A RESEARCH ASSIGNMENT ON

“TRANSPERENCY IN ARBITRATION”

SUBMITTED TO:
(Mr. VISHAL BERA)

(ASSISTANT PROFESSOR)

(FACULTY OF “SUBJECT NAME”)

SUBMITTED BY:

SOMYA SRIVASTAVA
ROLL NO.-

17FLICDDN02132
BATCH (2017-2022)

DATE OF SUBMISSION: 10TH NOVEMBER 2021

ICFAI LAW SCHOOL,

ICFAI UNIVERSITY, DEHRADUN
 DECLARATION

I, SOMYA SRIVASTAVA, student of BALLB(H) , hereby declare that the project work
entitled “Transparency in Arbitration” submitted to the ICFAI Law School, ICFAI
University, Dehradun is a record of an original work done by me under the guidance of Mr.
Vishal Bera, teacher in subject, ICFAI Law School, ICFAI University, Dehradun.

Date: 10th November 2021 Name- Somya Srivastava

Roll No. – 17FLICDDN02132

Batch – BALLB (H) (2017-22)

 CERTIFICATE

This is to certify that the project report entitled “TRANSPERENCY IN ARBITRATION”

submitted by SOMYA SRIVASTAVA in partial fulfilment of the requirement for the award
of degree of “Batch” to ICFAI Law School, ICFAI University, Dehradun is a record of the
candidate’s own work carried out by her under my supervision. The matter embodied in this
project is original and has not been submitted for the award of any other degree.

DATE:10th nov2021 (Mr. Vishal Bera)

Teacher in subject
 ACKNOWLEDGEMENTS

I would specially like to thank my guide, mentor, Mr. Vishal Bera without whose constant
support and guidance this project would have been a distant reality.

This work is an outcome of an unparalleled infrastructural support that I have received from
ICFAI Law School, ICFAI University, and Dehradun.
I owe my deepest gratitude to the library staff of the college.

It would never have been possible to complete this study without an untiring support from my
family, specially my parents.

This study bears testimony to the active encouragement and guidance of a host of friends and
well-wishers.

Name: SOMYA SRIVASTAV

Roll no 17FLICDDNO2132

Batch (2017-2022)
 LIST OF ABBREVIATIONS

US UNITED STATES

Cri. LJ Criminal Law Journal

HINDU L.R. Hindu Law Reporter

ICA INTERNATIONAL COURT OF ARBITRATION

TABLE OF CASES
1 Esso Australia Resources Ltd v The Honorable Sidney
James Plowman and Ors
2 The Commonwealth of Australia v John Fairfax
and Sons Ltd
3 Commonwealth of Australia v Cockatoo Dockyard Pty Ltd
[1995] 36 NSWLR 662.
 TOPIC PAGE NO.
 DECLARATION I

 CERTIFICATE ii

 ACKNOWLEDGMENT iii

 LIST OF iv
ABBREVIATIONS
 TABLE OF CASES v

CHAPTER-I: INTRODUCTION

CHAPTER- PRIVACY AND

II:
CONFIDENTIALITY

CHAPTER- TRANSPARENCY
III:

CHAPTER- PUBLIC ACESS AND

IV:
TRANSPARENCY
CHAPTER V:
THE NEED FOR TRANSPARENCY
CHAPTER
VI: ARBITRAL AWARDS
MAJOR FINDINGS

CONCLUSION

SUGGESTIONS

BIBLIOGRAPHY
 7

I. INTRODUCTION

In the ancient time, arbitration was a simple and easy informal process to resolve disputes
between the two parties. Both the parties should agree to abide by his decision and they would do
this not because of any legal punishment, but because this was what expected from them in the
community where they practiced their trade.

National arbitration regulations are more stringent than international commercial arbitration
regulations, but ICA does not stay within a state's national borders; rather, it crosses them
repeatedly. A company based in the United States might enter into a contract with a company
based in France to build a power plant in Indonesia, with the understanding that any conflicts
would be addressed by arbitration in London.

One of the important advantages of arbitration is that secrecy of arbitral proceedings. An

international arbitration hearing is not open to the public. Unlike in a court of law, where the
press and general public are often allowed to attend. Because it is primarily a private procedure,
it has the ability to remain private. Confidentiality, on the other hand, is becoming less and less
reliable as a major obligation of parties to arbitral proceedings.

