Confidentiality versus Transparency in International Arbitration: Where to Draw the Line? French Law Perspective
25 mai 2023 25 mai 2023
This is the fourth and final article in Clyde & Co’s latest international arbitration series covering the topic of confidentiality in international arbitration. In this piece, associate Constance Malleville from our Paris office provides the legal perspective from France.
Confidentiality is the duty not to disclose information to third parties and, in the context of international arbitration, may extend to the parties, arbitrators, witnesses, experts or members of the arbitral institution.
Confidentiality is often described as one of the key reasons for users’ trust in international arbitration, as it is a means of preserving the reputation and relationships of the parties, as well as limiting public disclosure of sensitive business transactions.
Yet, surprisingly, neither French arbitration law nor the ICC Rules of Arbitration provide for mandatory confidentiality of arbitral proceedings or awards, leaving this matter to the will of the parties.
Such a reluctance to make confidentiality obligatory under French law is coupled with the general trend for greater transparency in international arbitration, including in ICC proceedings, so as to legitimize and enhance the credibility of arbitration as a more open mechanism for the resolution of complex international disputes.
No express protection of confidentiality in international arbitration under French Law and in the ICC Rules of Arbitration
Under French law, only domestic arbitration proceedings are deemed confidential, unless the parties agree otherwise.1
There is no provision of French law which makes international arbitration proceedings confidential. Accordingly, international arbitration proceedings are not automatically confidential, unless stated otherwise in the applicable arbitration rules, agreed otherwise by the parties or decided by the arbitral tribunal.
This was confirmed in the 2004 Nafimco decision, in which the Paris Court of Appeal ruled that there is no presumption of confidentiality in international arbitration. Therefore, in the event of a breach of confidentiality by one of the parties, the confidentiality of the dispute must be proven by the aggrieved party in order to be enforced.2
Moreover, the ICC Rules of Arbitration do not automatically render proceedings confidential, unlike the rules of other arbitration institutions such as the LCIA. Article 22(3) of the 2021 ICC Rules (originally incorporated in the ICC 2012 Rules) only allows ICC tribunals to issue confidentiality orders tailored to the circumstances of a particular case, at the request of a party.3
As a consequence, for international arbitrations seated in Paris, it is generally recommended that the parties include a confidentiality provision in the arbitration agreement, or that the parties agree to include one in the Terms of Reference, once the arbitral tribunal is constituted. Such a provision should contain: (i) the addressee(s) of the confidentiality obligation; (ii) its material scope - i.e., the different categories of documents or information covered by the confidentiality obligation; and (iii) the sanctions in case of a breach of the provision.4
Global push for more transparency
In addition, it is also striking to note the recent trend towards greater transparency in international arbitration.
This is particularly visible in ICC proceedings, as the ICC Court recently implemented various initiatives to further transparency, with the aim to improving the legitimacy of the arbitration process.
For example, for arbitrations registered after 1 January 2016, the ICC now publishes on its website the names, nationality, roles within the tribunal and appointment method of the arbitrators, as well as whether the arbitration is pending or closed. This mechanism was updated in July 2019 and the ICC also now publishes the sector of industry involved and the names of the parties’ counsel for arbitrations.5 Of course, parties may, by mutual agreement, opt out of the publication of such information or request that additional information be published by the ICC Court.
Moreover, the ICC has, for many years, published anonymized extracts of arbitral awards in various publications.6 The 2019 and 2021 Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration now also provide that awards may be published in their entirety within two years of the notification of a final award. This can be easily circumvented through a confidentiality clause. In any case, any party may, at any time before publication, object to such publication or request that the award be anonymized (all or in part).
Finally, Article 11(7) of the 2021 ICC Rules now requires the parties to disclose any recourse to third-party funding. More specifically, each party must inform the Secretariat, the arbitral tribunal and the other parties of the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defences, and under which the funder has an economic interest in the outcome of the arbitration.7 In addition to ensuring greater transparency, the rationale behind this provision is also to facilitate compliance by prospective arbitrators with their independence and impartiality obligations and avoid conflicts of interest.
The above illustrates that, while confidentiality is not mandatory under French law or the ICC Rules, but depends upon the will of the parties, the call for greater transparency is becoming increasingly prevalent in international arbitration so as to better address the needs and concerns of its users.
Thanks are due to Mr. Thomas Lehmann, intern at Clyde & Co, for his research assistance.
The next series to follow in the upcoming weeks will cover the landscape of arbitrators across various international jurisdictions.
1 Article 1464 paragraph 4 of the Code of Civil Procedure: “Subject to legal obligations and unless otherwise agreed by the parties, the arbitration proceedings are subject to the principle of confidentiality.” (free translation).
2 Paris Court of Appeal, 22 January 2004, Société National Company for Fishing and Marketing Nafimco v société Foster Wheeler Trading Company AG, Rev. Arb. 2004.647.
3 Article 22(3) of the 2021 ICC Rules: “Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information.”
4 Xavier Nyssen and Eduardo Silva Romero, ‘La confidentialité dans l’arbitrage : un mythe fondateur ?’ (Les Echos 25 July 2017) accessible at La confidentialité dans l’arbitrage : un mythe fondateur ? - Les Echos accessed on 12 May 2023.
5 See ICC, ‘Case Information’ (ICC 2023) accessible at ICC Case Information - ICC - International Chamber of Commerce (iccwbo.org).
6 Main publications comprise the ICC Court Bulletin, the ICCA Yearbook, specialized collections of ICC awards and Clunet.
7 Article 11(7) of the 2021 ICC Rules : “In order to assist prospective arbitrators and arbitrators in complying with their duties under Articles 11(2) and 11(3), each party must promptly inform the Secretariat, the arbitral tribunal and the other parties, of the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defenses and under which it has an economic interest in the outcome of the arbitration.”