The notion of confidentiality in arbitration is inherently ambiguous and potentially confusing. It has long been standard practice to include the word ‘confidentiality’ in any list of supposed benefits of arbitration. Parties agreeing to an arbitration clause therefore expect any dispute to be resolved out of the sight of jealous competitors and inquisitive media, not to mention over-curious authorities. One wonders why many cases emanating from arbitral proceedings end up in the regular courts and why we have a lot of cases whose subject matter are arbitration ending up in the law reports in spite of the ‘confidential’ nature of arbitral proceedings.
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Very little critical analysis has been brought to bear on this issue, as may readily be verified by reviewing textbooks on arbitration. Even the most comprehensive ones have little to say on this subject, except to repeat generalities which are presumed rather than proven. In recent years, a handful of cases in a number of national jurisdictions have demonstrated that the issue is indeed complex. These cases illuminate not only the absence of an explicit and absolute duty of confidentiality, but also this paradox: if they really thought it through, many parties might find it undesirable for the rule to be as comprehensive as they vaguely suppose it to be.
It is true that third parties are excluded from most types of international arbitration. But does it follow that parties are obliged not to disclose to strangers what has transpired in the arbitration? Can one really point to a positive duty on the part of participants in arbitral proceedings to maintain confidentiality? If such a duty exists what are its limits and its practical effects? Parties may be astonished to find out that, when they actually test the matter, that the rule of confidentiality is not reliable.
Although confidentiality is often cited as one of the primary advantages of arbitration, the arbitration rules of most of the best-known institutions do not require the parties to maintain the confidentiality of the arbitral proceedings, award or any documents exchanged in or created for the proceedings. The arbitration rules of some institutions do, however, impose such a confidentiality requirement on the administrator and arbitrators. Several common law countries have imposed an implied obligation of confidentiality on arbitrators and parties, while some countries’ laws (e.g. Australia and United States) impose no confidentiality requirements on parties to arbitration unless confidentiality is expressly provided for in the contract between the parties.
At one extreme, arbitral scholars believe that it is an inherent element of arbitration that there is a general duty of confidentiality. It might be seen as an important aspiration of commercial parties to deal with their disputes in a way which does not adversely affect their status in the market place through bad publicity. Many disputes also deal with confidential aspects of technology and business know-how. At the other extreme, some argue that an undue concern for confidentiality comes at the expense of transparency and the ability to promote consistency through adoption of similar logic to other arbitral tribunals.
In Commonwealth of Australia v. Cockatoo Dockyard Pty Ltd [1995] 36 NSWLR 662, the Australian court concluded that whilst there was a ‘high level of confidentiality’ in arbitral proceedings, this should not prevent disclosure where the public interest was concerned. It is this concern for the public interest – and the public’s right to know’ – that has led to the erosion of the principle of confidentiality in arbitral proceedings.
Where one or both parties in an arbitral proceeding are state parties the requirement of transparency and disclosure in the public interest will outweigh that of confidentiality. For instance it is doubtful whether it is be possible to impose a binding duty of confidentiality on government institutions in Nigeria who are parties to an arbitration in view of the enactment of the Freedom of Information Act (FOIA) 2011.
Section 1(1) of the FOIA provides that:
“Notwithstanding anything contained in any other Act, Law or regulation, the right of any person to access or request information, whether or not contained in any written form, which is in custody or possession of any public official, agency or institution howsoever described, is established.”
Section 4 of FOIA mandates a public institution, subject to some exception, to make the information available to the applicant. Where a case of wrongful denial of access is established, the defaulting officer or institution commits an offence and is liable on conviction to a fine of N500, 000.
The FOIA however provides exemption for cases where application for information will be refused. The FOIA provides that a public institution may deny an application for information that is subject to legal practitioner-client privilege; health workers-client privileges; journalism confidentiality privileges and any other professional privileges conferred by an act.
Since no Act in Nigeria has conferred any privilege or made confidentiality mandatory on parties to an arbitral proceeding, any member of the public may request to have access to an arbitral award or documents exchanged during an arbitration proceeding which are in the possession of a public official, agency or institution.
Adetola-Kazeem, a lawyer, wrote from Lagos
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