1. Arbitration proceedings are less and less confidential.1 Internationally, they have become a victim of their own success. In cross-border commerce, arbitration is the customary method of resolving disputes, with litigation being rather the exception. Confidentiality, although in the past touted as one of arbitration's principal advantages, is not the reason for its popularity. The success of arbitration in international trade is chiefly due to considerations of neutrality and efficiency. Now that arbitration has become commonplace, parties can no longer see why it should be subject to greater confidentiality than court proceedings. On the contrary, when State parties are involved, there is an increasing call for the public to be informed about the conduct of proceedings in which taxpayers' money is at stake.2 Whether one finds this good or bad, it is a fact of life. In societies where transparency is regarded as a virtue in its own right, confidentiality in arbitration is coming increasingly under attack.

2. The decline of confidentiality in arbitration raises special difficulties as far as evidence is concerned. We are not referring to the admissibility of documents whose very nature prevents them from being used in proceedings of any kind, whether before an arbitral tribunal or in court. The confidentiality of documents created in the course of dealings between lawyers and their clients is a case in point. The admissibility of such documents has been dealt with in national and international statutes and case law and in professional codes of practice. The solutions provided therein should not be harder for arbitrators to apply than they would be for State courts judging international disputes. In any event, the problem is distinct from that of the confidentiality of arbitration proceedings and its decline. However, once confidentiality in arbitration ceases to be sacrosanct, how can third parties be prevented from taking personal and often unjustified advantage of documents produced in proceedings to which they are not parties? How can witnesses be encouraged to testify before arbitrators without risking retaliation from outsiders who yet have an interest in what the arbitrators will eventually decide?

3. In addition, the production of evidence raises confidentiality issues quite apart from the proceedings themselves. Without breaching the confidentiality of the proceedings, a party may be tempted to use evidence presented in the proceedings for purposes quite unrelated to the arbitration itself. The most striking example is the protection of trade secrets. Under cover of a request for the production of documents held by its [Page58:] opponent, 3 a party may in reality be attempting to obtain confidential information to improve its competitive position. Or, even worse, a party may find itself in a position where, to prove its case, it needs to provide the arbitrators with documents which, if revealed to the other party, could cause it harm outside the context of arbitration. The solutions used by State courts to overcome such difficulties cannot always be transposed to arbitration. This is notably the case when, as in common law countries, the court uses its power of restraint.

4. Although arbitrators are not endowed with the imperium that is vested in State courts, they nonetheless have ways and means of reconciling the right to evidence with the protection of confidential information. They have the power to organize proceedings as they think fit and in accordance with the needs of each case. This is well illustrated by the ICC Rules of Arbitration, Article 15(1) of which reads: 'The proceedings before the Arbitral Tribunal shall be governed by these Rules and, where these Rules are silent, by any rules which the parties or, failing them, the Arbitral Tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration.' Similar provisions are often to be found in State legislation and other institutional rules. 4 However, Article 20(1) of the ICC Rules strengthens the arbitrators' powers by mentioning that '[t]he Arbitral Tribunal shall proceed within as short a time as possible to establish the facts of the case by all appropriate means'. And Article 20(7) explicitly adds that '[t]he Arbitral Tribunal may take measures for protecting trade secrets and confidential information'.

5. At the same time, however, arbitrators are required to respect a party's right to defend itself and, in particular, the principle of an adversarial process. Article 15 of the ICC Rules, from which the arbitrators derive their freedom to organize the proceedings, underlines this principle: 'In all cases, the Arbitral Tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case.' It is therefore the principle of an adversarial process-meaning that parties should be given the possibility of commenting on all items on the record-that is the chief limitation on the arbitrators' power to reconcile the right to evidence with the protection of confidential information. Such reconciliation will be considered firstly in relation to confidentiality within the proceedings (i.e. vis-à-vis the parties) and then in relation to the protection of confidentiality outside the proceedings (i.e. vis-à-vis third parties).

I. Confidentiality within the proceedings

6. We are concerned here not so much with the confidentiality of the arbitration proceedings but rather the use a party may make of confidential information that it acquires from the other party during the proceedings. Confidential information may be disclosed in various ways: in documents that a party submits spontaneously to the [Page59:] arbitral tribunal as evidence; 5 in documents produced by one of the parties at the request of the other which may not necessarily be supplied to the arbitral tribunal; in written or spoken testimony; in expert findings; or through facts revealed during factory inspections, etc. There are various ends to which a party may use confidential information acquired during the arbitral proceedings outside those proceedings, but two broad categories of secondary usage should be distinguished: first, use of the information in other proceedings and, second, the appropriation of trade or technological secrets. It will be seen that these two types of secondary usage sometimes call for different solutions, as they pursue different objectives.

7. It might be thought instructive to consider the problem as being different depending on whether it is the person in possession of the confidential information who is seeking to use that information as evidence in arbitration proceedings, or the other party who is claiming access to the information for the same purpose. In the first case, is it not for the person possessing the information to choose between the need to produce the information and, therefore, to disclose it to the other party, and the risk that the other party might exploit that information outside the proceedings? In the second case, should not the protection of confidential information prevail over the other party's desire to obtain access to information it does not possess and which it claims will help to prove its allegations? Yet such a distinction would be artificial and have unfair consequences.

