Confidentiality and the Public Interest

Exception
Considerations for Mixed International Arbitration

Monique PONGRACIC-SPEIER*

"Arbitration is a universal institution arising out of a deep need of society. As many such
institutions it has, on one side, a common core, expressed in some general features and in
its functions, and on the other side, it has been submitted to a historical evolution
determined by changing circumstances and requirements."'

I. INTRODUCTION

Despite having suffered two high level attacks in recent years,' confidentiality is still
considered by many to be an important, and some would say even "core", feature of
international commercial arbitration. A survey of the cases reveals that, on balance, more
courts (from both common-law and civil-law jurisdictions) have affirmed confidentiality as
a legal feature o f commercial arbitration than have denied it. These include trial level3 and
appeal courts4 in the United Kingdom; a trial level Canadian court;5 the Paris Court of

* LL.B., University of British Columbia, Canada, 2001.

An earlier version of this article was awarded the 2001 Department of Justice Canada prize for the best paper
on a topic in dispute resolution produced at a Canadian university. The author wishes to thank Mr Henri Alvarez
for his helpful reviews of earlier drafts of this article and for his continued support in bringing it to completion.
The author may be contacted at: «postscript@shaw.ca».
1 Jerzy Jakubowski, Reflections on the Philosophy of International Commercial Arbitration and Conciliation, in Jan C.
Schultsz and Albert Jan Van Den Berg (eds.), The Art ojArbitration: Essays in International Arbitration Liber Amirnrum
Pieter Sanders, 12 September 1912-1982, Kluwer, Boston, 1982, 175, at 177.
2 See Esso Australia Resources Ltd. et al. v. the Honourable Sidney James Plowman et al. (Esso), 128 A.L.R. 391
(1995), (H.C.), online: QL (AHc); Bulgaria Foreign Trade Bank Ltd. v. A.1. Trade Finance Inc., (Bulbank), Case
No. T 1881-99, Swedish Sup.
3 See The Eastern Saga, [1984] 2 Lloyd's Rep. 373 (Q.B.) (combined hearing of disputes with common parties
and issues); Hassneh Insurance Co. ofTsrael et al. v. Stewart]. Mew (Hassneh Insurance), [1993] 2 Lloyd's Rep. 243 (Q.B.)
(whether permissible to disclose arbitral award to protect legal interest); Insurance Co. v. Lloyd's Syndicate, [19951 1
Lloyd's Rep. 272 (Q.B.) (whether permissible to disclose arbitral award to protect legal interest); and London �
Leeds Estates Ltd. v. Paribas Ltd., 1 E.G.L.R. 102 (1995) (Q.B.) (whether permissible to disclose expert witness's
statements made during arbitral proceedings).
4 See Dolling-Baker v. Merrett, [1990J 1 W.L.R. 1205 (C.A.) (whether permissible to disclose arbitral
documents to protect legal interests); and Ali Shipping Corporation v. Shipyard Trogir (Ali Shipping), [1998]
1 Lloyd's Rep. 643 (C.A.) (whether permissible to disclose arbitral award and other documents to protect legal
interests).
5 See Auction Finance Croup Ltd. v. Bob Dickenson Auction Service Ltd., [20001 O.J. No. 3384 (Out. S.C.J.),
online: QL (CJ).
Appeal,;6 and the Stockholm District Court? and the SvEA Court of Appeal8 (although the
decisions of these last two courts have been overturned by the Supreme Court of Sweden9).
But these confirmations of confidentiality are counterbalanced by a building body of
opinion in favour of restricting, or even denying, confidentiality in arbitration. As Yves
Fortier has remarked, "What is evident today is that, with respect to confidentiality in
international commercial arbitrations, nothing should be taken forgranted." (emphasis o r i g i n a l

