Some years ago, I was entrusted by the Commission on Arbitration of the International Chamber of Commerce (ICC) with the task of preparing a comparative study on confidentiality as a purported obligation of the parties in arbitration. The trigger was the extensive discussion of this issue in the arbitration community following the 1995 decision of the High Court of Australia in Esso v. Plowman1 and the subsequent revival of interest provoked by the three Swedish decisions in the Bulbank case. 2 In contrast to other institutional rules, the 1998 ICC Rules of Arbitration, which were at the time and still are in force, remained silent on the question. The study consisted in a review of institutional rules, case law and various articles and commentaries. 3 Its findings were summarized as follows:

The universally accepted right to privacy, inherent in arbitration, does not entail an implied obligation of an arbitrating party to keep confidential the information disclosed during an arbitration.

The protection of confidentiality in arbitration and its limits may depend on one or more of the following parameters: the nature of the disclosed information, the arbitration agreement, the applicable institutional rules, the law governing the arbitration agreement, the law at the seat of the arbitration.

It is generally acknowledged that the safest means of protecting confidentiality is to include a carefully-drafted relevant provision in the arbitration agreement or, more realistically, an agreement at the beginning of the arbitration proceedings. In an ICC arbitration, the Terms of Reference provide an ideal [Page6:] opportunity for the parties to discuss and agree on a confidentiality clause with the assistance of the arbitral tribunal. 4

It is with great interest that I revisit this subject today with the hindsight of developments in both institutional rules and national regimes, and when things seem at least 'dedramatized', if not resolved. The challenge behind such descriptive approach is to see whether the issue of confidentiality as an obligation of the parties is actually regulated, and if so, to what extent; but also to see whether and to what extent the existing rules are similar or at least not contradictory. Lastly, the real question may be whether an agreement between the parties on the issue of confidentiality is still the most effective solution, even in the presence of an institutional rule protecting confidentiality.

Part I will be devoted to some of the most commonly employed institutional rules. For reasons of convenience, the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) and the Rules on the Taking of Evidence in International Commercial Arbitration of the International Bar Association (IBA) will also be included. Only provisions dealing with confidentiality as an obligation of the parties, or lack thereof, will be examined. 5

Part II will be devoted to national laws, to the extent that they actually include provisions on confidentiality. Case law may be of interest and will also be examined where rules pertaining to confidentiality have been established by judgment rather than statute.

I. INSTITUTIONAL RULES

Institutional rules will be distinguished according to whether they do or do not impose a confidentiality obligation on the parties. Those that do will be quoted. Consideration will first be given to two issues that receive similar treatment across the board, namely the privacy of the hearings and the publication of awards. Given this uniformity of treatment, it is unnecessary to quote the various provisions on these two issues.

A. UNIFORM REGULATION

1. Privacy of the hearings

The majority of the institutional rules examined in this study include a specific provision on the privacy of the hearings. 6 The international arbitration rules of the Chamber of National and International Arbitration of Milan, and the arbitration rules of the German Institution of Arbitration (DIS), the Singapore International Arbitration Centre (SIAC) and the Kuala Lumpur Regional Centre for Arbitration (KLRCA) are the [Page7:] only institutional rules that do not include such a specific provision. Yet, it is clear from the text of these rules that there is no intention to depart from the principle of private hearings. The standard provisions on privacy, where they exist, are worded similarly and express the principle that the hearings will be private unless otherwise agreed by the parties. There are, however, two kinds of variations found in institutional rules. One requires the approval of the tribunal in addition to the consent of the parties. This is the case in Article 21(3) of the ICC Rules of Arbitration. Similarly, Rule 32(2) of the Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID) gives the arbitral tribunal the discretion to open the hearing with the consent of the parties and after consultation with the Secretary General. Article 33(1) of the CIETAC Rules also seems to leave this to the discretion of the tribunal ('Where both parties request an open hearing, the arbitral tribunal shall make a decision.'). The second kind of variation allows for the tribunal to decide to open the hearings even without the consent of the parties. Identical examples of this variation are found in Article 19(4) of the Rules of the London Court of International Arbitration (LCIA) and Article 28(3) of the Rules of the Dubai International Arbitration Centre (DIAC).

It is worth noting that, following the amendment of ICSID's Regulations and Rules in effect as of 10 April 2006, Article 37(2) of the Arbitration Rules allows the arbitral tribunal to permit written submissions by non-disputing parties (amici curiae) regarding a matter within the scope of the dispute, but not their participation in the proceedings (although, in practice, such participation is more often than not persistently requested by the amici and one of the parties).

2. Publication of the award

All institutional rules place upon the institution an obligation not to publish an award without the consent of all parties. 7 Again, ICC may be singled out insofar as there is no specific provision relating to publication with the consent of the parties, but only a general provision in Article 28(2) stating that awards shall not be made available to anyone other than the parties. Some institutional rules contain specific provisions subjecting publication to strict conditions, namely a request addressed to the institution, the deletion of all references to the parties' names and no objection from a party within the time allowed for objections. 8 Article 42 of the DIS Rules forbids the publication of the names of the parties, their legal representatives, the arbitrators and any other information specific to the arbitral proceedings, apparently notwithstanding the written permission of the parties.

