Introduction

This paper picks up where the two preceding contributions have left off. George Burn and Alison Pearsall1 have focussed on exceptions to the obligation of confidentiality, while Antonias Dimolitsa2 has discussed the regulation of this obligation in institutional rules and national law. Both articles would seem to support the following propositions:

To the extent that the obligation of confidentiality in arbitration is recognized in case law, institutional rules and national legislation, the scope of this obligation is not uniform.

Where there is an obligation of confidentiality, the problem lies in identifying the myriad exceptions 3 to this obligation.

Since it is difficult to enumerate all possible exceptions to the obligation of confidentiality, one practical approach to protecting arbitral confidentiality and its exceptions appears to be the express agreement of the parties at the start of an arbitration, which would be adapted to the parties' circumstances and set down appropriate parameters to a seemingly indefinable obligation of confidentiality.

A. Defining exceptions

Mr Burn and Ms Pearsall observe that courts in various jurisdictions have recognized that there is an implied duty of confidentiality in an arbitration agreement. Alternatively, the obligation of confidentiality may be explicitly mentioned in the relevant contract or appear in the applicable rules, or in another document. They further suggest that '[t]he question of the existence and scope of a duty of confidentiality remains contentious', but do not elaborate further on the obligation as it is beyond the scope of their article. 4[Page40:]

While judicial opinion in other jurisdictions differ over whether there ought to be an obligation of confidentiality at all, 5 the English courts recognize that it is an implied duty in an arbitration agreement 6 and appear to have enunciated a definitive statement on the nature of the obligation. In Emmott v. Michael Wilson & Partners, 7 the English Court of Appeal premised the juridical basis for the duty of confidentiality on the following principles.

The obligation of confidentiality is implied as a matter of law and arises out of the nature of arbitration itself. 8

This obligation is really a rule of substantive law masquerading as an implied term. 9

The obligation is an implied obligation on both parties not to disclose or use for any other purpose any documents prepared for and used in the arbitration, or disclosed or produced in the course of the arbitration, or transcripts or notes of the evidence in the arbitration or the award, and not to disclose in any other way what evidence has been given by any witness in the arbitration. The obligation is therefore not limited to documents containing material that is inherently confidential, such as trade secrets. 10

The content of the obligation may depend on the context in which it arises and on the nature of the information or documents at issue. The limits of the obligation are still in the process of development on a case-by-case basis. 11

The principal cases in which disclosure will be permissible are as follows: 12

The parties have given their consent (express or implied).

It is made with leave of court or pursuant to a court order.

It is reasonably necessary in order to protect the legitimate interests of an arbitrating party.

The interests of justice and the public interest require disclosure.

It is largely uncontroversial that the obligation of confidentiality applies to all persons entitled to know about an arbitration, i.e. the parties themselves, counsel, members of the tribunal, and the administering institution (if any). Should the obligation also apply to actual and potential witnesses? This question has not yet been fully addressed by case [Page41:] law. 13 Mr Burn and Ms Pearsall take the view that any duty of confidentiality affecting the parties will extend to witnesses. 14 However, Jan Paulsson and Nigel Rawding contend that it would 'seem unrealistic and even dangerous to attempt to impose a duty [of confidentiality] on witnesses'. 15 Apart from the fact that witnesses are 'a potential source of limitless leaks', the authors consider that witnesses are 'truly disinterested third parties' who 'have the most reliable contribution to make to the dispute' and are 'most likely to shy away from appearing [as witnesses] at all if to do so exposes them to an obligation'. 16 One solution that Messrs Paulsson and Rawding suggest is to impose a duty on parties not to disclose information obtained in the arbitration to witnesses (for use in preparing their testimony) unless the latter undertake not to disclose outside the arbitration any information they acquire about the case. 17

Although the scope of the duty of confidentiality in arbitration may be contentious, 18 it is acknowledged that this obligation cannot be absolute19 and that confidentiality may be required to give way to other competing interests.

Mr Burn and Ms Pearsall discuss the exception of disclosure that may be required when litigating in State courts. 20 They refer to the disclosure of awards in enforcement and setting-aside proceedings in the context of Rule 62.10 of the English Civil Procedure Rules (CPR), 21 which allows the court to hear arbitration claims in private. They also refer to the English Court of Appeal decision in Department of Economics, Policy and Development of the City of Moscow v. Bankers Trust Co. ('City of Moscow'), 22 where the Court of Appeal considered that a balance must be struck between the public's interest in open hearings, and the parties' wish for confidentiality and privacy. It would appear that the principle of open justice weighs heavily against confidentiality, as the Court of Appeal considered that CPR Rule 62.10(3)(b), which provides that arbitration claims are heard in private, was only a starting point and may easily give way to a public hearing. The New Zealand High Court has taken a similar position on the confidentiality of awards in enforcement and challenge proceedings. In Television New Zealand v. Langley Productions, 23 Robertson J held that the express confidentiality provisions in the arbitration agreement between the parties no longer applied, because 'the confidentiality which the parties have adopted and embraced with regard to their [Page42:] dispute resolution in arbitration cannot automatically extend to processes for enforcement or challenge in the High Court'.

Mr Burn and Ms Pearsall also discuss the following exceptions:

Disclosure in parallel or related proceedings; 24

Disclosure required by law, regulation or in the course of business; 25

State party required to disclose documents;

Disclosure requirements under market regulatory rules;

Disclosure of proprietary information.

They give numerous examples of persons to whom arbitration-related information may be disclosed for the purposes of arbitral proceedings (or related enforcement or challenge proceedings). These exceptions ought to be further extended to disclosures made to persons assisting in the conduct of the arbitration. Examples of such persons include:

independent providers of business services (e.g. transcribers, interpreters, photocopiers, hotel business centres, service staff in hotels (if an arbitration is conducted there), couriers);

secretaries and personal assistants to parties, even if from different companies (e.g. subsidiaries);

executives and in-house counsel of affiliate companies; and

private investigators.

