Transparency v. Confidentiality in Arbitral Proceedings

-Abilash Viswanathan

The debate between Transparency and Confidentiality is one of the most insightful academic debates in Arbitration Law. Confidentiality has been traditionally regarded as one of the most attractive features of arbitration as a method of dispute resolution, owing to the fact that arbitration is a private process at its core. This private nature of the arbitration proceeding has been traditionally considered to naturally result into a duty of confidentiality.[1] However, there is a notable distinction between the concepts of privacy and confidentiality in Arbitration Law. In the famous case of Esso/BHP v. Plowman, this distinction was acknowledged and it was stated that:

“Privacy is concerned with the right of persons other than the arbitrators, parties and their necessary representatives and witnesses, to attend the arbitration hearing and to know about the arbitration. Confidentiality by contrast, is concerned with … information relating to the content of the proceedings, evidence and documents, addresses, transcripts of the hearings or the award.”[2]

On the other hand, Commentators and scholars have long been making the case for expanding transparency in the international commercial arbitration system, notably by Dr. Julian Lew who argued that arbitration awards ought to be published as early as 1982.[3] Recently, advocates of greater transparency in International Commercial Arbitration (ICA) have been arguing that the general public has a stake-hold in many of the issues being adjudicated in ICA. This stake-hold, they argue, necessitates greater transparency in ICA though, inter alia, compulsory publication of arbitration awards.[4] In this note, we shall examine the debate between Transparency and Confidentiality in ICA.

In some jurisdictions such as England, confidentiality is considered to be an implied term in the arbitration agreement and it has been acknowledged that arbitrations are private and confidential unless otherwise stated in the arbitration agreement.[5] This English position that confidentiality is an implied term of the arbitration agreement flows from the traditional understanding of arbitration as a private contractual arrangement. However, in the 1990s, Australian and Swedish courts rejected any implied duty of confidentiality in arbitration. [6]

The Australian High Court in Esso v. Plowman observed that private arbitration hearings do not automatically clothe the information disclosed in them and held that “Absolute confidentiality of documents produced and information disclosed in an arbitration is not a characteristic of arbitrations in Australia”.[7] Similarly, in the AI Trade Finance case, the Swedish Supreme Court had held that “[t]here is no explicit provision in the ECE-rules on the parties’ possible obligation to hold information in confidence”. [8]

In the U.S., the Court of Appeals has affirmed that any presumption of confidentiality of the information tendered during arbitration would be erroneous, and that parties have the autonomy to decide if they wish to disclose the details of arbitration and award.[9]

The discussion on Transparency has led to the demarcation of three categories of Transparency:(i) “Organizational Transparency” asking arbitral institutions to be more transparent in their case management and decision-making; (ii) “Legal Transparency” asking for publication of arbitral decisions; and (iii) “Transparency of Proceedings” asking for public proceedings and hearings.[10] Within the U.S. legal system, the concepts of transparency and public access are often conflated with each other. Public access in this context refers to the right of an individual citizen to attend or access judicial proceedings. This right is particularly relevant in common-law systems, in which judges are expressly charged with law-making powers.[11] Consequently, these systems are able to better discharge their commitment to guaranteeing public access, as compared to civil-law systems such as Germany where “court files, though public records, are in any case not publicly accessible”.[12]

The general aim of greater transparency is to facilitate the monitoring of the adjudicator, in order to prevent potential abuses of power.[13] However, in the context of ICA, do citizens of one country have any legitimate interest in monitoring the adjudicator in an arbitration between parties that may have nothing to do with that country? Advocates of compulsory transparency reforms have conceded that transparency should not be insisted on in all cases because the public does not have an interest in all cases, and that there is a distinction between ‘interested parties’ and the general public.[14]

Contemporarily, the ICA system has made significant advances toward greater transparency.[15] Since June 2016, the International Chamber of Commerce (ICC) has been publishing the names of arbitrators serving in ICC administered cases.[16] Article 41 of the VIAC’s Rules of Arbitration permits the VIAC to “publish anonymized summaries or extracts of awards in legal journals or the VIAC’s own publications, unless a party has objected to publication within 30 days of service of the award”.[17] However, more recently, there have been calls to weigh the benefits of transparency against the legitimate interest of the parties’ in swift and confidential resolution of disputes.[18] Transparency concerns should therefore be addressed without compromising on one of the key selling points of ICA: the confidentiality of proceedings.

