JurisNet, LLC
ISBN 978-1-937518-77-6
9 781937 518776
TABLE OF CONTENTS
Foreword ................................................................ Elliott Geisinger
vii
About the Editor .............................................................................
xi
About the Contributors .................................................................
xiii
Chapter 1
Confidentiality within Arbitration
............................... Luca G. Radicati di Brozolo and Flavio Ponzano
1
Chapter 2
Confidentiality and Fundamental Rights of Due Process
and Access to the File: A Comparative Overview
.................................................. Karl Pörnbacher and Sebastian Baur
21
Chapter 3
Confidential and Restricted Data: Impact on Burden
of Proof? ................................................................. Sébastien Besson
45
Chapter 4
Addressing the Issue of Confidentiality in Arbitration
Proceedings: How Is This Done in Practice?
.............................................. Domitille Baizeau and Juliette Richard
53
Chapter 5
Confidential and Restricted Data in the Award:
How Do Arbitrators Draft Awards without Breaching
Confidentiality or Restrictions?
................................................ Martin Bernet and Benjamin Gottlieb
79
Appendices
Appendix 1:
Appendix 2:
Appendix 3:
Selected Statutory Provisions, Arbitration
Rules and Guidelines .........................................
95
Summary of the Decision of the Federal
Tribunal 4A_64/2011 (French); .........................
99
Decision of the Swiss Federal Supreme Court
(4A_64/2011) dated 1 September 2011
(see in particular con. 3.3) (German) ................
101
iii
iv
Appendix 4:
Appendix 5:
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
ICC International Court of Arbitration Case
n°XXXXX/YZ, Procedural Order No. 4 [order
on the ........ protection of confidential information
in the framework of document production and
on the setting-up of an electronic data-room] ........
109
ICC Case No.(…)/(…), O (…) vs H (…),
Procedural Oder No. 2 [order protecting
confidentiality of information and documentation
disclosed in arbitral proceedings]...........................
117
Appendix 6:
PCA Case No. XXXXX, C (…) and The Republic
(…) Procedural Oder No. 6 [order restricting
access to and limiting copies of raw footage used as
evidence in proceedings; order protecting the anonymity
of a witness and the confidentiality of that
witness’s testimony, and issuing further directions
to protect that witness] ..........................................
125
Appendix 7:
Confidentiality agreement in ICC
proceedings..........................................................
137
Unilateral confidentiality undertaking
given in ICC proceedings ..................................
141
ICC Case No. …, Procedural Order No. 5,
Protective Order by Consent .............................
145
Confidentiality agreement in ICC
Proceedings..........................................................
151
Confidentiality Order of 12 July 1994
issued in ICC Case No. 7893, Journal du
Droit International, 125e année 1998
n° 1 Janvier-Février-Mars, Juris-Classeur,
pp. 1069-1076 .......................................................
155
Confidentiality undertaking, in the matter of
Case No. XXXXX before the International
Centre for Settlement of Investment Disputes
between T (…) and the Republic (…) ...............
169
Decision by an arbitral tribunal [on excessive
redaction of documents provided following an
order for document production] .............................
171
Appendix 8:
Appendix 9:
Appendix 10:
Appendix 11:
Appendix 12:
Appendix 13:
TABLE OF CONTENTS
Appendix 14:
Appendix 15:
Appendix 16:
Appendix 17:
Appendix 18:
Appendix 19:
Appendix 20:
Appendix 21:
Appendix 22:
v
Procedural Order No. 10 in ICC Arbitration
Case No. XXXXX [order on the protection of
confidential information in the framework
of document production] ........................................
173
ICC Case No. XXXXX, N (…) V. S (…),
Confidentiality Undertaking [in relation to
documents provided following an order for
document production]............................................
177
ICC arbitration case No. (...), N. vs S.,
S’s Confidentiality Undertaking [in relation
to documents provided following an order for
document production]............................................
179
Swiss Chambers’ Arbitration No. XXXXX,
A (…) v. C (…), Procedural Order of
XX XXXX 20XX [ordering that a party
deliver a confidentiality undertaking in respect
of certain information] ...........................................
183
Claimants Counter-respondents v.
Respondents Counter-claimants,
Confidentiality Agreement [and, as exhibit,
a confidentiality undertaking by the independent
expert retained by one of the parties] .....................
191
Case No. XXXXX, Claimants vs.
Respondents, Confidentiality Agreement .......
195
Confidentiality Agreement in ICC
Arbitration ...........................................................
205
ICC Case No. (…), X v. Y, Third-Party
Neutral’s Procedural Rules [containing
provisions on protection and non-disclosure
of sensitive military technology] ............................