In addition, there are numerous everyday situations in which exceptions to confidentiality will be found, such as:

discussing an arbitration with members of one's family (after swearing them to secrecy);

discussing an arbitration with colleagues to check for conflicts of interest;

discussing an arbitration with potential arbitrators; and

disclosing details of an arbitration to an immigration office in a visa application.

The extensive discussion of exceptions to confidentiality by Mr Burn and Ms Pearsall, plus the additional exceptions discussed above, reveal a multitude of situations falling outside the confidentiality obligation.

B. Regulating exceptions

Drafters of national legislation and institutional rules have debated whether it is viable to codify the general principles of confidentiality and privacy in arbitration. However, most have concluded that the protean nature of the exceptions makes it difficult to devise a comprehensive framework capable of encompassing all possible exceptions, to say nothing of establishing and enforcing sanctions for non-compliance. [Page43:]

England

When drafting the English Arbitration Act 1996, the Departmental Advisory Committee on Arbitration Law (DAC) considered placing the general principles on privacy and confidentiality 'on a firm statutory basis'. 26 Whilst recognizing that it might be desirable to codify these general principles to cover arbitrations falling within the Arbitration Act 1996 (regardless of the substantive law applicable to the arbitration), the DAC concluded that it would be too difficult to do so because 'the exceptions to confidentiality are manifestly legion and unsettled in part'. 27 The reservations expressed by the DAC in relation to the codification of confidentiality are worth quoting:

Given these exceptions and qualifications, the formulation of any statutory principles would be likely to create new impediments to the practice of English arbitration and, in particular, to add to English litigation on the issue. Far from solving a difficulty, the DAC was firmly of the view that it would create new ones. Indeed, even if acceptable statutory guidelines could be formulated, there would remain the difficulty of fixing and enforcing sanctions for non-compliance. The position is not wholly satisfactory. However, none doubt at English law the existence of the general principles of confidentiality and privacy (though there is not unanimity as to their desirability). Where desirable, institutional rules can stipulate for these general principles, even where the arbitration agreement is not governed by English law. As to English law itself, whilst the breadth and existence of certain exceptions remains disputed, these can be resolved by the English courts on a pragmatic case-by-case basis. 28

The Privy Council in Associated Electric and Gas Insurance Services Ltd v. European Reinsurance Co. of Zurich ('AEGIS') 29 reiterated these sentiments. In the words of Lord Hobhouse, the formulation of exceptions to the obligation of confidentiality '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'. 30

New Zealand

The former section 14 of the New Zealand Arbitration Act 1996 31 was inserted into the Act in reaction to the decision of the High Court of Australia in Esso Australia Resources Ltd. v. Plowman (Minister for Energy and Minerals) ('Esso'). 32 In Esso, the Court held that there is no general rule of confidentiality, but rather a principle of privacy in arbitration hearings that is an incident of the subject matter of the agreement to arbitrate but is not an implied term of that agreement. The previous section 14 of the New Zealand Arbitration Act 1996 therefore reads into arbitration agreements an implied term of confidentiality with limited exceptions. In the February 2003 Report of the New [Page44:] Zealand Law Commission (led by Justice J. Bruce Robertson) ('Robertson Report'), 33 it was clear to the Law Commission that the previous section 14 did not adequately address the myriad exceptions to the obligation of confidentiality. Like the DAC in England, the New Zealand Law Commission was well aware of the impossibility of drafting a statutory implied term that would adequately address all exceptions to the obligation of confidentiality. 34 The Robertson Report pointed out two main flaws in section 14 of the New Zealand Arbitration Act 1996, which echoed the concerns of the DAC in its February 1996 Report:

The exceptions to the implied term seem insufficiently wide to deal with many everyday situations where disclosure may be necessary.

It is arguable that no statutory term can ever set out exhaustively all of the exceptions that may arise; these need to be determined on a case-by-case basis. 35

In contrast to the English approach of leaving the matter to the courts, 36 the New Zealand Law Commission repealed the former section 14 and replaced it with the new sections 14 A to I, which came into effect on 18 October 2007. 37 The provisions of these sections, albeit still imperfect, presently form the most comprehensive codification of confidentiality and will be discussed further below.

UNCITRAL Model Law and Rules

The High Court of Australia's decision in Esso also fuelled international discussions on whether the requirement of confidentiality in arbitral proceedings was adequately protected. The UNCITRAL Model Law on International Commercial Arbitration ('Model Law') is silent on confidentiality, and the UNCITRAL Arbitration Rules only refer to the privacy of the arbitral proceedings38 and confidentiality of the award. 39 The prevailing view of the United Nations (UN) Commission was that confidentiality was not a high priority. 40 In relation to the absence of any detailed provisions on confidentiality in the UNCITRAL Arbitration Rules, the UNCITRAL Notes on Organizing Arbitral Proceedings consider that:

There is no uniform answer in national laws on the extent to which the participants in an arbitration are under a duty to keep information relating to the case confidential.

Parties that have agreed on arbitration rules or other provisions that do not expressly address confidentiality cannot assume that all jurisdictions will recognize an implied commitment to confidentiality. [Page45:]

Participants in an arbitration might not have the same understanding of the expected scope of confidentiality.

