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Mr Shaurya Upadhyay

International Disputes Intern - Debevoise & Plimpton LLP

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Confidentiality

I. Definition

1.

The duty of “confidentiality” is the obligation that rests on participants in the arbitral process to not reveal to non-participants,1 information related to the dispute, its existence and resultant proceedings.2 Such obligation may vary in scope and effect based on the source and nature of the obligation. See further Sections IV and VI below.

II. Treaty practice

2.

Investment treaties have traditionally been silent on confidentiality obligations of disputing parties. Such obligations are however, increasingly being included as exceptions to the “Transparency Provisions” in BITs.3 

III. Confidentiality and transparency

3.

Confidentiality is inherently linked to the concept of Transparency. While the duty of confidentiality puts a negative burden on the parties involved to not reveal information and exists as a duty upon each individual party, Transparency provisions within international instruments require the public to have access to the arbitration proceedings, or case documents or both.4

IV. Applicable law and rules

4.

Investor-State arbitration relies on several legal documents including the Treaty under which the arbitration is taking place (if any), the ICSID convention (if applicable) or any Arbitration Rules provided for under the Treaty/Arbitration Agreement, and any inter-party agreements in the specific arbitration (including specific contracts between States and investors). In the case of non-ICSID investor-State arbitrations, the law of the seat (i.e. the lex arbitrii) may also provide for obligations on confidentiality of the arbitration proceedings. Tribunals regularly issue “Confidentiality Orders” which set out the scope of the confidentiality application.5 In some instances, the Tribunal may even provide for a mechanism to resolve inter-party disputes on confidentiality matters within such orders.6

A. Treaty provisions on confidentiality

5.

The treaty containing the parties’ consent to arbitration may include specific provisions on confidentiality and transparency applicable to the arbitration proceeding.7

B. The ICSID Convention and Arbitration Rules

6.

The ICSID Convention and Arbitration Rules contain no general presumption of confidentiality or transparency applicable to disputing parties.8 As per the ICSID website “The level of confidentiality or transparency in an ICSID arbitration depends on the agreement of the parties, the applicable treaty and the decisions of the Tribunal.9 

7.

Specific confidentiality obligations apply to the ICSID Secretariat and Tribunals constituted under ICSID Rules.10 The Tribunal members are required to keep confidential all information obtained as a result of their participation in the proceeding, including the contents of the award11 and the deliberations.12 The ICSID Rules do allow for the possibility of public attendance of oral hearings, but require arrangements to be made for the protection of privileged information in cases where this is permitted.13 Publication of the award and related material by the ICSID Secretariat is permitted only with the consent of the parties.14 However, it has the duty to promptly publish excerpts of the legal reasoning of the Tribunal, with no requirement for party consent.15 

C. Other Arbitration Rules

8.

The UNCITRAL Arbitration Rules do not provide for an express presumption of confidentiality.16 In contrast, rules such as the LCIA,17 SIAC,18 and SCC19 arbitration rules contain a default confidentiality provision. The ICC Rules authorise the tribunal to make orders on confidentiality of proceedings if requested.20 These institutional rules, although primarily used for commercial arbitrations, may at times be engaged in Investor-State proceedings.21

D. The law of the seat (lex arbitri) and party agreement

9.

In cases of ad-hoc Investor-State arbitration, the lex arbitri (as applicable) may also become a source of confidentiality obligations.22

10.

A confidentiality agreement may also be agreed upon the parties and subsequently adopted by the Tribunal.23 The confidentiality obligation may be imposed by the tribunal through a procedural order.24

V. Material scope

11.

The scope of confidentiality, i.e. the information and processes covered by the obligation differs from case to case and may cover anything from certain sensitive documents25 to all aspects of the arbitration, including orders or awards and hearings.26

12.

A confidentiality obligation may be a general all-encompassing duty of confidentiality, or may include certain specific duties on parties such as to i) designate as confidential (in part or whole), certain documents for use only in the arbitration;27 or ii) allow for redaction of certain documents before disclosure to the public.28 Such clause, if formed by party agreement, may also indicate parties consent to publication of documents in whole or a case by case basis. There may be additional obligations to refrain from public access to hearings/video broadcasting.

VI. Privity

13.

The duty of confidentiality is one towards the other party, and stems from the consent to arbitrate under those specific obligations.29 Therefore the rights of the parties to enforce confidentiality of privileged information exists only against each other, and the stakeholders within the arbitration proceedings, and cannot be exercised against third parties.30

VII. Effects of the obligation

14.

A confidentiality obligation requires the party to ensure that information as defined by the scope of the confidentiality obligation is not made public.31 This obligation usually applies from the very start of the process of initiating the arbitration.32 Confidentiality obligations may form the basis of injunctions restraining parties from disclosing information to certain third parties33 and failure to abide by the confidentiality provisions may attract negative consequences against the party in violation,34 including adverse costs.35

Bibliography

Nottage, L., Confidentiality v. Transparency in International Arbitration: Asia-Pacific Tensions and Expectations, 16(1) Asian International Arbitration Journal, 2020, p. 1.

Kenny, W., Transparency in Investor State Arbitration, 33(5) Journal of International Arbitration, 2016, p. 471.

von Goeler, J., Third Party Funding in International Arbitration and its Impact on Procedure, 35 International Arbitration Law Library, Kluwer Law International, 2016, pp. 294-330.

Reisman, W.M., Crawford, J.R. et al (eds.), Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed., Kluwer Law International, Section 12.04.

Hwang, M. and Thio, N., A Proposed Model Procedural Order on Confidentiality in International Arbitration: A Comprehensive and Self-Governing Code, 29(2) Journal of International Arbitration, 2012, p. 137.

Hwang, M. and Chung, K., Defining the Indefinable: Practical Problems of Confidentiality in Arbitration, 26(5) Journal of International Arbitration, 2009, p. 609.

Egonu, M.I., Investor State Arbitration under ICSID: A Case for Presumption Against Confidentiality?, 24(5) Journal of International Arbitration, 2007, p. 479.

Misra, J. and Jordans, R., Confidentiality in International Arbitration, 23(1) Journal of International Arbitration, 2006, p. 39.

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