The most persuasive rationale for enforcing confidentiality-and the related

principle o f p r i v a c y - i n arbitration," is that companies or private persons (private
parties) who have specifically contracted to resolve commercial disputes arising between
them in a private forum deserve to have their desire to withhold the matter from public
scrutiny respected.12 As one English judge sagely put it, "The concept of private [or
confidential] arbitration derives simply from the fact that the parties have agreed to
submit to arbitration particular disputes arising between them and only between them."
( e m p h a s i s added) 13

But, one may ask, what happens to confidentiality when one o f the parties to an
international commercial arbitration is not a private party, but a State, government or
public agency (collectively, public actors)? Should confidentiality be a feature of this
type of arbitration? Arguably, a commercial dispute between a private party and a public
actor is not something "arising between them and only between them". A public actor,
by definition, "concerns the people as a whole", 14 and it may have a duty to publicly

I- See Aita c. Ojjeh, Paris, 18 February 1986. This decision is discussed in Emmanuel Gaillard, Le principe de
cnnfidentialite de 1'arbitra`qe commercial international, 22 Recueil Dalloz Chron. 1987, 153, at 155; Emmanuel Gaillard
and John Savage, (eds.), Pouchard, Caillard, Goldman on Irnernational Commercial Arbitration, Kluwer, The Hague,
1999, at 612; and Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, 3rd
edition, Sweet and Maxwell, London, 1999, at 30.
S e e Bulgarian Foreign Trade Bank Ltd. v. A.l. Trade Finance Inc., Case No. T 6-111-98, Stockholm City Ct.
" See A.l. Trade Finance Inc. v. Bulgarian Foreign Trade Bank, Case No. T 1092-98, SVEA App.
y See Bulbank, supra, footnote 2. For overviews and assessments of the Bulbank saga, see Constantine Parasides,
Bulballk- The Final Act, 15(12) Mealey's Int'l Arb. Rep., 2000, 44; and Hans Bagner, Confidentiality in Arbitration,
Don't Take It For Granted, 15(12) Mealey's Int'l Arb. Rep., 2000, 52.
"' L. Yves Fortier, T7ie Occasionally Unwarranted Assumptioll oj Confidentiality, 15 Arb. 1m'], 1999, 131, at 138.
1 ' The Australian High Court and the Swedish Supreme Court in the decisions referred to at footnote 2, supra,
each distinguish privacy in arbitration (generally meaning the exclusion from the arbitration hearings of persons
other than those authorized to attend) from confidentiality (generally meaning the maintenance of secrecy with
respect to the progress of the arbitration and its outcome). Some consider this distinction unconvincing. See, for
example, Patrick Neill, Confidentiality in Arbitration, 12 Arb. Int'l, 1996, 287, at 307. The present author's view of
the relationship between "privacy" and "confidentiality" is that the distinction is, in large measure, without
difference. While "privacy" and "confidentiality" can be clearly distinguished on a theoretical level, the concepts
tend to flow into one another in the practice of arbitration. See also Edouard Bertrand, Confidentialite de I'arbitrage:
evolution on mutation apres I'affaire Esso/BHP v. Plowman, 2 Rev. de Droit des Affaires Internationales, 1996, 169,
where the author examines privacy, at 173, as an element of confidentiality. In this article, unless otherwise
indicated, the term "confidentiality" is used in a global sense to refer to a total regime that protects the secrecy of
the arbitration proceedings and their outcome.
12 Sec Jakubowski, supra, footnote 1, at 182; but see Francois Dessemontet, Arbitration and Confidentiality,
7 Amer. Rev. Int'l Arb. 1996, 299, where the author opines, at 313-314, that the Anglo-American tradition
grounds a duty of confidentiality in one of three alternative sources: 1) by implication of the contract binding the
parties; 2) on the basis of fiduciary duty (from whom and to whom is not specified); or 3) on the basis that the
owner of confidential information has a "property interest" or "property right" in trade secrets which carries with
it a right of protection against disclosure.
1J See The Eastern Saya, supra, footnote 3, at 379 (per Leggatt, J.).
14 See The Concise Oxford Dictionary, 8th edition, s.v. "public".