3rd AIDA Europe Conference Amsterdam, 26-27 May, 2011

26th May 2011, Working Party on Reinsurance

TOPIC: “Confidentiality in Arbitration: A Comparative

Jurisdictional Perspective.”

Dr. Kyriaki Noussia, LL.M., Ph.D.

noussia@gmail.com

1. Introduction

Arbitration most popular form of alternative dispute resolution

Of reasons for arbitration’s leading position presumption of confidentiality within it

Aim of presentation comparatively present treatment of confidentiality in arbitration

Treatment of topic is imperative nowadays Reasons? - central role of confidentiality in arbitration, - confidentiality is not always preserved - its protection is often problematic in many respects and stages

1. Introduction (Ctd.)

Confidentiality fundamental and compelling reason for arbitrating

Arbitration proceedings not public like state court proceedings private (documents and award protected by duty of confidentiality)

Private character does not presuppose that confidentiality and privacy are identical

Confidentiality ability of parties arbitrating and of others to disclose documents and information of arbitration

Privacy ability of third parties to access/ observe the proceedings without consent of disputing parties and/or arbitrator

1. Introduction (Ctd.)

England original distinction between privacy and confidentiality not as strong nowadays as in the past

Many cases allow us reach above conclusion

Most recently Emmott v Michael Wilson & Partners Ltd [2008] EWCA Civ 184

issue of the distinction (confidentiality & privacy) raised again

1. Introduction (Ctd.)

Lawrence Collins LJ arbitration is private privacy would be violated by publication of arb. doc.

arbitration is confidential - i.e. inherent confidentiality of doc. used & - i.e. implied agreement to use doc. only for arbitration purposeConfidentiality in 1st sense subsumed by conf. in 2nd sense

In other words arb. doc. remain confidential whether or not they contain trade secrets

1. Introduction (Ctd.)

Notwithstanding above statements confidentiality rule ultimately vital to arb. process in England

England general assumption confidentiality operates as implied term in arbitration

But duty of confidentiality - not absolute - may be overridden by wider considerations - may be waived by parties

2. The Legal Framework of Arbitration & the Position in Relation to Confidentiality

ENGLANDArbitration statutorily regulated (Arbitration Act 1996)

Report on Arb. Bill (Feb. 1996) Departmental Advisory Committee (“DAC”)

Privacy & Confidentiality features upon which parties choosing arb. in England place great importance

Arbitration Act 1996 no reference to obligation of confidentiality

Legislative process DAC concluded - confidentiality not to be regulated expressly - courts should be left to rule case-by-case

2.The Legal Framework of Arbitration

& The Position in Relation to Confidentiality (Ctd.)

GERMANY

Arbitration long tradition, nowadays Z.P.O. 10th Book

Arbitration proceedings not public

participation (parties & arbitrators)

GREECE

Civil Code Procedure (art.867-903) (domestic)

Law 2735/1999 (international)

3. Case Law on Confidentiality in Various Jurisdictions

Ample case law to mention

Today representative case law (reinsurance & other)

Case law divided in 3 parts1/ confidentiality in relation to arbitral proceedings

- existence of proceedings

- course of proceedings & consolidation

2/ confidentiality in relation to document discovery

3/ confidentiality in relation to the arbitral award

3. i. Confidentiality Re Proceedings

ENGLAND

where 2+ arbitral tribunals need be set up

always attendant risk of inconsistent findings

where separate disputes have common features

practice in English law consolidate proceedings

BUT English courts not always consistent rulings

other times consolidation granted

other times not

3.i. Confidentiality Re Proceedings (Ctd.)

ENGLAND

Eastern Saga [1984] 2 Lloyd’s Rep. 373

Leggat J. concurrent hearings not infringing arb. privacy

Decision unexpected forceful reminder - arbitration = private process - parties agree/not concurrent hearings

3.i. Confidentiality Re Proceedings (Ctd.)

ENGLAND

Sacor Maritima v Repsol [1998] 1 Lloyd's Rep 518

Disputes from 2 charters referred to 2 separate arbitrations

Court facts and conclusions

to be transported totally differently in 2nd arb.

no justification for proceedings consolidation

3.i. Confidentiality Re Proceedings (Ctd.)

