Transparency and Confidentiality in Arbitration: Assumptions Abound
Transparency and Confidentiality are not two sides of the same coin, they are both important topics in their own right. What they have in common is that they are both the victims of assumptions which are not necessarily always correct.
There is often an assumption that arbitrations are always confidential, which is far from the case. English law is unusual in that it implies a duty of confidentiality into arbitrations simply by virtue of the arbitration being governed by English law. Parties to arbitration have an implied duty to maintain the confidentiality of the proceedings. This extends to the hearing, the documents and submissions and the award. On this basis every arbitration that takes place in England is confidential as a matter of course. But there are many jurisdictions where there is no implied duty of confidentiality – Australia, the United States, Sweden immediately spring to mine because of the high profile cases they have had on this topic, but there are many others. There are also arbitration rules where there is no express duty of confidentiality – the ICC is one. But that doesn’t stop lots of clients assuming that all arbitrations will automatically be confidential.
There is also an assumption that the process of arbitration is not transparent, which I would argue is not always the case either. Certainly in the US there is transparency from the arbitral institutions in terms of when awards are expected to be rendered. There is the ability to give feedback on arbitrators to the institution at the end of the matter . Increasingly, arbitrators are much more transparent about their fees, the way they manage cases, their schedules and their case loads.
In this post I focus on the question of publishing commercial arbitration awards and how it relates to transparency and confidentiality in arbitration.
In my view, there can only be two reasons for publishing awards:
To build up a body of some kind of precedent so that parties can refer to the awards in argument.
To identify situations in which an arbitrator has ruled one way on a case to seek to exclude or challenge an arbitrator on the grounds that he or she is pre-disposed on an issue.
The ICC already publishes extracts of anonymised awards but it intends to go much further than this. It set out the principles on which it will publish the awards as follows:
The Secretariat will inform parties at the time of notification of awards, that the award may be published in its entirety no less than two years after notification. Parties are able to agree to publication in a shorter or longer time period.
Any party may, at any time before publication, object to publication or require that the published version of an award be anonymised or pseudonymised.
If a party objects to publication or requires that the award be anonymised or pseudonymised, the award will either not be published, or will be published in a restricted format.
If there is a confidentiality agreement in place covering the arbitration or specific aspects of the arbitration or award, publication of the award will be subject to the parties’ specific consent (opt-in to publication rather than opt-out).
Aspects of awards that refer to personal data may be anonymised or pseudonymised by the Secretariat to comply with applicable data protection regulations.
The Secretariat retains the discretion to exempt awards from publication.
There is an argument to be made that being able to see how tribunals approached a particular ICC Rule might assist in formulating an argument that the tribunal should decide the issue in the same way, but tribunals will not be bound by the previous award and frankly there is such broad discretion under the Rules I am not convinced as to how much value there would be. In terms of how tribunals approached the application of the governing law in a matter, there would be even less value – all the research on this shows that tribunals are very focused on the application of the law to the particular facts and do not see themselves as law makers.
Although the assumption that parties make, that arbitrations will be confidential, is often wrong, that doesn’t mean it is not a valid assumption. Good counsel and diligent arbitrators will always ask at the outset of a case whether or not the arbitration should be subject to a confidentiality order but not everyone has the benefit of good counsel or even diligent arbitrators.
Although the ICC has taken great pains to ensure that the parties have control over whether or not the award is published, I am still dubious about the real value that is added by the publication process. There is a risk that the proposed publication of awards, even with all the safeguards that the ICC have put in place catches clients by surprise and makes them question what they signed up to in the first place.