Parties concerned to ensure the confidentiality provisions in their agreement to arbitrate, or in a

separate confidentiality agreement concluded at the outset of arbitration. Primarily there are
distinction between privacy and confidentiality, and the classical position and current trend as far
as confidentiality and transparency is concerned.

II. PRIVACY AND CONFIDENTIALITY

As far as the hearing is concerned, the major institutional rules are in agreement: the hearing is
private. Article 26(3) of the ICC Rules states:

The Arbitral Tribunal shall be in full charge of the hearings, at which all the parties shall be
entitled to be present. Save with the approval of the Arbitral Tribunal and the parties, persons not
involved in the proceedings shall not be admitted.

The rules of the ICDR, LCIA, International Centre for the Settlement of Investment Disputes

(ICSID) and World Intellectual Property Organization (WIPO) contains similar provisions, as
do the rules of such commercial arbitration organizations as the Austria Federal Economic
 8

Chamber, the Swiss Chambers’ Arbitration Institution, the China International Economic and
Trade Arbitration Commission (CIETAC), and the Japanese Commercial Arbitration Association
(JCAA).

Article 28(3) of the UNCITRAL Rules spells out the position in similar terms:
Hearing shall be held in camera unless the parties agree otherwise. The arbitral tribunal may
require the retirement of any witness or witnesses, including expert witnesses, during the
testimony of other witnesses, except that a witness, including an expert witness, who is a party to
the arbitration shall not, in principle, be asked to retire.

The privacy of arbitration hearings is therefore uncontroversial. And if the hearing is to be held
in private, it would seem to follow that the documents disclosed and the evidence given at that
hearing should also be- and should remain- private. In principle, there would seem no point in
excluding non-participants from an arbitration hearing if they can later read all about it in printed
articles or on an authorized website. However, a broader duty of confidentiality in international
arbitration is now far from clear.

III. CONFIDENTIALITY- THE CURRENT SCENARIO

Notwithstanding the foregoing, the current trend in international arbitration is to diminish- or at

least to question-the confidentiality of arbitrations in which there was a genuine public interest-in
the sense that the decision of the arbitral tribunal would in some way affect the general public.
For example in Esso Australia Resources Ltd v The Honorable Sidney James Plowman and Ors1,
the High Court of Australia concluded that whilst the privacy of the hearing should be respected,
confidentiality was not an essential attribute of a private arbitration. Specifically, the court found
that a requirement to conduct proceedings in camera did not translate into an obligation
prohibiting disclosure of documents and information provided in, and for the purpose of, the
arbitration. The court then concluded that although a certain degree of confidentiality might arise
in certain situations, it was not absolute. In the particular case before the court,’ the public’s
legitimate interest in obtaining information about the affairs of public authorities’ prevailed.

In respect of this final point, one of the judges discussed the standards for disclosure in respect of
information that is of legitimate interest to the public and held that:

1
(1995) 193 CLR 10
 9

The courts have consistently viewed governmental secrets differently from personal and
commercial secrets. As stated in The Commonwealth of Australia v John Fairfax and Sons Ltd 1,
the judiciary must view the disclosures of governmental information 'through different
spectacles.’ this involves a reversal of the onus of proof: the government must prove the public
interest demands non- disclosure.

In another Australia case2 the appellate decided that an arbitrator had no power to make a
procedural direction imposing an obligation of confidentiality that would have had the effect of
preventing the government from disclosing to a state agency, or to the public, information and
documents generated in the course of the arbitration that ought to be made known to that
authority or to the public. It was said that public health and environmental issues were involved:

Whilst private arbitration will often have the advantage of securing for the parties a high level of
confidentiality for their dealing, where one of those parties is a government, or an organ of
government, neither the arbitral agreement nor the general procedural powers of the arbitrator
will extend so far as to stamp on the governmental litigants a regime of confidentiality duty to
pursue the public interest.

In the United States, neither the Federal Arbitration Act nor the Uniform Arbitration Act contain
a provision requiring the parties or the arbitrators to keep secret arbitration proceedings in which
they are involved. As a consequence, unless the parties’ agreement or applicable arbitration rules
provide otherwise, the parties are not required by US law to treat as confidential the arbitration
proceedings and what transpires in them.