[1] Gu Weixia, Confidentiality revisited: Blessing or curse in International Commercial Arbitration?, 15 Am. Rev. of Int’l Arb. 607 (2004). [hereinafter Weixia (2004)]

[2] Weixia (2004), Id.; Expert Report of Dr. Julian D.M. Lew, in Esso/BHP v. Plowman, 11 Arb. Int’l 283, 285 (1995).

[3] Catherine A. Rogers, Transparency in International Commercial Arbitration, 54 U. Kan. L. Rev. 1301 (2006) [hereinafter Rogers (2006)]; Julian D. M. Lew, The Case for the Publication of Arbitration Awards, in The Art of Arbitration 22 (Jan C. Schultz & Jan van den Berg eds., 1982).

[4] Rogers (2006), Id.

[5] Ali Shipping Corporation v. Shipyard Trogir, [1998] 1 Lloyd’s Rep. 643; Hassneh Insurance Co. of Israel v. Steuart J. Mew, [1993] 2 Lloyd’s Rep. 243.

[6] Joanna Du, Hong Kong: A Listed Company’s Duty of Confidentiality in Arbitration and its Duty of Disclosure to the Public, Kluwer Arbitration Blog (Jan. 12, 2019), http://arbitrationblog.kluwerarbitration.com/2019/01/12/hong-kong-a-listed-companys-duty-of-confidentiality-in-arbitration-and-its-duty-of-disclosure-to-the-public/?print=print&doing_wp_cron=1591202628.5715780258178710937500#:~:text=The%20classical%20position%2C%20as%20confirmed,an%20absolute%20duty%20of%20confidentiality.

[7] Esso Australia Resources Ltd. v. The Hon’ble Sidney James Plowman (1995) 128 ALR 391,

[8] Bulgarian Foreign Trade Bank v. A.I. Trade Finance Inc., Swedish Supreme Court, October 27 2000, Case No. T 1881-99.

[9] Samuel (2017), supra note 6.

[10] Victoria Pernt, How Much (More) Transparency Does Commercial Arbitration Really Need?, Kluwer Arbitration Blog (Mar. 4, 2017), http://arbitrationblog.kluwerarbitration.com/2017/03/04/how-much-more-transparency-does-commercial-arbitration-really-need/?doing_wp_cron=1591362305.8807220458984375000000. [hereinafter Pernt (2017)]

[11] Rogers (2006), supra note 3.

[12] Inga Markovits, Selective Memory: How the Law Affects What We Remember and Forget About the Past-The Case of East Germany, 35 Law & Soc’y Rev. 513, 525 (2001).

[13] Peter A. Winn, Online Court Records: Balancing Judicial Accountability and Privacy in an Age of Electronic Information, 79 Wash. L. Rev. 307, 308-11 (2004).

[14] Dora Marta Gruner, Note, Accounting for the Public Interest in International Arbitration: The Need for Procedural and Structural Reform, 41 Colum. J. Transnat’l L. 923, 960 (2003).

[15] Rogers (2006), supra note 3.

[16] ICC begins publishing arbitrator information in drive for improved transparency, ICC (June 27, 2016), https://iccwbo.org/media-wall/news-speeches/icc-begins-publishing-arbitrator-information-in-drive-for-improved-transparency/

[17] 2018 VIAC Rules of Arbitration and Mediation, Art. 41.

[18] Pernt (2017), supra note 10.