On 20 December 2018, the International Court of Arbitration of the International Chamber of Commerce (ICC) released a revised Note to parties and arbitral tribunals on the conduct of the arbitration under the ICC Rules of Arbitration (the note to parties). The revised text, which came into effect from 1 January 2019, adopts a new and very different default position that, barring party opt out, ICC arbitral awards will be published two years after they have been notified to the parties.
Are users behind this shift and is it essential to the future of arbitration?
In part 1 of this blog, we consider the ICC’s approach to the publication of awards and what it means in practice, as well as the move towards transparency. In part 2, we consider what users want from the transparency conundrum and whether there should be a pause.
What is the ICC’s approach to the publication of awards and what does it mean in practice?
The ICC’s revision relating to the publication of awards can be found in paragraphs 40 to 46 of the note to parties. The section first sets out the proposition that the publication and dissemination of information about arbitration is an “instrumental factor” in facilitating the development of world trade. It then proceeds to confirm that all future ICC awards issued from 1 January 2019, including those where the arbitrations are commenced before 1 January 2019, will be considered for publication by default no less than two years after the award has been notified to the parties. Parties can expressly refuse publication through a confidentiality agreement contained within their arbitration agreement. Prior to publication, parties may object to publication or require it to be anonymised or pseudonymised, in which case the award will not be published, or will be anonymised or pseudonymised. The ICC may also anonymise or pseudonymise awards of its own volition to comply with data protection regulations and retains its own discretion not to publish.
So, is the ICC’s newly pro-publication approach novel when compared to other arbitral institutions?
The major institutions each treat this issue slightly differently, but none of the other institutions will publish a full award if users fail to opt out/object.
Under the London Court of International Arbitration (LCIA) Rules (Article 30.3), the LCIA does not publish any award or any part of an award without the prior written consent of all parties and the arbitral tribunal. Selected decisions of the LCIA on arbitrator challenges are released, but the names of parties, counsel and arbitrators are redacted.
The Stockholm Chamber of Commerce (SCC) takes the approach that awards or decisions may only be published with the parties’ consent provided they are redacted to maintain confidentiality and do not include the names of arbitrators, parties or counsel. The SCC has also released an anonymised practice note which reviews the SCC Board’s decisions on arbitrator challenges.
The Singapore International Arbitration Centre (SIAC) Rules contain a provision (Article 38) which allows for very limited information to be published about a dispute (for example, date of commencement, whether proceedings are ongoing, and nationality of parties and arbitrators). The rules also allow for the publication of redacted excerpts of the reasoning of the tribunal and redacted decisions by the court on challenges to arbitrators. Under Article 38.3, further details of the dispute (such as the identity of the parties, their counsel, sums in dispute) or the award or any orders or directions issues can only be published with the parties’ express consent.
The Hong Kong International Arbitration Centre (HKIAC) may publish any award, whether in its entirety or in the form of excerpts or a summary, but only if all references to the parties’ names and other identifying information are deleted and no party objects to such publication within the time limit set by HKIAC.
There are clearly degrees of transparency sought by each of these main arbitral institutions. The publication of anonymised excerpts of procedural decisions of the arbitral institutions has become fairly standard practice. The publication of limited details regarding ongoing arbitrations is also becoming more commonplace. For most institutions, however, the publication of awards requires the consent of the parties and potentially the arbitrators as well.
The ICC’s new approach is more in line with that of the HKIAC (the most recently revised of all these rules), in that it provides for a default position of publication unless the parties object. However, the HKIAC’s default is also for the award to have all references to the parties’ names and other identifying information deleted. The ICC’s approach is rather broader, assuming the publication of the award in its entirety, unless parties object or redaction is required for data protection purposes.
Is this approach a problem? Parties are given a number of opportunities to opt out of publication, either in their arbitration agreement or once the award has been notified to them. But it is a fairly significant shift from the previous ICC approach whereby the ICC published anonymised extracts of selected awards and procedural orders related to particular subject areas three years after the proceedings closed. Importantly, it is also a significant shift in approach from the perspective of users of arbitration. Rather than publication being “opt in” it is now very much “opt out”, shifting the onus firmly onto users to manage the confidentiality of their own arbitration once it has ended. Without an express confidentiality provision on the arbitration agreement or raising a red flag to require anonymisation or to refuse publication at all, parties may find the full award in their arbitration entering the public domain. Some users may also be unaware of the shift in practice given that the change has been instituted through a practice note, rather than as part of the ICC Rules themselves.
So what has prompted the ICC to adopt a new opt out approach in relation to award publication, and is it the right approach to take?
The move towards transparency
Transparency has been a key topic within investment treaty arbitration for many years. Criticism from states and non-governmental organisations (NGOs) and within the arbitration community itself focused on a need to bolster the legitimacy of the system and confidence in decision-making by introducing greater transparency in the arbitral proceedings (through public access to hearings and materials and third-party participation), and in the mandatory publication of partial and final awards to help ensure greater consistency in decision-making in a system without binding precedent. This drive for transparency helped lead to the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (New York, 2014) (the Mauritius Convention) and the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, along with greater transparency in International Centre for Settlement of Investment Disputes (ICSID) proceedings.
Similar arguments have also been voiced in the commercial arbitration sphere. Then Lord Chief Justice of England and Wales, Lord Thomas, caused a stir at the 2016 BAILII Lecture by stating that the lack of transparency in commercial arbitration was inhibiting the development of the English common law as many key decisions never saw the light of day because they were being resolved behind closed doors in arbitration. Constantine Partasides QC also noted at the ICCA Congress in Sydney that it would not be a bad idea if the tidal wave that has swept through investment treaty arbitration, would sweep through commercial arbitration as well, arguing that over time it will become “less and less acceptable, and less and less wise [for commercial arbitration] to be automatically confidential.”
The move towards the publication of arbitral awards also fits within a wider quest for “data” in the arbitration community. We have witnessed an increasing drive for insight into arbitrator performance, rigour and efficiency. With greater focus on gender and ethnic diversity has also come greater focus on access to information about potential candidates who are not known to the parties or lawyers seeking to compile a shortlist. Lack of available data may lead to selection of “the usual suspects” when a wider pool of known candidates might, in reality, offer their clients a better arbitrator. However, it has been suggested that the confidentiality of commercial arbitrations and the lack of publicly available arbitral awards makes the analysis of trends in decision-making or in the performance of arbitrators very challenging.
To be continued…