Confidentiality is concerned with a state of keeping professional secrets, personal details or trial proceeds that shouldn’t be shared with a third party private unless authorized or it’s mandatory.
Arbitration can be defined as a closed process where the disputing parties agree that one person, individual, or group (the disputing parties present their case to a neutral third party) will make a final decision after a fair hearing, reception of evidence, and a trial from both disputing parties.
Arbitration is mostly applicable in resolving private, public, individual and group disputes. The confidentiality arbitration clause is a key attraction with regards to international arbitration.
Arbitrators are the neutral parties that make the decision. There are different ways of choosing arbitrators. This depends on the type of dispute. Also, the disputing parties have the right to choose the arbitrators or individuals that will preside over the arbitral process.
Note: When an arbitrator fails to make an accurate decision, or perform according to the function of his/her office, either by being biased and the likes, he/she is either replaced or the reconstituted arbitration proceedings is repeated.
Confidentiality in Arbitration is when there is a consensus or agreement via a confidentiality arbitration clause amongst all the participants in the arbitration process, namely, the arbitrators (neutral third party), the institutions, and the disputing parties), that all the proceeds, evidence, and outcomes of the arbitration party hearing must be kept secret.
It is assumed generally that evidence of arbitration, as well as its proceedings, are to be kept confidential both during and after the process.
Arbitrations are held in private so parties who are not involved in the dispute in any way or the other may not sit in or participate at all in any of the arbitration proceedings, except otherwise authorized by the presiding arbitrators.
There is an old Latin maxim that says aliud est tacere, aliud celare (to conceal is one thing; to be silent is another), this applies where both parties agree to keep the information and any decision or conclusion reached by the arbitrators during the process of arbitration, absolutely private. It must be agreed upon by the parties and is enforceable in any court of competent jurisdiction.
NOTE: There is no right of appeal for the revision of an arbitrary award, except in limited cases, where the arbitrators decided wrongly or are replaced.
Reasons for Confidentiality in Arbitration
The confidentiality arbitration clause is a noted fact why disputing parties prefer arbitration for their dispute resolution. This is because they do not want their disputes to be aired publicly by whatever means or channel.
With regards to the numerous sensitive information that are exchanged between all the participants in an arbitral resolution of a dispute, it is imperative to closely guard theses confidential documents, which may, in some cases, be the reason for a dispute in the first place.
This is because its disclosure may result in irreparable loss or damaging of relations or reputation on the part of those affected.
Confidentiality in Arbitration a gives the disputing parties the right to control which of their sensitive documents gets seen and by who. It affords them the right to carry out the arbitration of their disputes without any outside knowledge on the matter, except by those closely involved in it.
Some confidential evidence may be in the possession of one of the disputing parties. These may not be accessible to the public or the other party, due to their commercial, financial, or industrial significance.
Evidence or secrets are treated with high confidentiality by the arbitrators presiding over the dispute case, and if needed will prevent other parties from accessing that information.
Principles of Confidentiality in Arbitration
The decision of the arbitrator or chosen neutral party is ultimate, supported by the court of law and therefore should be given full adherence to by the disputing parties. They lay down the rules regarding the conduct of the parties on this account and these must be followed accordingly with no appeal or arguments.
The confidentiality in arbitration clause covers all aspects of arbitration. Not one part is exempted from it
There is consensus amongst all the participants in arbitration (be the arbitrators, institutions, or the litigating parties) as to the reasons why arbitration is chosen.
There is a greater speed guarantee, of settlement. This is due to the specialization and focused approach of the arbitrators without public interference. This in turn speeds up the process of arbitration, hinging on the availability of the arbitrator and level of confidentiality.
Another principle of confidentiality in arbitration is neutrality. Disputes are heard by a neutral person or to be heard by a neutral tribunal in a neutral location, with no affiliation with any of the disputing parties.
The need to be vigilant by both disputing parties arises from the natural tendency that the general principle, confidentiality in arbitration clauses may tend to trespass. Or the tendency of a spy being planted by curious and ambitious media teams, press offices, individuals, or the public in general that are interested in the proceeds of the hearing.
People to attend the arbitral hearing, proceedings, witness, evidence, and others are decided by the presiding arbitrators.
In summary,
The confidentiality arbitration clause is the agreement between two disputing parties to keep information regarding their dispute secret via the confidentiality arbitration clause.
It helps to safeguard sensitive information, trade secrets, documents of properties, or any other confidential information that when leaked may lead to irreparable loss to the affected parties.
This isn’t an easy task, to practice. Hence it is dependent on the degree of agreement and behavior between the two disputing parties and the neutral arbitrators.
Confidentiality in arbitration principles are based on:
Need for neutrality
Vigilance amongst disputing parties and arbitrators
A faster time frame for the arbitration process,
Conclusion:
Confidentiality in arbitration is an appealing characteristic of arbitration. Hence many disputing parties opt for it, as a preferred method for resolving disputes, especially those requiring the least bit of publicity.
Confidentiality in arbitration depends to a large extent, on the professionalism of the arbitrators appointed, who can ensure and enforce confidentiality in the arbitration clause.
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