8. The right to provide evidence to support one's allegations is identical for each of the parties. One party should be able to exercise that right without feeling endangered, and the other party should not be deprived of rightful access to evidence which, although in the possession of the other party, is necessary for it to assert its rights, due to the supposed risk that it might misuse that information. It is true that the person who possesses the confidential information is best placed to know what advantages it might gain and disadvantages it might suffer as a result of that information being produced in the proceedings. The party who requests that the information be produced rarely knows exactly what that information consists of and therefore cannot truly assess its evidential value or its confidential nature. Yet, here too, the distinction between the situations of the two parties should not be exaggerated. Such a distinction becomes irrelevant when the person possessing the information asks that it be considered confidential and that the customary procedures otherwise applicable for the production of evidence be consequently adapted. It makes no difference whether the information is being produced upon the initiative of the person who possesses it or upon the other party's request. In either case, it is necessary for the arbitral tribunal to intervene. The arbitral tribunal's job will be, first, to decide whether or not it is right to depart from ordinary procedures by adopting special measures to protect the confidentiality of the information and, if so, then what special adaptations should be made. [Page60:]

1. The decision to adopt special measures to protect confidentiality

9. The IBA Rules on the Taking of Evidence in International Commercial Arbitration have inspired a great number of decisions, even though parties and arbitrators rarely indicate that they apply directly to the proceedings. It should therefore be mentioned that Article 9.2 of the IBA Rules allows arbitrators to exclude 'document, statement, oral testimony or inspection' if they consider this to be justified on grounds of 'commercial or technical confidentiality'. Likewise, Article 9.4 allows arbitrators to make arrangements to ensure appropriate protection of confidential evidence. However, these solutions presuppose that there are serious grounds for producing the evidence in the proceedings. (We are not talking here about admissibility. If a proposal of evidence is inadmissible, it should be dismissed for this reason, and confidentiality will not be an issue, except in certain special cases such as correspondence with lawyers, which is rendered inadmissible by its confidentiality.) If a party offers evidence that has no bearing on the resolution of the dispute, or asks the other party to produce equally irrelevant information, the arbitral tribunal need not concern itself with confidentiality or appropriate measures of protection. Contrary to what one might think, the problem is identical in both of the above-mentioned situations.

10. The provisions of the IBA Rules relating to the production of documents by one party at the request of the other show the approach to be followed. They state that, to be entitled to such production, the requesting party must show that the matters to be proven are relevant and material to the outcome of the case. 6 A further requirement, over and above that expressly mentioned in the Rules, is that without the documents or, more generally, the information they contain the party would be unable to fulfil its obligations in relation to evidence. 7 Only when arbitrators believe this to be the case should they concern themselves with the confidentiality or otherwise of the information in question, in the event that such confidentiality is asserted by the party opposing production. If it is not the case, no production should be ordered, regardless of considerations of confidentiality.

11. The same applies when a party who wishes to bring into the proceedings information it holds, whether in documentary or other form, asks that the ordinary procedures applicable to the production of evidence be adapted due to the confidentiality of the information. Before even contemplating a departure from procedures intended above all to guarantee an adversarial process and equal treatment of the parties, the arbitrator must be convinced that the information is relevant and material to the outcome of the case and that without such information the party requesting arrangements to be made to guarantee confidentiality would be unable to fulfil its obligations in respect of evidence. It will be up to the party who is in possession of the information to decide whether or not to produce it without any measures to protect its confidentiality, provided, of course, that the admissibility of the information is not at issue, which, as we have seen, is quite another question. A party is always free to produce information as evidence, regardless of any doubts the arbitrators may have over its materiality to the outcome of the dispute. [Page61:]

12. So, before considering adopting measures to protect the confidentiality of information that is likely to be submitted as evidence, arbitrators should ensure that it is relevant and material to the outcome of the dispute and check its role in relation to the burden of proof. What indeed is the good of making special arrangements to protect the confidentiality of information that in any event is not needed to resolve the dispute? This principle applies mainly to documents, but also to testimonies and site inspections.

13. In cases that get through this initial filter, arbitrators must then check that the alleged confidentiality truly exists. It is of course up to the party invoking confidentiality to prove its existence. As has been appositely pointed out by an arbitral tribunal, '[t]he burden is on the party opposing disclosure to establish the factual support for the work product exemption'. 8 What applies specifically to correspondence with attorneys applies generally to any exception to confidentiality.

14. Such proof can be supplied without any particular difficulty when the party invoking confidentiality is concerned not about the knowledge its opponent might acquire of the information in question, but simply about the use its opponent might make of that information in relations with third parties. The classic example is a document that a party wishes to use in arbitration proceedings or consents to produce in such proceedings at the other party's request, but that is not to be used in another arbitration or in court proceedings. This may be referred to as relative confidentiality. The information is not confidential in the arbitration, but must remain confined to that arbitration. The same applies when the holder of the information fears that it could be revealed to the media or to its competitors.

