1. While confidentiality can be a significant feature of international arbitration, developments in recent years have demonstrated that it cannot be assumed when a dispute is submitted to arbitration. That is particularly so when one of the parties is a State or State entity. Confidentiality issues may arise in a variety of respects in arbitrations involving States. The purpose of this paper is to examine some of the different contexts in which such issues have arisen, including with respect to: (1) oral hearings; (2) documents and written submissions; (3) publicity and public discussions; and (4) decisions of the tribunal and the final award. Confidentiality issues relating to legal privilege and State parties will also be examined, including circumstances in which States and State entities may rely on confidentiality or State secrets to avoid disclosure of evidence.

A. THE ORAL HEARINGS

2. With respect to confidentiality as the obligation not to divulge information relating to, or arising out of, the oral proceedings, demands for greater public accountability and access to information about the affairs of government have led to greater transparency and less confidentiality in recent years, particularly in the context of investor-State arbitration.

3. Institutional arbitration rules expressly provide that, unless the parties and the tribunal agree otherwise, the arbitral hearings are private and may be attended only by the parties, their representatives, witnesses, and experts. Article 21(3) of the ICC Rules of Arbitration, for example, states: 'Save with the approval of the Arbitral Tribunal and the parties, persons not involved in the proceedings shall not be admitted [to the hearings].' The ICC Rules are consistent in this respect with Article 19(4) of the LCIA Rules, Article 20(4) of the AAA International Arbitration Rules, Article 25(4) of the UNCITRAL Arbitration Rules, and Rule 32 of the ICSID Arbitration Rules.

4. As investor-State arbitration grew, and in particular once Canada and the United States became regular respondents in such actions, the private and supposedly confidential nature of arbitral hearings attracted a great deal of criticism, particularly with respect to disputes that concerned the functioning of government and matters of public policy. 1 An editorial in The New York Times dated 27 September 2004 noted:

Unlike trials, arbitrations take place in secret. There is no room in the process to hear people who might be hurt . . . The trade agreements that set the rules should direct [Page74:] arbitration panels to take a much broader view-to consider not just corporate interests but the needs of governments and citizens. The panels should also be required to invite a wider range of views. Because their decisions have great public impact, arbitration panels owe the public a hearing. 2

5. Led by the United States and Canada, parties in several NAFTA Chapter 11 cases have agreed to open the hearings to the public, with the tribunal's consent. In the NAFTA context, for example, the parties in Methanex v. United States and in UPS v. Canada agreed to permit the arbitral hearings to be open to the public via closed-circuit broadcast. 3 Following the 2003 NAFTA Commission Meeting, the United States and Canada announced their intention to consent to open public hearings in all Chapter 11 arbitrations to which either is a party, and to request the consent of disputing investors to such open hearings. 4 Mexico similarly announced its support for open hearings in investor-State disputes following the 2004 NAFTA Commission Meeting. 5 Other States, however, have not yet rushed to follow suit, with the result that the majority of arbitral hearings, even in investor-State cases, are not open to the public.

6. In a further effort to open the process of investor-State arbitration to the public, several tribunals have allowed third parties, usually non-governmental organizations, to participate in the arbitral proceedings by means of amicus curiae written submissions. Attendance of such third party amici at the oral hearings, however, remains dependent upon the consent of the parties to the arbitration, as provided by applicable arbitration rules. This trend has also been seen in the NAFTA context with the tribunal in Methanex v. United States accepting amicus curiae written submissions from non-parties, 6 but it was held that, as a result of Article 25(4) of the UNCITRAL Arbitration Rules, the amici could not attend the oral hearings or receive materials generated within the arbitral proceedings without the consent of both parties. 7

7. Amicus submissions have not been limited to NAFTA Chapter 11, however, as the tribunal in the ICSID arbitration Aguas Argentinas v. Argentina similarly permitted amicus curiae written submissions, but ruled that, in the absence of consent from both parties under ICSID Arbitration Rule 32(2), the tribunal had no authority to allow third party amici to attend the arbitral hearings, or, in that case, to open the arbitral hearings to the public. 8 ICSID subsequently amended its Arbitration Rules in 2006 to allow non-parties to intervene in the arbitral proceedings and to attend the oral hearings when the tribunal permits and neither party objects. Amended ICSID Arbitration Rule 37 provides that tribunals, after consultation with both parties, may accept written submissions from non-parties, and amended Arbitration Rule 32 provides that tribunals may allow non-parties to attend or observe all or part of the arbitral hearings, after consultation with ICSID's Secretary-General, provided that neither party objects. [Page75:]

B. DOCUMENTS AND WRITTEN SUBMISSIONS

8. Most institutional arbitration rules provide that the arbitrators have the authority to protect confidential information submitted by the parties and are prohibited from disclosing any information relating to, or revealed within, the arbitral proceedings or in their deliberations. Article 20(7) of the ICC Rules of Arbitration, for example, provides as follows: 'The Arbitral Tribunal may take measures for protecting trade secrets and confidential information.' Article 30(2) of the LCIA Rules, Article 34 of the AAA International Arbitration Rules, and Rule 6(2) of the ICSID Arbitration Rules are similar.