It should be noted, however, that excerpts from awards, redacted to prevent identification of the parties or the dispute, are often published for scientific purposes, even when not specifically provided for in the relevant institutional rules. ICSID awards [Page8:] and decisions of ad hoc committees are very often divulged even without the consent of the parties and in full, with no information removed. 9

B. INSTITUTIONAL RULES NOT IMPOSING A CONFIDENTIALITY OBLIGATION ON THE PARTIES

The rules of the following institutions remain silent about a general confidentiality obligation incumbent on the parties:

International Chamber of Commerce (ICC), Rules of Arbitration (effective 1 January 1998)

Chamber of National and International Arbitration of Milan, International Arbitration Rules (effective 1 January 2004)

International Centre for Settlement of Investment Disputes (ICSID), Arbitration Rules (effective 10 April 2006)

American Arbitration Association (AAA), International Arbitration Rules (effective 1 May 2006)

International Arbitral Centre of the Austrian Federal Economic Chamber, Rules of Arbitration and Conciliation (Vienna Rules) (effective 1 July 2006)

Arbitration Institute of the Stockholm Chamber of Commerce (SCC), Arbitration Rules (effective 1 January 2007)

It is recalled that the working party responsible for the 1998 ICC Rules of Arbitration preferred to avoid regulation of this question due to the difficulty of agreeing on an appropriate formulation for the general duty of confidentiality and any legitimate exceptions thereto. Apparently, similar concerns were faced during the latest revision of the SCC Rules. More specifically, 'a great deal of consideration was given to the question of whether the new Article 46 should impose a confidentiality obligation also on the parties . . . Ultimately it was decided not to impose a confidentiality obligation on the parties . . . The comments received on the draft new SCC Rules were overwhelmingly against the imposition of such an obligation on the parties. The numerous exceptions to such an obligation were deemed to outweigh any potential benefit. Moreover, it was felt that the importance of confidentiality for parties should not be exaggerated.' 10

At this point, mention should be made of Article 20(7) of the ICC Rules of Arbitration:

The Arbitral Tribunal may take measures for protecting trade secrets and confidential information.

This provision and the lack of any definition of 'confidential information' is rightly interpreted as granting the arbitral tribunal the power to issue an order protecting the [Page9:] confidentiality of pleadings, witness statements, the award and other information relating to the arbitration or even its existence. 11

The UNCITRAL Arbitration Rules (effective 15 December 1976) do not place an obligation of confidentiality on the parties either. In its 1996 Notes on Organizing Arbitral Proceedings, UNCITRAL stated that 'there is no uniform answer in national laws as to the extent to which the participants in an arbitration are under the duty to observe the confidentiality of information relating to the case' and suggested that 'the arbitral tribunal might wish to discuss that [i.e. the extent of confidentiality that is expected] with the parties and, if considered appropriate, record any agreed principles on the duty of confidentiality'. The issue has recently been considered by the UNCITRAL working group studying the revision of the UNCITRAL Arbitration Rules. At its forty-eighth session held in New York on 4-8 February 2008, the working group discussed at length the desirability of including in the UNCITRAL Arbitration Rules provisions on transparency specifically for investor-State arbitrations, but finally decided not to embark on such a path at this stage. 12 The Commission, meeting for its forty-first session in New York on 16 June-3 July 2008, agreed that it would not be desirable to include specific provisions on transparency in the UNCITRAL Arbitration Rules themselves, that any such work might be undertaken in the future as part of a general discussion on treaty-based arbitration, and that it should not delay completion of the revision of the UNCITRAL Arbitration Rules in their generic form. 13 It is thus assumed that the revised UNCITRAL Arbitration Rules, as at present, will not subject the parties to an obligation of confidentiality.

C. INSTITUTIONAL RULES IMPOSING A CONFIDENTIALITY OBLIGATION ON THE PARTIES

A number of institutions contain express provisions on confidentiality as an obligation incumbent on the parties. LCIA was the first institution to introduce a sophisticated confidentiality provision and other institutions have followed suit, more or less closely. For purposes of completeness and comparison, the relevant provisions are quoted below.

• London Court of International Arbitration

Arbitration Rules, effective 1 January 1998 (LCIA Rules)

Article 30(1):

Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain-save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority. [Page10:]

• German Institution of Arbitration

Arbitration Rules, effective 1 July 1998 (DIS Rules)

Article 43(1):

The parties, the arbitrators and the persons at the DIS Secretariat involved in the administration of the arbitral proceedings shall maintain confidentiality towards all persons regarding the conduct of arbitral proceedings, and in particular regarding the parties involved, the witnesses, the experts and other evidentiary materials. Persons acting on behalf of any person involved in the arbitral proceedings shall be obligated to maintain confidentiality.

• Kuala Lumpur Regional Centre for Arbitration

Rules for Arbitration, effective 1998 (KLRCA Rules)

Rule 9:

Unless the parties agree otherwise, the Arbitrator and the parties must keep confidential all matters relating to the arbitration proceedings. Confidentiality extends also to the award, except where its disclosure is necessary for purposes of implementation and enforcement.

• World Intellectual Property Organization

Arbitration Rules, effective 1 October 2002 (WIPO Rules)

Article 73:

(a) Except to the extent necessary in connection with a court challenge to the arbitration or an action for enforcement of an award, no information concerning the existence of an arbitration may be unilaterally disclosed by a party to any third party unless it is required to do so by law or by a competent regulatory body, and then only:

(i) by disclosing no more than what is legally required; and

(ii) by furnishing to the Tribunal and to the other party, if the disclosure takes place during the arbitration, or to the other party alone, if the disclosure takes place after the termination of the arbitration, details of the disclosure and an explanation of the reason for it.

(b) Notwithstanding paragraph (a), a party may disclose to a third party the names of the parties to the arbitration and the relief requested for the purpose of satisfying any obligation of good faith or candor owed to that third party.

Article 74:

(a) In addition to any specific measures that may be available under Article 52, any documentary or other evidence given by a party or a witness in the arbitration shall be treated as confidential and, to the extent that such evidence describes information that is not in the public domain, shall not be used or disclosed to any third party by a party whose access to that information arises exclusively as a result of its participation in the arbitration for any purpose without the consent of the parties or order of a court having jurisdiction.

(b) For the purposes of this Article, a witness called by a party shall not be considered to be a third party. To the extent that a witness is given access to evidence or other information obtained in the arbitration in order to prepare the witness's testimony, the party calling such witness shall be responsible for the maintenance by the witness of the same degree of confidentiality as that required of the party.

Article 75:

The award shall be treated as confidential by the parties and may only be disclosed to a third party if and to the extent that:

(i) the parties consent; or [Page11:]

(ii) it falls into the public domain as a result of an action before a national court or other competent authority; or

(iii) it must be disclosed in order to comply with a legal requirement imposed on a party or in order to establish or protect a party's legal rights against a third party.

