Introduction
A common misunderstanding persists among many arbitration users that selecting arbitration as a dispute resolution mechanism automatically means that the proceedings will remain confidential; however, that is not the case. Although some legal systems provide that arbitration proceedings are confidential, this is not a universal rule. Even in those legal systems that provide for confidentiality as a general rule, there are many exceptions. There are also practical limits on enforcement mechanisms even when confidentiality applies.
As with the various approaches among legal systems, not all institutional arbitration rules provide that the proceedings shall remain confidential: even when rules stipulate that the proceedings shall be confidential, most rules fail to provide adequate assurance that all materials exchanged during the course of the arbitration shall remain confidential after the conclusion of the case. By themselves, arbitration rules also fail to provide for an effective enforcement mechanism after the arbitral tribunal’s mandate ends.
For all of these reasons, parties and counsel involved in IP-related arbitration must be proactive in cases where maintaining confidentiality is particularly important. This chapter explains how different jurisdictions and institutional rules address the question of confidentiality, and also suggests how users might supplement these provisions to create more robust and effective confidentiality protections in IP arbitration.
At the outset, it is necessary to be clear about terminology, particularly the difference between privacy and confidentiality in the context of international arbitration. By definition, arbitration is a private dispute resolution regime. Hearings are not open to the public in the same way that court proceedings are often open to the public. In principle, only the parties to the proceedings have the right to be present at the hearing or to receive copies of the communications and submissions; however, the private nature of arbitration does not necessarily mean that parties have an obligation to maintain confidentiality of the existence of the arbitration itself, the submissions in the arbitration, the materials submitted into evidence or other documents that the parties exchange during document production.
Privacy does not necessarily imply that parties are precluded from disclosing facts about the arbitration or using materials exchanged during the arbitration for other purposes. Rather, the privacy of the proceedings limits who is entitled to be present and to participate in the proceedings while the arbitration is pending, but it does not regulate activities outside the proceedings.
In contrast, the question of confidentiality generally concerns whether and under what circumstances a party or participant in arbitration may be bound by an affirmative duty not to disclose information related to the arbitration. Broadly speaking, there are two categories of circumstances where the issue may arise. The first is where a party wishes to make a disclosure or actually makes a disclosure, whether voluntarily or inadvertently. Here, the question is whether the disclosure gives rise to a cause of action. If the disclosure has not yet been made, but only threatened, the party wishing to maintain confidentiality may wish to seek injunctive relief. If the disclosure has already been made, a party may wish to seek damages.
A second category arises where a party or participant does not wish to disclose certain information but might nevertheless be bound by a competing legal obligation to do so. For example, a party to arbitration may have an obligation to make disclosures to its regulator, a third party in unrelated litigation proceedings might request discovery of confidential materials that a party came to possess because of arbitration, or a government entity might request documents or other information as part of an investigation. In those circumstances, the question is whether a duty of confidentiality overrides a competing duty to disclose, and whether it is possible to invoke confidentiality to resist or limit the scope of disclosure.
Sometimes the confidentiality provisions in the underlying contract are drafted broadly enough to include the confidentiality of the arbitration proceedings. Sometimes parties separately address confidentiality in the arbitration agreement. Often, commercial parties are prepared to agree, at the time they make their contract, that they will maintain confidentiality in the event of a future dispute. But far more often than not, they fail to draft the arbitration agreement with this level of particularity.
In arbitration proceedings at the International Court of Arbitration (ICC), arbitral tribunals sometimes invite parties to consider inserting a confidentiality clause in the terms of reference. Signing terms of reference with a confidentiality clause might be regarded as creating a new and independent contractual obligation if there was no such undertaking in the underlying contract.
Parties are under no obligation to agree on confidentiality after a dispute arises, and in many cases, after the dispute arises, one of the parties might perceive that a stringent confidentiality undertaking is not in its best interests and, therefore, might be reluctant to agree to include a confidentiality clause in the terms of reference.
Sometimes the parties’ interests are aligned on this matter, but not always. There are many reasons why one of the parties might prefer more flexibility or might even suggest that there should be no confidentiality obligation at all. For example, one party might perceive that publicity about a dispute would increase pressure on the other party to reach a quick settlement, and may wish to disclose the existence of a dispute and at least some information about the claims and defences. Alternatively, a party may conclude that in some circumstances there may be a strong public interest for disclosure, even of a dispute between private parties.