213
Arbitral Tribunal Constituted Pursuant to
Article 287 of the United Nations Convention
on the Law of Sea and in Accordance with
Annex VII thereto, In the matter of an
Arbitration between GUYANA and
SURINAME, Order No. 1 of 18 July 2005,
Access to Documents ..........................................
217
vi
Appendix 23:
Appendix 24:
Appendix 25:
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
Procedural order (excerpt) [order on the
protection of confidential information in the
framework of document production and on the
setting-up of an electronic data-room] ...................
223
Excerpt of hearing transcript on
“Confidentiality of the Transcript” ..................
225
Confidentiality Agreement between
Chairman of an arbitral tribunal and a
“Conference Administrator” [aiming
to secure confidentiality of information to
which the administrator of a web conference
would have access] .................................................
227
This chapter is from ASA Special Series No. 43 Confidential and Restricted Access Information in International Arbitration
© JurisNet, LLC 2016 www.arbitrationlaw.com
Chapter 5
Confidential and Restricted Data in the Award:
How Do Arbitrators Draft Awards without
Breaching Confidentiality or Restrictions?
Martin Bernet and Benjamin Gottlieb*
1.
INTRODUCTION
It is a truism to state that confidentiality is a key benefit of
international commercial arbitration. While the general presumption in
the past that the arbitral process will always be confidential has been
replaced by an understanding that better reflects reality,1
confidentiality is still one of the primary reasons corporations opt for
arbitration over state court litigation.2
In broad terms, parties’ confidentiality concerns with respect to
international arbitration proceedings are twofold: on the one hand,
the parties may wish to protect all or certain information involved in
the arbitration from public disclosure (i.e., to non-involved third
parties). On the other hand, in certain cases, confidentiality concerns
will also arise with respect to the opposing party (or parties) in a
* Martin Bernet is a Partner with Schellenberg Wittmer Ltd. and head of the firm’s
dispute resolution group in Zurich, Switzerland; Benjamin Gottlieb trained with
Schellenberg Wittmer Ltd. and is currently on leave to finish his doctoral thesis and
obtain his bar admission.
1 JOLLES/CANALS DE CEDIEL/STARK-TRABER, in: Geisinger/Voser (eds.), INTERNATIONAL
ARBITRATION IN SWITZERLAND: A HANDBOOK FOR PRACTITIONERS 132 (2nd ed., 2013);
MÜLLER, La confidentialité en arbitrage commercial international: un trompe-l’œil?, 23 ASA
BULLETIN 216, 224 (2005); REUBEN, Confidentiality in Arbitration: Beyond the Myth, 54 U.
KAN. L. REV. 1255 (2006); FORTIER, The Occasionally Unwarranted Assumption of
Confidentiality, 15-2 ARB. INT’L 131 (1999); Expert Report of Dr. Julian D.M. Lew in Esso v.
Plowman, 11-3 ARB. INT’L 283 (1995); RITZ, DIE GEHEIMHALTUNG IM SCHIEDSVERFAHREN
NACH SCHWEIZERISCHEM RECHT 94; RITZ, Privacy and Confidentiality Obligation on Parties
in Arbitration under Swiss Law, 27 JOURNAL OF INTERNATIONAL ARBITRATION 221, 238
(2010); See however the findings of the 2010 International Arbitration Survey conducted
by the School of International Arbitration of Queen Mary University of London (“SIA
2010”), p. 21, which shows that still “50% of respondents erroneously believe that arbitration
is confidential even where there is no specific clause to that effect in the arbitration rules adopted
or the arbitration agreement,” available at http://www.arbitrationonline.org/docs/
2010_InternationalArbitrationSurveyReport.pdf, last accessed on 6 April 2014.
2 See the SIA 2010 (supra footnote 1), which highlights that 62% of the survey participants
declared confidentiality to be “very important.”
79
80
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
potential or ongoing proceeding. For instance, this may be the case in
disputes involving trade secrets or other private know-how, such as
where one party does not wish to disclose its manufacturing process
to the other party; in defense industry cases, where one party wants
(and typically is under an obligation) to keep secret certain data for
reasons of national security; in joint venture disputes between two
competitors in the same market, where each side wishes to keep
confidential its commercial figures; or in cases where a key witness
feels threatened by the opposing party (a state or a state entity, for
example) and will only testify if his or her identity remains unknown
to this party.3
Practitioners and scholars have developed a number of methods
to address confidentiality concerns during an arbitration proceeding
(sometimes modeled after the state court system).4
This article focuses on the arbitrators’ role in protecting confidential
and restricted data. It looks at the stage when the proceedings are
closed and the arbitrators begin drafting the award. How arbitrators
can best protect confidential and restricted data in the award is
critically important; all efforts previously undertaken to protect
confidential and restricted data would be frustrated if the award were
to subsequently disclose them.
