A Corporation v B Firm - Arbitral Duty of Confidentiality

At this interim injunction hearing, Foxton J clarified the obligation of arbitral confidentiality. The case concerned an application for injunctive relief to prevent Firm B from using confidential information from an earlier arbitration. Having explained that there was an implied obligation of confidentiality in relation to arbitrations arising under English law, he set about answering two questions:

1. What material does the obligation of arbitral confidentiality extend to? And
2. To the extent that the obligation of arbitral confidentiality is engaged, what are the relevant exceptions?

What material does the obligation of arbitral confidentiality extend to?

The Court summarised the case law to conclude that the obligation of arbitral confidentiality extends to the following categories of documents or information:

1. The hearing or hearings in the arbitration;
2. Documents disclosed by a party in the arbitration to other parties in the arbitration in the hands of those other parties;
3. Documents “generated” or “prepared for” and then used or produced in the arbitration. This would extend to pleadings, witness statements and expert reports, written submissions and correspondence between the parties or their representatives relating to the arbitration; and
4. The arbitral award.

The Court clarified that, to the extent that those documents are themselves the source of confidential information, information derived from documents is itself subject to the arbitral obligation of confidentiality. A party’s own documents which came into existence independently of the arbitral process do not, however, become confidential in the hands of the party whose documents they already are merely because that party discloses or relies upon them in the arbitration. The Court explained “the fact that a document is used in an arbitration does not confer on it any confidentiality or privilege which can be availed of in subsequent proceedings”. (emphasis added).

The Court continued that, in addition, the fact that a commercial dispute leads to the commencement of an arbitration does not of itself make the existence of the dispute and the events which gave rise to it confidential. The Court gave several examples, such as: “If a party buys good which it concludes are defective, that fact does not become confidential simply because the buyer commences an arbitration against the seller.” However, the dissemination of a pleading or witness statement filed in the arbitration, for example, would not be permitted.

The Court explained that this is because “the implied obligation of arbitral confidentiality is not premised on the inherent confidentiality of the material to which it attaches, but arises from the private nature of the process – it is not the information itself which benefits from arbitral confidentiality in this particular context, but the fact and manner of its deployment in the arbitration.”

The Court spoke of the idea of a “sliding scale of arbitral confidentiality”, so that disclosing a parties’ own filings or reports is less intrusive than disclosure of material produced by another party, being at the most sensitive end of the scale.

The Court also distinguished between information protected by the obligation of arbitral confidentiality, and the experience which lawyers inevitably acquire from conducting arbitrations, otherwise “few lawyers who have been called for any length of time will be able to take part in litigation.”

That might involve, for example, the litigation strategies of particular opponents and their approach to certain contested issues, or the outlook of certain arbitrators acting in the field towards issues such as contractual interpretation, a readiness to find dishonesty, disclosure, amendments and security for costs. Counsel may be cross-examining a factual or expert witness that they have previously cross-examined or seen cross-examined, but are permitted to “share their cross-examination strategy accordingly.” Presumably, therefore, that extends to asking colleagues about previous experiences with witnesses or arbitrators.

What are the relevant exceptions?

Next, the Court considered the exceptions to arbitration confidentiality, being:

1. Where there is consent, express or implied. This consent might, for example, be set out in the contract between the parties.
2. Where there is an order, or leave of the court (although Foxton J stressed that the court does not have a general discretion to lift the obligation of confidentiality);
3. Where it is reasonably necessary for the protection of the legitimate interests of an arbitrating party. That might for example comprise:
   1. Founding an issue estoppel from an award against the arbitrating party in other proceedings;
   2. permitting statements, reports or transcripts to be deployed where witness or expert evidence is being deployed in one arbitration which is contrary to evidence from the same individual in a prior arbitration; or
   3. for the purposes of making claims against or defending claims by a third party; and
4. Where the interests of justice require disclosure, and potentially where the public interest requires disclosure.

Important Lessons

The Court held that on the facts of this case injunctive relief was not justified. Foxton J was influenced by the fact that Firm B’s London office was far removed from its Asian office, together with the fact that any confidential information Firm B’s Asian office had, had likely already been passed on to C Corporation. A different outcome might, however, have been reached if the same office of the same law firm were acting, and if there were confidential information which had not yet been passed to a different party but was at risk of being so passed. The decision is also a useful reminder that parties should make sure they understand the confidentiality requirements in an arbitration, particularly if there are express contractual provisions that are more extensive than the implied duty discussed in the present case.

It is also important to remember that, as with adjudications, the arbitral duty of confidentiality does not necessarily extend to subsequent challenges to the award. For example, in Mordchai Ganz v Petronz FZE and Abraham Goren [2024] EWHC 1011, the Court published its judgment concerning challenges to an arbitration award which was neither anonymised nor redacted. That judgment suggested that such publication would be the default position in most cases, notwithstanding the confidentiality of the underlying arbitral proceedings, or the anonymised judgment in A Corporation v B Firm.