• Chambers of Commerce and Industry of Basel, Bern, Geneva, Ticino, Vaud and Zurich

Swiss Rules of International Arbitration, effective 1 January 2004 (Swiss Rules)

Article 43(1):

Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards and orders as well as all materials submitted by another party in the framework of the arbitral proceedings not otherwise in the public domain, save and to the extent that a disclosure may be required of a party by a legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a judicial authority. This undertaking also applies to the arbitrators, the tribunal-appointed experts, the secretary of the arbitral tribunal and the Chambers.

Article 44(2):

After the award has been made and the possibilities of correction, interpretation and additional awards referred to in Articles 35 to 37 have lapsed or been exhausted, neither the Chambers nor the arbitrators, the tribunal-appointed experts or the secretary of the arbitral tribunal shall be under an obligation to make statements to any person about any matter concerning the arbitration, nor shall a party seek to make any of these persons a witness in any legal or other proceedings arising out of the arbitration.

• China International Economic and Trade Arbitration Commission

Arbitration Rules, effective 1 May 2005 (CIETAC Rules)

Article 33(2):

For cases heard in camera, the parties, their representatives, witnesses, interpreters, arbitrators, experts consulted by the arbitral tribunal and appraisers appointed by the arbitral tribunal and the relevant staff-members of the Secretariat of the CIETAC shall not disclose to any outsiders any substantive or procedural matters of the case.

• Dubai International Arbitration Centre

Arbitration Rules, effective 7 May 2007 (DIAC Rules)

Article 41(1):

Unless all parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards and orders in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain-save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.

• Singapore International Arbitration Centre

Arbitration Rules, effective 1 July 2007 (SIAC Rules)

Rule 34(1):

The parties and the Tribunal shall at all times treat all matters relating to the proceedings, and the award as confidential. [Page12:]

Rule 34(2):

A party or any arbitrator shall not, without the prior written consent of all the parties, disclose to a third party any such matter except:

a. for the purpose of making an application to any competent court of any State under the applicable law governing the arbitration;

b. for the purpose of making an application to the courts of any State to enforce or challenge the award;

c. pursuant to the order of or a subpoena issued by a court of competent jurisdiction;

d. to a party's legal or other professional advisor for the purpose of pursuing or enforcing a legal right or claim;

e. in compliance with the provisions of the laws of any State which is binding on the party making the disclosure; or

f. in compliance with the request or requirement of any regulatory body or other authority.

Rule 34(3):

In this Rule, 'matters relating to the proceedings' means the existence of the proceedings, and the pleadings, evidence and other materials in the arbitration proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings or the award arising from the proceedings but excludes any matter that is otherwise in the public domain.

• Japan Commercial Arbitration Association

Commercial Arbitration Rules, effective 1 January 2008 (JCAA Rules)

Rule 40(2):

The arbitrators, the officers and staff of the Association, the parties and their representatives or assistants shall not disclose facts related to arbitration cases or facts learned through arbitration cases except where disclosure is required by law or required in court proceedings. 14

• Hong Kong International Arbitration Centre

Administered Arbitration Rules, effective 1 September 2008 (HKIAC Rules)

Article 39(1):

Unless the parties expressly agree in writing to the contrary, the parties undertake to keep confidential all matters and documents relating to the arbitral proceedings, including the existence of the proceedings as well as all correspondence, written statements, evidence, awards and orders not otherwise in the public domain, save and to the extent that a disclosure may be required of a party by a legal or regulatory duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a judicial authority. This undertaking also applies to the arbitrators, the tribunal-appointed experts, the secretary of the arbitral tribunal and the HKIAC Secretariat and Council.

Finally, it is worth mentioning Article 3.12 of the IBA Rules on the Taking of Evidence in International Commercial Arbitration (adopted 1 June 1999), which are often applied as [Page13:] a result of being chosen by the parties or agreed upon between the arbitral tribunal and the parties.

International Bar Association

Rules on the Taking of Evidence in International Commercial Arbitration, effective 1 June 1999 (IBA Rules)

Article 3.12:

All documents produced by a Party pursuant to the IBA Rules of Evidence (or by a non-Party pursuant to Article 3.8) shall be kept confidential by the Arbitral Tribunal and by the other Parties, and they shall be used only in connection with the arbitration. The Arbitral Tribunal may issue orders to set forth the terms of this confidentiality. This requirement is without prejudice to all other obligations of confidentiality in arbitration.

It may be concluded from this comparative survey of institutional rules imposing an obligation of confidentiality on the parties that, although they vary in their degree of detail, they cover essentially the same aspects of the parties' obligation and the same exceptions to that obligation. KLRCA and CIETAC have opted for succinct provisions, while WIPO has drawn up very detailed provisions, in keeping with the nature of the disputes submitted to it. It is interesting that the HKIAC Rules, although inspired by those of LCIA, and the very detailed SIAC Rules also include provisions explicitly protecting the existence of arbitrations. For understandable reasons, this is also the case of the detailed WIPO Article 73. Finally, Article 44(2) of the Swiss Rules contains a unique provision preventing parties from seeking to make arbitrators, tribunal-appointed experts or tribunal secretaries witnesses in legal or other proceedings arising out of the arbitration. Although there may be understandable and legitimate reasons for this provision, its practical implementation remains rather doubtful.

II. NATIONAL REGIMES

A. INTRODUCTORY REMARKS

The UNCITRAL Model Law on International Commercial Arbitration does not address the issue of confidentiality at all because, as it has been rightly said, confidentiality should be better dealt with in arbitration rules than in the Model Law. 15 Thus, national legal systems that have closely followed the Model Law do not subject parties to an obligation of confidentiality. Logically, therefore, the extent to which confidentiality in arbitration is protected in these systems will depend solely on the parties' agreement. Be this is at it may, the present survey will concentrate on those national systems that take a particular position, in their statutes or their case law, with regard to confidentiality as an obligation of the parties. They will be divided into two main categories: national systems that reject such an obligation and those that do not, although subtle variations may appear within each category.

