The protection of confidentiality in arbitration: balancing the tensions between commerce and public policy

Brown, Julian Christopher Patric (2021) The protection of confidentiality in arbitration: balancing the tensions between commerce and public policy. Doctoral thesis, London Metropolitan University.


When the Arbitration Act 1996 came into force on 31 January 1997 it had two aims: to consolidate the existing laws and codify arbitration practice as it then was in England and Wales. The Departmental Advisory Committee (DAC) then charged with drafting the new Act elected not to address the issue of confidentiality, preferring the law to develop on a case-by-case basis. Appropriate at the time, a quarter of a century on that approach to confidentiality and privacy is looking increasingly anachronistic: society demands transparency in all its various branches, not least the judicial system. This thesis argues that the Arbitration Act 1996 should be reformed with respect to privacy and confidentiality. It begins by exploring the differences between privacy and confidentiality and tracing the development of those concepts. A comparative analysis is conducted of arbitral confidentiality in jurisdictions outside England and Wales, and the rules and terms of selected arbitral institutions worldwide. The various studies into arbitration since the 1970’s provide insights not only into the views and opinions of those closely involved in arbitration, but also potential alternative approaches.

Widespread criticism of the status quo has come from many quarters: academics, practitioners, lawyers as well as senior members of the judiciary. Two aspects of the Arbitration Act 1996 that are commonly considered as being in need of reform are those relating to the appeal of arbitral awards and confidentiality. Focusing on the primary issues of confidentiality in arbitration, the thesis asks who and what are bound by these obligations? Is confidentiality an implied term as held by Potter LJ in Ali Shipping Corporation v Shipyard Trogir - an approach subsequently criticised by the Privy Council in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich (Bermuda), where their Lordships expressed reservations about the desirability or merit in so characterising a duty of confidentiality? Lord Hobhouse viewed any attempt at generalisation to be unworkable:

It runs the risk of failing to distinguish between different types of confidentiality which attach to different types of document or to documents which have been obtained in different ways and elides privacy and confidentiality. Generalisations and the formulation of detailed implied terms are not appropriate.

This thesis explores the reasons why confidentiality should be codified with respect to the arbitral process. That those involved - the parties, institutions, arbitrators, solicitors and witnesses - should be bound by its provisions. It argues that there is a pressing need to address the gaps in the current law such as the consolidation of proceedings and the use of materials generated during the course of an arbitration. Equally important is the need to create a framework that determines how awards are used in related arbitrations and litigation, whilst meeting the societal expectations of judicial transparency. The stunting of commercial law and the hindering of its development due to the dearth of published awards is addressed threefold: by making award publication the default rule; requiring copies of all arbitral awards to be deposited with the courts; and enabling redacted awards to be published. The modernisation proposals continue by addressing and requiring transparency when third party funding is utilised; by defining and addressing exceptions including those in the interests of justice and what constitutes in the public interest. I view it as a fundamental necessity that the ethics, transparency and disclosure obligations of every arbitrator is core to ensuring the integrity and continued success of English arbitration. The arguments that excessive intervention, whether judicially or by statute, risk London’s place in the world of arbitration are in my view misguided. An emphasis on openness, ethics and transparency will ultimately be more beneficial to English arbitration. The thesis concludes by proposing amendments that codify privacy and confidentiality in the Arbitration Act 1996.

Brown-Julian-Christopher-Patric_Final-Submission_26Feb2021.pdf - Published Version

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