Arbitration and Confidentiality


Published: 6 June 2005

Outlining the duty of confidentiality in connection with arbitration proceedings. There is a need to be careful if a party to an arbitration wishes to disclose documents for purposes outside the arbitration.

Most disputes in shipping may be resolved by way of negotiation, but some disputes will – for whatever reason – have to be litigated between the parties either in court or by way of arbitration. Most, if not all, owners and charterers will at some stage have been involved in arbitration – most likely either in London (frequently under an LMAA arbitration) or in New York (frequently under an SMA arbitration).

A great number of disputes are resolved according to English law and London arbitration, and if this is the case, it is extremely important to be aware that a party to a London arbitration is subject to a duty of confidentiality.

This effectively means that a party is prohibited from disclosing practically a large part of what has been produced or submitted in an arbitration, and this includes not only a party’s written submissions (i.e. claims submissions, defence submissions etc.) but also e.g. transcripts or oral evidence and to the award itself.

In other words, once a party is involved in a London arbitration, the possibilities of “using” either the award, the submissions or the documents are very restricted, and with regard to the documents, this relates both to some of the documents a party has itself submitted in the arbitration and also to documents submitted by (i.e. received from) the other party/parties in the arbitration.

If there is a need to disclose anything from an arbitration for any purpose outside the arbitration – or a request is received from a third party to see such documents – the best way to deal with this is to seek advice from a P&I or defence club or legal advisers.

The LMAA terms do not themselves specify an express duty of confidentiality, and even the UK 1996 Arbitration Act does not mention any specific statutory principle of confidentiality. Instead, it has been left to the English courts to clarify the extent of confidentiality etc. (It was thought that a “difficult area” could be better resolved by the courts on a pragmatic case-by-case basis!)

It is nevertheless clear under English law (established by case law) that there is a general duty of confidence in relation to arbitration proceedings.

This duty to keep matters confidential extends to virtually all aspects of the arbitration proceedings, including the documents produced in relation to the arbitration, the hearing (unless the arbitration is on documents alone) and the award.

The documents which will be produced for the purpose of an arbitration will therefore include:

  • Claims submissions and defence submissions etc.
  • Any other document which sets out a party’s statements and/or submissions with respect to the case
  • Witness statements
  • Expert reports

If notes or transcripts are taken of the proceedings, these will be considered confidential as well.

More importantly the documents disclosed as evidence in the arbitration are also considered confidential and this extends to documents such as correspondence, logbooks, weather routing services reports and analyses etc.

A party can therefore not use any such document for any other purpose than the dispute. If any document has been received from (disclosed by) an opponent, there is an implied obligation not to use such documents for any purpose other than for the actual arbitration in question (if such documents are a party's "own" documents (e.g. logbooks, reports etc. belonging to an Owner) the disclosure in an arbitration does of course not prohibit a party from disclosing such documents for other purposes).

There are exceptions to this general duty of confidentiality but, depending on circumstances, it may not be easy to bring oneself within any of the exceptions.

Firstly, a party may of course agree to (either expressly or impliedly) documents being disclosed, but in a situation where arbitration is already in progress or has been finalised, any such agreement or consent may be difficult to obtain.

Secondly, disclosure can be ordered by the court (or arbitration panel).

Thirdly, a party may be granted permission (also by the court) to disclose documents to a third party if it is considered “reasonably necessary for the protection of the legitimate interests of an arbitrating party.” This exception is, however, not available where disclosure is “just” necessary for ,say, commercial reasons, or where it would otherwise be helpful or even where it would save time and costs.

Documents received from others before arbitration is commenced are not caught by the prohibition.

The arbitration award itself is also subject to confidentiality (although the LMAA terms do allow that awards of “general interest” are published, but in this case publication is effected in such a way that the anonymity of the parties is preserved).

A New York arbitration award will be treated somewhat differently and New York arbitration awards are frequently published. If a party in a New York arbitration does  not want the Award to be published, he must specify this at the beginning of the proceedings. It is also possible to request that certain information provided during the course of the arbitration and which is considered confidential or proprietary is left out of an award and generally the arbitrators respect such a request. If there is serious concern about confidentiality, the best option would be for the parties to execute a specific confidentiality agreement which could limit disclosure, but any agreement on this may of course in itself become a source of dispute and disagreement between the parties.

Finally, although this appears still to be a debated issue, it is at least arguable that a Danish arbitration award is not confidential except where this has been specifically agreed either in the arbitration agreement or separately.