As a general comment, it can be noted that all the national regimes studied accept the principle of the privacy of the hearings. The publication of awards does not really arise [Page14:] as an issue in national legislation. As to the divulgation of the award by a party, it is obvious that a general rule forbidding divulgation does not fit the nature of national legislation but may be dealt with specifically in case law.

B. NATIONAL LAWS AND CASE LAW OPPOSED TO AN OBLIGATION OF CONFIDENTIALITY ON THE PARTIES

1. Norway

The Norwegian Arbitration Act (effective 1 January 2005) does not really endorse the principle of the privacy of the hearings, but just makes their opening dependent on the agreement of the parties. More interestingly, it affirms in its General Provisions (Chapter 1, s. 5) the inexistence of any obligation of confidentiality with respect to the proceedings and the award.

§ 5. Duty of confidentiality and public access

Unless the parties have agreed otherwise, the arbitration proceedings and the decisions reached by the arbitration tribunal are not subject to a duty of confidentiality.

Third parties may only be present during arbitral proceedings when and to the extent that follows from the agreement between the parties.

2. Australia

In its case law, Australia has rejected a general obligation of confidentiality.

The existence of an obligation of confidentiality was implicitly denied in the 1983 case Alliance v. Australian Gas Light Co. 16 However, it was in the notorious 1995 case ESSO Australia Resources Limited and Others v. The Honourable Sidney James Plowman (Minister for Energy and Minerals) and Others17 that the High Court of Australia explicitly held that under Australian law a general obligation of confidentiality cannot be regarded as implicit in an agreement to arbitrate, inasmuch as confidentiality is not an 'essential attribute of a private arbitration imposing an obligation on each party not to disclose the proceedings or documents and information provided in and for the purposes of the arbitration', nor part of the 'inherent nature of a contract and of the relationship thereby established'. The Australian High Court did, nevertheless, acknowledge that an obligation of confidentiality could be imposed on the parties through express contractual provision. 18

However, an Australian Court of Appeal has held that, in certain circumstances, a court may override a confidentiality provision in an arbitration agreement or in an arbitral decision in order to protect the public interest. The case was Commonwealth of Australia v. Cockatoo Dockyard Pty Ltd., 19 where it was held that '[w]hilst private [Page15:] arbitration will often have the advantage of securing for parties a high level of confidentiality for their dealing, where one of those parties is a government, or an organ of government, neither the arbitral agreement nor the general procedural powers of the arbitrator will extend so far as to stamp on the governmental litigant a regime of confidentiality or secrecy which effectively destroys or limits the general governmental duty to pursue the public interest'.

3. Sweden

Following the Bulbank decision of the Swedish Supreme Court in 200020 and given the absence of any statutory provisions on the obligation of confidentiality in arbitration, the position of Swedish law largely matches that of Australian law.

The Swedish Supreme Court, affirming a judgment of the Svea Court of Appeal in the Bulbank case, held that under Swedish law there is no legal duty of confidentiality in arbitration implied or inherent in an arbitration agreement. Although the Supreme Court recognized the private nature of the arbitration proceedings, from which it follows that 'outsiders are not entitled to attend the hearings during the proceedings or have access to the written submissions in the dispute', it nevertheless went on to hold that 'this advantage does not have to mean that there is a preconceived duty of confidentiality binding the parties. The real meaning of this, as compared with judicial proceedings, is instead that the proceedings are obviously not public, i.e., that the public does not have any right of insight by being present at the hearings or having access to documents in the matter . . . This is not contradicted by the parties at the same time being entitled to disclose information to outsiders concerning the arbitration proceedings.' The Supreme Court also observed that '[t]he fact that such a far-reaching rule as a duty of confidentiality for a party has not found expression in any statutory rules, in any event not in the new Arbitration Act, lends strong support for the conclusion that no such obligation exists'. It added that no clear position emerged from foreign jurisdictions and referred, on the one hand, to English and French cases (Ali Shipping Corp. v. Shipyard Trogir21 and Aita v. Ojjeh22) recognizing a general obligation of confidentiality in arbitration and, on the other hand, to the decision of the High Court of Australia in Esso v. Plowman23 taking the opposite position. Its conclusion was that a party in arbitration proceedings cannot be considered bound by an obligation of confidentiality unless this has been expressly agreed by the parties.

4. United States

Neither the Federal Arbitration Act nor the Uniform Arbitration Act imposes a confidentiality obligation on the parties. As a consequence, unless the parties' agreement or applicable arbitration rules provide otherwise (and even then the result is far from certain), there is no requirement under US law for the arbitration proceedings and matters transpiring within them to be treated as confidential by the parties. 24[Page16:]

In the much discussed case United States v. Panhandle Eastern Corp. et al., 25 the Court accepted the US Government's request for production of documents relating to an ICC arbitration held in Geneva between one of the defendants and Sonatrach, the Algerian national oil and gas company. However, it has been observed that there is a real danger in reading too much into this decision, for it does not concern the making of the original order for disclosure but a subsequent attempt by the defendant to obtain a protective order shielding the arbitration documents; and according to earlier cases, parties seeking such orders are subject to a high onus of proof when establishing 'good cause'. 26 It has further been argued that, even if the parties had expressly agreed that the arbitration proceedings were confidential and even if the arbitral tribunal had imposed on the parties an obligation of confidentiality, a US court seized of an application from a government body or official would, and should, direct disclosure of information submitted in an otherwise private arbitration proceeding when such information is sought in aid of properly discharging the public task assigned to that body or official. 27

US federal case law appears stable in its reluctance to grant orders protecting arbitration communications and persists in rejecting arguments that confidentiality may be recognized by implication of law, by internal arbitration rules, or by the parties' general understanding that arbitration proceedings are confidential. 28 In Contship Containerlines, Ltd v. PPG Industries, Inc., 29 the Court rejected the argument that confidentiality is implied in law as a part of the agreement to arbitrate and compelled discovery of communications from an international arbitration held in London. Similarly, in Lawrence E. Jaffee Pension Plan v. Household International, Inc., 30 the Court compelled the production of documents from an arbitration in response to requests made in parallel litigation, notwithstanding the existence of an explicit confidentiality agreement covering all documents disclosed by the parties in connection with the arbitration. 31

C. NATIONAL LAWS AND CASE LAW IMPOSING AN OBLIGATION OF CONFIDENTIALITY ON THE PARTIES

1. New Zealand

The New Zealand Arbitration Act of 1996 (as amended on 18 October 2007) 32 explicitly provides, in reaction to the Australian Esso v. Plowman case33, that confidentiality is an implied obligation of the parties, deriving directly from their arbitration agreement [Page17:] (Article 14B(1)). Moreover, the detailed provisions of Article 14 would appear to be of a mandatory nature. The uniqueness of these provisions justifies their being quoted in full: 34

14A. Arbitral proceedings must be private

An arbitral tribunal must conduct the arbitral proceedings in private.

