Award

[2.177] Some institutional rules of arbitration, including those of ICSID, provide that the award may be made public only with the consent of the parties.²⁷⁵

[2.178] It has always been recognised, however, that there are circumstances in which an award may need to be made public, for example for the purpose of enforcement by a national court. In Hassneh Insurance Co of Israel v Mew²⁷⁶ —a case mentioned earlier—the judge concluded that an award and the reasons contained in that award were different in character from the other elements of the arbitration proceedings (such as notes and transcripts of evidence, witness statements, submissions, and pleadings, all of which were, in his view, covered by the principle of privacy stemming from the fact that arbitration hearings were held in private). He found that the award was potentially a public document for the purposes of supervision by the courts or enforcement in them, and therefore could be disclosed without the consent of the other party or the permission of the court if—but only if—the party seeking disclosure needed to do so in order to assert or protect its legal rights vis-à-vis a third party.²⁷⁷ This position is now reflected in many of the institutional arbitration rules.

[2.179] In addition to the disclosure of awards where required by law, disclosure of a kind takes place when an arbitral institution—such as the ICC—publishes ‘edited and redacted’ copies of arbitral awards as a guide for the benefit of lawyers and arbitrators.²⁷⁸

[2.180] Article 27(4) of the ICDR Rules provides that an award may be made public ‘only with the consent of all parties or as required by law’.²⁷⁹ These Rules provide that, unless otherwise agreed by the parties, selected awards may be made publicly available, with the names of the parties and other identifying features removed. If the award has become publicly available through enforcement proceedings or otherwise, then the names need not be removed.

[2.181] In England, the Privy Council had to consider in Aegis v European Re²⁸⁰ whether an arbitration award in one arbitration under a reinsurance agreement could be relied upon by the winning party in another arbitration under the same agreement, despite an express confidentiality agreement in respect of the first arbitration. The case came to the Privy Council on appeal from the Court of Appeal of Bermuda and disclosure of the award was allowed. The Privy Council said that the legitimate use of an earlier award in a later, also private, arbitration between the same parties was not the kind of mischief against which the confidentiality agreement was directed. This decision has been rightly described as:

… eminently sensible in the circumstances of the case. The private and, in theory, confidential nature of arbitration should not mean that the parties can go on arbitrating the same point ad infinitum until they get the result they prefer.²⁸¹

[2.182] In France, the Paris Cour d’Appel ruled, in Aita v Ojjeh,²⁸² that the mere bringing of court proceedings to challenge an arbitration award violated the principle of confidentiality in that it caused ‘a public debate of facts which should remain confidential’. The judgment also contains dicta to the effect that it is in ‘the very nature of arbitral proceeding that they ensure the highest degree of discretion in the resolution of private disputes, as the two parties had agreed’.²⁸³ More recently, however, and in line with the modern trend, the Paris Cour d’Appel in Nafimco²⁸⁴ found that the claimant failed to ‘show the existence and foundation of such a duty in French international arbitration law’.

[2.183] In the Cockatoo Dockyard case,²⁸⁵ the Australian court concluded that whilst there was a ‘high level of confidentiality’ in arbitral proceedings, this should not prevent disclosure where the public interest was concerned. It is this concern for the public interest—and for the public’s ‘right to know’—that has led to the erosion of the principle of confidentiality in arbitral proceedings. The need to balance the private interest in confidentiality against the possible public interest in disclosure may be seen in arbitrations that have taken place under the treaty that established the North American Free Trade Agreement (NAFTA).

[2.184] In the early 1980s, an international arbitral tribunal applying the ICSID Arbitration Rules in Amco v Republic of Indonesia²⁸⁶ held that ‘as to the “spirit of confidentiality” of the arbitral procedure, it is right to say that the Convention and the Rules do not prevent the parties from revealing their case’. Balanced against this finding, the Amco tribunal nonetheless referred to a general duty existing under international law not to exacerbate an ongoing international dispute, and relied on the existence of this duty to recommend to the parties that they should ensure that their public statements about cases in which they were involved were both short and accurate.

[2.185] In the years since Amco, tribunals applying the ICSID Rules, including NAFTA tribunals, have striven to achieve the same balance. For example, in Metalclad Corporation v United Mexican States,²⁸⁷ Mexico made an application for a confidentiality order, pursuant to Article 1134 of NAFTA (‘Interim measures of protection’) and Article 28 of the (then) ICSID Additional Facility Rules (‘Procedural orders’). The tribunal dismissed the application, finding that:

There remains nonetheless a question as to whether there exists any general principle of confidentiality that would operate to prohibit discussion of the arbitration proceedings by either party. Neither the NAFTA nor the ICSID (Additional Facility) Rules contain any express restriction on the freedom of the parties in this respect. Though it is frequently said that one of the reasons for recourse to arbitration is to avoid publicity, unless the agreement between the parties incorporates such a limitation, each of them is still free to speak publicly of the arbitration … Indeed, as has been pointed out by the Claimant in its comments, under US security laws, the Claimant, as a public company traded on a public stock exchange in the US, is under a positive duty to provide certain information about its activities to its shareholders, especially regarding its involvement in a process the outcome of which could perhaps significantly affect its share value.

The above having been said, it still appears to the Arbitral Tribunal that it would be of advantage to the orderly unfolding of the arbitral process and conducive to the maintenance of working relationships between the Parties if during the proceedings they were both to limit public discussion of the case to a minimum, subject only to any externally imposed obligation by which either of them may be legally bound.²⁸⁸

[2.186] In another NAFTA arbitration, R Loewen and Loewen Corporation v United States of America,²⁸⁹ the US government requested that all filings, as well as the minutes of oral proceedings, be treated as open and available to the public. Loewen did not oppose public disclosure, but requested that the disclosure take place only after the conclusion of the arbitration. The tribunal rejected the US government’s request, referring to Article 44(2) of the ICSID Additional Facility Rules, which provide that minutes of hearings should not be published without the consent of the parties.²⁹⁰

[2.187] Although the tribunal rejected the US government’s request, it did not recognise any general duty of confidentiality; rather, it rejected Loewen’s submission that each party is under an obligation of confidentiality in relation to the proceedings. In its award on jurisdiction, the tribunal summarised its conclusions as follows:

In its Decision the Tribunal rejected the Claimants’ submission that each party is under a general obligation of confidentiality in relation to the proceedings. The Tribunal stated that in an arbitration under NAFTA, it is not to be supposed that, in the absence of express provision, the Convention or the Rules and Regulations impose a general obligation on the parties, the effect of which would be to preclude a Government (or the other party) from discussing the case in public, thereby depriving the public of knowledge and information concerning government and public affairs. The decision concluded by repeating the comment made by the Metalclad Tribunal, namely that it would be of advantage to the orderly unfolding of the arbitral process if during the proceedings, the parties were to limit public discussion to what is considered necessary.²⁹¹

[2.188] The trend towards greater transparency in investor–state arbitration has emerged more clearly in recent years. In Biwater Gauff (Tanzania) Ltd v United Republic of Tanzania,²⁹² the tribunal recognised that the 2006 ICSID Rules reflected this overall trend towards transparency. The tribunal considered the balance between transparency and what it referred to as the integrity of the arbitral process, and concluded that some confidentiality controls were warranted, but ought to be ‘carefully and narrowly delimited’.²⁹³ Ultimately, the tribunal did not prevent the parties from discussing the case in public, or from publishing awards and other decisions by the tribunal, but restricted the disclosure of records of hearings, submissions, and witness statements.

[2.189]