A MATTER OF TACT: CONFIDENTIALITY IN ARBITRATION
The concept of confidentiality – generally defined as the obligation to avoid disseminating information or materials from an arbitration to anyone other than the parties, their advisers or the arbitrators – is one of the most valuable, as well as misunderstood, aspects of the arbitration process.
The concept has also served to make arbitration perhaps the most popular mode of alternative dispute resolution. Testifying to this is a recent survey led by the Queen Mary School of International Arbitration – ‘The Evolution of International Arbitration’ – in which 97 percent of respondents stated a preference for using arbitration to resolve their disputes, chiefly because of its confidential nature.
Supporting this contention is Clyde & Co, which considers confidentiality to be one of the fundamental pillars of an arbitration institution and a necessary element for its development, as well as a principle which gives arbitration a great advantage over judicial proceedings.
“The importance and benefits of confidentiality for parties are major,” says Dr Can Eken, an assistant professor at Durham Law School. “First, companies want to protect their reputation. Whatever the dispute is, if a company, and especially a big company, is reported heavily in the media, this may have a negative impact on how its business is perceived.
“Resolving disputes in arbitration means parties want to keep things confidential and out of the public eye,” he continues. “Moreover, parties want to protect their internal information from the public, such as salaries, trade secrets or any other information that they do not wish to disclose.”
Oct-Dec 2023 issue
Fraser Tennant