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SVKM’S

NMIMS SCHOOL OF LAW

SYNOPSIS SUBMITTED ON;

‘CONFIDENTIALITY IN MEDIATION AND ARBITRATION’

IN COMPLIANCE TO THE PARTIAL FULFILLMENT OF THE MARKING


SCHEME, FOR TRIMESTER VIII OF 2016-2017, IN THE SUBJECT OF:

ALTERNATIVE DISPUTE RESOLUTION

SUBMITTED TO FACULTY:

ISHNOOR ARORA

SUBMITTED BY:

MUDIT SINGH CHAUHAN

B.B.A. LL.B. (HONS.)

YEAR III

ROLL NO. – A061

RECEIVED BY: _____________________

ON DATE: __________ TIME: _________


CONFIDENTIALITY IN ARBITRATION AND MEDITATION:
AN UNEXPLORED TERRITORY

Mediation is not something new to India. Centuries before the British arrived, India had
utilized a system called the Panchayat system, whereby respected village elders assisted in
resolving community disputes. Such traditional mediation continues to be utilized even today
in villages. Also, in pre-British India, mediation was popular among businessmen.

After the British adversarial system of litigation was followed in India, arbitration was
accepted as the legalized ADR method and is still the most often utilized ADR method.

Arbitration is one of the modern techniques of alternative dispute resolution (ADR) that has
gained a lot of prominence due to the freedom it offers to the disputants.

The arbitration procedure is based on party autonomy, where both the parties decide the
procedure as well as the circumstances under which arbitration is sought. Generally it is made
in form of a contract which is formulated much before the dispute actually arises. The “rules
of the game”, such as applicable law, the seat of arbitration, the language of the proceedings
may also include a provision to govern confidentiality issues.1

It has been a standard practise now to include the term ‘confidentiality’ in the benefits of
international commercial arbitration. The reason why the confidentiality clause is generally
included in the contract or arbitration agreement is to save the parties from the glaring eyes of
the media, competitors or even the savaging authorities. It further plays an important role in
disputes involving intellectual property rights and trade secrets, thus saving the position in the
marketplace. However, this also raises certain moral as well as ethical questions regarding the
meaning as well the obligation on the part of the institutions and parties regarding the
meaning and limitation on arbitrational confidentiality.

Even the UNCITRAL Model Code on International Commercial Arbitration refrains from
laying down any provision on the controversial topic of confidentiality and it is left to the
parties or arbitral rules that the parties have chosen. The UNCITRAL notes on Organising
Arbitral Proceeding have certain useful observations:

1
http://blogs.law.nyu.edu/transnational/2012/12/confidentiality-vs-transparency-in-commercial-
arbitration-a-false.
“There is no uniform answer in national laws as to extent to which the participants in
arbitration are under the duty to observe confidentiality of information relating to the case.
Moreover, the parties that have agreed on arbitration rules or other provisions that do not
expressly address the issue of confidentiality cannot assume that all jurisdictions would
recognise an implied commitment to confidentiality.”2

RESEARCH PROBLEM
Some of the issues involving confidentiality in arbitration include the very nature of the
obligation of confidentiality and its source, the parties bound by it and exceptional
circumstances when this obligation can be waived. Different countries have different
stipulations with regard to the obligation of confidentiality. While some countries have
express provisions in their arbitration legislation mandating the observance of confidentiality
in arbitration,3 the legislations of other countries are silent about it.4 Rules of different
arbitration institutions also vary in provisions relating to confidentiality. For example, while
the London Court of International Arbitration includes an express provision of
confidentiality, there is no such provision in the rules of the American Arbitration
Association.5

The present paper examines the pros and cons of confidentiality; the difference between
privacy and confidentiality, limitations of confidentiality and disclosure in Public Interest.