14B. Arbitration agreements deemed to prohibit disclosure of confidential information

(1) Every arbitration agreement to which this section applies is deemed to provide that the parties and the arbitral tribunal must not disclose confidential information.

(2) Subsection (1) is subject to section 14C.

14C. Limits on prohibition on disclosure of confidential information in section 14B

A party or an arbitral tribunal may disclose confidential information-

(a) to a professional or other adviser of any of the parties; or

(b) if both of the following matters apply:

(i) the disclosure is necessary-

(A) to ensure that a party has a full opportunity to present the party's case, as required under article 18 of Schedule 1; or

(B) for the establishment or protection of a party's legal rights in relation to a third party; or

(C) for the making and prosecution of an application to a court under this Act; and

(ii) the disclosure is no more than what is reasonably required to serve any of the purposes referred to in subparagraph (i)(A) to (C); or

(c) if the disclosure is in accordance with an order made, or a subpoena issued, by a court; or

(d) if both of the following matters apply:

(i) the disclosure is authorised or required by law (except this Act) or required by a competent regulatory body (including New Zealand Exchange Limited); and

(ii) the party who, or the arbitral tribunal that, makes the disclosure provides to the other party and the arbitral tribunal or, as the case may be, the parties, written details of the disclosure (including an explanation of the reasons for the disclosure); or

(e) if the disclosure is in accordance with an order made by-

(i) an arbitral tribunal under section 14D; or

(ii) the High Court under section 14E.

All of the above provisions were inserted in New Zealand's Arbitration Act pursuant to section 6 of the Arbitration Amendment Act 2007 of 18 October 2007 (2007 No. 94).

2. Spain

The Spanish Arbitration Act (effective 26 March 2004) condenses the obligation of confidentiality on the parties into the following provision:

Title V - The Conduct of Arbitral Proceedings

Article 24 - Principles of Equal Treatment of Parties and of a Fair Hearing

. . .

(2) The arbitrators, the parties and the arbitral institutions, if applicable, are obliged to maintain the confidentiality of information coming to their knowledge in the course of the arbitral proceedings. 35[Page18:]

3. United Kingdom

The English Arbitration Act of 1996 is silent on confidentiality and has left the matter to the courts. In the words of the Departmental Advisory Committee at the time, 'that is a developing topic and it is simply not possible to frame more than the most general principles . . . Thus the best we could have done would be to have stated some general rule about privacy and confidentiality and made it subject to "all just exceptions". That of course would have told the reader nothing at all.' 36 A November 2006 report on the 1996 Arbitration Act recommended against a change in the law because it saw a 'virtual impossibility of legislating satisfactorily' in the absence of a consensus about what the statute should provide. 37 English case law, on the other hand, has been eloquent on the subject, which has led to the gradual formulation of relatively clear rules.

- Arbitration proceedings are held in private.

English case law sees this rule as self-evident and does not easily allow exceptions thereto. It has thus been held that, in the absence of the parties' consent, arbitrators had no power to order the concurrent hearing of two arbitrations in which the arbitrators-but not the parties-were identical and the disputes closely associated. 38

- An implied obligation of confidentiality, binding on the parties, arises from the very nature of arbitration.

In Dolling-Baker v. Merrett & Another, 39 the Court of Appeal held that '[a]s between parties to an arbitration, although the proceedings are consensual and may thus be regarded as wholly voluntary, their very nature is such that there must . . . be some implied obligation on both parties not to disclose or use for any other purpose any documents prepared for and used in the arbitration, or transcripts or notes of the evidence in the arbitration or the award, and indeed not to disclose in any other way what evidence had been given by any witness in the arbitration, save with the consent of the other party, or pursuant to an order or leave of the court'. Parker LJ, with whom the other members of the Court of Appeal agreed, also stated: 'But [the fact that] the obligation [of confidentiality] exists in some form appears to me to be abundantly apparent. It is not a question of immunity or public interest. It is a question of an implied obligation arising out of the nature of arbitration itself.'

A distinction was subsequently made in English case law between documents created for the purpose of the arbitration (e.g. transcripts, notes of evidence, pleadings, written submissions, witness statements), which ought to be covered by the implied confidentiality obligation, and documents not created for that purpose but disclosed in the proceedings (the so-called 'historical documents'). The latter are, however, protected by relevant English rules of discovery applied by the arbitrator. 40 It was further held that the award and its reasons may be used to establish cause of action against, or [Page19:] defend a claim brought by, a third party, without needing to request leave of court, whereas raw materials from the arbitration (such as pleadings and witness statements) cannot normally be used unless and until, upon request, the court determines that the ends of justice require confidentiality to be overridden. 41

- The duty of confidentiality is subject to specific exceptions.

