Is Arbitration Confidential?

Introduction

It is generally assumed as a matter of commercial dealings that arbitration proceedings will be both private and confidential.

The first assumption is essentially correct. Arbitrations are private in that third parties who are not a party to the arbitration agreement cannot attend any hearings or play any part in the arbitration proceedings.

The second assumption, since the 1990s, is not. Confidentiality - which is concerned with the parties' obligation to each other not to disclose information concerning the arbitration to third parties (and the arbitrator's like obligations to the parties) - does not apply to arbitration as an all-encompassing rule, and indeed in some circumstances will not apply at all. Generally speaking, however, parties to arbitration agreements assume that it does. Indeed, surveys suggest that confidentiality is one of the main reasons commercial parties choose arbitration over court proceedings (along with the flexibility of the process and the ability to nominate an arbitrator of choice).

The traditional assumption that arbitrations are confidential is, on the face of it, a fair one, given that arbitration arises through private agreement: it is the contractual agreement to arbitrate (and usually to do so using a pre-agreed set of arbitration rules and with the assistance of an administrating body, such as the International Chamber of Commerce ("ICC") or the London Court of International Arbitration ("LCIA")) that provides the necessary legal framework for arbitration. This is inherently different to taking a dispute to a local court, which is a formal dispute resolution process provided and mandated by the state, and therefore, to varying degrees, open to the public and the press.

This traditional assumption was, however, dealt a severe blow in the 1990s, when, with the growth in the use of international arbitration, a closer consideration of various aspects of arbitration began to take place. Those considerations included the extent to which arbitrations were confidential, and when the issue came before the courts in Australia and Sweden in the mid- to late 1990s, the courts in those jurisdictions rejected the concept of an overall duty of confidentiality in arbitration. This led to a debate about confidentiality in arbitration in many jurisdictions, and new legislation in some places. It also led to many of the recognised arbitral institutions amending their rules to clarify the position on confidentiality.

Unfortunately, however, there has been no common approach amongst legislators and arbitral institutions, other than to recognise, and seek to reflect in different ways, the important arbitral mainstay that the parties should have considerable autonomy to decide the rules which will regulate their arbitration. In some instances, therefore, legislators and arbitral administrative bodies moved to make the default position that there...