2
United Nations Commission on International Trade [UNICITRAL], UNICITRAL Notes on Organizing Arbitral
Proceedings, 31, U.N Doc . A/C .9/423 (Oct 4, 1996).
3
These countries include Australia, Dominican Republic, Hong Kong, New Zealand, Nicaragua, Peru, Scotland,
Spain and Venezuela (Source: ILA Hague Conference Report (n 1)).
4
For example, Japan and India.
5
London Court of International Arbitration, Article 30. See International Law Association (n 1).
RESEARCH QUESTIONS

 What is the importance of confidentiality clause in contract or arbitration agreement?


 What is the difference between privacy and confidentiality?
 Why there is a need for disclosure in public interest over ‘the cloak of
confidentiality’?

METHODOLOGY

 SCOPE OF THE STUDY

The score of this paper is constrained to subjective examination of the issue of confidentiality
in arbitration and mediation and what all issues involve confidentiality in arbitration. This
paper thoroughly discusses the pros and cons of confidentiality in Arbitration and Mediation,
compares United Kingdom - where the courts have held confidentiality in arbitration is held
to be an implied obligation; Australia, which has express statutory provisions and India,
which follows a general obligation of confidentiality.

 RESEARCH METHODOLOGY

The method of research adopted in this research paper is the ‘Doctrinal’ method of research.
Primary and Secondary Sources of data have been used to formulate opinions. Books and
internet content constitute major part of the research and surveys and examinations have not
been conducted for the research.

 TENTATIVE CHAPTERIZATION

This paper aims to study the obligation of confidentiality in international commercial


arbitration. It starts by discussing the pros and cons of confidentiality, limitations of
confidentiality and the difference between privacy and confidentiality. The second part
discusses some of the issues associated with confidentiality. In order to understand how the
obligation of confidentiality is maintained through implication and express statutory
provisions, the third part considers three jurisdictions- the United Kingdom (hereinafter the
UK) where the courts have held confidentiality in arbitration is held to be an implied
obligation; Australia, which has express statutory provisions and India, which follows a
general obligation of confidentiality. The project concludes in part four by giving a brief on
“DISCLOSURE IN PUBLIC INTEREST” and stating a way how parties can avoid dispute
regarding confidentiality provisions in the contract.

REVIEW OF LITERATURE

How confidential are arbitral proceedings? This is a highly controversial and difficult issue.
On the one hand, and mostly in intellectual property disputes, confidentiality of certain
documents is sometimes of crucial importance. The situation does arise (and, e.g., has arisen
in the IBM/Fujitsu arbitration) that a party may wish to rely on documents which should not
be seen by the other party (which may be its main competitor in this specific field).6

- Confidentiality vs. Transparency In Commercial Arbitration: A False


Contradiction To Overcome
- By Stefano Azzali

The author in this article has discussed about the general context of confidentiality in
commercial arbitration. He has discussed about various issues related to confidentiality, about
the interest of the arbitrators and scholars. To conclude, the author discussed how can the
interest of the parties be protected and the best way to safely guarantee confidentiality

Prior to this symposium, there was not a single law review article dedicated to the discussion
of arbitration confidentiality and familiar arbitration treatises considered it only in passing.
But the time has come for a principled and rigorous analysis of arbitration confidentiality.
Like mediation, arbitration has become a permanent fixture of the landscape of civil justice.
Like mediation, arbitration is often promoted as a "private" or "confidential" process, raising
some moral and perhaps ethical obligations on the part of the profession to be candid with
consumers as to the meaning and limitations of arbitration confidentiality.7

- Confidentiality in Arbitration: Beyond the Myth


- By Richard C. Reuben

6
http://blogs.law.nyu.edu/transnational/2012/12/confidentiality-vs-transparency-in-commercial-arbitration-
a-false./

7
http://www.mondaq.com/x/475674/Arbitration+Dispute+Resolution/Confidentiality+in+Arbitration
The author in this article has discussed how the area of confidentiality has still not been
discussed in-depth by any scholar or arbitrator and what all challenges are there to
arbitrational confidentiality.

HYPOTHESIS
Confidentiality and privacy go hand in hand. The courts have to strike a balance between
confidentiality in the arbitration proceedings and fair litigation. Confidentiality as a concept
had found wide acceptance and sufficient weightage and importance has to be given to it.