This article confronts the topic primarily from the point of view of
an arbitral tribunal seated in Switzerland.
2.
DEFINITIONS
In international arbitration, there are no generally accepted
definitions of the two terms used in the title of the present paper,
“confidential data” and “restricted data.” International arbitration
conventions do not address the issue at all,5 and the few national
arbitration laws that do address confidentiality still do not define these
3 See also the list of sensitive information that Swiss courts have identified to be deserving
protection outlined in JOLLES/CANALS DE CEDIEL/STARK-TRABER, op. cit., p. 150.
4 Such methods range from restricting access to “counsel only,” installing a
“confidentiality club,” and having a “confidentiality advisor” to the tribunal. For a more
detailed discussion, see JOLLES/CANALS DE CEDIEL/STARK-TRABER, op cit., pp. 150 et seq.
Typically, the occurrence of the arbitration itself remains confidential, but there are
significant exceptions to this rule. Disclosure may be possible for reasons such as pursuit
of the legitimate interests of one party, compulsion of law, reasons of public interest,
enforcement or challenge of an award, or specific leave granted by a state court. For a
more detailed discussion, see HWANG S.C./CHUNG, Defining the Indefinable: Practical
Problems of Confidentiality in Arbitration, 26 JOURNAL OF INTERNATIONAL ARBITRATION 609
(2009).
5 BORN, INTERNATIONAL COMMERCIAL ARBITRATION, Vol. II, 2783 (2nd ed., 2014).
CONFIDENTIAL AND RESTRICTED DATA IN THE AWARD
81
terms. Typically, the pertinent provisions of those laws deal with the
issue of confidentiality of the arbitral process as a whole or with
respect to specific parts (e.g. tribunal deliberations), but do not address
the treatment of confidential or restricted data contained in the parties’
pleadings or presented as evidence in the arbitration.6
Frequently, the terms “confidential” and “restricted” are used to
describe different levels of secrecy.7 For instance, certain governmental
bodies use the two terms to describe different degrees of protection
and secrecy applying to certain data and to classify the sensitive nature
of the information.8
The lack of generally accepted definitions is unsurprising.9 After
all, parties to international arbitration proceedings often have differing
understandings of what qualifies as confidential and restricted
information.
Consequently, to help define these categories so as better to
protect sensitive data in the award, the arbitral tribunal will have to
look at the parties’ arbitration agreement10 and possibly other
agreements reached prior to or during the arbitration proceeding. By
the time they begin drafting the award, the arbitrators will typically
know what the parties consider to be “confidential” and “restricted”
and what level of protection they expect for this data.
See BORN, op cit., pp. 2784 et seq.
Compare the definition of “confidentiality” in Black’s Law Dictionary, 9th edition.
8 For an international comparison of different denominations in governmental usage for
the varying degrees of secrecy, see http://www.imagi.de/SharedDocs/Downloads/
IMAGI/DE/Imagi/Vergl_int-supr_Geheimschutzgrade.pdf?__blob=publicationFile, last
accessed on 6 April 2014.
9 Swiss law neither provides a uniform definition of confidential or restricted data, such
as trade or business secrets, nor does it provide a single set of provisions that would deal
with the issue exhaustively. Provisions dealing with the issue of business-, trade-,
production-, or similar secrets are contained in many different substantive and
procedural laws. For a detailed discussion of the different sources for protection of
confidential and restricted data in Swiss substantive and procedural rules, see
https://www.aippi.org/download/commitees/215/GR215switzerland.pdf, last accessed
on 6 April 2014.
10 WYSS, How to Protect Business Secrets in International Commercial Arbitration,
6 INTERNATIONAL ARBITRATION LAW REVIEW 158, 159 (2009); See also, JOLLES/ CANALS DE
CEDIEL/STARK-TRABER, op cit., p. 133.
6
7
82
3.