15. To convince the arbitrators of the confidentiality of the information, the person in possession of that information may describe it sufficiently clearly to all parties and ask that the tribunal, when ordering production, forbid that the information be disclosed to any person outside the arbitration, including, if such be the case, in any other proceedings. If this is not enough to allow the arbitrators to decide whether protective measures are appropriate, they may order that the information be disclosed provisionally and issue an interlocutory protective order preventing the other party from using the information outside the arbitration. The order will be valid simply for ascertaining whether or not the information is confidential. This interlocutory order will allow the arbitrators to examine the information, seek comments from the other party and decide adversarially whether the protective measures requested are justified. If the arbitrators decide they are not, the consequences are likely to vary depending on whether it is information to be produced spontaneously in the proceedings by the person in possession of that information, or information to be produced by one party at the request of the other. In the first case, the person in possession of the information may decide not to produce it, without incurring any risk. After all, it has been free from the very outset to use this information to support its case. If, on the other hand, one party requests the production of a document by the other party, the person in possession of the document must produce it. The arbitrators will order production, after taking the view that the information could be disclosed without any special protective measures and, first, that such production was justified (as explained above). [Page62:] A refusal to comply with this decision will have the consequences customarily associated with such situations. The arbitrators could draw a negative inference from a refusal to produce the information, as Article 9.4 of the IBA Rules invites them to do. It should be pointed out, however, that there is little risk of an arbitrator not ordering measures to protect the relative confidentiality of information. Whenever there are reasonable arguments in support of an exception for confidentiality, there is every reason to think that arbitrators will adopt the protective measures that have been requested. Article 3.12 of the IBA Rules encourages them to do so when it states that all documents produced by a party shall be used only in connection with the arbitration and that the arbitrators may issue orders to uphold that confidentiality.

16. The situation is more problematic when the confidentiality is not relative, but absolute. Here, the person in possession of the information does not wish the other party in the proceedings to have access to it. The confidential nature of the information must therefore be proven ex parte, that is to say outside the adversarial rule requiring that all information disclosed to the arbitrators must also be disclosed to the other party. Leaving aside cases where the confidentiality of information can be proven by logical reasoning or by submitting supporting documents or testimonies that are not confidential, it is impossible to provide such proof without presenting the information itself. However, a literal application of the adversarial principle can have absurd consequences. For instance, a party will object to information it considers as confidential being disclosed to the other party and will seek to ensure that, when produced in the proceedings, it is accompanied by exceptional measures to prevent it from coming to the knowledge of the other party. Is it acceptable that, in order to justify this exceptional treatment, the party should have to make the disclosure which it precisely wishes to avoid? Of course not. Yet, the adversarial principle, which is an essential part of any procedure that respects fundamental rights, has to be reckoned with, and it is an obstacle to which there is no universal answer.

17. A number of avenues can be explored. They vary depending on the nature of the information claimed to be confidential, the parties' trust in the arbitrators and the quality of the professional relations between the parties' lawyers.

18. The simplest case is doubtless that in which a party wishes to use or is willing to give to the other party one or more documents only certain parts of which it considers to be relevant to the dispute. The other parts, although not relevant to the dispute, are nonetheless confidential. A typical example is the minutes of board meetings, in which only some of the decisions are linked to the dispute between the parties. The party who wishes to produce these documents or is asked by the other party to produce them requests the arbitrators' permission to conceal in their text (commonly referred to as redacting) any part that it considers to be foreign to the dispute and confidential. The other party is, of course, fully entitled to question both the fact that the concealed parts of the documents are indeed foreign to the dispute and their confidentiality. The arbitrators are generally left to check this by being provided with the complete text as well as the redacted documents, while only the latter are disclosed to the other party. 9 The arbitrators must then carry out a twofold examination to determine, first, whether the redacted parts of the documents are truly foreign to the dispute and, then, whether [Page63:] they are confidential. It could be thought that this exercise is pointless if the arbitrators are not convinced that the concealed information has no relation whatsoever to the dispute. This is not true, however, for the arbitrators must in any event check that the information is confidential. The production of a document with part of its content missing must remain an exception in any proceedings. It is not the fact that the hidden parts are foreign to the dispute that justifies their being redacted, but rather their confidentiality, without which there would be no reason for not producing the document as it stands. Those parts of the document that are not directly relevant to the dispute may indeed contribute to a better understanding of those parts that are relevant. In reality, it is only when the concealed parts of the document are both confidential and unrelated to the dispute that arbitrators can confirm acceptance of the redacting, previously accepted only on a provisional basis for the purpose of examining whether or not the request by one party to deprive the other party of access to the full contents of a document to be produced in the proceedings is justified. In other words, the fact that the redacted text is unrelated to the dispute allows the arbitrators to exclude from the proceedings any confidential information that has no part to play therein. If the confidential information were to be considered by the arbitrators to be relevant to the outcome of the dispute, the redacting would be inappropriate. Protective measures would then need to be ordered, so that the information could be used as evidence in the proceedings, just like any other information of the same kind. This, of course, presupposes that the person in possession of the information is willing to produce it, which, as seen above, 10 raises distinct issues depending on whether the redacted document is produced spontaneously or at the request of the other party.

19. Allowing the arbitrators to decide on their own, without the involvement of the parties, whether or not it is appropriate to accept the production of redacted documents is compatible with the principle of adversarial proceedings. The fleeting knowledge they have of the hidden information remains outside the bounds of this principle so long as the information remains concealed, that is to say so long as the information remains outside the proceedings. In this respect the information is comparable to any personal details to which they might have access and which do not appear on the record. No use can be made of such details. However, to ensure that their knowledge of the information remains fleeting, it is advisable to ask arbitrators to return non-redacted documents after checking them and not to make copies of them.

