IV. Confidentiality of the Proceedings

Another prominent feature contrasting state court proceedings is the confidentiality of arbitration proceedings. Apart from certain fields of law in which individual interests are esteemed higher than public interests, state court proceedings are usually held in public due to transparency being regarded as an important feature of most constitutional states. In contrast to that, in many arbitrations even the mere fact that arbitration proceedings between the parties exists is to be kept confidential. The confidentiality of the proceedings can protect the parties’ reputation in certain cases and prevents that sensitive information is disclosed to the public or to competitors.

In recent years, there have been many discussions at a global level as to whether the principle of confidentiality is inherent to any international commercial arbitration or whether it only becomes part of the arbitration if the parties agreed in any way on its application. While especially Swedish and Australian courts have held that there is no such principle outside any agreement of the parties, jurisdictions in France, England and New Zealand have tended to the viewpoint that even without such explicit or implicit agreement of the parties the principle of confidentiality in arbitration proceedings exists at least to some extent. Likewise, arbitral tribunals around the globe have come to split decisions. In practice, however, the dispute often is irrelevant for in most cases the parties either explicitly (by drafting a specific confidentiality agreement) or implicitly (by choosing institutional rules which contain a confidentiality clause) agree on keeping their proceedings confidential.

It is important to bear in mind that any agreement between the parties can only be binding upon the parties themselves but not to third parties. Thus, if also witnesses and expert witnesses shall be bound be any agreement of confidentiality, the parties are well advised to conclude an additional agreement with the persons concerned.

Last modified: Friday, 23 October 2015, 7:10 PM