CONFIDENTIALITY IN ARBITRAL PROCEEDINGS

This article has been written by Aman Degra and Lakshyaraj Singh Charan, 4th year Students pursuing B.A. LL.B (Hons) from Institute of Law Nirma University, Ahmedabad.



Introduction

Arbitration allows parties to resolve their disputes by out of court settlement process. In this process parties come to a mutual agreement to resolve their disputes. It provides parties autonomy over the dispute settlement, cost effective, speedy procedure. Arbitration is of two type: first is ad-hoc in which arbitration is autonomous and party driven and second is institutional arbitration in which specialized institutional are there to deal with any kind of dispute allowed for arbitration under law.


In a country like India, where courts are already having lakhs of pending cases, arbitration method can be very effective to resolve dispute speedily. Unlike courts, it does not require to follow particular rules and procedure to resolve the dispute, also parties need not to pay heavy fees to their lawyers and it also ensure parties speedy solution of the dispute. Due to this, in India there has been an increase in arbitration lawyer because it does not require unnecessary procedure to follow, minimal judicial intervention and quick and cost-effective resolution of dispute.


Meaning of confidentiality

The Arbitration Act does not contain any definition of ‘Confidentiality’. The oxford dictionary defines ‘Confidentiality’ as “a situation in which you expect someone to keep information secret”. The Black’s Law Dictionary defines ‘confidential’ as “entrusted with the confidence of another or with his secret affairs or purposes; intended to be held in confidence or kept secret”.


As a client-attorney privilege the principle of confidentiality is established in the legal the legal workers in the whole world. In India, the Evidence Act, 1872 expressly mentions the confidentiality between a client and his attorney. It says that the counsel is restricted from disclosing any information provided by their client and any advice they have given to their client, subject to some exceptions.

To arbitration proceedings, the principle of Arbitration has been introduced through the Arbitration Act, 1996. It mentions that the parties, arbitral institution and the arbitrator(s) to the proceedings will maintain confidentiality about the arbitral proceedings and the only exceptions mentioned before arbitral awards’ disclosure is its enforcement and implementation.


The Global Position on Confidentiality

Various major establishments of arbitral proceedings opined the proceedings to be private. For example, ICC, Britain, UNCITRAL etc. all consists of procedure related to private intervention except if requested by the court. But still, most of these rules do not explicitly deal with the issue of confidentiality except Article 30 of LCIA Rules. It states to keep confidential all the awards, materials, and documents of arbitration proceedings

Huge numbers of the major arbitral establishments perceive the arbitral procedures to be private. For example, Britain, ICC, UNCITRAL and all accommodate private intervention procedures except if generally concurred by the gatherings or requested by the court.


Nonetheless, the vast majority of these guidelines don't explicitly manage the issue of secrecy except for Art.30 of LCIA Rules which expresses that the gatherings attempt the general rule to keep the honor and requests just as all other material submitted amid the procedures secret aside from when revelation is required as a legitimate obligation, exercise of a lawful right or for the honor's implementation.


The imposition of “implied confidentiality obligations” approach has also been perused by some jurisdictions. The English courts adopted it in Michael Wilson & Partners case and the Singaporean and Swiss courts got it after International Coal Pte. Ltd. case. In this regard, the oldest standing authority is the English law and the reason for parties opting for Arbitration has been made clear as it refrains from attracting the public attention, because knowledge to the general public might make the completion of proceedings successfully a bit difficult. This objective makes it the implied duty of parties and others to maintain confidentiality in the Arbitration proceedings at the first place. The only exception that courts have recognized to this implied obligation of confidentiality is ‘to protect the legal rights of a party’.


Despite the fact that numerous nations don't have any arrangement with respect to classification in their national intervention enactment, New Zealand and Spain seem to be exemptions. New Zealand accommodates the honor, records and data identifying with the procedures to be private except if generally concurred by the gatherings. Spain forces commitment to keep up privacy of data gained identifying with and in course of arbitral procedures.


The HKAO explicitly forced privacy in intervention procedures from 2011, commanding non-exposure of any data relating to arbitral procedures. Where parties don't concur on secrecy measures, statutory confinements will apply. Required legitimate divulgences, revelation important for upholding a privilege and exposure in course of difficult the arbitral honor are the three special cases.


In any case, purviews like US and Australia dismiss any suggested classification. In spite of the fact that the US Court of Appeals have confirmed that any inquiry on appropriateness of secrecy in intervention is an inquiry on the very idea of the procedure, it is mistaken to assume that all data offered amid discretion will stay secret. Gatherings have the self-rule to choose on the off chance that they wish to reveal the subtleties of mediation and grant. Be that as it may, classification is much of the time damaged by gatherings and observers in US. The Australian High Court in Plowman recognized security from secrecy, seeing that the last isn't a basic characteristic of intervention.


Case Analysis: A Discussion on Evolution of Law

1. US v. Beg E. Corp

US organization in this case was requested by govt of Panhandle to deliver reports from an ICC discretion between Panhandle's backup and an Algerian state oil organization. Beg tried to square revelation, contending that mediation is secret in nature and that divulgence would disappoint the gatherings' desires. The court came to the decision that there is no suggested secrecy until and except if the gatherings consent to. Also , the ICC Rules puts no commitment of secrecy on parties.