In Ali Shipping Corporation v. Shipyard 'Trogir', 42 the Court of Appeal held that the implied term of confidentiality ought properly to be regarded as attaching to arbitration agreements as a matter of law. Exceptions to the rule of confidentiality of broad application were then formulated by the court on the basis of previous court decisions:

consent, i.e. where disclosure is made with the express or implied consent of the party that originally produced the material;

order of the court, e.g. an order for disclosure of documents generated by an arbitration for the purposes of a later court action;

leave of the court;

reasonable necessity, i.e. to protect the legitimate interests of an arbitrating party's legal rights vis-à-vis a third party, found a cause of action against that third party or defend a claim (or counterclaim) brought by the third party (the exception covers not only awards but also pleadings, written submissions, witness statements, transcripts and notes of evidence);

'public interest' (meaning 'the interests of justice', i.e. the importance of reaching a judicial decision on the basis of truthful and accurate evidence from witnesses). 43

The recognition of an implied duty of confidentiality and a limited number of exceptions has since been confirmed by English case law on several occasions. 44 Most recently, in Emmott v. Michael Wilson & Partners45, the English Court of Appeal ordered the disclosure of arbitration materials, holding that the exception to confidentiality in the 'interests of justice' is not limited to the interests of justice in England but may relate to a foreign jurisdiction where the dispute is of an international nature. In this case, the disclosure of arbitration materials was permitted for the purpose of their being submitted to courts in Australia and the British Virgin Islands.

4. Singapore

In Myanma Yaung Chi Oo Co Ltd v. Win Win Nu, 46 the High Court of Singapore largely followed the English decision in Dolling-Baker v. Merrett. It thus accepted that the parties to an arbitration are under an implied duty to keep arbitral documents confidential but that disclosure is permitted when 'reasonably necessary', even without [Page20:] leave of the court. It added that a court should rule on the 'reasonable necessity' for disclosure only when disclosure has already been made on this ground by one of the parties and the other party disputes it and moves to expunge the disclosure. The Court also held that the assessment of whether or not disclosure is 'reasonably necessary' can change over time in the course of the same case.

5. France

French case law is less abundant and explicit in asserting the principle of confidentiality-which is traditionally accepted and stressed by French authorities and practitioners-and in delineating the boundaries of the obligation of confidentiality imposed upon the parties. French courts would appear to reconsider in each case the confidential character of the arbitration process and adapt the general rule of confidentiality in light of the particular circumstances and the parties' intentions at the time of their original agreement.

In Aïta v. Ojjeh47 the Paris Court of Appeal dismissed an action to set aside an arbitral award rendered in London, ruled that the very fact of initiating the proceedings violated the principle of confidentiality, and ordered the challenging party to pay a significant amount of damages to the party that had won the arbitration. The Court held that the annulment action 'allowed facts that should remain confidential to be discussed in a public hearing' and that it is in 'the very nature of arbitral proceedings that they ensure utmost discretion in the resolution of private disputes, as agreed between the parties'. However, it should be pointed out that the facts in this case were exceptional: the action brought before a clearly incompetent court amounted to manifest abuse, which is what led the Court to award such high damages.

In Société True North et société FCB International v. Bleustein et autres, 48 the Paris Court of Appeal reiterated the principle of confidentiality in arbitration in general terms, this time in a normal procedural context, and added the exception of a 'legal obligation to inform':

Whereas arbitration is a private procedure of a confidential nature,

Whereas recourse to arbitration, accepted by the parties, was to avoid creating any publicity about the dispute between them and its possible consequences,

Whereas, save where there is a legal obligation to inform, any possible breach of this confidentiality by one of the parties subject to the said procedure is wrong. 49

The Court ordered the claimants not to make any communications intended to publicize information about the existence, subject matter and particulars of their dispute with the respondents, unless it was proven that they were subject to a legal obligation to inform.

The latest known French decision on confidentiality is Société National Company for Fishing and Marketing 'NAFIMCO' v. société Foster Wheeler Trading Company AG in a procedure for setting aside an ICC award. 50 In this case, the Paris Court of Appeal rejected respondent's claim of damages for abusive procedure and, as a consequence thereof, the claim of damages for violation of confidentiality, which was linked by respondent to the abusive procedure. In a somewhat pedagogical statement akin to an obiter dictum the Court remarked that the respondent 'abstains from providing an [Page21:] explanation for the existence of and reasons for a principle of confidentiality in French law of international arbitration, irrespective of the nature of the arbitration, and, if such be the case, for the parties' waiver of this principle in view of the applicable institutional rules chosen by them'. 51

This last decision seems to distance itself from the view traditionally taken, at least in French legal theory, that French law contains a presumption of confidentiality in arbitration. The Court would appear to be drawing the parties' attention to the fact that if they wish confidentiality to be protected, they need to ensure that the applicable arbitration rules provide for such protection or alternatively that they have concluded an agreement between themselves to protect confidentiality.

CONCLUSION

At the outset of the present contribution, three main questions were set as the underlying purpose of such descriptive approach regarding institutional rules and national regimes relating to the parties' confidentiality obligation.

First, in response to the question of whether confidentiality as an obligation of the parties is actually regulated and, if so, to what extent, it is evidenced from the above that in both institutional rules and national regimes this is not always the case. Nonetheless, there are numerous institutional rules that do regulate the issue, through provisions that vary in detail. In contrast, very few national laws contain provisions on confidentiality. Indirect regulation through case law also exists but, again, in a very limited number of countries.

Second, as regards the extent to which existing rules are similar or at least not contradictory, it is important to distinguish between institutional rules and national regimes. Institutional rules (insofar as they contain provisions on confidentiality) tend to be similar, at least regarding the principle and scope of the protection they afford. They leave the strong impression that the real challenge behind the formulation of such rules is to cover all possible legitimate exceptions to the principle. On the other hand, the few national statutes that include provisions on confidentiality are clearly contradictory, with Norway at one extreme, New Zealand at the other and Spain 'timidly' on the latter's side. Case law in different countries follows the same pattern, with contradictory judgments on the principle and scope of confidentiality and exceptions to that principle.

Third, as to the practical question of whether an agreement between the parties on the issue of confidentiality is still the most effective solution, even in the presence of an institutional rule protecting confidentiality, the answer seems to be affirmative. Parties, after the dispute has arisen, especially at the beginning of the arbitration proceedings, are in the best position to craft a confidentiality agreement tailored to their needs and concerns. This holds true even where the applicable rules provide for the protection of confidentiality as the parties may, through their agreement, render them more specific (particularly given that they are sometimes far from clear or not sufficiently detailed), may limit or expand the scope of such rules and the exceptions to confidentiality [Page22:] provided therein, and even add sanctions. In principle, such parties' agreements are fully respected; only rarely is this not the case. 52

A last thought, at the end of the present contribution and on the occasion of the initiated discussions on a revision of the ICC Rules: in view of the fact that we are far from an international consensus on the parties' obligation of confidentiality, my personal opinion is that the Rules should remain unchanged in this respect given their genuinely international and open character. The present practice of arbitral tribunals' initiating discussions to help parties reach an agreement on their obligations with respect to confidentiality at the stage of the Terms of Reference should be maintained and perhaps even formalized.

