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Confidentiality And Disclosure In Arbitration Proceedings: A "Win Win" Situation?
March 2009 | Litigation & Arbitration | Litigation Brief

Introduction

It is often said that arbitration proceedings are private and confidential. This article seeks to outline the developing nature and scope of privacy and confidentiality in arbitration and suggests a way to manage complex and, at times, conflicting case law.

English implied confidentiality

One of the early English cases that discussed the scope of privacy and confidentiality in arbitration proceedings was Dolling-Baker v Merrett  [1990] 1 WLR 1205 which decided that there was an implied obligation of confidentiality arising from the private nature of arbitration. This was further developed in Hassneh Insurance Co of Israel v Mew [1993] 2 Lloyd's Rep 243, where an "implied obligation" of confidentiality arising out of custom or business efficacy attached to documents used or arising in the course of arbitration. The court also recognised two distinct exceptions to the confidentiality rule, namely, disclosure made pursuant to order or leave of the court and disclosure where reasonably necessary for the protection of an arbitrating party's rights against a third party.

Australian doubts over implied confidentiality

However, this is not necessarily the only approach to confidentiality of arbitration proceedings and documents.  In Esso Australia Resources Limited v Plowman [1994-1995] 183 CLR 10 ("Esso"), the Australian court took the view that while arbitration was a private affair between parties, confidentiality was not an essential attribute such as to impose an implied obligation on each party not to disclose the proceedings or documents. The Australian court's view of confidentiality focused more on documents produced by a party pursuant to a direction by the arbitrator.  In its view, such a class of documents was confidential because of a duty that was similar to the implied obligation of parties in court litigation to keep confidential documents obtained pursuant to a judge's directions.

English categories of exceptions to confidentiality - Ali Shipping

Although aware of the views of the Australian court in Esso, the English Court of Appeal ("English CA") in Ali Shipping Corporation v Shipyard Trogir [1999] 1 W.L.R. 314 ("Ali Shipping") affirmed its view that arbitration proceedings carried an implied duty of confidentiality and went further to analyse this duty as arising out of a "definable category of contractual relationship", saying that the duty arose as an implied term of law rather than an implied term of fact.

"Categories of exceptions" to this implied duty of confidentiality were formulated. They were said to be:

Singapore favours Ali Shipping

It was said in the Singapore case of Myanma Yaung Chi Oo Co Ltd v Win Win Nu and another [2003] 2 SLR 547 ("Win Win") that the English position was to be preferred over the Australian position and that Ali Shipping represents the law in Singapore.  However, English law on confidentiality in arbitration proceedings has developed since Ali Shipping due to the Privy Council's decision in AEGIS v European Reissurance Company of Zurich [2003] 1 WLR 1041 ("AEGIS").

Ali Shipping criticised in AEGIS

After Ali Shipping was decided by the English CA, one sees the Privy Council in AEGIS discouraging a formulaic approach to confidentiality and encouraging an approach that was more sensitive to the actual facts and circumstances of the case. In AEGIS, the Privy Council regarded it to be a better approach for the court to analyse the nature of the document of which disclosure was sought, instead of an approach where the court tried to fit the document into an Ali Shipping "category of exceptions".

AEGIS considered in Singapore

The question arises whether the Singapore courts will in future cases treat the law of confidentiality in arbitration as that stated in the Win Win case or revise its approach to be consistent with the AEGIS case.

In a recent Singapore case, International Cost Pte Ltd v Kristle Trading Ltd and Another and Another Suit [2008] SGHC 182 ("International Cost"), the Singapore courts had the opportunity to consider AEGIS.

The judge in International Cost recognised that the question of "exceptions" gave rise to much controversy and stated that:

"... The principles that can be extracted from... AEGIS v European Re were that (unlike the approach taken... in Ali Shipping Corporation v Shipyard Trogir) there should be no generalisations of what the duty of confidentiality encompassed as each case should be evaluated in the context of its circumstances. Further, following... Hassneh Insurance Co of Israel v Steuart J Mew, a distinction has to be drawn between different types of confidentiality attaching to different types of documents. Arbitration awards were also to be treated differently from the materials used or disclosed in the course of arbitration proceedings..."

However, the Ali Shipping/Win Win principles were not expressly criticised and the precise Singapore position today is unclear.

Ali Shipping reloaded

Now, with the case of Emmott v Michael Wilson & Partners Ltd [2008] EWCA Civ 184 ("Emmott"), the English CA appears to recognise privacy and confidentiality as different concepts.  In relation to confidentiality, there are now two approaches - confidentiality arising out of the inherent confidence in the information in documents and confidentiality arising out of an implied agreement that documents disclosed or generated in arbitration can only be used for the purposes of the arbitration. This implied agreement, the CA clarified, was a rule of substantive law.

Also, notwithstanding the criticisms of the Privy Council in AEGIS, the Ali Shipping approach of "categories of exceptions" was reiterated by the English CA in Emmott albeit with a slight reformulation.  The categories are now:

However, the English CA has also accommodated the views of the Privy Council in AEGIS by acknowledging that although the approach would still be one of categorised exceptions to confidentiality:

Dealing with confidentiality issues

The law on confidentiality of arbitration proceedings and documents is developing and it is difficult to tell whether the Singapore courts would deal with issues of confidentiality by applying Ali Shipping, AEGIS or Emmott principles or perhaps a hybrid of them.

One way to manage confidentiality issues is to read the categories of exception in Ali Shipping/Emmott as merely being descriptive rather than prescriptive categories.  Hence, not every document which falls within one of the categories of exceptions will invariably result in a finding that the document is not confidential.  One must then consider the nature of the document and its parts, as well as the circumstances of the case in reaching a conclusion as to whether confidentiality applies.