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Need for confidentiality in international commercial arbitration
Need for confidentiality in international commercial arbitration
One of the main advantages of international commercial arbitration (ICA) is confidentiality. It is what makes people choose ICA to settle litigation disputes. Originally confidentiality was not an essential attribute for arbitration since much national legislation failed to regulate and recognise it. Still, over the years, it became an irreplaceable and implied part of it. Many arbitration institutions regulate confidentiality. Rules of some institutions are more detailed than others, but the common feature is that there are Codes of Ethics for arbitrators. Still, they do not always establish a requirement of confidentiality for the parties.
Like in the ICC Rules[1], Article 6 of Appendix I, and article 1 of Appendix II, imposes duties on arbitrators and the International Court of Arbitration staff but are silent when it comes to the parties. However, through article 22.3, the parties can request the arbitral tribunal to provide orders concerning confidentiality. The same is with the ICDR rules[2], whose article 37.1 only imposes duties of confidentiality on arbitrators and administrators, and article 37.2 establishes that the tribunal may make orders concerning privacy. At the same time, the LCIA[3] Rules regulates the duty of confidentiality in a well-defined manner under article 30.
Although most of the arbitrations institutions does not have direct rules asking parties to stick to confidentiality, still most of them impose this duty on various people involved within the arbitration, just like the arbitrators, the staff of the arbitration institutions, secretaries, witnesses, experts, court reporters, translators, interpreters etc. This is often why arbitrators in International Commercial Arbitration usually promote the inclusion of an express agreement about confidentiality among the parties when establishing the basis of the arbitration procedure.
Confidentiality covers the very existence of the arbitration process, from the pleadings and memorials of the parties to the documents produced or other evidence like witness statements or experts reports and therefore the award and other arbitration decisions.
Need for confidentiality-
- To protecting disputes from public dissemination.
- To avoiding potentially unfavourable or harmful publicity.
International views on confidentiality
The UNCITRAL Model Law is silent on confidentiality within the absence of any international rules prescribing confidentiality in arbitral proceedings. There have been differing views concerning implied confidentiality in arbitration proceedings. The courts in Australia and the USA have rejected the thought of an implied duty of confidentiality in arbitration and held that there could not be a presumption of arbitration. It must be mentioned in some clause. Norway is another such jurisdiction with an express statutory provision that states that there is no duty of confidentiality in arbitration proceedings unless the parties otherwise agree. On the opposite hand, countries like UK and France have recognised the concept of implied confidentiality as there is no express statutory provision regarding confidentiality.
In conclusion, confidentiality is the only thing that tends to be recognised almost altogether in national legislation and within the arbitration rules regarding International Commercial Arbitration. Though the majority of the institutions impose this duty of confidentiality on the arbitrators within the performance of their tasks, but not necessarily on the parties involved within the arbitration proceedings and so the parties at the time of preparing arbitration agreement must include a provision regarding confidentiality to be shielded from future contingencies.
[1] https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/
[2] https://www.adr.org/sites/default/files/ICDR_Rules.pdf
[3] https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2020.aspx
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.
- One of the main advantages of international commercial arbitration (ICA) is confidentiality.
- Many arbitration institutions regulate confidentiality. Rules of some institutions are more detailed than others.
- Need for confidentiality- To protecting disputes from public dissemination, To avoiding potentially unfavourable or harmful publicity.