Another situation that sometimes arises is a multi-contract, multiparty dispute with back-to-back contracts, such as a licence and sub-licence. If the entire dispute cannot be resolved in a single proceeding, the party in the middle position may wish to use documents and evidence that it obtains in the first arbitration in separate proceedings against a different party. In other multiparty disputes, parties whose interests are aligned may wish to coordinate and share material, but this might not be possible when the parties have agreed on strict confidentiality obligations. In all those circumstances, an argument can be made that there is nothing unique about arbitration that should impede a party from making disclosures that it would otherwise be entitled to make if the dispute was resolved in the national courts.
Although it is not always possible for the parties to agree on the scope of confidentiality, most legal systems and institutional rules confer powers on tribunals to resolve these disputes as a matter of procedure and to issue orders to maintain confidentiality and to protect confidential information. Sometimes these orders are temporal in nature, and sometimes they are incorporated into the award to ensure that the obligations will continue to bind the parties even after the conclusion of the arbitration.
We now turn to a brief overview of selected legal systems and arbitration rules to consider common features and differences across the arbitration landscape. After completing this survey, we offer suggestions for how parties might utilise and supplement the tools that are available to fashion the degree of confidentiality that is appropriate in a particular case.
Confidentiality under national arbitration laws
While more than 80 countries have adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration of 1985, whether in whole or in part, with or without the 2006 amendments, the Model Law does not contain any provisions on confidentiality. The UNCITRAL Arbitral Rules appear to recognise an implied duty of privacy of the arbitral proceedings and an implied duty of confidentiality regarding the arbitral award, but do not provide for a duty of confidentiality in relation to arbitral proceedings and documents produced therein. The UNCITRAL Notes on Organizing Arbitral Proceedings state that the question of confidentiality is subject to national legislation and that, in the absence of an express agreement on confidentiality, parties ‘cannot assume that all jurisdictions would recognize an implied commitment to confidentiality’.
While a few jurisdictions address the issue of arbitral confidentiality in statutory law, most jurisdictions defer this issue to case law. We briefly survey the national arbitration laws in a sampling of six major jurisdictions: England, Germany, the United States, France, Singapore and Hong Kong.
England
In England, the Arbitration Act 1996 is silent on the issue of arbitral confidentiality. Nevertheless, English courts have consistently held that there is an implied duty of confidentiality in arbitration.
Dolling-Baker v. Merret is one of the first cases in which the concept of an implied duty of confidentiality was propounded by English courts. In this case, the English Court of Appeal rejected a party’s request for discovery of arbitral documents from a previous arbitration. The court reasoned that there is an implied obligation of confidentiality arising out of ‘the nature of arbitration itself’, which would impose an implied obligation on both parties ‘not to disclose or use for any other purpose any documents prepared for and used in the arbitration’.
In Hassneh Insurance Co of Israel and Others v. Stuart J Mew, the plaintiffs requested the court to issue an injunction against the defendant, where the defendant tried to use documents it procured from a previous arbitration between the plaintiffs and the defendant in separate proceedings. The plaintiffs argued that this would constitute a breach of confidentiality in arbitration. In its decision, the English High Court recognised a duty of confidentiality in arbitration as an implied term in the parties’ agreement to arbitrate. It derived confidentiality from privacy of the arbitration, reasoning that ‘disclosure to a third party [a note or transcript of the evidence] would be almost equivalent to opening the door of the arbitration room to that third party’.
In a similar vein, in Ali Shipping Corp v. Shipyard Trogir, the English Court of Appeal held that an implied duty of confidentiality arises as an essential corollary of the privacy of arbitral proceedings, and that the duty is implied as matter of law. At the same time, it indicated that general exceptions to the broad rule of confidentiality recognised by English law also apply to the duty of confidentiality, namely consent, order of the court, leave of the court, disclosure being reasonably necessary for the protection of the legitimate interests of an arbitrating party and public interest.
