one of the core advantages of international arbitration. For instance, confidentiality reduces disclosure of sensitive information and the influence of public opinion.[1] Confidentiality is to be distinguished from privacy, which concerns the fact that only parties to the arbitration agreement may attend hearings and participate in arbitral proceedings.[2] Privacy prevents interference from third parties in the proceedings, whereas confidentiality refers to the parties obligations not to disclose information concerning the arbitral proceedings to third parties.[3]
There is uncertainty concerning the regulation of confidentiality in international arbitration because of differences between national arbitration legislation on this topic.[4] International arbitration conventions are themselves silent on the issue of confidentiality. In the absence of such conventions, the question is subject to national legislation.[5]
Party Autonomy Concerning Confidentiality in International Arbitration
The parties have a right to agree upon the confidentiality of the arbitral proceeding. This right results from the application of the parties’ autonomy, recognized in modern legal systems.[6] They are free to conclude a confidentiality agreement, for instance, concerning the arbitration proceedings. Such agreements provide rights that may be protected through provisional measures or other appropriate relief.[7]
However, confidentiality agreements bind only the parties to that agreement, and not third parties. Hence, third parties are free to disclose materials received without any confidentiality restriction. Moreover, confidentiality provisions may be subject to public policy exceptions.[8]
The Implied Obligation of Confidentiality in England, France and the United States
In situations where parties do not agree expressly on confidentiality provisions, national courts may provide for implied obligations of confidentiality.[9]
In particular, English Courts have established implied confidentiality obligations from the existence of an arbitration agreement. English courts imply from the privacy of the arbitral proceedings the confidentiality obligations. The rationale of these decisions is that the implied obligation arises out of the nature of the arbitration itself. However, this presumption may be rebutted where disclosure is shown to be necessary to protect a party’s rights.[10] English Courts generally protect the materials of the arbitral proceedings while allowing disclosure of arbitral awards to protect the parties’ rights.
Under French law, case law initially held that there was an implied obligation of confidentiality concerning arbitration proceedings, arising from the arbitration agreement. However, France subsequently adopted legislation which included an express confidentiality obligation for domestic arbitration, which was not extended to international arbitration. This exclusion was explained as being the result of the trend towards more transparency in international investment arbitration. For international commercial arbitration, it can be argued that the implied obligation previously recognized by French courts remains applicable. Because of this uncertainty, however, for arbitration proceedings seated in France, it is recommended to include an express confidentiality provision in the arbitration agreement.[11]
In the United States, the issue of confidentiality often arises in the context of disclosure of the arbitral proceedings’ materials, following a third-party request for discovery. U.S. Courts generally admit the production of submissions, evidence and transcripts from arbitration proceedings. However, they do so without addressing the issue of the implied obligation of confidentiality and sometimes despite express confidentiality provisions in the arbitration agreement, or the existence of implied obligations of confidentiality under the law of the arbitral seat.[12]
[1] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2781.
[2] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2781.
[3] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2782.
[4] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, pp. 2782-2783.
[5] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2783.
[6] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2785.
[7] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2786.
[8] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2787.
[9] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2789.
[10] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, p. 2790.
[11] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, pp. 2794-2795.
[12] Gary Born, International Commercial Arbitration, Second Edition, Chapter 20: Confidentiality in International Arbitration, pp. 2795-2796.