20. There are still times when, all too often, the composition of an arbitral tribunal raises doubts-often irrational and unjustified-over the independence of party-appointed arbitrators. 11 When this is the case, the party that wishes to prevent information it considers confidential from coming to the knowledge of the other party will be reluctant to give the arbitrator named by that party access to such information. If this is the case, it will often express a wish that the non-redacted documents be sent only to the chairman of the arbitral tribunal. This may well displease the party-appointed arbitrators, who are thereby suspected of an inclination to betray the duties incumbent upon them. Yet, it may sometimes be the only way to resolve serious confidentiality issues. [Page64:]

21. If there is mutual esteem and trust between the parties' lawyers and if they follow similar codes of practice in a truly fraternal spirit, this is likely to help solve difficulties arising from the redacting of documents by limiting the extent to which the arbitrators derogate from the adversarial principle. The lawyers may agree to examine the non-redacted copies together, without passing them on to their respective clients, and to decide whether what is hidden is relevant and confidential. In such a situation, the arbitrators-or one of them-will need to intervene only if the lawyers are unable to agree on one or more points, in which case the arbitrator will decide. Experience has shown it to be both practical and effective to invite the lawyers to meet in the offices of the chairman of the arbitral tribunal, initially without the chairman being present, so that they can examine the redacted documents without making copies and also maybe without taking notes. The chairman will only attend if they so request, to record their decisions and resolve any differences they might have, after first listening to their arguments.

22. Such a procedure can be used only if the parties have first agreed thereto. The same applies when distrust towards one of the members of the arbitral tribunal causes the chairman to resolve the difficulties relating to redacting alone. Any such intervention by the chairman alone should, moreover, remain an exception and be accompanied by the necessary precautions. First, the chairman should always keep open the possibility of not deciding alone in cases he or she considers to be borderline and to confer with the other members of the arbitral tribunal in accordance with procedures freely established by the tribunal as a whole. This may not necessarily result in redacted documents being given to the co-arbitrators, for the chairman may simply explain his or her dilemma without handing over the documents. However, such disclosure cannot be ruled out altogether, as a matter of principle. It will be up to the arbitral tribunal to decide. The person in possession of the document must be given advance warning, however. If he or she objects, it will not be possible to produce the redacted document in the proceedings, unless of course the other party agrees to this. The arbitral tribunal will draw the necessary inferences, which will of course vary depending on whether it is a document that the person responsible for the redacting wishes to produce or a document that the other party is asking to be produced. Only in the latter case will the arbitrators be entitled to drawn adverse conclusions.

23. In any event, the parties should ideally agree that the arbitrators will examine ex parte and in full any documents that have been produced by one of the parties after being redacted, so as to decide whether the redacting was justified. However, it is not always possible to obtain such agreement. The consequences of a lack of agreement will vary depending on the origin of the refusal and on whether the redacted document was produced spontaneously by one of the parties or has been requested by the other.

The party who has spontaneously produced the redacted document may be justified in refusing such a procedure. One can understand that it should object to the arbitrators' acquiring confidential information that it considers irrelevant to the proceedings. In this case, the arbitrators will rule that the redacted document is inadmissible, unless the party producing it convinces them that there are quite exceptional circumstances justifying the use of another procedure to protect confidentiality. The other party will not be concerned, however. The fact that the arbitrators become aware of what has been concealed in the documents, decide that it is irrelevant to the proceeding and should be removed on account of the confidentiality of the information it contains, and finally allow the redacting makes no difference to the other party. Neither it nor the arbitrators can make any use whatsoever of the redacted texts which the arbitrators have moreover considered to be irrelevant. Of course, the other party is entitled to express reservations over the evidential value of a document which it has not seen in full and, if need be, the [Page65:] arbitrators must take account of these reservations when assessing the document's weight as evidence. Indeed, that weight is determined not only on the basis of the contents of the document but also on whether it has been made available for serious examination by both parties. If the redacting-albeit justified-does not allow the document to be examined in this way, its value as evidence will necessarily be affected. 12 Yet there is reason to be suspicious of a party's objection to the arbitrators' checking whether or not the redacting of a document spontaneously produced by the other party is justified. It is likely to be seen as an obstacle to impede the production of evidence and, if the non-redacted parts are decisive, arbitrators would be entitled to overrule the objection.

If the redacted document has been produced by the person who possesses it, at the request of the other party, only the former will have an interest-whether justified or not-in preventing the arbitral tribunal from becoming aware of the contents of those parts that have been concealed. It may therefore object, yet this will mean that the arbitrators consider that the document has not been produced and will be entitled to draw negative conclusions with respect to that party, just as if it had simply refused to produce the document. As for the party that has requested the production of a document, it has no justifiable interest in seeking to prevent the arbitrators from having access to the contents of the redacted parts of the document, for were it to do so, this would simply have the effect of causing the arbitrators to refuse to order the production of the redacted document.