In United States v Panhandle Eastern Corporation 3, Panhandle brought a motion before a US

federal district court for a protective order, preventing the disclosure of documents relating to
arbitration proceedings between it and Sonatrach, the Algerian national oil and Gas Company. In
support of its motion, Panhandle argued that disclosure to third parties of documents related to
the arbitration would severely prejudice Panhandle’s ongoing business relationship with both
Sonatrach and the Algerian government.

1
(1995) 193 CLR 10
2
Commonwealth of Australia v Cockatoo Dockyard Pty Ltd [1995] 36 NSWLR 662.
3
118 FRD 346(d.dEL.1988).
 10

The court denied the motion on the grounds that Panhandle has failed to satisfy the ‘good cause’
requirements of rule 26(c) of the Federal Rules of Civil Procedure and that the filling was
untimely, but it proceeded to address the question of confidentiality and, having rejected the
existence of an express confidentiality agreement between the parties, gave no credence to the
existence of an implied obligation.

This decision has been followed in subsequent US cases in which the courts have refused to find
a duty of confidentiality in the absence of an express contractual provision or the adoption of a
set of arbitration rules containing such a provision.

The Supreme Court of Sweden has also rejected the idea of a general implied duty of
confidentiality in arbitration proceedings. The same position prevails in Norway: absent an
agreement to the contrary, arbitration proceedings and decisions by the tribunal are not subject to
any duty of confidentiality.

TRANSPARENCY

Transparency is not clearly defined in international law. Synonymous to openness or

accountability, transparency is often invoked but seldom defined. It is an information-centric
concept that relies on openness and access to information, viewed as a more accountable, more
democratic, and more legitimate system of global governance. In the arbitral realm, it involves
the disclosure of documents or other materials, open hearings, the participation of third parties in
the arbitration process, and public access

In recent years, there have been incessant calls for increased transparency in the international
commercial arbitration system. While some advocate for a presumption of the publication of
arbitral awards unless parties object, others propose the formation of an international supervisory
entity to supervise and oversee the publication of awards. While the mandatory publication of
arbitral awards is often put forward as a solution to the transparency deficit, such an approach
may raise more questions than it answers.

PUBLIC ACCESS AND TRANSPARENCY

 11

Public access refers to a citizen’s individual right of access to a hearing. It enables open scrutiny
of public officials and guards against misuse of power. Differentiating transparency from public
access is essential in order to understand the motivation behind the appeals for enhanced
transparency in international commercial arbitration.

Public access and transparency come together by facilitating the public’s right of attending
proceedings as well as enabling the scrutiny of the adjudicator’s performance. While it is
tempting to make an amalgam of these two concepts, they are nevertheless distinct from each

Other in the arbitral context: public access is an individual right whereas transparency relates to
the system as a whole. There is a notable discrepancy in the treatment of transparency and public
access in international commercial arbitration given that the former is often seen as an imperative
while the latter is seen as expendable. This difference in treatment stems from the objectives
each concept seeks to achieve. Public access is an individual right that finds its roots in domestic
considerations of fairness and justice. As one commentator notes, it would be nonsensical to
insist that a Brazilian citizen has a right to attend an Austrian hearing governed by German law
involving Chinese and Russian parties. On the other hand, several international tribunals espouse
public access in a bid to ensure transparency. Consequently, although public access is an
instrument for stimulating transparency, it is not an essential characteristic of transparency. The
fundamental difference between the domestic and international approach to public access lies in
the fact that domestic legislators refrain from overstepping on a fundamental right in a bid to
avoid a backlash of the local population and human rights activists, while in international
disputes, such domestic considerations are non-existent.

THE NEED FOR TRANSPARENCY

Transparency can lead to a higher degree of trust and acceptance of the arbitral process.
Transparency increases accountability as the arbitrator, counsel, and parties to an arbitration are
mindful that their behavior is likely to be scrutinized by the public. Transparency also renders the
decision-making process in arbitration more accurate, as arbitrators who know that their awards
will be rendered public are more inclined to thoroughly research and investigate before reaching
a conclusion. It helps to guarantee democratic principles such as the right of access to
information and also promotes fairness, the rule of law, equity, and due process. Furthermore,
 12

companies can fulfill their corporate social responsibility by adopting transparent dispute
resolution mechanisms. The benefits of arbitral transparency include the consistency of arbitral
awards, development of arbitral law, prevention of prospective disputes, better openings to
develop the arbitral system, and increased efficacy in determining the expertise of an arbitrator.

