REUTERS | Phil Noble

Confidentiality undone? Publication of Court judgments in challenges to arbitration awards

One well-known reason for commercial parties to choose arbitration is the reassurance that such proceedings are confidential. For various reasons, parties prefer not to air “dirty linen” in public.

However, having been through an arbitration process and obtained an award from the tribunal, the possibility of court proceedings initiated by the losing party can potentially undermine this confidentiality. Indeed, it is not unheard of for losing parties who don’t want to pay the full sum awarded and wish to apply commercial pressure, to threaten court proceedings with a view to making unmeritorious allegations about the winning party and the arbitration in public. On the other hand, a party with a valid complaint about an award may feel reticence about recourse to the courts if there is a risk of confidential matters being publicised.

It is undoubtedly the case that court proceedings attract different public policy considerations to a private consensual arbitration. There is a public interest in “open justice” and in the law being developed in published judgments that are available to all. In the context of complaints about the conduct of arbitration, there is also a public interest in ensuring and disseminating appropriate standards of fairness for the benefit of all arbitrators and arbitration users.

These factors are often held to outweigh the parties’ interest in confidentiality, especially when it comes to determining whether a judgment in an arbitration case should be publicised. Every year numerous judgments are published concerning sections 67, 68, and 69 of the Arbitration Act 1996 (AA 1996). In the recent case of Manchester City v Premier League, the Court of Appeal affirmed the right of the court to publish a judgment on a section 67/68 application, even where both parties objected to publication.

How worried, therefore, should parties be about the possibility of publicity where an award is challenged under sections 67 – 69 of AA 1996? In short, not overly. In this context privacy concerns are alleviated in a number of ways and should not be overstated:

  • While most court pleadings can be inspected by third parties, arbitration claim forms may only be inspected with the permission of the court (paragraph 5.1Practice Direction (PD) 62).
  • The starting point is that hearings under sections 67 and 68 are held in private (CPR r62.10).
  • While CPR r62.10 starts from the position that hearings under section 69 are, subject to contrary order by the court, to be held in public (CPR r62.10), this presumption does not apply to an application for permission to appeal under section 69(2)(b). It should not be forgotten that there is usually only a hearing once permission to appeal has been granted, and that the permission issue is normally determined on paper and therefore privately (paragraph 12.12, PD 62). Indeed, the permission stage should weed out most, if not all, unmeritorious cases.
  • Following a private hearing, it is correct that the courts lean towards judgments being published, but the parties are entitled to make submissions in this regard and judgments are to be published only where this can be done without disclosing significant confidential information as laid down in City of Moscow v Bankers Trust.
  • The issues in sections 67 – 69 challenges to an award often do not require full recitation of all the facts and allegations made or proven in the underlying arbitration. Section 67 concerns the tribunal’s jurisdiction, which is often a case of construing the relevant arbitration clause. Section 68 challenges are focussed on the procedure adopted by the tribunal rather than the substance of the dispute (although the substantive issues can come into consideration), and section 69 concerns issues of law rather than factual issues. The scope of such challenges is therefore often limited and does not require recitation or reopening of all of the issues which were “in play” before the tribunal.
  • In appropriate cases judgments are anonymised and reported as A v B or similarly, as in C v D.

As noted in the Manchester City case, commercial court judges are experienced at balancing the various factors in play. Although the parties’ wishes are not paramount, they are taken into account. As Males LJ put it:

“the business community will see that…Commercial Court judges can be trusted to ensure that genuinely confidential information is not published…publication of such judgments will confirm the pro-arbitration stance consistently taken by the English courts…It will demonstrate that the second 68 gateway is a very narrow one…and that it is only in cases of real injustice that arbitral awards can be successfully challenged in the English courts”.

 

 

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