1
ESSO Australia Resources Limited and Others v. The Honourable Sidney James Plowman (Minister for Energy and Minerals) and Others, High Court of Australia, 7 April 1995, (1995) 11 Arbitration International 235, see part II.B.2, below.

2
Bulgarian Foreign Trade Bank Ltd v. Al Trade Finance Inc., First Instance Court, 10 Sept. 1998, Rev. arb. 1999.670 (note L. Burger); Court of Appeals, 30 March 1999, (1999) XXIV Y.B. Comm. Arb. 321; Supreme Court, 27 October 2000, (2001) XXVI Y.B. Comm. Arb. 291, see part II.B.3, below.

3
For guidance, the numerous articles on confidentiality include the following: J. Paulsson & N. Rawding 'The trouble with confidentiality' (1994) 5:1 ICC ICArb. Bull. 48; (1995) 11:3 Arbitration International (special issue on confidentiality); J.-L. Delvolvé, 'Vraies et fausses confidences, ou les petits et les grands secrets de l'arbitrage' Rev. arb. 1996.373; P. Neill 'Confidentiality in Arbitration' (1996) 12 Arbitration International 287; H. Bagner 'The Confidentiality Conundrum in International Commercial Arbitration' (2001) 12:1 ICC ICArb. Bull. 18; J. Sarles 'Solving the Arbitral Confidentiality Conundrum in International Arbitration' ADR & the Law (2002); L. Trackman 'Confidentiality in International Arbitration' (2002) 18 Arbitration International 1; F. Fages, 'La confidentialité de l'arbitrage à l'épreuve de la transparence financière' Rev. arb. 2003.5; A. Jolles & M. Canals de Cediel 'Chapter 6-Confidentiality' in G. Kaufmann-Kohler & B. Stucki, eds., International Arbitration in Switzerland (Kluwer, 2004) 89; A. Dimolitsa 'Quid encore de la confidentialité?' in F. Bohnet & P. Wessner, eds., Mélanges en l'honneur de François Knoepfler (Helbing & Lichtenhalm, 2005) 249; C. Müller 'La confidentialité en arbitrage commercial international : un trompe-l'œil ?' (2002) 23 ASA Bulletin 216; A. Tweeddale, 'Confidentiality in Arbitration and the Public Interest Exception' (2005) 21 Arbitration International 59; P. Cavalieros, 'La confidentialité de l'arbitrage' Gaz. Pal., Les Cahiers de l'arbitrage, 2006/3, 56; E. Loquin 'Les obligations de confidentialité dans l'arbitrage' Rev. arb. 2006.323; R. Reuben 'Confidentiality in Arbitration: Beyond the Myth' (2006) 54 Kansas Law Review 1255; C. Thomson 'Confidentiality in Arbitration: A Valid Assumption? A Proposed Solution!' (2007) 62:2 Dispute Resolution Journal.

4
As in fact generally happens nowadays in ICC arbitration practice. See also the clause proposed by Serge Lazareff in his article 'Terms of Reference' (2006) 17:1 ICC ICArb. Bull. 21 at 29-30.

5
Some of these provisions extend the obligation to arbitrators, institutions and witnesses. Those which only concern such other persons will not be examined in this article. As for the deliberations of the tribunal, they relate to the arbitrator's jurisdictional mission rather than the problem of confidentiality in arbitration and in any event come within the scope of other contributions to the present publication.

6
ICC Rules, Article 21(3); SCC Rules, Article 27(3); Vienna Rules, Article 20(4); AAA Rules, Article 20(4); ICSID Rules, Article 32(2); LCIA Rules, Article 19(4); Swiss Rules, Article 25(4); DIAC Rules, Article 28(3); HKIAC Rules, Article 23(7); JCAA Rules, Article 40(1); CIETAC Rules, Article 33(1); UNCITRAL Rules, Article 25(4).

7
AAA Rules, Article 27(4); ICSID Convention, Article 48(5); ICSID Rules, Article 48(4); Milan Rules, Article 8(2); LCIA Rules, Article 30(3); Swiss Rules, Article 43(3); HKIAC Rules, Article 39(3); DIAC Rules, Article 37(9); DIS Rules, Article 42. Article 32(5) of the UNCITRAL Rules also prohibits the publication of the award without the consent of the parties, but it should be emphasized that this is a contractual obligation assumed by the parties, as opposed to an obligation incumbent on the institution. The proposed revision of Article 32(5), to be discussed by the working group, reads as follows: 'An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty, to protect or pursue a legal right or in relation to legal proceedings before a court or other competent authority.'

8
Swiss Rules, Article 43(3); HKIAC Rules, Article 39(3).

9
In addition, the ICSID Newsletter publishes the status of ongoing cases: constitution of the tribunal, hearings, exchanges of submissions, rendering of interim awards etc. This is particularly noteworthy, given that many ICSID disputes, including BIT-related disputes in recent years, involve sovereign States and are arguably all the more sensitive and therefore potentially subject to confidentiality concerns. The parties are deemed to have consented to the piercing of confidentiality by agreeing to the ICSID Rules. However, their 'agreement' is questionable insofar as some disputes arise out of investments within the meaning of BITs where consent to ICSID jurisdiction is assumed to exist even when not expressly formulated and, as a consequence, a lack of complete confidentiality is assumed to have been accepted.

10
K. Hober & W. McKechnie 'New Rules of the Arbitration Institute of the Stockholm Chamber of Commerce' (2007) 23 Arbitration International 261.