COMMERCIAL LAW IS GOING UNDERGROUND

The absence of transparency and the difficulty involved in obtaining precedence in arbitration
means that there is a lack of information on the development of commercial law and the
performance of the arbitrator within arbitral tribunals. The impossibility of or difficulty in
obtaining these jurisprudential deliberations means that commercial law is effectively going
underground. International commercial disputants are increasingly opting for arbitration instead
of litigation and as a result, legal practitioners are unable to track jurisprudential developments in
the commercial law sector. This secrecy surrounding the development of commercial law
inevitably damage public interests. Legal practitioners are unaware of developments in crucial
areas of the law, and parties disputing similar issues are required to reinvent the wheel.

The present situation also means that only the big international law firms with a large practice in
international commercial arbitration are able to review the latest developments in commercial
law within the arbitral system, while other practitioners are left to operate relatively in the dark.
The certainty and predictability which the law strives for is essentially restricted to a number of
privileged insiders, with relevant information effectively being monopolized by a small elite. The
result of the perpetuation of such practices is that the development of commercial law within the
courts has been hampered and ultimately privatized within the arbitral system.

THE UNCITRAL RULES ON TRANSPARENCY AS A ROADMAP FOR REFORM

In 2014, the arrival of the UNCITRAL Rules on Transparency signaled a new era of
international cooperation in the promotion of transparency in investor-state arbitrations, and was
viewed as a symbolic step forward on the path to transparency in international arbitration. The
scope of the UNCITRAL Rules on Transparency is restricted to investor-state arbitration, but its
impact has led to appeals for greater transparency in international commercial arbitration.
 13

An overhaul of the approach to confidentiality in international commercial arbitration requires

re-examining deep-rooted practices in the area of privacy and confidentiality. The UNCITRAL
Rules on Transparency represent an important starting point for such an overhaul. Investor-state
arbitrations may create pressure or at least inspiration for greater transparency in international
commercial arbitration.

THE INTERNATIONAL COURT OF ARBITRATION

 The International Court of Arbitration (the "Court") of the ICC has published a Note to Parties
and Arbitral Tribunals on the conduct of the arbitration under the ICC Rules of Arbitration (the
"Note" or the "2019 Note") which entered into force on 1 January 2019.
 The ICC implements a new mandatory transparency regime, during and after the proceedings, by
providing for publication of case data and awards. Publication of awards will be a concern for
some clients and such clients may wish to prohibit publication of awards as part of the arbitration
agreement.
 The Note assists arbitrators with disclosure of potential conflicts, the constitution of tribunals and
transparency.
 Other updates deal with the issues of (i) additional Secretariat assistance in the constitution of
arbitral tribunals; (ii) data protection; (iii) increased transparency and scrutiny for investor-state
arbitrations; and (iv) duties of administrative secretaries.

ARBITRAL AWARDS

Usually, transparency in commercial arbitration is mostly focused on the publication of sanitized

arbitral awards. For instance, the ICC Secretariat publicizes synthesis of awards in the ICC
International Court of Arbitration Bulletin for educational purposes. In this publication reference
is made only to the docket number and the award is sanitized by removing the names of the
parties, geographical and industrial facts that would risk to render the case and its participants
identifiable.

More recently, the Milan Chamber of Arbitration has adopted a set of guidelines for the
anonymous publication of arbitral awards. Their purpose is clearly embodied in paragraph (1) of
the Preamble, which reads: “The Guidelines aim to provide a set of common and uniformly
 14

applicable standards in order to publish arbitral awards and provisions anonymously and
confidentially…” especially when the parties have not expressly and directly agreed on
confidentiality issues”.

Generally speaking, as we said a higher transparency – and, consequently, wider predictability –

would also represent a crucial step forward in the promotion of arbitration in the business
community. Arbitration, although having a contractual nature, is a system for rendering justice.
Arbitration plays a sort of “social” role, having a social impact. For this reason, we must render
commercial arbitration – starting from the awards – more accessible, more transparent. We
cannot see arbitration as a purely private phenomenon. But how can we reach all these
advantages, combining the general interest to transparency with the parties’ interest to
confidentiality.