Arbitral privacy or confidentiality does not always override the principle of open justice. In City of Moscow v. Bankers Trust, the English Court of Appeal clarified that while arbitration-related hearings are often held in private, the same rule of privacy does not apply to judgments rendered in relation to those hearings. Judgments should be published if they can be made public without disclosing significantly sensitive or confidential information.
In Manchester City Football Club Ltd v. The Football Association Premier League Ltd and others, the English Court of Appeal found that a judgment dismissing challenges to an arbitral award could be published if there was a public interest in ensuring appropriate standards of fairness in the conduct of arbitration, even where the parties’ wishes were to avoid public scrutiny.
Germany
In Germany, the arbitration act as codified under the German Code of Civil Procedure does not contain any express provision on confidentiality. Germany defers this issue of confidentiality to the parties’ agreement, to be executed separately or to be incorporated through the institutional rules the parties adopt.
In this regard, the Arbitration Rules of the German Arbitration Institute (DIS) expressly provides for strict arbitral confidentiality: Article 44 of the Rules provides that unless the parties agree otherwise, the parties and their outside counsel, the arbitrators, the DIS employees and any other persons associated with the DIS who are involved in the arbitration shall not disclose to anyone any information concerning the arbitration, including, in particular, the existence of the arbitration, the names of the parties, the nature of the claims, the names of any witnesses or experts, any procedural orders or awards, and any evidence that is not publicly available.
There are diverging scholarly views in Germany with regard to whether parties to arbitral proceedings have an implied duty of confidentiality. The academic debate is still unresolved, and there is little case law on the issue; however, it appears to be widely accepted that the arbitrators (not the parties) are under an implied duty of confidentiality.
United States
The legal regime for arbitration in the United States is complicated because of the overlap between federal and state law. The Federal Arbitration Act does not address the question of arbitral confidentiality. State laws supplementing the Federal Arbitration Act are not uniform and generally remain silent on the question of confidentiality.
The Revised Uniform Arbitration Act 2000 has only been adopted by a handful of states. The Act merely authorises the arbitral tribunal to issue a protective order to prevent the disclosure of privileged and confidential information in arbitration, but only to the extent that a court could if the controversy were the subject of a civil action in the state. As in England, the question of a general duty of confidentiality is deferred to the courts.
In contrast to the approach adopted by English courts, US courts have been reluctant to recognise the existence of a broad implied duty of confidentiality in arbitration. While US courts consider confidentiality agreements in arbitration as common and enforceable, in the absence of such a confidentiality agreement, parties cannot expect the arbitration proceedings and the documents and information exchanged in arbitration to receive any special confidentiality protection.
The issue of confidentiality most frequently arises in the US courts in connection with requests for discovery of arbitral documents in subsequent proceedings. The 1988 decision in United States v. Panhandle Eastern Corp is a leading case on this issue. In that case, the plaintiff sought discovery of the defendant’s documents from a previous ICC arbitration to which the defendant’s subsidiary was a party. The defendant filed a motion for a protective order to preserve confidentiality of the arbitration documents, relying on the ICC Rules and the parties’ ‘general understanding . . . that the pleadings and related documents in the arbitration would be kept confidential’.
The US District Court in Delaware rejected the defendant’s request for a protective order and ordered disclosure of the documents, finding that the ICC Rules in effect at the time only governed the internal functioning of the ICC Court and did not apply to the parties and the arbitral tribunal. The decision further stated that the defendant failed to ‘point to any actual agreement of confidentiality, documented or otherwise’, effectively refusing to recognise an implied confidentiality obligation.
Other US courts have reached similar conclusions, denying an implied duty of confidentiality in the absence of an express agreement. In Industrotech Constructors, Inc v. Duke University, the defendant was ordered to produce transcripts from a previous arbitration that involved the defendant and a third party. The defendant appealed, arguing that the parties to the arbitration stipulated that the arbitral proceedings would remain confidential. The defendant further contended that, even without a stipulation of confidentiality, the public policy required confidentiality of arbitration. The North Carolina Court of Appeals dismissed the defendant’s appeal, concluding that nothing in the relevant arbitration rules or the state’s arbitration statutes required ‘strict confidentiality’.