Ms Dimolitsa remarks that the revised UNCITRAL Arbitration Rules (which were discussed at the UN Commission's forty-first session in New York in 2008) will not, as they presently stand, subject the parties to an obligation of confidentiality. 41

ICC Rules of Arbitration

The protean nature of the exceptions is also a problem for drafters of institutional rules. For example, the difficulty of agreeing on exceptions partly explains why the drafters of the ICC Rules of Arbitration (ICC Rules) in 1988 did not include provisions dealing with the confidentiality of arbitral proceedings. The ICC Rules are used internationally and it would have been difficult to formulate a rule that did not conflict with any national laws. Like the DAC in England, the drafters of the ICC Rules also envisaged the difficulty of enforcing an obligation of confidentiality, given the lack of available sanctions. This position remained the same when the 1998 ICC Rules were drafted. 42

The ICC Rules nonetheless protect the privacy of arbitral proceedings43 and, to a limited extent, the confidentiality of arbitration related information. 44 As is widely known, the work of the International Court of Arbitration is confidential. 45

C. National legislation

Given the Model Law's silence on confidentiality, most national legal systems that have closely followed the Model Law do not subject parties to an obligation of confidentiality, as Ms Dimolitsa rightly points out. 46 The few jurisdictions that have adopted the Model Law and added a provision intended to uphold confidentiality in arbitration take different approaches. Not all, however, expressly recognize a duty of confidentiality or provide for detailed exceptions to that duty. For instance, some protect the privacy of hearings on arbitration claims (e.g. enforcement, setting aside, appeals on points of law) and the publication of awards; some seek to limit the publication of judgments arising out of those arbitration claims rather than the publication of the awards concerned. There is also the question (beyond the scope of this article) of the accessibility of court records concerning those arbitration claims (which would presumably contain the whole award at issue) to interested parties or even the public. [Page46:]

Singapore and Hong Kong

The Singapore International Arbitration Act (Cap. 143A) ('IAA') and the Hong Kong Arbitration Ordinance (Cap. 341) ('Arbitration Ordinance') both deal with the privacy of the hearings relating to arbitration claims and the publication of judgments arising out of such hearings. Both section 22 of the IAA47 and section 2D of the Arbitration Ordinance48 provide that any party may apply for proceedings under the respective statutes to be heard otherwise than in open court. Courts cannot decide to hear proceedings in camera on their own motion. Section 23 of the IAA49 and section 2E of the Arbitration Ordinance50 restrict the reporting of proceedings not conducted in open court, but the court has discretion to decide whether or not judgments should be reported and may direct that sanitized judgments be published if they are of major legal interest. The awards that are the subject of those judgments would inevitably be discussed and, as such, disclosed. The IAA and Arbitration Ordinance therefore appear to give limited protection to confidentiality in arbitration, but seek to maintain the privacy of the arbitration to some degree. Neither statute, however, stipulates any exceptions to the obligation of confidentiality.

While the position in the Arbitration Ordinance is that arbitration claims made in court will be heard in private if a party so requests, the presumption in the Hong Kong draft Arbitration Bill is that court proceedings relating to arbitration claims will be heard in open court. 51 The principle of open justice is incontrovertibly the basis for this significant amendment, as the Department of Justice remarks in the Consultation Paper, 'Reform of the Law of Arbitration in Hong Kong and Draft Arbitration Bill':

However, we take the view that it is necessary to balance the need to protect the confidentiality of arbitral proceedings as a consensual method of dispute resolution on the one hand, and the public interest in having transparency of process and public accountability of the judicial system on the other. 52

Under Clause 16 of the Hong Kong draft Arbitration Bill, the court has discretion to decide that arbitration claims ought to be heard in open court notwithstanding a party's request for private hearings, but no guidance is given on the criteria to apply when ordering closed-door hearings. [Page47:]

While Clause 17 of the draft Arbitration Bill reiterates section 2E of the Arbitration Ordinance concerning restrictions on the reporting of proceedings heard otherwise than in open court, Clause 1853 is a new provision that seeks to protect the confidentiality of arbitration-related information and provides for exceptions where (i) disclosure is compelled by law, or (ii) disclosure is made to a professional or other adviser of any party. However, Clause 18 adopts the repealed section 14 of the New Zealand Arbitration Act 1996, 54 as recommended by the Committee on Hong Kong Arbitration Law in its 30 April 2003 Report, 55 despite criticisms of this section by the Robertson Report56 published just two months earlier in February 2003. The only difference between section 14 of the New Zealand Act and Clause 18 of the Hong Kong bill is Sub-Clause 18(2)(b) 57, which provides for an exception to confidentiality where disclosure of arbitration-related information is compelled by law. Clause 18(2)(a) allows information relating to arbitration proceedings and awards to be disclosed in situations contemplated in the statute itself. These include:

an application by a party for proceedings to be heard otherwise than in open court; 58

restrictions on the reporting of proceedings heard otherwise than in open court; 59

a challenge of arbitrators; 60

court-ordered interim measures; 61

special powers of the court in relation to arbitral proceedings; 62

enforcement of orders and directions of the arbitral tribunal; 63

taxation of costs of arbitral proceedings (other than the fees and expenses of the arbitral tribunal); 64

applications for setting aside the arbitral award; 65

enforcement of arbitral awards; 66

enforcement of New York Convention awards, 67 refusals to enforce New York Convention awards; 68[Page48:]

Consolidation of arbitrations; 69

Determination of a preliminary question of law by the court; 70

Challenging the arbitral award on grounds of serious irregularity; 71

Appeal against the arbitral award on a question of law; 72 and

Application for leave to appeal against the arbitral award on a question of law. 73

New Zealand

As discussed above, the Robertson Report criticized the former section 14 of the New Zealand Arbitration Act 1996, 74 in which it was presumed that an arbitration agreement prohibited the communication, disclosure and publication of arbitration-related information and the award, subject to two exceptions: (i) disclosure contemplated under the Act, and (ii) disclosure to any professional or other adviser of any of the parties. In Television New Zealand v. Langley Productions, 75 Robertson J also made it clear that section 14 had its limits in that the confidentiality agreed by the parties for their arbitration could not automatically extend to enforcement and challenge proceedings in the New Zealand High Court. 76 He also opined that a clear and unambiguous determination by Parliament was necessary if the cloak of confidentiality attaching to the arbitral process were to apply to subsequent proceedings in the High Court. 77

The new sections 14A to 14I of the New Zealand Arbitration Act 1996 (effective 18 October 2007) therefore sought to overcome the former limited protection of confidentiality and lack of detailed exceptions by adopting a more comprehensive approach. The New Zealand Law Commission's recommendations78 for the amendments provide a concise summary of the key changes to the provisions relating to confidentiality:

The hearing should take place in private.