9. With respect to the parties, most institutional arbitration rules are silent and do not expressly impose an obligation of confidentiality. 9 The obligation of the parties to keep confidential any information relating to, or arising out of, the arbitral proceedings derives from the privacy of the arbitral hearings or may be expressly agreed by the parties, as parties often conclude confidentiality agreements when confidential information may be at issue.

10. A number of tribunals in the investor-State arbitration context have held that the privacy of the arbitral hearings extends to the records of such hearings, pleadings submitted by the parties, as well as to orders and decisions of the arbitral tribunal. The tribunal in World Duty Free v. Kenya, for example, held that where there is no decision to open the hearings to the public, the records of the hearings should not be disseminated unilaterally by one of the parties without the other party's consent. 10

11. Similarly, in Mondev v. United States, the tribunal held that the privacy of the arbitral hearings extended to arbitral orders and decisions, and did not permit the United States to post an order and interim decision until the close of the proceedings, because 'it represented the outcome of a hearing not open to the public'. 11

12. Tribunals have allowed State parties to release information relating to, or revealed within, the arbitral proceedings where required by statutory disclosure obligations such as domestic 'sunshine laws'. In the NAFTA context, for example, the tribunal in S.D. Myers v. Canada allowed Canada to disclose to its provinces and territories certain documents generated during the course of the arbitration, as required by Canadian law. 12

13. Similarly, in Mondev v. United States, the tribunal allowed the United States to release certain documents and correspondence that had been requested by private persons under the US Freedom of Information Act. 13 In so doing, the Mondev tribunal confirmed that documents not subject to specific statutory disclosure requirements and not publicly available remained confidential until the conclusion of the proceedings. 14[Page76:]

14. There have been cases where the arbitral tribunal itself ordered that certain materials relating to the arbitration remain confidential. Depending upon the source of the tribunal's authority (i.e. international treaty or private law contract), the tribunal's order might be binding on a State party notwithstanding a conflicting domestic law disclosure obligation. For example, in Pope & Talbot v. Canada the tribunal held that the confidentiality order in that case precluded Canada from releasing certain documents under the Canadian Access to Information Act, finding that, under the confidentiality order, such documents were to be kept confidential and could not be disclosed. 15

C. PUBLICITY AND PUBLIC DISCUSSIONS

15. Institutional arbitration rules do not impose any general obligation of confidentiality on the parties that would require them to refrain from engaging in public discussions regarding the case. In the context of investor-State arbitration, however, some tribunals have ordered the parties to limit public discussions and disclosures of information to what is necessary and to abstain from aggravating or exacerbating the dispute so as not to disrupt the orderly conduct of the arbitral proceedings.

16. In the ICSID context, for example, the tribunal in Amco Asia Corp. v. Indonesia held that although the ICSID 'Convention and the Rules do not prevent the parties from revealing their case,' 16 the parties were required to abide by the 'good and fair practical rule', which states that 'both parties to a legal dispute should refrain, in their own interest, to do anything that could aggravate or exarcebate [sic] the same, thus rendering its solution possibly more difficult'. 17

17. Similarly, in Biwater Gauff v. Tanzania the tribunal ruled that public discussions of the case should not be used as an instrument to antagonize the parties, exacerbate their differences, unduly pressurize one of the parties, or render the resolution of the dispute potentially more difficult. As the tribunal observed:

It is self-evident that the prosecution of a dispute in the media or in other public fora, or the uneven reporting and disclosure of documents or other parts of the record in parallel with a pending arbitration, may aggravate or exacerbate the dispute and may impact upon the integrity of the procedure. This is all the more so in very public cases, such as this one, where issues of wider interest are raised, and where there is already substantial media coverage, some of which already being the subject of complaint by the parties. 18

While the Biwater tribunal recognized that there may be public interest in the subject matter of the dispute, it found that those considerations must be balanced against the need to conduct an orderly proceeding and to safeguard the integrity of arbitration while it remains ongoing.

