出版物

The English Court of Appeal recently¹ examined the law of privacy and confidentiality in English arbitrations in the context of a dispute between providers of legal services in Kazakhstan which was being fought in several jurisdictions.

Although the decision resulted in the court ordering disclosure of a limited set of documents to third parties, the court stressed that most arbitrations in England are conducted with complete confidentiality. London, therefore, remains an attractive arbitration seat for parties seeking to avoid public exposure of their private commercial disputes.

The Facts

Michael Wilson & Partners Ltd (MWP), a provider of legal services in Kazakhstan, was in dispute with one of its former partners, John Emmott, whom it claimed had diverted business away from the firm. MWP was suing Mr Emmott in arbitration in London for breach of contract and breach of trust. MWP was also suing two of Mr Emmott's former MWP colleagues and two of Mr Emmott's companies in New South Wales (NSW) and the British Virgins Islands (BVI). Mr Emmott was not a party to those proceedings. There were also related proceedings afoot in the Bahamas.

The London arbitration had originally included claims of fraud and conspiracy against Mr Emmott, but these were later dropped. In contrast, the NSW proceedings did not originally include claims of fraud and conspiracy against Mr Emmott, but MPW successfully applied to the NSW court to amend its claim there to include allegations that Mr Emmott's companies had acted fraudulently. In so doing, MWP had stated that the purpose behind the amendments was to "bring a level of parity" to the proceedings being conducted in NSW, BVI, and England.

Given that the London arbitration case contained no claims of fraud yet the NSW and BVI proceedings did, Mr Emmott argued that the claims made in the London arbitration case were materially inconsistent with the claims being advanced in NSW and BVI and that MWP was presenting those courts with a misleading picture. He applied to the English court for permission to disclose to the NSW and BVI courts limited categories of documents generated in or in connection with the London arbitration, namely:

• the amended points of claim;
• the skeleton argument that had been used by Mr Emmott before the arbitrators to strike out the original points of claim;
• the points of defence and counterclaim (although the entire counterclaim and parts of the defence were redacted); and
• the judgment of the English court in respect of the above.

At first instance the English court held that, while the documents were confidential in principle, the interests of justice "required that the English court, so far as possible, should ensure that parties to London arbitrations should not seek to use the cloak of confidentiality with a view to misleading or potentially misleading foreign courts."

MWP appealed, claiming that the decision was an unwarranted intrusion into the confidentiality of arbitrations and had serious consequences for the attractiveness of England as the seat of arbitration. MWP also challenged the jurisdiction of the English court to make such an order.

The Court of Appeal's Findings

The Court of Appeal upheld the first instance decision. It permitted limited disclosure of the documents in the foreign court proceedings and made the following comments and findings:

• It expressed the “tentative view” that the arbitral tribunal might have been the most appropriate forum for the question of confidentiality to be determined, in which case the matter would have been determined in private. However, the Court of Appeal noted, because MWP did not object to the intervention of the court, it was only right that the court determine the application.
• By referring a foreign court to the scope of the claims in English arbitration, it was possible that MWP had waived its right to assert confidentiality over the English arbitration.
• It was in the interests of justice to order disclosure of a limited category of documents for a limited purpose because the NSW court, without being informed of the London arbitration, was in danger of being misled.
• The interests of justice were not confined to the interests of justice in England; the international nature of the dispute demanded that the court take a broader view.
• The court emphasised that, while the interests of justice necessitated disclosure on the facts of this particular case, the position remains that the overwhelming majority of arbitrations in England are conducted privately and with complete confidentiality.

Conclusion

The Court of Appeal noted that only a minority of arbitration rules deal expressly with the confidentiality of material generated or disclosed in an arbitration. In such circumstances, the laws of the arbitration agreement and of the seat of the arbitration are critical. The English Arbitration Act 1996 did not codify the general principles of privacy and confidentiality because it was accepted that these were evolving principles better dealt with by the English court on a pragmatic case-by-case basis. Case law demonstrates that the circumstances in which the court can intervene are very limited.

This decision emphasises the importance the English courts place on the private and confidential nature of arbitration in England, but it also demonstrates their willingness to extend the considerations of the interests of justice to international proceedings. The starting point, however, remains that such matters should normally be decided in private by an arbitral tribunal.