Subject to (c) to (f) below, the arbitral tribunal and the parties to the arbitration agreement should not disclose pleadings, evidence, discovered documents or the award arising from the arbitration.

Disclosure can be made upon a court order or subpoena, or to a professional or other adviser of any of the parties.

The arbitrating parties may apply to the arbitral tribunal for an order that they be permitted to disclose information otherwise protected by the implied term. Such an order:

should only be made after the arbitral tribunal has heard the arbitrating parties; and [Page49:]

if the arbitral tribunal is satisfied that:

such an order is necessary to enable the party applying for disclosure to comply with any statutory, contractual or regulatory requirement; and

disclosure of the information would have been required if no dispute had arisen or the dispute had been resolved by private means (e.g. negotiation or mediation) other than arbitration.

If the mandate of the arbitral tribunal has expired, the application referred to in paragraph (d) would be made to the High Court (which would apply the same criteria as the arbitral tribunal).

If the application is declined by an arbitral tribunal, then there would be an automatic right of appeal to the High Court. There is no appeal where the application is made at first instance to the High Court.

Sections 14 to 14I of the New Zealand Arbitration Act 1996, as amended by the Arbitration Amendment Act 2007, read as follows:

14 Application of sections 14A to 14I

Except as the parties may otherwise agree in writing (whether in the arbitration agreement or otherwise), sections 14A to 14I apply to every arbitration for which the place of arbitration is, or would be, New Zealand.

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 [Model Law] 79; 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 [Page50:]

(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.

14D Arbitral tribunal may allow disclosure of confidential information in certain circumstances

(1) This section applies if-

(a) a question arises in any arbitral proceedings as to whether confidential information should be disclosed other than as authorised under section 14C(a) to (d); and

(b) at least one of the parties agrees to refer that question to the arbitral tribunal concerned.

(2) The arbitral tribunal, after giving each of the parties an opportunity to be heard, may make or refuse to make an order allowing all or any of the parties to disclose confidential information.

14E High Court may allow or prohibit disclosure of confidential information if arbitral proceedings have been terminated or party lodges appeal concerning confidentiality

(1) The High Court may make an order allowing a party to disclose any confidential information-

(a) on the application of that party, which application may be made only if the mandate of the arbitral tribunal has been terminated in accordance with article 32 of Schedule 1 [termination of proceedings]; or

(b) on an appeal by that party, after an order under section 14D(2) allowing that party to disclose the confidential information has been refused by an arbitral tribunal.

(2) The High Court may make an order under subsection (1) only if-

(a) it is satisfied, in the circumstances of the particular case, that the public interest in preserving the confidentiality of arbitral proceedings is outweighed by other considerations that render it desirable in the public interest for the confidential information to be disclosed; and

(b) the disclosure is no more than what is reasonably required to serve the other considerations referred to in paragraph (a).

(3) The High Court may make an order prohibiting a party (party A) from disclosing confidential information on an appeal by another party (party B) who unsuccessfully opposed an application by party A for an order under section 14D(2) allowing party A to disclose confidential information.

(4) The High Court may make an order under this section only if it has given each of the parties an opportunity to be heard.

(5) The High Court may make an order under this section-

(a) unconditionally; or

(b) subject to any conditions it thinks fit.

(6) To avoid doubt, the High Court may, in imposing any conditions under subsection (5)(b), include a condition that the order ceases to have effect at a specified stage of the appeal proceedings.

(7) The decision of the High Court under this section is final.

14F Court proceedings under Act must be conducted in public except in certain circumstances

(1) A Court must conduct proceedings under this Act in public unless the Court makes an order that the whole or any part of the proceedings must be conducted in private.

(2) A Court may make an order under subsection (1)-

(a) on the application of any party to the proceedings; and [Page51:]

(b) only if the Court is satisfied that the public interest in having the proceedings conducted in public is outweighed by the interests of any party to the proceedings in having the whole or any part of the proceedings conducted in private.

(3) If an application is made for an order under subsection (1), the fact that the application had been made, and the contents of the application, must not be made public until the application is determined.

(4) In this section and sections 14G to 14I,-

Court-

(a) means any court that has jurisdiction in regard to the matter in question; and

(b) includes the High Court and the Court of Appeal; but

(c) does not include an arbitral tribunal

proceedings includes all matters brought before the Court under this Act (for example, an application to enforce an arbitral award).

14G Applicant must state nature of, and reasons for seeking, order to conduct Court proceedings in private

An applicant for an order under section 14F must state in the application-

(a) whether the applicant is seeking an order for the whole or part of the proceedings to be conducted in private; and

(b) the applicant's reasons for seeking the order.

14H Matters that Court must consider in determining application for order to conduct Court proceedings in private

In determining an application for an order under section 14F, the Court must consider all of the following matters:

(a) the open justice principle; and

(b) the privacy and confidentiality of arbitral proceedings; and

(c) any other public interest considerations; and

(d) the terms of any arbitration agreement between the parties to the proceedings; and

(e) the reasons stated by the applicant under section 14G(b).

14I Effect of order to conduct Court proceedings in private

(1) If an order is made under section 14F,-

(a) no person may search, inspect, or copy any file or any documents on a file in any office of the Court relating to the proceedings for which the order was made; and

(b) the Court must not include in the Court's decision on the proceedings any particulars that could identify the parties to those proceedings.

(2) An order remains in force for the period specified in the order or until it is sooner revoked by the Court on the further application of any party to the proceedings.