18. Similarly, the tribunal in Metalclad Corp. v. Mexico recommended that the parties 'limit public discussion of the case to a minimum', subject only to any external legal [Page77:] obligation of disclosure, so as to maintain both orderly proceedings and working relations between parties. 19 The tribunal in Loewen v. United States likewise concluded that while the parties were not 'under a general obligation of confidentiality in relation to the proceedings . . . it would be of advantage to the orderly unfolding of the arbitral process if during the proceedings the parties were to limit public discussion to what is considered necessary'. 20

D. THE FINAL AWARD

19. Although arbitral awards may come into the public domain through enforcement actions or challenges in some jurisdictions, most institutional arbitration rules expressly provide that arbitral awards are confidential and may be published only upon the consent of both parties. In particular, Article 28(2) of the ICC Rules states that copies of the award are available to the parties, 'but to no one else.' Article 48(5) of the ICSID Convention similarly provides that the International Centre for Settlement of Investment Disputes 'shall not publish the award without the consent of the parties'. Article 30(3) of the LCIA Rules, Article 27(4) of the AAA International Arbitration Rules, and Article 32(5) of the UNCITRAL Arbitration Rules are similar.

20. In the context of investor-State arbitration, arbitral awards increasingly have become accessible to the public. With respect to NAFTA arbitration, Article 1137 of the NAFTA allows either disputing party to publish awards in cases involving Canada or the United States. With respect to ICSID arbitration, the International Centre for Settlement of Investment Disputes not only strongly encourages parties to publish their arbitral awards, but Rule 48(4) of the Arbitration Rules was recently amended to provide that '[t]he Centre shall . . . promptly include in its publications excerpts of the legal reasoning of the Tribunal'. This amendment accordingly makes publication of the award's legal reasoning mandatory and thus contributes to the development of an accessible jurisprudence in the field of investment protection. It may be noted that investor-State arbitrations proceeding under the UNCITRAL Rules are not subject to such automatic disclosure and thus remain confidential at the parties' option.

E. PRIVILEGE

21. Arbitrations with States or State entities sometimes involve issues regarding the potential disclosure of documents to which a legal privilege or classification of confidentiality may apply. Such circumstances are to be addressed by the arbitral tribunal exercising its discretion (and subject to any applicable laws), but also are contemplated in Article 9(2)(b) and (f) of the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration ('IBA Rules'), which provide that an arbitral tribunal will exclude from production any testimony or documents that it considers to be subject to an applicable legal impediment or privilege or on 'grounds of [Page78:] special political or institutional sensitivity (including evidence that has been classified as secret by a government or a public international institution) that the Arbitral Tribunal determines to be compelling'. 21

22. In those cases in which States have objected to the production of documents on the grounds that the documents are subject to a privilege that prevents disclosure, arbitral tribunals have required a specific showing as to the legal basis for the privilege and to its application to the documents at issue. In S.D. Myers v. Canada, for example, Canada objected to producing documents it claimed were confidential and protected by Crown privilege. 22 The tribunal accepted that such a privilege may be a valid basis to avoid disclosure, but required a showing either that a 'certificate' of confidentiality had been issued pursuant to the Canada Evidence Act or that Canada 'on a "document-by-document" basis' would 'give sufficient information and justification to sustain privilege for each document'. 23

23. Similarly, in UPS v. Canada, Canada objected to the production of documents on the basis that the documents were protected by cabinet privilege. 24 The tribunal in that case rejected Canada's arguments, noting that Canada had failed to persuade that the privilege would in fact be applicable in the given circumstance. 25 While the tribunal accepted that the 'deliberative and policy-making processes at high levels of government . . . cannot function completely in the open', 26 the tribunal underscored the limited nature of Cabinet privilege:

[T]he protection to be afforded is in general carefully circumscribed to protect no more than the interests that call for protection, for instance in frank and uninhibited exchanges between Cabinet members or in advice given to them, and, as already discussed, those interests in general are subject to being outweighed by the competing interest in disclosure. 27

24. In Glamis Gold v. United States, the United States claimed privilege with respect to 'pre-decisional and deliberative' documents, i.e. documents that were 'generated before the adoption of an agency policy or decision that contain opinions, recommendations or analyses of specific policies or decisions'. 28 Taking a conservative approach to the claimed privilege, the tribunal held that in that context, 'factual information' was distinct from 'policy information' and thus should be produced, unless it is 'so inextricably intertwined with policy information that it cannot be appropriately segregated or the factual information itself would reveal too much of the deliberative process to be disclosed'. 29

25. State parties may assert attorney-client privilege, as also occurred in Glamis Gold v. United States. The tribunal accepted that an attorney-client privilege may apply to the government as a client, even though the government comprises multiple departments [Page79:] and subunits, 30 although the tribunal limited its application in two respects: the tribunal observed that communications between governmental agencies will remain privileged only if there is a 'substantial identity of legal interests within the different agencies in the particular subject matter of the communications'31 and that communications to the attorney will remain privileged only while the attorney is acting in a legal, advisory capacity and not 'as a policy-maker or corporate officer'. 32