11
Y. Derains & E. Schwartz, A Guide to the ICC Rules of Arbitration (Kluwer, 2005) at 286.

12
Report of Working Group on Arbitration and Conciliation on the work of its forty-eighth session (New York, 4-8 February 2008), A/CN.9/646 at 13-16.

13
Report of the United Nations Commission on International Trade Law, Forty-first Session (A/63/17), para. 314.

14
Similarly, the Rules of the Tokyo Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange (effective 1 March 2004) provide that '[t]he arbitral proceedings and record are not public information and the parties, their agents or attorneys or any other persons concerned shall not reveal to third parties the contents of the arbitration, the names of the parties or anything else related to the pending matter in question'. (Article 21(3))

15
P. Sanders 'UNCITRAL's Model Law on International and Commercial Arbitration: Present Situation and Future' (2005) 21 Arbitration International 443.

16
34 SASR 215.

17
See supra note 1.

18
It has been argued that, despite Esso v. Plowman, there is no real danger to confidentiality if parties choose to arbitrate in Australia. 'The circumstances in which documents will not fall under the cloak of confidentiality for having been produced outside the usual discovery process or pursuant to subpoena will be relatively rare. Even in such rare circumstances, Australian courts are likely to hold that such documents have been produced subject to an implied undertaking not to use them other than for the purposes of the arbitration. Courts will be loath to relieve a party from that undertaking . . .' S. Derrington, 'An Illusory Distinction-The Australian & English Approaches to Confidentiality in Arbitration: Transfield Philippines Inc. & Ors v. Pacific Hydro Ltd & Ors' (2007) 21 A & NZ Mar LJ.

19
[1995] 36 NSWLR 662.

20
See supra note 2.

21
See part II.C.3, below.

22
See part II.C.5, below.

23
See part II.B.2, above.

24
See Industrotech Constructors Inc. v. Duke University (1984) 67 N/C/ App. 741, 314 S.E.2d 272; Giacobazzi Grandi Vini S.p.A. v. Renfield Corp. (1987) US Dist. LEXIS 1783.

25
(D. Del. 1988) 118 F.R.D. 346.

26
See P. Neill, supra note 3 at 303-304.

27
See 'Expert Report of Professor Hans Smit (in Esso/BHP v. Plowman)' (1995) 11 Arbitration International 297.

28
R. Reuben, supra note 3. As far as US state case law is concerned, Mr Reuben states that '[t]he overwhelming majority of states do not have statutes or court rules that generally preclude the admission of arbitration communications in formal legal proceedings' and until recently only two state cases existed on the issue. Ibid.

29
2003 WL 1948807 (S.D.N.Y. Apr. 23, 2003).

30
2004 WL 1821968 (D. Colo. Aug. 13, 2004).

31
See also American Cent. E. Tex. Gas Co. v. Union Pac. Res. Group, 2000 WL 33176064, at *1 (E.D. Tex. 27 July 2000), where the court denied a preliminary injunction to seal an arbitration award in which the movant was found liable for antitrust violations because 'the public has a strong countervailing interest in knowing the results of arbitration proceedings that involve allegations of anticompetitive and monopolistic conduct'.

32
For a commentary on the recent amendments to New Zealand's Arbitration Act, see A. Kawharu 'New Zealand's Arbitration Law Receives a Tune-Up' (2008) 24 Arbitration International 405.

33
See part II.B.2, above.

34
The New Zealand Arbitration Act also provides a list of circumstances under which the arbitral tribunal (Articles 14C and 14D) and the High Court (Article 14E) may disclose or allow disclosure of confidential information.

35
It has been suggested that this provision, which did not appear in the original draft, was added as it passed through the Spanish legislature with a view to providing a further reason for parties to prefer arbitration to litigation. See G. Llobregat, 'Commentarios a la Ley 60/2003, de 23 de diciembra, de Arbitraje' (Bosch, 2004) at 597-601.

36
Lord Saville 'The Arbitration Act 1996' (1997) Lloyd's Maritime and Commercial Law Quarterly 502 at 507.

37
See B. Harris 'Report on the Arbitration Act 1996' (2007) 23 Arbitration International (2007) 437; see also M. Marks Cohen 'A Missed Opportunity to Revise the Arbitration Act 1996' (2007) 23 Arbitration International 461.

38
Oxford Shipping Co. Ltd v. Nippon Yusen Kaisha (The Eastern Saga), [1984] 3 All E.R. 835. Accepted also by Colman J in Hassneh Insurance Co of Israel and Others v. Steuart J Mew [1993] 2 Lloyd's Rep. 246-47.

39
Dolling-Baker v. Merrett & Another (CA 1990), [1990] 1 W.L.R. 1205, [1991] 2 All E.R. 890.

40
Hassneh Insurance Company of Israel & Others v. Steuart J Mew [1993] 2 Lloyd's Rep. 243.

41
Ibid. See also Associated Electric & Gas Insurance Services Ltd v. European Reinsurance Company of Zurich, [2003] UKPC 11, in which, however, the Privy Council expressed reservations about the desirability or merit of adopting a general duty of confidentiality as an implied term of arbitration and then formulating exceptions to which such a duty would be subject. It held that such an approach 'runs the risk of failing to distinguish between different types of confidentiality which attach to different types of document or to documents which have been obtained in different ways and elides privacy and confidentiality'.

42
[1998] 2 All E.R. 136.

43
It was thus stated that this exception should not be read as extending to the wider issues of public interest contested in the Australian case Esso v. Plowman.

44
See e.g. Glidepath BV and Others v. John Thompson & Others, [2005] EWHC 818.

45
[2008] EWCA Civ 184.

46
[2003] 2 SLR 547.

47
Rev. arb. 1986.583 (Annot. G. Flecheux).

48
Rev. arb. 2003.189.

49
Translation from French by the author.

50
Rev. arb. 2004.647 (Annot. E. Loquin).

51
Translation from French by the author.

52
See e.g. Commonwealth of Australia v. Cockatoo Dockyard Pty Ltd., supra note 19; Lawrence E. Jaffee Pension Plan v. Household International, Inc, supra note 30.