It is also notable that the amended section 2 of the same Act defines what constitutes 'confidential information' and provides a non-exhaustive list of the types of documents that would fall within this definition:

confidential information, in relation to arbitral proceedings,-

(a) means information that relates to the arbitral proceedings or to an award made in those proceedings; and

(b) includes-

(i) the statement of claim, statement of defence, and all other pleadings, submissions, statements, or other information supplied to the arbitral tribunal by a party;

(ii) any evidence (whether documentary or otherwise) supplied to the arbitral tribunal;

(iii) any notes made by the arbitral tribunal of oral evidence or submissions given before the arbitral tribunal;

(iv) any transcript of oral evidence or submissions given before the arbitral tribunal; [Page52:]

(v) any rulings of the arbitral tribunal;

(vi) any award of the arbitral tribunal.

The current sections 14 to 14I do not fully protect confidentiality as court proceedings under the Act are conducted in open court unless the court, taking into consideration the criteria set out in section 14H, makes an order pursuant to an application by any party for the hearing to be conducted in private. 80 This discretionary approach to the conduct of court proceedings arising out of arbitration claims highlights the dichotomy between the conflicting principles of open justice and confidentiality in arbitration. The effect of an order to conduct court proceedings in private is (i) restricted access to court records on proceedings heard in camera, and (ii) sanitization of judgments concerning those proceedings. 81 Importantly, the Act provides that, subject to the parties' agreement, the arbitral tribunal will first decide any question concerning the disclosure of arbitration information that arises during the arbitral proceedings. 82 The court would only make an order to allow or prohibit the disclosure of confidential information where (i) the tribunal is functus officio, or (ii) a party appeals from the decision of an arbitral tribunal that refused to allow such disclosure. 83

Nonetheless, there are provisions in the Act that clearly protect confidentiality and its exceptions, at least to some extent. For instance, section 14B, which constitutes a starting point for the subsequent sections, lays down the presumption that the parties84 and the tribunal are subject to an obligation of confidentiality. Section 14C sets out the limits that apply to the non-disclosure of confidential information, the underlying conditions being that such disclosure must be both 'necessary'85 and 'reasonably required'. 86 Section 14A also protects the privacy of arbitration proceedings by requiring arbitral tribunals to hold the proceedings in private.

Whereas section 14F of the New Zealand Arbitration Act87 and the proposed Clause 16 of the draft Hong Kong Arbitration Bill88 both expressly state that court proceedings relating to arbitration claims are heard openly, section 22 of the IAA89 does not provide for situations in which no party applies for court proceedings on arbitration claims to be heard behind closed doors. Singapore legislation therefore leaves the following question unanswered: if there is no application for a gag order, does that amount to a waiver of confidentiality, meaning that all court proceedings can be reported and the parties are released from all obligations of confidentiality?

Dubai International Financial Centre (DIFC)

Section 14 of the DIFC Arbitration Law (DIFC Law No. 1 of 2008) 90 is a general provision protecting confidentiality, the only exception to which is the disclosure of [Page53:] arbitration-related information pursuant to a court order. There is no reference to whether or not the court proceedings concerning arbitration claims would be heard in private, or to the publication of judgments arising from such proceedings. It is open to the DIFC court to interpret the general exception of disclosure pursuant to a court order as allowing the DIFC courts to determine each application for leave under section 14 according to the circumstances and merits of each case, which would allow the progressive development of jurisprudence relating to exceptions based on individual cases rather than established precedents.

D. Institutional rules

In her comparative survey of institutional rules, Ms Dimolitsa considers the following: 91

(i) whether the rules provide for privacy of arbitral proceedings;

(ii) whether the rules restrict the publication of arbitral awards;

(iii) whether the rules impose confidentiality and allow for exceptions.

She concludes that, although institutional rules providing for confidentiality vary in their degree of detail, they 'cover essentially the same aspects of the parties' obligations and the same exceptions to that obligation'. 92 The aspects of confidentiality that are relevant to an analysis of institutional rules include:

whether the rules provide for general confidentiality;

whether the rules provide for non-disclosure of the existence of arbitration;

whether the rules provide for the extension of confidentiality to documents used or generated in the arbitration;

whether the tribunal is bound by confidentiality;

whether witnesses are bound by confidentiality;

whether the administering institution is bound by confidentiality;

whether confidentiality extends to the award.

Readers are referred to the comprehensive discussion of institutional rules by Ms Dimolitsa, to which we would add the following remarks.

Singapore International Arbitration Centre (SIAC)

In Singapore, Rule 34 of the SIAC Rules (3rd edition, 1 July 2007) 93 is one of the most detailed institutional rules on confidentiality, covering almost all of aspects of confidentiality. However, Rule 34 is still imperfect as the list of exceptions to confidentiality set out in Rule 34.2 would appear to be exhaustive, and Rule 34 does not appear to contemplate applications by parties to an arbitral tribunal or court for release from confidentiality. [Page54:]

Hong Kong International Arbitration Centre (HKIAC)

Article 39 of the new HKIAC Administered Arbitration Rules (effective 1 September 2008) 94 is applicable to international arbitrations and covers almost all of the aspects of confidentiality listed above. In particular, Article 39.1 extends confidentiality to tribunal-appointed experts, tribunal secretaries and the HKIAC Secretariat and Council, and Article 39.2 provides that the deliberations of the arbitral tribunal are confidential. The UNCITRAL Arbitration Rules govern unadministered international arbitrations.

It is worth noting that the HKIAC Domestic Arbitration Rules (1993 edition) do not provide for confidentiality to the same degree as the Administered Arbitration Rules. Article 26 of the Domestic Arbitration Rules95 merely prohibits the disclosure of arbitration-related information without the written consent of all parties to the arbitration. The commentary on this provision in the HKIAC Revised Guide to Arbitration under the Domestic Arbitration Rules suggests that Article 26 follows the position in Esso (i.e. there is no implied obligation of confidentiality).

