Confidentiality Clause in Arbitration Proceedings: A comparative study

Introduction Confidentiality is one of the important clauses in an Arbitration agreement. It has been considered as an advantage of arbitration. Unlike in a court, where the public gets to know about what happens inside the proceedings but in Arbitration the entire facts or the arguments are protected by the insertion of the Confidentiality clause. The clause provides an armor around the entire dispute resolution mechanism by restricting the movement of the stakeholders with regards to the entire Arbitration proceeding.In this globalized age , when trade and the entire commercial world is getting intensely competitive , speedy dispute redressal mechanisms are needed. Arbitration is just suited for such purpose. It is swift, uncomplicated and tailor made for international disputes. There are many reason why Arbitration is becoming increasingly important for settling of disputes. One of the major reasons are its privacy clauses. Allegations of various types like misrepresentations, of incompetence and worse are often made in the course of commercial dispute proceedings and if such mudslinging comes out openly then it will hamper their public image. So it is understandable that the parties of the dispute will prefer a more private and confidential setting. There is a difference between privacy and confidential in international arbitration. Privacy is typically used to refer to the fact that under virtually all national arbitration statutes and institutional rules , only parties to the arbitration agreement and not the third parties may attend arbitral hearings and otherwise participate in the arbitral proceedings.[footnoteRef:2] The position is entirely a contrast in confidentiality which is basically an asserted obligation of the parties not disclose information concerning the arbitration to third parties. Obligations does not only extend to prohibiting parties from allowing third parties into the hearings, but also not to disclose the hearing transcripts, as well as the written submissions and the pleadings, the evidence adduced in the arbitration , materials produced during disclosure and the arbitral awards etc. The confidentiality clause seeks to provide the parties a centralized forum for dispute resolution which helps in giving a commercially sensible solution by limiting the disclosure by the parties to the public, press etc. [2: See, Gary B. Born, International Commercial Arbitration,vol II, WoltersKluwer,2014,p.2782]

The position of Confidentiality can be divided into two parts. Firstly, there is the classical position which can be prevalently seen in the English law. The view was spelt out by the English court of appeal in Dolling Baker v Merrett and another[footnoteRef:3] which was further substantiated in the Hassneh Insurance Co. of Israel v Mew[footnoteRef:4] which said that there is an existence of an implied duty of confidentiality as the natural extension of the undoubted privacy of the hearing in an international commercial arbitration. Implied obligations has also been recognized by many other countries like Singapore and Switzerland. Whereas in US or Australia has not recognized implied confidentiality obligations in Arbitration agreements. In these jurisdictions have claims of implied confidentiality obligations were rejected. They considered the expressly written clauses in the Arbitration, which specifically deals with confidentiality with no room for any implied understanding. [3: Dolling-Baker v Merrett (1991) 2 All E.R. 890] [4: Hassneh Insurance Co. of Israel v Mew, (1993) 2 Lloyds Rep.243]

The researcher will try to analyze the importance of confidentiality clauses in international commercial arbitration. While assessing the importance the researcher will try to compare both implied and express obligation in some major legal regimes across the world.

Chapter I.Confidentiality Clause: An overview