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Introduction
Arbitration has emerged as the most favoured method for resolving international disputes, which is driven by a surge in globalization, world trade, and bilateral investments. The harmonization of arbitration norms across countries has been a notable outcome. Thus, one of the key attractions of arbitration in this case has been perceived as the level of confidentiality and privacy it offers, despite these terms not being synonymous. Ensuring privacy and limited access to the proceedings, besides ensuring confidentiality at the disclosure of information without the consent of the parties.
However, despite of private, any sort of arbitration may or may not be confidential in nature.
Transparency with the Investment of Arbitrations: Distinguishing between commercial and investment disputes, the legal frameworks provide a significant divergence. The New York Convention governs international commercial arbitration, by emphasizing recognition and enforcement of foreign arbitral awards. Thus, the investment disputes and legal frameworks have significantly diverged. The New York Convention also governs international commercial arbitration, emphasizing recognition and enforcement of foreign arbitration awards. Thus, any investment arbitrations, falling under public international law mostly rely upon treaties like ICSID and Bilateral Investment Treaties. The degree of confidentiality in terms of investment arbitration varies, where the ICSID rules demand a commitment to confidentiality, as the awards may be published unless they are contested. At the same time, UNCITRAL rules also ensure public access to hearings with protected confidential information.
Confidentiality in terms of Commerical Arbitrations: Confidentiality is often perceived as a norm in terms of Commercial arbitrations for attracting parties seeking privacy. However, this assumption also stands to be incorrect, with a range of opinions on transparency in terms of Commercial arbitrations varying globally. Whereas investment arbitrations draw public interest, commercial disputes involve private entities aiming to keep matters away from public scrutiny. The reasons for desiring confidentiality include protecting reputations, trade secrets, and competitive advantages.
Legal Positions on Confidentiality: All the arbitral institutions differ in their stance on confidentiality, some like ICC and LCIA explicitly mandate, confidentiality, whereas others like ICC and UNCITRAL remain silent. The UNCITRAL Model Law emphasizes party autonomy allowing parties to decide upon confidentiality. As the legal positions on confidentiality globally vary, the UK therefore looks upon balancing confidentiality with public interest, as India expressly protects arbitral proceeding confidentiality under Section 42A of the Arbitration and Conciliation Act.
Case Study on Contrasting Approaches: Taking the example of Emmott vs. Michael Wilson & Partners Ltd., where the English Court of Appeal recognized the implied obligation of confidentiality in arbitration agreements. In this case, disclosure was permitted with the consent, court order, and protection of legitimate interests, where justice and public interest is required. In contrast to this development, the US, Australia, and France lack express implying confidentiality rights unless specified in arbitration agreements.
Balancing Interests: Balancing confidentiality and transparency in commercial arbitration becomes a crucial task. Confidentiality can help protect sensitive information, whereas on the other hand it can also lead to raising concerns about unethical practices. The call for transparency gains strength in cases involving states, public interests, and influential corporate entities. Unlike the investment arbitrators, establishing a universal norm for confidentiality in commercial arbitrations has been quite challenging. Thus, a case-by-case evaluation based on the nature of documents and context is necessary to strike an appropriate balance.
Conclusion
The rise of Arbitration as the preferred method of dispute resolution brings with it a further nuanced discussion on confidentiality and transparency. As investment arbitrations lean towards transparency due to public interests and state involvement, commercial arbitrations present a diverse landscape. Thus, striking a balance will gradually involve recognizing the varying needs of parties, the nature of disputes, and the broader public interest, where the evolution of norms have posed a dynamic scenario to emphasize the necessity for case-specific evaluations to ensure fairness, justice, and confidence in the arbitration process.
Sources referred- https://www.latestlaws.com/arbitration/balancing-confidentiality-and-transparency-in-commercial-and-investment-arbitration-208447/
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