First of all, a good “sanitization” of the arbitral award (an intervention to make it entirely
anonymous, being impossible for anyone to understand the identity of the parties involved in the
case) would render such interest (if any) real.

The “sanitization” of arbitral awards can be better guaranteed in an administered arbitration,

where the Institution – thanks to its Rules – can take into equal consideration, on the one hand,
parties’ interest to confidentiality and, on the other hand, the wider interest of potential users to
access information about arbitration practice and arbitral decisions.

In order to ensure that parties would not be easily recognizable, an efficient treatment – that the
Institution has the duty to guarantee – is essential.

For this purpose, many Arbitral Institutions specifically provide for a discipline of such treatment
in their Rules. It must be pointed out that those provisions are extremely useful: they give the
parties the certainty that during all the proceedings, their needs would be protected. The
Institution is the first actor in arbitration to have the obligation to insure the maximum privacy of
the whole proceedings and its integrity.

As regards to the Milan Arbitration Rules, they provide also the publicity of awards for purposes
of research and of course, any additional publicity the parties may wish.
 15

Among all the information related to an arbitral proceedings, awards are surely the most
important ones. But the general interest for transparency is definitely not to show the whole
world which parties were involved in the arbitration and why. The goal of transparency is not to
disclose everything but mostly to promote research and at the same time to improve the quality
of arbitrations in general.

In institutional arbitration, the center has a general duty of constantly building case law, and in so
doing, it also provides information on performances of arbitrators.

But, of course, such case law has to be carefully built. If publicity is made properly – that is to
say, without any evidence for recognizing what has to be hidden – there would not be any
problem with transparency. Transparency is not criticized per definition, as a principle, but for
what it could lead to if publicity has been made incorrectly.

Therefore, quality has to be met not only by the arbitrators in the award but also by the arbitral
institution in publishing such awards. Publication that has not to harm parties’ rights.

The solution to prevent such risks is a good “sanitization” of the arbitral award. This technique
consists of cleaning the entire text by selecting only the elements which have a general interest
for arbitration users and scholars, avoiding the disclosure of any aspects irrelevant for those
purposes and able to identify the identity of the parties. CAM’s Guidelines are very detailed on
these techniques.
 16

CONCLUSIONS

Confidentiality and transparency have a strenuous relationship within the arbitration realm.
There is a need to develop a balance between the guarantees that attract commercial parties to
arbitration and the concurrent need for equity and justice. Although confidentiality and
transparency have been described as competing values, they can coexist in practice.
Confidentiality encourages a comprehensive investigation of the issues without the invasion of
privacy but it also provides the parties with their best chance to save the underlying business
relationship. The disparity in the jurisdictional treatment of confidentiality should be managed in
order to increase predictability. As discussed, while some jurisdictions recognize an implied duty
of confidentiality, other jurisdictions reject such an approach and advocate for express
confidentiality agreements. This kind of practice results in inconsistency and unpredictability.
Considering the legal and jurisprudential variances between jurisdictions, moving toward a more
uniform treatment of confidentiality in international commercial arbitration would require an
unprecedented level of interjurisdictional cooperation as well as elaborate amendments to
international arbitration rules.

The foregoing discussion brought to light that the issue of corruption is marred by complexity as
it raises tensions between public policy matters in respect to which it is difficult to strike a
balance. Even though corruption is subject to significant condemnation and abhorrence, it should
be within an arbitrator’s authority to adjudicate upon such allegations. Indeed, cross-border
business transactions would suffer a setback if such issues are kept out of the scope of
arbitration. The problems that arise with respect to both burden of proof and standard of proof, as
it is difficult to uncover and establish corruption because of the systematic manner in which it is
carried out in most cases. It it is within the power of an arbitrator to initiate a sua sponte
investigation to unravel corruption when circumstances so warrant, for an arbitrator cannot be
expected to remain a silent spectator to unscrupulous dealings. Further, the consequences that a
finding of corruption would bring, by making a distinction between contracts aimed at corruption
and ones obtained by corruption, and arguing that in the latter case, since one of the parties is
innocent, restitution may be granted if it is reasonable under the circumstances.
 17

SUGESSTIONS

1) Transparency can lead to higher degree of trust and acceptance so there is a strong need
of transparency in arbitration process