US courts generally acknowledge the common law right of access to judicial records and may allow the arbitral award and other arbitral information to become public in court proceedings seeking confirmation or challenge of an arbitral award. Given that US courts have held that a strong presumption of access to judicial records applies to those of dispositive motions, the parties’ confidentiality agreement alone may not be sufficient for the court to order all arbitration information to be sealed in the court proceedings.
France
In 2011, France updated both its domestic and international arbitration laws in the French Code of Civil Procedure. Under the new arbitration regime, domestic arbitration is confidential unless the parties agree otherwise; however, for international arbitration, there is no equivalent confidentiality provision, except the requirement that the arbitral tribunal’s deliberations be kept secret.
Nevertheless, French courts have historically taken an approach similar to their English counterparts in recognising an implied confidentiality obligation in arbitration. In Aïta v. Ojjeh, where the petitioner sought to annul an arbitral award issued in London, the Paris Court of Appeal rejected the petition, decided that the annulment proceedings violated the duty of arbitral confidentiality and subjected the petitioner to penalties. The Court concluded that the annulment petition was merely an attempt to disclose confidential arbitral information and found the attempt to be against ‘the very nature of arbitral proceedings to ensure the highest degree of discretion in the resolution of private disputes in accordance with the parties’ agreement’.
Similarly, in Bleustein et al v. Société True North et Société FCB International, the Commercial Court of Paris found that the defendant breached its duty of confidentiality when it issued a press release involving the disclosure of the existence of arbitral proceedings without a legal obligation to report.
The decision in NAFIMCO v. Foster Wheeler Trading Company a few years later, however, indicates that French courts are now taking a more reserved position on arbitral confidentiality. In this case, the Paris Court of Appeal stated that the party claiming breach of the duty of arbitral confidentiality had the burden of proving the existence of such duty.
Singapore
In Singapore, the International Arbitration Act allows a party to apply for arbitration-related proceedings to be heard other than in open court. If the arbitration-related proceedings are held other than in open court, the court shall not give directions for the publication of information without the parties’ consent or the court’s own judgment that the information will not reveal any confidential matter. In this regard, the Singapore High Court confirmed in the decision of BBW v. BBX that Singapore courts have the inherent power to grant orders to seal court files in the interest of preserving the confidentiality of related arbitration proceedings.
Although Singaporean statutory law does not codify a general duty of confidentiality in arbitration, the International Arbitration Act was amended in 2020 to include express provisions that authorise the arbitral tribunal to enforce existing confidentiality obligations between the parties. Regarding whether a default obligation of confidentiality exists, Singapore courts have followed the English position and recognise a common law duty of confidentiality.
In Myanma Yaung Chi Oo Co Ltd v. Win Win Nu, a party made references to the proceedings and documents from a previous arbitration, alleging that the disclosure was required for its case before the court. The High Court of Singapore recognised an implied obligation of confidentiality, quoting a number of English court cases on this issue. It reasoned that as arbitration constitutes private hearings, the parties’ expectation is that ‘the proceedings are confidential’; however, it noted that if the disclosure is reasonably necessary to protect a party’s legitimate interest, one may be excused from the duty of confidentiality, and leave of the court is not required for disclosure.
In CJY v. CJZ, the High Court noted that such exceptions to confidentiality permitting disclosures of arbitration proceedings could be relied on by an employee of a party (in that case, the head of finance) to protect the party’s interests. In the same case, the Court also found that a court’s exercise of case management powers fell under the category of another exception to confidentiality: that disclosure was in the interests of justice.
The decision of International Coal Pte Ltd v. Kristle Trading Ltd and Another and Another Suit provides further guidance on the duty of confidentiality in arbitration. In that case, the High Court of Singapore held that there should be no generalisation on what the duty of confidentiality encompasses and concluded that the question of the duty of confidentiality should be evaluated in each case in the context of circumstances. It also drew a distinction between different types of confidentiality attaching to different types of documents, such as arbitral awards, which would be treated differently from the materials used or disclosed in the course of arbitration proceedings. According to the High Court, once an arbitral award is registered as a judgment, it enters the realm of the public domain and cannot be protected by the rule of privacy.
