7th March 2017
Arbitration is generally considered to be a quicker, less expensive and more flexible process than litigation. There is also an assumption that arbitration is both private and confidential, with the parties involved often preferring not to have details of their dispute made public (unlike court proceedings).
An arbitration is private in the sense that a third party, who is not a party in the arbitration, cannot attend any hearings or play any part in the arbitration proceedings. The Arbitration Act 1996 – which is the relevant legislation – contains no provisions as to confidentiality. However, as a matter of English law, the parties to an arbitration are under implied duties to keep the hearing, the documents arising from the arbitration, and the decision or award confidential.
The situation is further complicated by the different rules that apply, the legislation of other countries, and what, in fact, the parties agree. Further, there are exceptions to the obligation of confidentiality.
In the recent English Commercial Court decision of Teekay Tankers Ltd, it was decided that the disclosure of arbitration awards was in the interests of justice, and did not breach obligations of confidentiality. The awards related to claims made in arbitrations by subsidiaries of the claimant against the same shipyard. The claimant had commenced a separate claim in the Commercial Court against the shipyard, and disclosed the awards in support of a legal argument as to estoppel. The shipyard argued this was a breach of the obligations of confidentiality.
The Commercial Court held that as the claimant had a bona fide belief in the necessity of disclosing the confidential information to the court in support of a legal argument, there was no breach of the confidentiality obligation as the disclosure was in the public interest.
In summary, subject to satisfying the test of "bona fide belief", it would appear that any party wishing to disclose such material in a piece of litigation has some scope to run this argument. There is no all-encompassing rule regarding confidentiality in arbitration proceedings.
For help and advice on dispute resolution issues, please contact David Patterson.