24. Redacting is a process that causes few problems, given that it concerns material that is supposed to lie outside the proceedings. This is not the case when the information a party wishes to withhold from the other party, due to its alleged confidentiality, is relevant to the outcome of the dispute. It may be a redacted extract from a document, which the arbitrator finds to be not unrelated to the dispute, or, more generally, any allegedly confidential information. When issuing an order to protect confidentiality, an arbitrator first needs to be able to assess whether the information is indeed confidential, without revealing it to the opponent of the party in whose possession it lies. Not only must the arbitrator be able to have access to the information without any risk of confidentiality being undermined by the need to respect the adversarial nature of the proceedings, but he or she should also be capable of assessing the significance of the information. This last point is particularly sensitive where technical matters and especially know-how are concerned, and maybe in other fields too. For instance, how can an arbitrator who is a qualified lawyer know whether a manufacturing process has not fallen into the public domain, is secret and therefore cannot be introduced into the proceedings unprotected?

25. Article 20(7) of the ICC Rules of Arbitration, mentioned above, 13 provides arbitrators with a means of overcoming this difficulty. It was inspired14 by Article 52 of the Arbitration Rules of the World Intellectual Property Organization (WIPO), 15 which relates to the disclosure of trade secrets and confidential information in general. It is aimed above all at protecting the confidentiality of information before that information is [Page66:] produced in an arbitration. It even contains a provision allowing arbitrators to designate a 'confidentiality advisor'. The allegedly confidential information is revealed to the confidentiality advisor, but not to the arbitrators or the other party. The advisor can thus report on the alleged confidentiality and, in the event it is upheld, propose measures to protect it during the proceedings. There would so far appear to be nothing against ICC arbitrators doing likewise under Article 20(7) of the ICC Rules of Arbitration. They may appoint an expert to undertake such an assignment pursuant to Article 20(4) of the Rules. Whilst it is true that the expert, whose report will be discussed by all parties involved, must not disclose to the arbitrators or the other parties the details of the information he or she has perused, this will be an acceptable infringement of the adversarial process so long as it remains limited to assessing the confidentiality of the information and, if the information is to be introduced into the proceedings, deciding what protective measures are necessary. The problem is quite different, however, when it is a question of assessing the evidential value of the information. The WIPO Rules empower arbitrators to entrust the confidentiality advisor with such an assignment. As we shall see, this would not be possible for ICC arbitrators, unless the parties had specifically agreed thereto.

26. In any event, the appointment of an expert to assess the alleged confidentiality of information is necessary only in extreme situations. If the person in possession of the information is invited by the arbitral tribunal to present the information to all parties in an abstract or abridged form, without going into detail, this will normally be sufficient to justify the need for protective measures to accompany full disclosure of the information in the arbitration. Discussions turn on the assumption that the information provided is correct. For instance, a manufacturer accused of having misappropriated technology licensed to it denies this accusation, claiming that it has instead used new and distinct technology. It wishes to prevent the licensor, who is its opponent in the arbitration proceedings and a competitor in the market, from having access to this technology, yet must refer to the technology to show that it has not misappropriated what it was given. In such a case, the assumption that the licensee's arguments are correct may be sufficient to justify keeping the new technology confidential. However, it would be preferable to reveal to all parties certain aspects of the technology that demonstrate its novelty without allowing it be reconstituted in a usable form (e.g. use of different energy, product characteristics incompatible with licensor's technology, etc.). In particularly difficult cases, parties may be assisted by experts, who will help to enlighten the arbitrators on the desirability of ordering protective measures. If the arbitrators decide to do so, then it is clear that defining those measures will cause problems. It may be noted, however, that the arbitrators' very decision to adopt such measures often causes the parties to negotiate a confidentiality agreement amongst themselves. Unless there is excessive tension between the parties, they should be allowed to explore this possibility, with or without the arbitrators' assistance.

2. Measures for protecting confidentiality

27. Article 20(7) of the ICC Rules of Arbitration empowers arbitrators to issue protective orders similar to those issued by the courts. In practice, the measures considered appropriate to protect confidential information in arbitration proceedings will depend on the nature of the information and the purpose pursued by the party requesting such measures.

As far as the nature of the information is concerned, it is more often than not in the form of documents, in the broad sense of the word: letters (including electronic mail), studies, reports, calculations, various handbooks, films, etc. But it may also be part or [Page67:] all of an industrial site, to which access can be given only on condition that the findings made at the site remain confidential. The need for confidentiality also sometimes extends to other items (e.g. water samples) and the contents of statements by witnesses or experts.

As far as the purpose pursued is concerned, the distinction between relative and absolute confidentiality, which was made in relation to the decision to adopt protective measures, also has its place in relation to the choice of those measures, for the legal problems vary depending on whether the confidentiality does or does not exclude the arbitrators and the parties or their counsel (absolute confidentiality in the first case and relative confidentiality in the second case). In the second case, confidentiality comes into conflict with the principles of an adversarial process, which is not so in the first case.

a) Relative confidentiality

28. If the protective order is not intended to prevent the opponent of the party in possession of the information from having access to that information, but simply to prevent it from using the information outside the proceedings, 16 it will usually specify that disclosure of the information is limited to named individuals. The choice of these individuals will depend on the legitimate needs, in the context of the proceedings, of the party being allowed access to the confidential information, whether this be because the party in possession of the information is producing it spontaneously to support its case, or because it has been forced to produce it at the request of the other party. The latter must be allowed to examine the information as necessary, that is to say with the assistance of its lawyers and also, depending on the nature of the information, specialists within the firm and/or outside experts. Rarely will an arbitrator simply be able to convert the temporary protective order he or she issued when assessing the confidentiality of the information into a permanent order. The new order must take account of the intervention of other personnel needed by the party given access to the information for the purpose of exercising its right to be heard. Such personnel may be described generically in the order. In this case, it is not unusual for them to be limited in number. Sometimes, they are identified by name. By way of illustration, below are the provisions on confidentiality from an order issued in an ICC arbitration between two European parties in 2006: 17