Hong Kong
Hong Kong is one of the very few jurisdictions that has an express statutory duty of confidentiality provided under its arbitration law, the Hong Kong Arbitration Ordinance. Under the Ordinance, no party may publish, disclose or communicate any information relating to the arbitral proceedings or an award. This duty is imposed on the parties by virtue of law, although the duty can be limited or lifted if the parties ‘otherwise agree’.
Statutory exceptions exist, including disclosure in legal proceedings to protect a party’s legal right or interest or to enforce or challenge the arbitral award, and disclosure to a party’s professional or other advisers. Disclosure is also permitted if there is a legal obligation to disclose.
In general, court hearings related to arbitral proceedings are not to be heard in open court unless the court decides otherwise based on a party application or the court’s own discretion. If arbitration-related proceedings are held in closed court proceedings, a party can request the court’s direction with regard to what arbitration information (if any) may be published. The court must not make a direction permitting information to be published unless all parties agree or the court is satisfied that publication of the information would not reveal any matter (including the identity of any party) that any party reasonably wishes to remain confidential.
Confidentiality under institutional arbitration rules
Most major arbitral institutions at least mention confidentiality in their rules, but without going into significant detail. One common approach is to affirm the general principle that the proceedings should remain confidential, but without trying to determine the boundaries of any legally enforceable obligations, or when any exceptions might apply. Another common approach is to confirm that the arbitral tribunal has the authority to order measures to protect confidential information – and then leave it to the arbitral tribunal to deal with the issue. These approaches are not mutually exclusive.
Some institutions expressly provide for more confidentiality protections than others. Some only impose confidentiality duties on members of the administrative body, while others may bind the tribunal and parties as well. Similarly, some institutions make it a default rule to allow publications of awards in some form (full, partial or redacted) unless a party objects, while the norm under other institutional rules is to require the parties to opt in to publication.
Even where an institution provides for express confidentiality protections under its rules, the protections and corresponding duties imposed are presumably subject to exceptions. In addition, confidentiality is difficult to enforce owing to the lack of any meaningful remedy. These are issues that institutions have been trying to tackle as they continue to revise and update their rules. A summary of the confidentiality protections that are currently offered under the rules of some of the major arbitral institutions is provided below.
ICC
The ICC only expressly imposes confidentiality duties on members of the court and does not extend similar duties to the arbitral tribunal or parties. Instead, the 2021 version of the ICC Rules, as with previous versions of the Rules, defers to the arbitral tribunal to order confidentiality and other similar measures to protect trade secrets and confidential information pursuant to a party’s request, under Article 22.
In effect, the measures that may be ordered by the arbitral tribunal under Article 22 are at the tribunal’s discretion, limited in part by the confines of the procedural or other applicable law of the arbitration. Whether parties will actually comply with such tribunal-ordered measures is an entirely different issue, as parties only undertake to comply with any tribunal order, and no sanctions or potential remedies are prescribed under the rules for a breach of such an order.
Regarding the publication of awards, the ICC has confirmed that all awards made as of 1 January 2019 may be subject to publication in full at the ICC Secretariat’s discretion, unless a party objects to publication or only agrees to publication subject to the removal of identifying information. Such an approach reflects the ICC’s ongoing efforts to introduce greater transparency in arbitration administered by the court; therefore, should parties to ICC proceedings wish to keep their award confidential, they must be mindful to expressly oppose publication of their award.
LCIA
In contrast to the ICC, the London Court of International Arbitration (LCIA) offers some of the strongest confidentiality protections of all the various institutions, expressly providing for a broad scope of confidentiality duties under the 2020 version of the LCIA Arbitration Rules.
Under Article 30, the arbitral tribunal and the parties are bound to keep confidential all materials created for the purposes of arbitration and any documents produced during arbitration that is not in the public domain, as well as any award. The 2020 version of the Rules extends that obligation to all persons involved in the arbitration, including the parties’ authorised representatives, fact and expert witnesses, and service providers, by imposing a positive duty on parties to obtain confidentiality undertakings from them – presumably when their involvement in the arbitration has been fixed.