E. Confidentiality clause

Although arbitration treatises rarely contain model confidentiality clauses, one such example can be found in Robert Merkin and Julian Critchlow, Arbitration Forms and Precedents (2000, loose-leaf, updated to August 2002), paragraph 1G.1.1, which reads:

IG.1.1 Arbitration clause providing for confidentiality

Neither party shall disclose to any third party the existence, nature, content or outcome of any arbitration, or purported arbitration, brought in respect of this Agreement.

Neither shall any party disclose to any third party:

Any document prepared or procured in the course of or otherwise for the purpose of the arbitration;

Any document prepared or procured by the other party and received in the course of or otherwise for the purpose of the arbitration;

Any document received directly or indirectly from the Tribunal or any court of competent jurisdiction including, but not limited to, any direction, order or award;

save insofar as may be necessary for the purpose of conducting the arbitration itself, or making any application to a court of competent jurisdiction in respect of the arbitration, or for the enforcement of any order or award of the Tribunal, or of any order or judgment of the court, or as may be required to comply with any lawful authority.

Although parties may be able to better this example, it would be impossible for them to provide for all exceptions to confidentiality, as there will always be situations that are not covered by the stipulated exceptions. A confidentiality clause conceived as a complete code on confidentiality between the parties will prove incapable of anticipating all disclosures of arbitration-related information that could arguably be classified as [Page55:] exceptions to confidentiality. Such a confidentiality clause will also be inadequate due to a lack of clear and effective sanctions, unless the parties expressly agree on liquidated damages in the event of a breach of confidentiality (which will in turn lead to the difficulties of enforcement encountered when applying liquidated damages clauses).

The problem of drafting suitable provisions to deal with confidentiality and its exceptions is clearly endemic. Where national legislation and institutional rules provide for confidentiality, they fail to provide adequately for the protean nature of the exceptions to confidentiality. Similarly, contractual clauses governing confidentiality, albeit consensual, cannot provide a formulation that sufficiently addresses confidentiality. In the event of a disclosure of arbitration-related information by the parties that is not addressed by the confidentiality clause, the parties would have no choice but to request the arbitral tribunal or a third party to decide whether the disclosure constitutes a breach of confidentiality.

F. Conclusions

In current approaches to confidentiality in arbitration, the problem lies in defining the exceptions to confidentiality rather than confidentiality itself. It has not been sufficiently acknowledged that there can be no comprehensive definition of these exceptions, which are continually developing and need to be moulded to particular fact situations. It is for this reason that national legislation and institutional rules can be no more than an imperfect codification of the law on confidentiality. Categories of exceptions must never be closed, and no verbal formula can hope to encompass all legitimate exceptions; otherwise, parties might find themselves locked into an inflexible code that would unfairly penalize them when there may be legitimate reasons for disclosing information. A confidentiality clause proves to offer no better solution, for it purports to be a complete provision, yet cannot foresee the many everyday and unexpected situations that may justify exceptions to confidentiality. Besides, in practice it is too much to expect parties to take the time required to draft a comprehensive confidentiality clause, when arbitration clauses are often one of the last provisions of the contract to be negotiated.

So, what can parties do to provide adequately for arbitral confidentiality and its exceptions? The most comprehensive (although still imperfect) text to have been drafted to date is the New Zealand Arbitration Act 1996 (with the 2007 Amendment). The way forward would appear to be that the tribunal and the parties take time to discuss the question of confidentiality early in the arbitration, with a view to agreeing on a general order, which could be modeled on sections 14A to 14I of the amended New Zealand Arbitration Act as far as the main categories of exceptions are concerned. The most important part of the order, based on section 14D of the New Zealand Arbitration Act, would reserve the right for parties to make an application to the arbitral tribunal (or, in certain circumstances, a court) for the disclosure of confidential information, which can then be decided by the tribunal or the court in light of the particular circumstances of the case, the interests of the parties, and other relevant factors like public interest. Confidentiality is an important value, but it is not the only value that needs to be taken into account, and the ultimate solution is to have the competing values balanced and assessed by an independent party on a case-by-case basis.

1
G. Burn & A. Pearsall, 'Exceptions to Confidentiality in International Arbitration' in this Special Supplement, pp. 23ff.

2
A. Dimolitsa, 'Institutional Rules and National Regimes Relating to the Obligation of Confidentiality on Parties in Arbitration' in this Special Supplement, pp. 5ff.

3
Departmental Advisory Committee on Arbitration Law (chaired by the Rt Hon. Lord Justice Saville), Report on the Arbitration Bill, February 1996 ('DAC Report'), para. 15.

4
G. Burn & A. Pearsall, supra note 1 at 24.

5
See e.g. Esso Australia Resources Ltd. v. Plowman (Minister for Energy and Minerals) (1995) 128 ALR 391 (HCA), in which the High Court of Australia held that there is no general rule of confidentiality but rather a rule of privacy of arbitration hearings. However, the privacy that attaches to an arbitration is just an incident of the subject matter of the agreement to arbitrate rather than a term to be implied into the arbitration agreement. In Sweden, national legislation does not provide for confidentiality, and the Swedish Supreme Court case of Bulgarian Foreign Trade Bank Ltd v. AI Trade Finance Inc. (Case T-1881-99) (also known as the 'Bulbank case') held that there is no implied duty of confidentiality in private arbitrations. In the United States, there is likewise no general rule of confidentiality: see e.g. United States v. Panhandle Eastern Corp. et al. 118 FRD 346 (D. Del. 1988). See also Burn & Pearsall, supra note 1 at 27-28 and A. Dimolitsa, supra note 2 at 14-16.

6
See e.g. Dolling-Baker v. Merrett [1990] 1 WLR 1205 (CA) at 1213 (Parker LJ); Hassneh Insurance Co. of Israel v. Steuart J. Mew [1993] 2 Lloyd's Rep. 243 (QB (Com. Ct)) at 247 (Colman J). Singapore courts likewise recognize the implied duty of confidentiality: see Myanma Yaung Chi Oo Co Ltd v. Win Win Nu [2003] 2 SLR 547 (HC); International Coal Pte Ltd v. Kristle Trading Ltd [2008] SGHC 182 (HC).