Documents or information furnished by one party to the other before or during this arbitration and designated by that party as confidential pursuant may not be disclosed to any third party;

Documents or information furnished by one party to the other before the start of this arbitration and not designated as confidential at the time when it was furnished will not become confidential if and when it is submitted in this arbitration;

In order to properly participate and defend itself in the arbitration procedure, any of the parties may, with the leave of the Arbitral Tribunal, disclose confidential documents or information to third parties involved in the genesis of the dispute and/or to be called as witnesses of fact or expert witnesses; the Arbitral Tribunal may make its authorization subject to the execution of a confidentiality undertaking by such third parties; [Page68:]

With the leave of the Arbitral Tribunal, a party may disclose confidential documents or information to any third party, provided it is necessary not to lose a right of recourse against a customer and/or a supplier or if such disclosure is required by law or ordered by a court of law; the Arbitral Tribunal may make its authorization subject to the execution of a confidentiality undertaking by such third party.

In the same case, the confidentiality undertaking signed by any person with access to confidential information read as follows:

Confidentiality Undertaking

1. [X] acknowledges to have received the documents mentioned in the attached list from the Claimant.

2. [X] has been informed that these documents are confidential.

3. [X] is aware that the Claimant has been authorised by the Arbitral Tribunal-within the framework of the ICC arbitration proceedings no. . . . between [E] and [F]-to communicate these documents to him only to be in the position to properly participate and defend itself in the arbitration procedure.

4. [X] acknowledges that this confidentiality undertaking will extend to any colleagues he may wish to involve in order to assist him in his work.

5. [X] will be responsible towards both [F] and [E] in case of breach of this undertaking by him or by any of his colleagues.

6. [X] has been informed that one copy of this confidentiality undertaking is remitted to the above-mentioned Arbitral Tribunal and to [F].

29. Special but comparable solutions are adopted for confidential site inspections: factories, laboratories etc., ships, military equipment, or access to any other information that cannot be transmitted physically, such as the performance of chemical experiments. It is not necessary for such confidential information, of whatever kind, to be systematically brought to the knowledge of the arbitrators. This is hardly ever the case when the information is disclosed to one party at the request of the other, without being put on record in discovery proceedings. Likewise, site inspections sometimes take place without the arbitrators, to whom the parties give simply the findings of their respective experts. Yet this does not undermine the principle of an adversarial process, because if confidential information accompanied by measures to protect relative confidentiality is used for the purposes of evidence, each of the parties will have had access to the information and it can be discussed by all of them before the arbitrators, regardless of whether the latter have direct or only indirect knowledge of the information, through expert reports the basis of which is familiar to all involved. This cannot be the case when it comes to absolute confidentiality.

b) Absolute confidentiality

30. A party's refusal to let its opponent become aware of information it holds, on grounds of confidentiality, goes against the principle of an adversarial process. In the above example of a manufacturer accused of having misappropriated technology given to it under licence, one can understand the manufacturer's unwillingness to allow the licensor access to the technology it claims to have developed independently. If the arbitrator is convinced that only by examining the characteristics of this technology will it be possible to resolve the dispute but that the licensor cannot be given access to this information on account of its confidentiality, then the arbitrator will be disposed to order protective measures. However, without the parties' agreement, the means available to the arbitrator are very limited. As has already been mentioned, the solution lies in the appointment of an expert, whose role will not only be to assess the confidential nature of the information but also, and above all, to examine the [Page69:] information and, on the basis of that examination, answer the specific questions asked by the arbitrators. In our somewhat simplistic example, the arbitrators would ask the expert to state whether the technology used by the manufacturer is new or originates from that which was licensed to it. The expert's report would be the subject of open discussion by all parties before the arbitrators, but such discussion would be artificial, to say the least, due to the fact that the report would have no subject, as this could not be described in detail to the arbitrators or the two parties. It is conceivable that the expert might provide the arbitrators alone with a fuller version of the report, in which the findings made would be supported by a detailed presentation of the technology at issue. However, from an adversarial point of view, this appears even worse as it would be tantamount to allowing the arbitrator to determine the merits of the dispute on the basis of information unavailable to both parties. 18 In both situations, how can arbitrators be expected to rule on the basis of evidence on which one of the parties has been unable to express itself without reservation, having thereby been deprived of its right to be heard?