The high level of confidentiality imposed on the persons involved in LCIA arbitration is mirrored by the LCIA’s own confidentiality undertakings. The LCIA has confirmed that it will not provide any information to any third party about pending or completed LCIA arbitration. It will also not publish arbitral awards in any form, partial or even redacted, without the consent of the tribunal and the parties.
The LCIA Rules recognise exceptions to confidentiality. For instance, parties may be excused from their confidentiality obligations where disclosure is required by ‘legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings’. Given the broad nature of these exceptions, particularly the broad exception ‘to protect or pursue a legal right’, further case law is needed to see whether the LCIA Rules provide any protection greater than the English common law duty of confidentiality.
ICDR
The International Center for Dispute Resolution (ICDR) of the American Arbitration Association strikes a balance between the American tradition of favouring disclosure in adversarial proceedings and an acknowledgement that there may be a need to protect the confidentiality of certain information in international arbitration.
Under Article 40(1) of the 2021 version of the ICDR Rules, the ICDR and the tribunal are prohibited from disclosing confidential information provided by parties and their witnesses during the course of an arbitration, as well as all matters relating to the arbitration and the award, subject to certain exceptions. The same general confidentiality duties do not apply, however, to parties or other participants.
Like the ICC, the ICDR defers to the arbitral tribunal to manage confidentiality issues that may arise with respect to parties and other participants. Article 40(2) permits the tribunal to make orders regarding the ‘confidentiality of the arbitration or any matters in connection with the arbitration’ and to take measures to protect trade secrets and confidentiality at its discretion, provided that there is no party agreement to the contrary. The tribunal’s power to order confidentiality measures is again confirmed in Articles 24(5) and 25 in connection with the exchange of information subject to commercial or technical confidentiality and documents subject to privilege.
In effect, the ICDR Rules take a similar approach to the ICC Rules, and raise similar questions on the discretionary nature of the measures that the arbitral tribunal may order to ensure confidentiality and the effectiveness of such measures where there are no prescribed sanctions or remedies for a breach.
Regarding awards, Article 40(3) makes it clear that parties must opt in to the publication of an award by requiring the consent of all parties for publication. The award, as well as orders, decisions and rulings, may also be published or be made publicly available by the ICDR if they have already become public during the course of enforcement or through other means. The ICDR may also publish or otherwise disclose awards and other decisions, provided that identifying information about the parties and the case is redacted, should no party object to such publication in writing within six months of the date of the award.
WIPO
Among the major institutional rules, the World Intellectual Property Organization (WIPO) arguably provides the most detailed confidentiality protections, in line with its focus on IP-related disputes. For instance, under Article 54 of the 2021 version of the WIPO Rules, trade secrets and other confidential information are given substantial protections from disclosure. These include protections under an appropriate confidentiality undertaking that must be signed by any person who will have access to confidential information, should the tribunal deem it proper for such information to be disclosed.
The tribunal may also make decisions on specific issues without the confidential information being disclosed to it or to the party from which the confidential information does not originate by appointing a confidentiality adviser to serve as an expert on those issues.
Despite these detailed protections, however, the WIPO Rules also carve out a number of exceptions, similar to those adopted by the institutions that have already been discussed in this chapter.
Specifically, parties must keep confidential all information concerning the existence of an arbitration under Article 75, which includes the cause of the action, the remedies sought, the IP rights at issue and the members constituting the arbitral tribunal. Disclosure of information may be permitted to ‘the extent necessary in connection with a court challenge to the arbitration or an action for enforcement of an award’, and where a party is required to disclose ‘by law or by a competent regulatory body’. In the latter case, however, disclosure is only permitted in limited form, as parties may only disclose information to the extent that disclosure is legally required, and must inform the other party (if the arbitration has concluded), or the other party and the tribunal (if the arbitration is still ongoing) of the details of the disclosure and the reasons why disclosure was necessary.
Parties may also disclose party names and the relief requested ‘for the purpose of satisfying any obligation of good faith or candor owed’ to the third party, although it is unclear what circumstances would constitute permissible disclosure in such cases.
In addition, all documents or other evidence given by a party, including its witnesses, are to be kept confidential under Article 76; however, evidence may be disclosed by the other party if:
- information in the evidence is in the public domain;
- the other party knew the information prior to or otherwise apart from the arbitration; and
- either the evidence-giving party agrees to disclosure or disclosure is ordered by a court.