26. In all such cases, tribunals have required a clear showing that the claimed privilege applies to the documents at issue. Thus, for example, in Rumeli Telekom v. Kazakhstan, the tribunal required Kazakhstan to produce specific details and descriptions of each document for which it claimed privilege, including the case or proceeding for which the document had been prepared, and the identity of the legal advisor who was involved in the communication. 33 Similarly, in ADF v. United States, the tribunal ruled that before it could determine the applicability of the privileges asserted by the United States, including attorney-client privilege, 'the Respondent will have to specify the documents in respect of which one or more privilege is claimed and the nature and scope of the particular privilege claimed, and show the applicability of the latter to the former'. 34

1
See e.g. A. Depalma, 'NAFTA's Powerful Little Secret; Obscure Tribunals Settle Disputes, But Go Too Far, Critics Say', The New York Times (11 March 2001).

2
'The Secret Trade Courts', Editorial, The New York Times (27 September 2004).

3
See e.g. 'United Parcel Service of America, Inc. v. Government of Canada NAFTA/UNCITRAL Arbitration Rules Proceeding', ICSID News Release, 28 May 2001.

4
See 'NAFTA Commission Joint Statement', Department of Foreign Affairs and International Trade News Release No. 152, 7 October 2003.

5
See 'A Decade of Achievement', NAFTA Free Trade Commission Joint Statement, 16 July 2004.

6
See Methanex Corp. v. United States, UNCITRAL (NAFTA), Decision of the Tribunal on Petitions from Third Persons to Intervene as 'Amici Curiae', 15 January 2001 ('Methanex') 47-53. Documents relating to NAFTA disputes can be found at <http://www.naftaclaims.com/>.

7
Ibid. 47.

8
See Aguas Argentinas et al v. Argentine Republic, ICSID Case No. ARB/03/19, Order in Response to a Petition for Transparency and Participation as Amicus Curiae, 19 May 2005 ('Aguas Argentinas'). Documents relating to ICSID cases can be found at <http://icsid.worldbank.org/ICSID/Index.jsp>.

9
Article 30.1 of the LCIA Rules is an exception. It provides: 'Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceeding not otherwise in the public domain - save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.'

10
See World Duty Free Company Ltd. v. Republic of Kenya, ICSID Case No. ARB/00/7, Award, 4 October 2006 ('World Duty Free') 16.

11
Mondev Int'l Ltd. v. United States, ICSID Case No. ARB(AF)/99/2, Award, 11 October 2002 ('Mondev') 28.

12
See S.D. Myers, Inc. v. Canada, UNCITRAL (NAFTA), Procedural Order No. 16, 13 May 2000 ('S.D. Myers') 16.

13
See Mondev 29.

14
Ibid.

15
See Pope & Talbot, Inc. v. Canada, UNCITRAL (NAFTA), Decision and Order by the Arbitral Tribunal, 11 March 2002 ('Pope & Talbot') 7-8, 18.

16
Amco Asia Corp. v. Republic of Indonesia, ICSID Case No. ARB/81/1, Decision on Request for Provisional Measures, 9 December 1983, reprinted in (1985) 24 I.L.M. 365 ('Amco Asia') 4-5.

17
Ibid. 5.

18
Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Procedural Order No. 3, 29 September 2006 ('Biwater') 136.

19
Metalclad Corp. v. United Mexican States, ICSID Case No. ARB(AF)/97/1, Award, 30 August 2000 ('Metalclad') 13.

20
See Loewen Group, Inc. & Raymond L. Loewen v. United States, ICSID Case No. ARB(AF)/98/3, Decision on Hearing of Respondent's Objection to Competence and Jurisdiction, 5 January 2001 ('Loewen') 26.

21
IBA Rules on the Taking of Evidence in International Commercial Arbitration (1999), Art. 9(2)(f).

22
See S.D. Myers, Procedural Order No. 10, 16 November 1999.

23
S.D. Myers, Explanatory Note to Procedural Order No. 10, 17 November 1999, 5.

24
See United Parcel Service of America Inc. v. Canada, UNCITRAL (NAFTA), Decision Relating to Canada's Claim of Cabinet Privilege, 8 October 2004 ('UPS') 1.

25
Ibid. 10.

26
Ibid. 11.

27
Ibid.

28
Glamis Gold Ltd. v. United States, UNCITRAL (NAFTA), Decision on Parties' Requests for Production of Documents Withheld on Grounds of Privilege, 17 November 2005 ('Glamis Gold ') 36.

29
Ibid.

30
Ibid. 24.

31
Ibid. (internal quotations omitted).

32
Ibid. 23.

33
See Rumeli Telekom A.S. & Telsim Mobil Telekomikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16, Award, 29 July 2008 ('Rumeli') 47.

34
ADF Group, Inc. v. United States, ICSID Case No. ARB(AF)/00/1, Award, 6 January 2003 ('ADF') 38.