A World Of Choice: The Competition For International Arbitration Work - Part II

This is the second part of an edited version of a paper

given to an evening meeting of the Chartered Institute of

Arbitrators (East Asia Branch) on 3 December 2007. The author

considers some of the principal factors that influence party choice

of venue for international arbitrations, in particular factors

arising from the legal environment. This part discussed the impact

of privacy and confidentiality, arbitral impartiality and the

implementation of new arbitration rules and legislation, in

particular the UNCITRAL Model Law. Part I of this article was

published at [2008] Asian DR 44.

Privacy And Confidentiality

Because arbitration is a private means of dispute resolution and

privacy and confidentiality are general characteristics of the

arbitration process, it might be assumed that the position is

universal and therefore neutral as between legal regimes.

Department of Economic Policy and Department of the City of

Moscow v Bankers Trust Co1 was the occasion for an

examination by the English Court of Appeal of what the law requires

and permits by way of exception to obligations of privacy and

confidentiality. An arbitration of a dispute arising under a

finance agreement had been held under the UNCITRAL Arbitration

Rules (1976 Edn), during which allegations of corrupt practices

were made against Moscow's employees. When a challenge to the

award was made in the English High Court, Moscow argued initially

that the judgment should be confidential, because the

subject-matter of the arbitration was highly sensitive. When,

however, it transpired that the award exonerated it completely,

Moscow sought full publication, which the bankers resisted.

Inadvertently, neither party had asked for the judgment to be

protected from publication and a headnote and link to the complete

judgment were made available by LAWTEL, the online legal database.

The 1996 Act contains no provision as to privacy or

confidentiality. The UK Government's Departmental Advisory

Committee on Arbitration Law had cited a London Business School

study of Fortune 500 US corporations as supporting the view that

? "There is no doubt whatever that users of

commercial arbitration in England place much importance on privacy

and confidentiality as essential features".

However, it was decided that the UK legislature would leave

provision for privacy and confidentiality to the parties and, of

course, a number of international commercial contracts contain

express obligations on the parties in these respects. By contracts,

the City of Moscow case, in the absence of party

agreement, had to be decided under common law principles. A further

complication was that the case concerned legal proceedings arising

out of the arbitration rather than the arbitration itself. The

Court of Appeal upheld the first instance decision that the

judgment should remain private, but Moscow's appeal succeeded

insofar as a brief and factually neutral summary was allowed to

remain on LAWTEL.

In the absence of detailed agreement between the parties, the

principal institutional regimes make varying degrees of provision

for confidentiality and privacy. Unsurprisingly, given the

sensitivity of intellectual property disputes, the WIPO Arbitration

Rules (2002 Edn) give the fullest protection2. By

contrast, the most 'open' regime is the ICSID Rules of

Procedure for Arbitration Proceedings (2006 Edn), which contemplate

the possibility of attendance by "other

parties"3 and publication of excerpts from

decisions by the Centre4. Between these two extremes are

several variants. The UNICTRAL Arbitration Rules provide for

privacy of hearings unless the parties agree otherwise5

and for the award to be made public only by consent6.

The ICC Rules are notably silent on the subject of party

confidentiality obligations, although they do provide for private

hearings unless the parties agree otherwise7. The

AAA's ICDR International Arbitration Rules (2007 Edn) provide

for privacy of hearings unless the parties otherwise agree8 and

also make general provision as to confidentiality9. The

LCIA Rules provide for both privacy and confidentiality unless

otherwise agreed10.

While in many cases ... variations [in national

arbitration laws] will be rendered irrelevant by express party

agreement, whether or not within institutional rules, the degree of

protection afforded by the law could still be of crucial importance

to the parties in certain situations ...

There is likewise considerable variation in national laws.

English law applies a basic presumption of privacy and

confidentiality in the arbitration itself, although the opposite is

the case in litigation. This presumption is subject to exceptions

where there is party consent or an order of the court.

In Sweden, by contrast, the Supreme Court decision in

Bulgarian Foreign Trade Bank v Al Trade Finance Inc (the

Bulbank case)11 established that there is no

inherent confidentiality obligation in arbitration under Swedish

law. This appears to be somewhat similar to the position in

Australia. In Esso Australia Resources Ltd v

Plowman12, the High Court of Australia rejected

arguments based on English law in favour of implied terms in the

arbitration agreement, Mason CJ stating that complete

confidentiality cannot be achieved, no such obligation attaches

automatically to witnesses and arbitration...