Likewise, the award must be kept confidential under Article 77. Disclosure, however, is permitted under specified circumstances including, among other things, where disclosure is required to comply with a legal requirement imposed on a party or to establish or protect a party’s legal right against a third party.
Article 78 extends the same confidentiality duties stipulated for parties to members of WIPO and the tribunal, subject to similar exceptions. In addition, under Article 78(b), WIPO has carved out the right to publish information concerning any arbitration, subject to the removal of identifying information about the parties and the circumstances of the dispute.
SIAC
The Singapore International Arbitration Centre (SIAC), much like the LCIA, is another arbitral institution that expressly provides for confidentiality protections under its rules. For instance, under Rule 24.4, all materials and other documents used in relation to a SIAC arbitration must be kept confidential unless otherwise agreed by the parties.
Under Rule 39, the arbitral tribunal and parties must keep confidential ‘all matters relating to the proceedings and the Award’, which includes the existence of the arbitration itself, the award and all materials submitted, used or produced during the course of the arbitration that are not in the public domain. Those confidentiality duties also extend to any administrative secretary and any other person the arbitral tribunal appoints, but currently do not apply to other participants, such as party representatives or witnesses.
Under Rule 32, a SIAC award may only be published with the consent of the tribunal and the parties. Even where there is consent, the award may only be published in redacted form, without any identifying information about the parties.
Like the LCIA Rules, the SIAC Rules also recognise exceptions. Disclosure of matters relating to the proceedings or the award may be permitted if the parties agree, or if it is required by a court or under other circumstances prescribed in Rule 39.
Unique to the SIAC Rules is the express grant of power to the arbitral tribunal to impose sanctions, including costs, or take other measures following a breach of the confidentiality provisions under Rule 39.4. It remains unclear how frequently this rule has been invoked, and whether the rule has been effective in curbing confidentiality breaches.
HKIAC
In line with the express statutory provision for confidentiality in arbitration under the Hong Kong Arbitration Ordinance, the Hong Kong International Arbitration Centre (HKIAC) also expressly mandates that the arbitral process as a whole be kept confidential in its rules.
Under Article 45.1 of the HKIAC Rules, the parties must keep confidential all information relating to the arbitration itself and any award or emergency decision rendered in the proceedings, which presumably includes any information or documents submitted or used during the arbitration. The same confidentiality obligations are extended to the arbitral tribunal, the HKIAC, experts and witnesses under Article 45.2. As a general exception, however, disclosure is permitted for parties and party representatives where such disclosure is made, among others, to a governmental or regulatory body, court or tribunal as required by law; to professional or other advisers (including actual and potential witnesses and experts); or to any person ‘for the purposes of having, or seeking, third party funding’ in an arbitration.
Meanwhile, Article 45.5 expressly provides that the HKIAC may publish any award, in full or in part or as a summary, so long as the parties’ identifying information is removed and no party objects to such publication. In effect, the HKIAC requires that parties proactively oppose the publication of any award, much like the ICC.
Conclusions and recommendations
Against this background, it should be clear that the legal and institutional framework regarding international arbitration will often not be sufficient, by itself, to protect all the information that a party to an IP arbitration may wish to protect from disclosure. Although some common law jurisdictions (most notably, England) have recognised a common law duty of confidentiality, those same jurisdictions have also recognised exceptions that may weaken the degree of effective protection. The difficulty in identifying the boundaries of the exceptions makes it challenging to conclude that these protections are adequate to protect the parties’ interests. They also fail to address the practical difficulty of proving damages in the case of a breach.
Although institutional rules sometimes affirm the principle that the arbitration shall remain confidential, these rules are often phrased in general terms, are not exhaustive and sometimes do not take into account the circumstances under which any exceptions might apply. Moreover, it is unclear how much effective protection these rules can provide after the conclusion of the arbitration, particularly in circumstances where the award is silent regarding any ongoing confidentiality obligations.
