In its Consultation Paper (CP) in connection with its Review of the Arbitration Act 1996, the Law Commission concludes that the Act still works very well and there is no need for extensive reform but proposes amendments in some areas. The report summarises their review of eight key areas. In this the first of our commentaries on the review, we consider the first area: Confidentiality.

Confidentiality is consistently cited as one of the main reasons why parties choose international arbitration as their preferred method of dispute resolution alongside ease of enforcement internationally under the New York Convention. However, the Act makes no mention of confidentiality; the approach taken at the time was that there were many exceptions to the general rule of confidentiality, too many to state and that the law was not settled. The CP considers if this approach should be maintained or whether the time is now right to amend the Act.

Arbitrations seated in England and Wales are by default private and confidential. However, confidentiality can arise in a variety of ways: expressly; by implied term; or in equity. The tort of misuse of private information may also arise. That there are exceptions to this has been the subject of many decisions (such as Emmott -v- Michael Wilson & Partners Ltd [2008] EWCA Civ 184) but common law acknowledges that the exceptions are difficult to state and has questioned the desirability of dealing with confidentiality in arbitration simply as a matter of implied term subject to exceptions, even if a suitable list could be identified.  

The CP observes that some jurisdictions have dealt with arbitral confidentiality in legislation, typically stating a general rule followed by exceptions, sometimes on an opt - out basis and sometimes opt-in. It refers to New Zealand and Scotland which have opt-out provisions, Australia which has opt-in provisions and Hong Kong which has mandatory provisions.

The CP points out that not all arbitration starts from a presumption of confidentiality, most notably investor - state arbitrations under UNCITRAL rules proceed on the basis of transparency. It also observes that confidentiality can be expressly provided for in the arbitration agreement or by adoption of rules which expressly deal with confidentiality (for example Article 45  2018 HKIAC Administered Arbitration Rules).

The CP concludes that: confidentiality is not the default position for all arbitrations; if it were a general rule, producing a robust list of exceptions is very difficult; the law of confidentiality is complex and evolving; and rather than amending the Act, it is better left to the development of common law.

The conclusion in the CP is provisional, pending the outcome of consultation.

Opinions on the conclusion reached will no doubt vary but the reasoning of the Law Commission appears to be sound. Confidentiality can be an issue in arbitral proceedings but often the tribunal will be prepared to rule on issues and recourse can be had to the courts. As the CP points out, parties can always deal with confidentiality expressly if they wish in their arbitration agreement or adopt rules which do so.