7
[2008] EWCA Civ. 184 (CA).

8
Ibid. at para. 81.

9
Ibid. at para. 84.

10
Ibid. at para. 81 and para. 105.

11
Ibid. at para. 107.

12
Ibid.

13
London & Leeds Estates Ltd. v. Paribas Ltd (No.2) [1995] EGLR 102 (QB) raises the question of whether the parties in an arbitration owe any duty of confidentiality to an expert witness in an arbitration where the witness was found to have given evidence that was inconsistent with the evidence that he had given in previous arbitrations. Mance J held that, where a witness was proved to have expressed himself in a materially different sense when acting for different sides, that would be a factor which should be brought out in the interests of individual litigants involved and in the public interest.

14
G. Burn & A. Pearsall, supra note 1 at 35.

15
J. Paulsson & N. Rawding, 'The Trouble with Confidentiality' (1995) 11 Arbitration International 303 at 319-20.

16
Ibid. at 319.

17
Ibid.

18
G. Burn & A. Pearsall, supra note 1 at 24.

19
In Emmott v. Michael Wilson & Partners [2008] EWCA Civ. 184 (CA), Lawrence Collins LJ said (at para. 85): 'It is plain that there are limits to the obligation of confidentiality. An award may fall to be enforced, or challenged, in a court. The existence and details of an arbitration claim may need to be disclosed to insurers, or to shareholders, or to regulatory authorities.' See also G.B. Born, International Commercial Arbitration, vol. II (Kluwer Law International, 2009) at 2285

20
G. Burn & A. Pearsall, supra note 1 at 24-28.

21
CPR, rule 62.10 reads as follows: '(1) The court may order that an arbitration claim be heard either in public or in private. (2) Rule 39.2 does not apply. (3) Subject to any order made under paragraph (1)- (a) the determination of- (i) a preliminary point of law under section 45 of the 1996 Act; or (ii) an appeal under section 69 of the 1996 Act on a question of law arising out of an award, will be heard in public; and (b) all other arbitration claims will be heard in private. (4) Paragraph (3)(a) does not apply to- (a) the preliminary question of whether the court is satisfied of the matters set out in section 45(2)(b); or (b) an application for permission to appeal under section 69(2)(b).'

22
[2004] 3 WLR 533 (CA).

23
[2000] NZLR 250 (HC).

24
G. Burn & A. Pearsall, supra note 1 at 28-30.

25
Ibid. at 30-37.

26
DAC Report, paras 14-15.

27
DAC Report, para. 16.

28
DAC Report, para.17.

29
[2003] 1 WLR 1041 (PC).

30
Ibid. at 1050.

31
The previous section 14 of the New Zealand Arbitration Act 1996 read: '14 Disclosure of information relating to arbitral proceedings and awards prohibited (1) Subject to subsection (2), an arbitration agreement, unless otherwise agreed by the parties, is deemed to provide that the parties shall not publish, disclose or communicate any information relating to arbitral proceedings under the agreement or to an award made in those proceedings. (2) Nothing in subsection (1) prevents the publication, disclosure, or communication of information referred to in that subsection- (a) If the publication, disclosure, or communication is contemplated by this Act; or (b) To a professional or other adviser of any of the parties.'

32
(1995) 128 ALR 391 (HCA); see also A. Dimolitsa, supra note 2 at 14.

33
New Zealand Law Commission, Report 83, Improving the Arbitration Act 1996, February 2003 ('Robertson Report').

34
Ibid. at para. 5.

35
Ibid.

36
See DAC Report, para. 18.

37
The Arbitration Amendment Bill passed its third and final reading on 9 October 2007, and received royal assent on 17 October 2007. The Bill came into effect as the Arbitration Amendment Act 2007 on 18 October 2007. For a review of the amendments, see e.g. A. Kawharu, 'New Zealand's Arbitration Law Receives a Tune-Up' (2008) 24 Arbitration International 405.

38
UNCITRAL Arbitration Rules, Art. 25(4) reads (where relevant): 'Hearings shall be held in camera unless the parties agree otherwise.'

39
UNCITRAL Arbitration Rules, Art. 32(5) reads: 'The award may be made public only with the consent of both parties.'

40
Report of the United Nations Commission on International Trade Law on the work of its thirty-second session, 17 May-4 June 1999, A/54/17, para. 359. See also P. Binder, International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdictions, 2d ed. (London: Sweet & Maxwell, 2005) at para. 11-005.

41
A. Dimolitsa, supra note 2 at 9. Nor did the UNCITRAL working group decide to provide for transparency specifically in investor-State arbitrations: ibid.

42
See also A. Dimolitsa, supra note 2 at 5, 8.

43
ICC Rules of Arbitration (ICC Rules), Art. 21(3) reads: 'The Arbitral Tribunal shall be in full charge of the hearings, at which all the parties shall be entitled to be present. Save with the approval of the Arbitral Tribunal and the parties, persons not involved in the proceedings shall not be admitted.'

44
ICC Rules, Art. 20(7) reads: 'The Arbitral Tribunal may take measures for protecting trade secrets and confidential information.'

45
ICC Rules, Appendix I, Statutes of the International Court of Arbitration, Art. 6 reads: 'The work of the Court is of a confidential nature which must be respected by everyone who participates in that work in whatever capacity. The Court lays down the rules regarding the persons who can attend the meetings of the Court and its Committees and who are entitled to have access to the materials submitted to the Court and its Secretariat.' See also ICC Rules, Appendix II, Internal Rules of the International Court of Arbitration, Art. 1 entitled 'Confidential Character of the Work of the International Court of Arbitration).

