It is a long established principle of English common law that arbitrations are private and confidential. This means that arbitration hearings are not open to third parties, and both the parties and the tribunal have an implied duty to maintain the confidentiality of the hearing and documents generated in the arbitration, including the award. Many institutional rules also expressly provide for confidentiality (such as article 30 of the LCIA rules) and parties that agree to adopt those rules will incorporate those confidentiality provisions into their arbitration agreement.
The private and confidential nature of arbitration in England is often cited as one of the key reasons that parties choose to arbitrate rather than litigate their disputes. However, the positions as regards privacy and confidentiality for litigating in the English courts are different. They are led by the guiding principle that justice should be administered in public, such that justice is both done, and seen to be done. This applies to both hearings (as enshrined in CPR 39.2) and judgments.
Given this “culture clash”, what happens when the English courts are called upon to exercise their supervisory jurisdiction over an arbitration? Or what if an English court action is commenced which overlaps with the subject matter of the arbitration? Will those cases be open to the public, and can the resulting judgments be published?
In recent months, the English courts have had to grapple with both of these questions, building on the Court of Appeal’s initial analysis of this topic and the provisions of the CPR regarding arbitration claims in the City of Moscow case. In particular, they have considered whether a case management conference for a court action which overlapped with an arbitration should be held in private (CDE v NOP) and whether to publish a judgment relating to the challenge of an arbitral award (Manchester City Football Club v Football Association Premier League Ltd and others)
Privacy of hearings and the CDE case
CPR 62.10 confirms that the Court may order an arbitration claim to be heard either in public or private. In City of Moscow v Bankers Trust, the English Court of Appeal confirmed that “The consideration that parties have elected to arbitrate confidentially and privately cannot dictate the position in respect of arbitration claims brought to court under CPR 62.10. CPR 62.10 therefore only represents a starting point. Such proceedings are no longer consensual. The possibility of pursuing them exists in the public interest. The courts, when called upon to exercise the supervisory role assigned to them under the Arbitration Act 1996, are acting as a branch of the state, not as a mere extension of the consensual arbitral process. Nevertheless, they are acting in the public interest to facilitate the fairness and well-being of a consensual method of dispute resolution, and both the Rule Committee and the courts can still take into account the parties’ expectations regarding privacy and confidentiality when agreeing to arbitrate.”
Therefore, the starting point for arbitration claims under CPR 62.10, except where the court is asked to determine points of law, is that they are generally heard in private. However, this is only a starting point and the public interest must be taken into consideration in each case.
In the recent case of CDE v NOP, the English Court of Appeal was asked to determine whether, in court proceedings which overlapped with the subject matter of an LCIA arbitration, a case management conference should have been held in public or private.
CPR 39.2 sets out the general rule that a hearing must be held in public unless the court is satisfied that one of the grounds of exception applies and it is necessary to sit in private to secure the proper administration of justice. Given that arbitrations are confidential, the applicable exception in this case was c, which provides:
” (c) it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality;”
The claimants argued that rather than using CPR 39.2 as a starting point, the judge had wrongly applied the principle of arbitral confidentiality recognised in CPR 62.10, which deals with “arbitration claims”. They argued that as this case was not an “arbitration claim”, this rule of confidentiality did not apply. The claimants also contended that they were seeking to pursue a legal right, which fell within the exception to confidentiality recognised in article 30.1 of the LCIA rules. Accordingly, they said that there would be no question of any breach of confidentiality if the hearing was held in public.
The defendants stressed that the arbitration award was confidential and that confidentiality would be lost if there was a reference to the award at a public hearing. They argued that it was necessary to sit in private to secure the proper administration of justice.
Ultimately, the court of appeal dismissed the claimants’ appeal and determined that the first instance judge was correct to hold the discussion about the award at the case management conference in private, based on the exception contained in CPR 39.2(3)(c). The court held, however, that the case management conference should have been opened to the public when the discussion turned from the award to more routine topics.
In reaching this decision, the court accepted that the case management conference involved confidential information, and that arbitral confidentiality is recognised by English law as significant and worthy of protection. Moreover, the court clarified that the arbitral award engaged CPR 39.2(3)(c) regardless of whether its disclosure would cause harm over and above the fact of disclosure itself.
However the Court of Appeal emphasised that confidentiality was not a trump card. The critical question was whether it was necessary to sit in private to secure the proper administration of justice. That question involved taking account of the stage which the proceedings have reached. A case management conference was less likely to involve matters of public interest or require public scrutiny of the court’s conduct of the proceedings and decision-making processes than a substantive hearing.
Finally, the court also noted that if it were to decide that the hearing should be held in public under CPR 39.2, which does not apply to arbitration claims under CPR 62.10, there would be no question of any breach of article 30 of the LCIA rules, as the exception to the obligation of confidentiality that is available for a party to protect or pursue a legal right would be engaged.