31. To implement solutions such as this, agreement between the parties is required. Article 52 of the WIPO Rules reflects such agreement. In other contexts, it is usually difficult to reach. However, the possibility should not be ruled out altogether, as a matter of principle. If information that deserves full protection due to its confidentiality is crucial to the outcome of the dispute, the arbitrator should explore with the parties the possibility of allowing an expert whose independence is beyond suspicion to have access to the information so as to be able at least to describe the characteristics of that information to the parties and the arbitrators. Of course, the expert-and any assistants the expert may have-must sign a confidentiality undertaking. The expert's description, once openly discussed by all parties, will often be sufficient for the arbitrators to make up their minds. Such a procedure should not be forced upon a party for, although of an adversarial nature, it limits the possibility that party has to exercise its right to be heard. However, depending on the circumstances of the dispute, the party should ponder the risks to which it might be exposed if it were to refuse. A refusal by the person in possession of the information would leave the arbitrators unsympathetic and entitle them to draw adverse conclusions in respect of that party. It is indeed an abuse of confidentiality to invoke it as a means of preventing the only decisive piece of evidence from being examined confidentially. Hesitation by the other party, who is deprived of access to the information, is easier to understand. It all depends on how the confidential information is examined by the expert. If the examination is to be carried out by the expert on an industrial site that is under the control of the person in possession of the information, the other party may suspect that the arbitrators' expert could be influenced by that person, with whom the expert would have intimate dealings and might be shown only what that person wished to show him or her. There is less cause for fear if the expert is to take samples and examine them later in his or her own laboratory. Yet, such hesitation also has its limits. A party cannot, at one and the same time, base a claim on an alleged factual situation and refuse to allow its allegations to be verified without breaching justified confidentiality. [Page70:]

32. Whatever the case, if an arbitrator is tempted to draw conclusions that are to the disadvantage of a party that has objected to the adoption of special measures to protect confidentiality, then the arbitrator must inform the parties in advance, so that they can state their views on this eventuality.

II. Confidentiality outside the proceedings

33. It was seen above that arbitrators could order measures to prevent parties from using confidential information outside the proceedings or, more generally, from disclosing to third parties confidential information of which they have become aware in the arbitration proceedings. This is what we called measures occasioned by relative confidentiality. Yet it is not necessarily the parties that leak information to outsiders. So, quite apart from any leaks for which they may be responsible, the parties may wish that special measures be adopted to prevent any third party whatsoever from having access to confidential information.

34. In ICC arbitration, no one who is foreign to the proceedings may attend a hearing without the approval of the arbitral tribunal and the parties. This is explicitly mentioned in Article 21(3) of the ICC Rules. In theory, this should be sufficient to reassure a party that it can introduce evidence that it wishes to be kept from third parties. Yet, this protection is likely to be illusory. Hearings are increasingly transcribed using stenotype or audio recordings, and the circulation of these transcripts is virtually impossible to control. When States are involved in the proceedings and military secrets are at issue, can one be sure that other States with sophisticated means of accessing information will not be tempted to use-or, rather, abuse-such information? As a result, parties are somewhat apprehensive about using documentary evidence that they consider to be confidential during the hearings, or calling witnesses who may fear for their safety. In such situations, there is no magic answer, but arbitrators may, with or without the parties' agreement, reduce the risk of leaks.

35. Proceedings will, in principle, include documentary evidence. Apart from cases in which special measures of security have been adopted, as mentioned in the first part of this article, the documents will have been presented by one of the parties to the arbitrators and, of course, to the other party, and it is possible for the party concerned about protecting their confidentiality simply to allude to the contents of the documents at the hearing and leave the arbitrators to refer to the documents. However, such self-restraint will rarely work. If the documents are truly important as evidence, the other party will inevitably challenge the way in which they are interpreted and the significance they have. One or other-and probably both-of the parties will need to present them to witnesses so as put them in their context and explain their meaning.

36. Take the example of a dispute between the manufacturer of microprocessors and its exclusive distributor. The latter claims that the manufacturer has entered into contractual relations with a third party and thereby breached its exclusivity. The manufacturer denies this and, to prove that it was in the right, has to submit its contract with the third party. That the very existence of this contract should be brought to the knowledge of third parties does not unduly concern it. However, if some of its clauses were to escape the limited context of the hearing, this could cause it harm, for other parties with which it contracts or its competitors could use these clauses to attack it. Unfortunately, the exclusive distributor has a justifiable interest in having all provisions in the contract closely examined, arguing that it would otherwise be impossible to correctly characterize the contract and determine its scope. This would require that the contract be produced in the hearing, that its clauses be read by witnesses, and that the contents of those [Page71:] clauses and the way in which they were actually to be performed be analysed in an adversarial manner. In normal proceedings, the discussions will be transcribed word-for-word or recorded, and it is by reading the transcript or listening to the cassettes that a correct understanding of the contract and how it was to be performed can be acquired. Should the fear the distributor might have that the confidentiality of these discussions will not be respected cause it to forgo evidence without which it would have difficulty resisting the accusations made against it? Even if prepared to do so, it may well have no option. It is possible that the exclusive distributor, who has a different interpretation of the contract in question, considers that its right to be heard would be flouted if the contract were not examined in detail at the hearing.

37. If the arbitrator is convinced that the manufacturer's concerns over the confidentiality of the discussions are not due to paranoia and that leaks could have a truly harmful effect on it, then it will be up to the arbitrator to order measures to avoid this. For example, the arbitrator may decide that some of the provisions in the contract and the discussions relating thereto shall not be included in the transcript of the hearing and that the participants should each make their own notes. Whilst a verbatim transcript is an appreciable asset, allowing greater analysis by the parties' lawyers of evidence produced in the form of testimonies, the lack and especially the incompleteness of a verbatim transcript undermines neither the principle of an adversarial process nor the right to be heard. In situations of a more sensitive nature than that described above, it is conceivable that the transcription of the hearing could be interrupted while some of the documents are presented to witnesses. A halfway house would be to create just one copy of the transcript, which would be kept by the chairman of the arbitral tribunal, who may allow the parties' lawyers to consult it in his or her own offices, without making a copy or taking notes. In this field, however, it all depends on the circumstances . . .