46
A. Dimolitsa, supra note 2 at 15.

47
Singapore International Arbitration Act (Cap. 143A) ('IAA'), s. 22 reads: 'Proceedings under this Act in any court shall, on the application of any party to the proceedings, be heard otherwise than in open court.'

48
Hong Kong Arbitration Ordinance (Cap. 341), s. 2D is substantively similar to IAA, s. 22.

49
IAA, s. 23 reads: '(1) This section shall apply to proceedings under this Act in any court heard otherwise than in open court. (2) A court hearing any proceedings to which this section applies shall, on the application of any party to the proceedings, give directions as to whether any and, if so, what information relating to the proceedings may be published. (3) A court shall not give a direction under subsection (2) permitting information to be published unless- (a) all parties to the proceedings agree that such information may be published; or (b) the court is satisfied that the information, if published in accordance with such directions as it may give, would not reveal any matter, including the identity of any party to the proceedings, that any party to the proceedings reasonably wishes to remain confidential. (4) Notwithstanding subsection (3), where a court gives grounds of decision for a judgment in respect of proceedings to which this section applies and considers that judgment to be of major legal interest, the court shall direct that reports of the judgment may be published in law reports and professional publications but, if any party to the proceedings reasonably wishes to conceal any matter, including the fact that he was such a party, the court shall- (a) give directions as to the action that shall be taken to conceal that matter in those reports; and (b) if it considers that a report published in accordance with directions given under paragraph (a) would be likely to reveal that matter, direct that no report shall be published until after the end of such period, not exceeding 10 years, as it considers appropriate.'

50
Arbitration Ordinance, s. 2E is substantively similar to IAA, s. 23.

51
Hong Kong draft Arbitration Bill 2007, Clause 16 reads: '(1) Proceedings under this Ordinance in the court shall, subject to subsection (2), be heard in open court. (2) Upon application of any party, the court shall order those proceedings to be heard otherwise than in open court unless, in any particular case, the court is satisfied that those proceedings ought to be heard in open court. (3) An order of the court under subsection (2) shall be subject to no appeal.'

52
Hong Kong Department of Justice, Consultation Paper, 'Reform of the Law of Arbitration in Hong Kong and Draft Arbitration Bill', December 2007, para. 2.29.

53
The Hong Kong draft Arbitration Bill, Clause 18 reads: '(1) Unless otherwise agreed by the parties, a party shall not publish, disclose or communicate any information relating to- (a) the arbitral proceedings under the arbitration agreement; or (b) an award made in those proceedings. (2) Nothing in subsection (1) prevents the publication, disclosure or communication of information referred to in that subsection by a party- (a) if the publication, disclosure or communication is contemplated by this Ordinance; (b) if the publication, disclosure or communication is made to any government body, regulatory body, court or tribunal and the party is obliged by law to make such publication, disclosure or communication; or (c) if the publication, disclosure or communication is made to a professional or any other adviser of any of the parties.'

54
Supra note 31.

55
Hong Kong Institute of Arbitrators, Committee on Hong Kong Arbitration Law, 'Report of Committee on Hong Kong Arbitration Law', 30 April 2003, paras 8.18-8.19.

56
Supra note 33.

57
Supra note 53.

58
Hong Kong draft Arbitration Bill, Clause 16.

59
Ibid., Clause 17.

60
Ibid, Clause 26.

61
Ibid, Clause 46.

62
Ibid, Clause 61.

63
Ibid, Clause 62.

64
Ibid, Clause 76.

65
Ibid, Clause 82.

66
Ibid, Clauses 85-86.

67
Ibid, Clauses 88-89.

68
Ibid, Clause 90.

69
Ibid, Schedule 3, Clause 2.

70
Ibid, Schedule 3, Clause 3.

71
Ibid, Schedule 3, Clause 4.

72
Ibid, Schedule 3, Clause 5.

73
Ibid, Schedule 3, Clause 6.

74
Supra note 31.

75
[2000] 2 NZLR 250 (CA).

76
Ibid. at para. 38.

77
Supra note 75 at para. 39.

78
Robertson Report, para. 53.

79
New Zealand Arbitration Act 1996, Schedule 1, Art. 18 on the equal treatment of parties is the same as Art. 18 of the Model Law and reads: 'The parties shall be treated with equality and each party shall be given a fully opportunity of presenting his case.'

80
New Zealand Arbitration Act 1996, as amended, s. 14F.

81
Ibid., s. 14I.

82
Ibid, s. 14D.

83
Ibid, s. 14E.

84
Ibid, s. 2 defines a 'party' as 'a party to an arbitration agreement, or, in any case where an arbitration does not involve all of the parties to the arbitration agreement, means a party to the arbitration'.

85
Ibid., s. 14C(b)(i).

86
Ibid., s. 14C(b)(ii).

87
See p. 50, above.

88
Supra note 51.

89
Supra note 47.

90
DIFC Arbitration Law (DIFC Law No. 1 of 2008), s. 14, reads as follows: 'Unless otherwise agreed by the parties, all information relating to the arbitral proceedings shall be kept confidential, except where disclosure is required by an order of the DIFC Court.'

91
A. Dimolitsa, supra note 2 at 6-13.

92
Ibid. at 13.

93
Ibid. at 11-12.

94
HKIAC Administered Arbitration Rules, Rule 39, reads: '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. 39.2 The deliberations of the arbitral tribunal are confidential. 39.3 An award may be published, whether in its entirety or in the form of excerpts or a summary, only under the following conditions: (a) a request for publication is addressed to the HKIAC Secretariat; (b) all references to the parties' names are deleted; and (c) no party objects to such publication within the time limit fixed for that purpose by the HKIAC Secretariat. In the case of an objection, the award shall not be published.'

95
HKIAC Domestic Arbitration Rules (1993 edition), Art. 26, reads: 'No information relating to the arbitration shall be disclosed by any person without the written consent of each and every party to the arbitration.'