Confidentiality entails the obligation to safeguard specific information, preventing its disclosure to unauthorized parties and ensuring the protection of sensitive or proprietary data across various domains such as law, healthcare, business, and personal relationships.
Arbitration boasts a primary advantage in its staunch commitment to confidentiality. In stark contrast to court proceedings, where privacy often faces compromise, arbitration offers a distinct advantage by affording parties control over participant selection and procedural determinations. This autonomy extends to decisions regarding the disclosure of information during proceedings, including the discretion to opt for public or private awards. Such emphasis on confidentiality solidifies arbitration’s appeal as a preferred dispute resolution method.
Numerous international laws address the privacy or confidentiality of arbitration proceedings. The United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules 2021, for instance, refrain from expressly presuming confidentiality but uphold private hearings:
Article 34(5): “An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty, to protect or pursue a legal right or in relation to legal proceedings before a court or other competent authority”.
Similarly, the International Chamber of Commerce (ICC) Arbitration Rules 2021 state:
Article 22(3) “Upon request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information”.
Echoing these sentiments, the London Court of International Arbitration Rules (LCIA) 2020 includes provisions to maintain confidentiality:
Article 30(1) “The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a part by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority. The parties shall seek the same undertaking of confidentiality from all those that it involves in the arbitration, including but not limited to any authorized representative, witness of fact, expert or service provider”.
The Nigerian Institute of Chartered Arbitrators (NICArb) Arbitration Rules 2021 similarly prioritize confidentiality, subject to parties’ agreement in alignment with international best practices:
Article 38(1): “The parties and the tribunal shall at all times treat all matters relating to the proceeding and the award as confidential”.
Article 38(2): “A party or any arbitrator shall not, without the prior written consent of all the parties disclose to a third party any such matter except:
a. For the purpose of making an application to any court of any state to enforce or challenge the award.
b. For the purpose of making application to any competent court of any state under the applicable law covering the arbitration.
c. Pursuant to the order of or a subpoena issued by a court of competent jurisdiction.
d. To a Party’s legal or other professional advisor for the purpose of pursuing or enforcing a legal right or claim.
e. In compliance with the provision of the law of any state which is binding on the party making the disclosure; or
f. In compliance with the request or requirement of any regulatory body or other government authority.
While the new Arbitration and Mediation Act (AMA) 2023 does not explicitly provide for confidentiality or privacy in arbitration, there is an implied rule that arbitration hearings remain private, and arbitrators may only make awards public with the consent of both parties, implying a duty of confidentiality on all parties involved.
In conclusion, confidentiality stands as a cornerstone principle in arbitration, offering parties the assurance of privacy and control over sensitive information. The commitment to confidentiality within arbitration proceedings, underscored by international laws and institutional rules, enhances its appeal as a preferred method for resolving disputes. As arbitration continues to evolve, maintaining confidentiality remains paramount to fostering trust, fairness, and efficiency in the resolution of commercial conflicts on the global stage.
