When these authors commenced practice, confidentiality (and we will use the term confidentiality to also mean the term privacy) was one of the holy trinity of advantages that arbitration was said to give to participants over and above what might be achieved in some court settings. The other two members of the holy trinity were often said to be speed and cost, which we will address elsewhere.
Turning back to the days pre internet, irrespective of whatever confidentiality provisions might have been agreed, arbitration was an inherently private act. Proceedings were known to the participants and a few others and awards were seldom published. Arbitration tended only to reach the public gaze when awards were appealed or enforced in the courts, or in specific types of proceedings which were inherently public to an extent (e.g. Investor State cases).
The practical effect was that irrespective of whatever confidentiality clause had been agreed most arbitrations, particularly commercial arbitrations, remained private.
Gradually over the last 20 years or so that inherent privacy has been eroded. Institutions now commonly publish awards (with or without redactions) and there is considerably increased press interest in arbitration. Indeed modern technology makes it much easier for proceedings to be recorded and shared and these authors have been involved in confidential cases where information about the case has appeared on social media, on an almost live basis.
Well, while traditionally most arbitration hearings are held behind closed doors, post COVID it seems clear that there will be a greater use of online platforms for arbitrations where the parties and their lawyers are not physically present.
This raises a whole new series of issues concerning confidentiality in arbitration.
For those parties who become involved in virtual arbitrations there are a series of new questions that need to be asked, for example:-
Some of these issues are part of a wider list of issues concerning confidentiality which is presently being addressed by society at large; and it is probably the case that technical solutions needed to resolve some of these issues are not yet commonly available. However, that does not mean that there are no steps which a prudent party cannot take in order to reduce the risks of unexpected publicity in and around its legal disputes.
The first thing to do is to look at the terms of the contract, ideally at the time of drafting the contract. You need to make sure that there is a clause which states expressly and unequivocally that the arbitration proceedings themselves should be kept confidential. It was once thought that simply having a general confidentiality clause in the contract would be sufficient but these authors have certainly come across situations where tribunals have considered that such a clause is insufficient to render the proceedings confidential.
The confidentiality clause needs then to be checked, at a minimum, against the law of the seat as well as the rules of the relevant arbitral institution. For example, as a matter of English law there is an implied duty of confidentiality in arbitration which will support any confidentiality provision in your contract. On the other hand in many other jurisdictions, there is no such presumption for international arbitration and hence your confidentiality provision should be more tightly drafted to ensure that it is effective in the absence of that presumption.
Turning to the rules and practices of the relevant institutions. Is it an institution that habitually publishes awards and if so in what form? Some institutions routinely publish redacted awards, but those redactions maybe insufficient to disguise the identity of the parties. Some institutions will name the parties, legal advisers and arbitrators but only with consent. However, this is often dealt with after the end of the proceedings when the parties and their lawyers may not have quite the focus on the procedures in the case that they might have had when the proceedings where at their most active. This can be an elephant trap for the unwary. The safest course is to let the institution know at the start of the proceedings that you do not consent to publication of any award.
This is not the place to set out a full protocol for confidentiality in virtual arbitration, but there are certain enquiries that one can make to ensure that there is the best chance of confidentiality during the course of the proceedings:
There are both legal and practical measures that can be taken to assist with confidentiality when circumstances allow. For example:
In conclusion, the issue of confidentiality and privacy has become more difficult to manage with the advent of modern technology. But that is all the more reason to make sure that you do take all steps available, if you do want to retain confidentiality.
If you would like to discuss any of the points or issues raised in this article please contact us.