ENGLAND

Ali Shipping Co. v Shipyard Trogir [1998] 1 Lloyd’s Rep. 643

6 companies owned & managed by Ali Shipping entered into 6 separate contracts with Trogir Shipyard to have 1 vessel build for each company

In separate arbitral proceedings for 3 of the 6 vessels Trogir sought to introduce materials from the 1st arbitration

First Instance Court no confidence duty blocked doc. communication

Court of Appeal disagreed Court of Appeal’s decision

in sharp contrast to the general English judicial trend

3.i. Confidentiality Re Proceedings (Ctd.)

ENGLANDAssociated Electric & Gas Ins. Serv. Ltd.(AEGIS) v European Reinsurance Co. of Zurich [2003] UK PC 11 (Jan. 29, 2003)

- 2 successive arbitrations - same parties - arising out of two separate disputes- under an automatic, facultative reinsurance agreementEuropean Re sought to introduce award from 1st arbitrationAEGIS obtained ex parte injunction to restrain European Re to introduce 1st award Bermuda Court of Appeal allowed Eur. Re’s app. & vacated inj.AEGIS appealed to Privy Council Privy Council recognised need to preserve confidentiality

3.i. Confidentiality Re Proceedings (Ctd.)

GERMANYArbitration proceedings not public

Clear arbitrators themselves subject to confid. duty may not disclose award/details without parties agreement

Debated conflict of academic opinions on topic of confidentiality

OLG Karlsruhe Court Dec. 27.11.2007 parties had committed to secrecy and confidentiality nevertheless offense of this obligation not to be justified as such

3.ii. Confidentiality Re Doc. Discovery/Disclosure

ENGLAND

Confidentiality Duty for documents disclosed on discovery judicially established in

Dolling-Baker v Merrett [1990]1 W.L.R. 1205

Court of Appeal restrained party to reins. arbitration from disclosing on discovery in subsequent action documents relating to arbitration

BASIS docs not relevant to issues in action docs production not necessary for fair case ruling

3.ii. Confidentiality Re Doc. Discovery/Disclosure (Ctd.)

ENGLAND

More recent ruling in

J. F. Emmott v M. Wilson & Partners Ltd. [2008] EWCA Civ 184

- confirms England as arbitration-friendly jurisdiction

- which respects desire of parties for confidentiality

- while recognising legitimate circumstances for confid. relaxation

3.iii. Confidentiality Re the Award

ENGLANDImportant aspect extent to which awards are confidential

Department of Economic Policy & Development of the City ofMoscow (DEPD) v Bankers Trust Co. [2003] EWHC 1337

Q whether award should be published

Court sensitivity of award material = favoured confidentiality preservation

Associated Electric & Gas Ins. Serv. Ltd.(AEGIS) v European Reinsurance Co. of Zurich [2003] UK PC 11 (Jan. 29, 2003) &Ali Shipping Co. v Shipyard Trogir [1998] 1 Lloyd’s Rep. 643

Held award could be produced

3.iii. Confidentiality Re the Award (Ctd.)

GERMANY

OLG Frankfurt Court - Decision of 22.10.2004

Held where arbitral tribunal’s constitution challenged as biased

no valid reason

for confidentiality breach /

for a challenge & annulment of the arb. award

4. Critical Assessment – Conclusions

Parties expect arbitration to be confidential

Cross-border disputes many legal systems, parties

What does this mean for confidentiality in arbitration?

Case law confidentiality Qs = legal minefield

Confidentiality in arbitration ongoing scholarly debate

4. Critical Assessment – Conclusions (Ctd.)

English view implied right of arb. privacy extends to confidentiality

Other jurisdictions confidentiality = implied characteristic Extent varies (various factors)

NO READY SOLUTION exists Parties may hold key to solution = contractual provision on conf.

Still not wholesale certainty

Advise draft confidentiality clause in detailBUT need to see both conf. adv. & disadv. => confidentiality > to be observed BUT WITHIN limits

Many Q still unanswered, no clear consensus in arb. world sparse quant./qualit. data for general conclusions

4. Critical Assessment – Conclusions (Ctd.)

Where do we stand?England aim of Arbitration Act 1996 = establish autonomy of arbitration from court intervention

Nowadays view = party autonomy much favoured

Absent a - way to assess conf. practical impact - consensus on origins of conf. duty no safe guidelines to be drawn on directions of confidentiality

4. Critical Assessment – Conclusions (Ctd.)

No golden solution & best path = in between

Business & financial worlds value confidentiality highly enough

against general relaxation of confidentiality

Best solution?

continue to assess it case by case

Thank You For Your Attention !