38. The hearing of witnesses raises identical problems calling for similar solutions. Added to which, there is their possible fear that third parties become aware that they have testified in the arbitration. If such fear seems justified, it is insufficient simply to order the parties not to disclose the existence of the testimony to third parties, for the arbitrators need to be able to use evidence provided by testimony in their award and thus to mention it. It is possible that the award might be the subject of proceedings to have it set aside or enforced, in which case it would no longer be confidential. Arbitrators will in extreme cases decide, in agreement with the parties, to refer to the witness at the hearing and in the award by means of a code name.

Conclusion

39. Maintaining legitimate secrecy is sometimes irreconcilable with the production of evidence. All sorts of solutions may be found to put arbitration and its players in a bubble so that the revelation of the truth is sheltered from indiscreet ears. This is relative confidentiality, which can coexist with the principle of an adversarial process. The situation is different when the secrecy lies within the arbitration and direct contact with evidence must be withheld from a party and especially the arbitrators. This is absolute confidentiality which, when pushed to an extreme, is likely to sacrifice to legitimate secrecy the most basic and no less legitimate procedural rights. Arbitrators are the guardians of such fundamental procedural rights and should not forget this, no matter how strong their respect for confidentiality.

1
See e.g. S. Kouris, 'Confidentiality: Is International Arbitration Losing One of its Major Benefits?' (2005) 22:2 Journal of International Arbitration 127.

2
Especially J. Misra & R. Jordans, 'Confidentiality in International Arbitration: An Introspection of the Public Interest Exception' (2006) 23:1 Journal of International Arbitration 39.

3
See Document Production in International Arbitration, ICC ICArb. Bull., 2006 Special Supplement.

4
E.g. French Code of Civil Procedure, Art. 1494; Belgian Judicial Code, Art. 1693; Dutch 1986 arbitration law, Art. 1036; Portuguese 1986 law, Art. 15; Spanish 2003 law, Art. 25(2); Swiss private international law statute, Art. 182(2); Egyptian 1994 law, Art. 25; Italian Code of Civil Procedure, Art. 816; English 1996 Arbitration Act, s. 34; UNCITRAL Arbitration Rules, Art. 15(1); LCIA Rules, Art. 5.

5
In international arbitration, when a request for document production is made by one party to another, it is common practice not to disclose all the documents exchanged between the parties to the arbitrators. The party that has received documents from its opponent will chose those it intends to rely upon and these will be the only documents submitted in the proceedings. See B. Hanotiau, 'Document Production in International Arbitration: A Tentative Definition of "Best Practices"' in Document Production in International Arbitration, ICC ICArb. Bull., 2006 Special Supplement, 113 at 116.

6
Art. 3.6(i).

7
See Y. Derains, 'Towards Greater Efficiency in Document Production before Arbitral Tribunals-A Continental Viewpoint' in Document Production in International Arbitration, ICC ICArb. Bull., 2006 Special Supplement, 83 at 87; also B.. Hanotiau, supra note 5 at 116.

8
Quoted by V. Hamilton, 'Document Production in ICC Arbitration' in Document Production in International Arbitration, ICC ICArb. Bull., 2006 Special Supplement, 63 at 77.

9
When, in a bundle of documents, entire documents are redacted, it is advisable to request the party producing them to leave visible anything that may allow the documents to be identified: author, date and addressee. See the award quoted by V. Hamilton, supra note 8 at 77.

10
See paragraph 15, above.

11
During the last decade, the independence of party-appointed arbitrators has grown considerably and arbitrators who represent the interests of the parties who have chosen them are nowadays a regrettable exception. Unfortunately, a party may be convinced of the independence of the arbitrator it has chosen while having doubts over the independence of the arbitrator chosen by its opponent.

12
This situation is similar to that in which a witness, from whom a written statement has been produced, is not subject to cross-examination because a compelling reason prevents the witness from attending the hearing. The written statement is not disregarded, but its evidential weight is necessarily affected.

13
See paragraph 4, above.

14
See Y. Derains & E.A. Schwartz, A Guide to the ICC Rules of Arbitration, 2d ed. (Kluwer Law International, 2005) at 285.

15
(1993) 5 World Trade and Arbitration Materials 412.

16
See paragraph 14, above.

17
See also the order rendered in 1994 in ICC case no. 7893: Journal du droit international 1998.1069 (Annot. D.H.).

18
There would appear to be agreement amongst commentators that an arbitrator can be informed of confidential evidence only with the parties' agreement. See J.-F. Poudret & S. Besson, Droit comparé de l'arbitrage international (Schulthess/LGDJ/Bruylant, 2002) at 589, paragraph 654, and E. Gaillard & J. Savage, eds., Fouchard, Gaillard, Goldman On International Commercial Arbitration (Kluwer Law International, 1999) at 693, paragraph 1265, who take the view that, to be effective, this agreement must occur after the confidentiality issue has become known, which would seem to be an excessive requirement.