This case demonstrates that a party who wishes a court proceeding which overlaps with an arbitration to take place in private must satisfy the court that one of the grounds set out in CPR 39.2(3) applies and it is necessary to sit in private to secure the proper administration of justice. Therefore, whilst a confidential arbitral award will engage CPR 39.2(3), that is not the end of the story, whether the hearing will take place in private will depend on a number of factors, including the stage of the relevant proceedings and whether the case involves matters of public interest.
Publication of judgments and the Manchester City case
As the Court of Appeal confirmed in the City of Moscow case in 2004, even though a hearing of an arbitration claim may have taken place private, the court should, when preparing and giving judgment, bear in mind that any judgment should be given in public where this can be done without disclosing significant confidential information. The factors militating in favour of publicity have to be weighed against the desirability of preserving the confidentiality of the original arbitration and its subject-matter. The court also commented that a party inviting the court to protect confidential information did not necessarily need to prove detriment beyond the undermining of their expectation that the subject-matter would be confidential. If a case raises matters of general importance, that may swing the balance in favour of publication.
Ultimately, the Court of Appeal in the City of Moscow case concluded that it was not necessary to publish its decision ,which related to a challenge under section 68 of the Arbitration Act 1998, as the judge at first instance had concluded that the text covered “sensitive matters of greatest confidentiality”, involving highly sensitive political issues for one party and commercial issues for both parties. Nonetheless, the court did note in that case that section 68 challenges often cover only limited aspects of the subject-matter of the original arbitration, and that it is often possible to anonymise the judgment or reach some other agreement to protect sensitive information.
It is therefore noteworthy that the Court of Appeal reached the opposite conclusion in the recent case of Manchester City Football Club Ltd v Football Association Premier League Ltd and others.
In that case, Manchester City Football Club (MCFC) brought a challenge against an award made under sections 67 and 68 of the English Arbitration Act, which was dismissed by the High Court (the Merits Judgment). The hearing of MCFC’s challenge was held in private under CPR 62.10. When the first instance judge sent the draft Merits Judgment to the parties, she indicated that she was minded to publish it. Although both parties opposed publication, in her judgment dated 24 March 2021, the judge determined that the Merits Judgment should be published on the basis that it did not contain significant confidential information and that it was difficult to see any real prejudice from disclosure of the existence of the dispute as to production of documents and information.
MCFC appealed the Publication Judgment to the Court of Appeal. MCFC argued that although the Merits Judgment did not contain any significant details of the substance of the disclosure dispute, the parties had a reasonable expectation of confidentiality being maintained. Publication of the Merits Judgment would disclose that there was a decision in the arbitration at an early stage. It was also not publicly known that MCFC had argued that there was no power to arbitrate the particular dispute under the applicable rules and that there was apparent bias. Publication would also lead to extensive press comment and speculation, which could be prejudicial for MCFC, for example in its dealings with commercial partners. MCFC also argued that publication was not in the public interest because the club’s complaint was specific to its case.
The Court of Appeal dismissed the appeal in its entirety, concluding that the balance here was clearly in favour of publication. It concluded that publication would not lead to disclosure of significant confidential information (which did not include a challenge to arbitrators or an unsuccessful allegation of apparent bias), particularly as the existence of the arbitration was already public knowledge. The court also determined that there was a legitimate public interest in this particular dispute between the Premier League and a member club, which included the allegation of structural bias.
Conclusion
These decisions demonstrate the potential complexities that can arise when the court is asked to determine applications relating to confidential arbitrations. Different considerations will apply to the question of whether the matter should be heard in public or private, depending on whether the matter is an “arbitration claim” under CPR 62.10 or a court proceeding which overlaps with an arbitration, under CPR 39.2. Other relevant factors that will feed into the court’s analysis include the stage of the relevant proceedings and whether the case raises issues of public interest. Further, a matter that is heard in private may still lead to a public judgment, even on an anonymised basis, provided no significant confidential information is disclosed. That begs the question as to the scope and meaning of “significant confidential information”, which will be determined on a case by case basis. It is important to note that the court may order this disclosure may take place despite the agreement of the parties to the contrary.
The law around confidentiality in arbitration is one of the possible areas that will be included in the Law Commission’s review of the Arbitration Act 1996 in its 14th programme of law reform. Although the Department Advisory Committee deliberately excluded the subject of confidentiality from the scope of the Arbitration Act in 1996, leaving the issue and in particular, the exceptions to confidentiality to evolve through the common law, this may be set to change in due course. Although it is difficult to predict what the precise focus of the Law Commission’s review will be, possible areas include putting the implied duty of confidentiality in arbitration on a statutory footing and codifying the exceptions to the general duty, focussing on the tribunal’s power to enforce confidentiality, or indeed wider questions of privacy and confidentiality in court applications as tackled by these recent cases. However, it is unlikely that these specific interactions between the court and arbitration will be covered by any such codification, since they fall within the remit of the court’s powers as set out in the CPR. Instead, it is more likely that the position will continue to evolve through judicial interpretation of the CPR.