In IP arbitration, one or both of the parties is more likely to have a keen interest in limiting the disclosure of confidential information and carefully regulating how recipients use that confidential information. There are more likely to be specific concerns about maintaining confidentiality of particularly sensitive confidential information, as distinguished from a desire to maintain confidentiality of the proceedings generally, which may or may not be a concern to the parties. Rather than frame the issue of confidentiality in general terms, parties should focus on particular information they wish to protect and how to protect that information not only during the arbitration, but also after the proceedings end.
Adequate mechanisms are normally available to protect confidentiality, but parties and their counsel need to be proactive. In the absence of an agreement between the parties, it may become necessary to seek assistance from the arbitral tribunal and to ask the arbitral tribunal to incorporate certain provisions about confidentiality into the final award.
The following are some practical steps that parties can take to enhance the scope of effectiveness of confidentiality in IP arbitrations.
Contractual agreements
Perhaps the most effective protection is the protection that the parties have expressly agreed to in their contract. A well-drafted confidentiality agreement will clearly identify the scope of confidential information, the purposes for which the confidential information may be used, the medium in which confidential information may be stored or distributed, the security measures that parties are required to take to prevent unauthorised disclosure and the specific persons who are authorised to receive the confidential information.
Parties can agree on measures to return or destroy confidential information once the contractual relationship ends or the purpose of the disclosure has been fulfilled. They can also define the scope of any permitted disclosure, including disclosures that may be required by law. They may require that a party that receives a third-party request for disclosure should notify the other party and provide the other party an opportunity to try to resist any order for disclosure. They may also stipulate the term of a party’s confidentiality obligations. They may provide for liquidated damages for a breach, as proving actual damages is one of the most difficult elements to establish in a breach of confidentiality claim.
It is always better to rely on any contractual provision with negotiated exceptions rather than to rely on a default rule implied by law with exceptions that are also implied by law, the boundaries and contours of which may be difficult to define.
Generally speaking, arbitrators, tribunal secretaries, counsel and experts are bound by their professional obligations to maintain confidentiality, which are often regarded as stringent enough that no additional protection is necessary. Institutions also often impose additional obligations on the arbitrators and employees of the institution. Notwithstanding those protections, in IP arbitration involving particularly sensitive confidential information, parties may sometimes request separate confidentiality undertakings from the non-party participants in the arbitration.
Most IP contracts include confidentiality covenants. Lawyers often draft these provisions in contemplation of the parties’ obligations during the expected performance of the contract. They are usually not drafted to address confidentiality obligations after a dispute arises, or when one party claims the right to terminate or rescind the contract; however, there is no reason why parties cannot stipulate in the contract that the same degree of confidentiality shall continue to apply, notwithstanding any dispute or conclusion of the contractual relationship.
After a dispute arises, it is usually more difficult to reach an agreement on such matters. Once a case commences, if one party raises concerns about protecting the confidentiality of particular information, the normal course is for the arbitral tribunal to invite the parties to try to reach an agreement. If they cannot reach an agreement, the arbitral tribunal may issue some form of protective order after hearing submissions and proposals from both parties.
Confidentiality orders
When the parties cannot reach an agreement, the scope of the tribunal’s authority to order the protection of confidential information will be determined by, among other things, the law of the place of arbitration and the applicable rules of the arbitration. Both of these sources of authority typically confer broad authority on the arbitral tribunal.
In addition to the types of confidentiality terms that may normally appear in the underlying contract, an arbitral tribunal may also order specific protections, taking into account that a dispute has arisen. These could include, for example, an order that certain documents may be produced with redactions or on an ‘attorney’s eyes only’ basis, or that certain documents may be reviewed in camera. The tribunal may also order measures restricting how highly confidential information may be shared with experts, or how such information may be used at the evidentiary hearing.
Parties should consider not only the content of such an order, but whether and to what extent it should have any binding effect after the conclusion of the arbitration. Procedural orders normally lose their binding effect once the tribunal issues a final award and the tribunal’s mandate has concluded. If parties seek relief from the tribunal during the arbitration to protect the confidentiality of materials or information exchanged during the arbitration, parties may wish to consider whether it is advisable to make those protections permanent, as part of the relief requested in the final award. If the tribunal intends that the confidentiality provisions should have continued binding effect, this should be recorded in the award.