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
THE LEGAL FRAMEWORK REGARDING THE
PROTECTION OF CONFIDENTIAL AND RESTRICTED
DATA IN THE AWARD
3.1 The Arbitral Tribunal’s Confidentiality Obligations and
Its Power to Protect Confidential and Restricted Data
By virtue of their judicial function, arbitrators are bound by
certain confidentiality obligations.11 These obligations also stem from
additional sources, such as general ethical duties established in
guidelines,12 institutional arbitration rules,13 and national arbitration
laws.14 In some cases, confidentiality may even be mandated by
provisions of criminal law.15 Additionally (and perhaps more
importantly), arbitrators have a contractual duty to maintain
confidentiality. Apart from their general contractual obligation of
confidentiality pursuant to the “receptum arbitri (Schiedsrichtervertrag),”16
arbitrators are bound by the parties’ agreements to which they subject
themselves.17 Such agreements may contain a more specific duty with
regard to the protection of the confidentiality of certain data. Violation
of their contractual confidentiality obligations may expose the
arbitrators to liability claims.18
It is undisputed that arbitrators have the powers necessary to
enforce their confidentiality obligations, be it by virtue of specific
agreements with the parties or provisions found in the rules of many
arbitration institutions.19 Even absent such specific provisions or
BORN, op cit., pp. 2002 et seq.; SMEUREANU, Confidentiality in International Commercial
Arbitration, 22 INTERNATIONAL ARBITRATION LAW LIBRARY 142 (2011).
12 IBA Rules of Ethics for International Arbitrators, Para. 9; JAMS Arbitrators Ethics
Guidelines, Para. 4; The Chartered Institute of Arbitrators Code of Professional and
Ethical Conduct for Members, Part II, Rule 8.
13 Article 44 Swiss Rules of International Arbitration, Article 46 SCC Rules, Article 8
Milan Chamber of Arbitration Rules.
14 In particular with regard to the tribunal’s deliberation process and the disclosure of the
award (or its content) to non-involved third parties. See, e.g., Article 1479 French New
Code of Civil Procedure and Article 565 Romanian New Civil Procedure Code.
15 In Switzerland, in particular Article 162 of the Swiss Criminal Code (breach of
manufacturing or trade secrecy). See JOLLES/CANALS DE CEDIEL/STARK-TRABER, op cit.,
p. 142.
16 BERGER /KELLERHALS, INTERNATIONAL AND DOMESTIC ARBITRATION IN SWITZERLAND
(2nd ed., 2010), N 889 to 891, 907 et seq.
17 BORN, op cit., p. 2004; RADJAI, Confidentiality in International Arbitration: Brief overview of
the position in Switzerland and further reading, 27 ASA BULLETIN 48 (2009).
18 BERGER /KELLERHALS, op cit., N 909 et seq.
19 Article 22(3) ICC Rules; Article 52 WIPO Rules; Article 9 IBA Rules on the Taking of
Evidence in International Arbitration; See also WYSS, op cit., p. 162.
11
CONFIDENTIAL AND RESTRICTED DATA IN THE AWARD
83
agreements with the parties, under most national arbitration laws and
arbitration rules, arbitral tribunals have the authority to conduct
proceedings as they see fit.20 This includes the ability to issue
appropriate orders to protect confidential or restricted information. In
the authors’ view, the power of arbitrators to protect sensitive data
extends beyond the close of proceedings to the actual time when the
award is rendered. Otherwise, all prior measures to protect
confidentiality could be frustrated.21
3.2. The Admissibility of Unreasoned or Only Partially
Reasoned Arbitral Awards in Particular
As will be explained below,22 one of the methods available to
protect confidential and restricted information is to refrain from
addressing this information in the reasoning of the award, or to issue
an award without reasons altogether.
Swiss law allows the parties to waive the right to obtain a
reasoned award.23 Absent such waiver, the arbitral tribunal does not
have the power to issue an unreasoned award. The extent to which an
arbitral tribunal may issue an incompletely reasoned award, i.e., an
award with reasoning that leaves out a discussion of confidential or
restricted data, will be discussed below.24
Arbitrators will therefore normally not issue a fully or partially
unreasoned award without first having the agreement of the parties –
20 See, e.g., Article 182(2) PILA. The limits of such autonomy of arbitrators sitting in
Switzerland lies in accordance with Article 182(3) PILA in the equal treatment of the
parties and the parties’ right to present their case. See BSK IPRG-SCHNEIDER/SCHERER,
Article 182 N 49 et seq.
21 See WYSS, op cit., p. 162.
22 See Chapter 4 below.
23 Article 189 (1) PILA. In line with the case law of the Swiss Federal Supreme Court and
the majority of scholars (DFSC 4A_198/2012 of 14 December 2012, with a list of
supporting views found in legal writing at consid. 2.2.), the authors are of the opinion
that a waiver to obtain a reasoned award does not constitute a waiver of the right to
challenge the award for the following reasons. If it did amount to a waiver of the right to
challenge the award, the requirements for such a waiver contained in Article 192(1) PILA
would have to be complied with by the parties in order to validly forgo their right to
challenge; see CHK IPRG-FURRER/GIRSBERGER/SCHRAMM, Arts. 187-189 N 14. This,
however, is clearly not the case because proceedings between a party having its
domicile, habitual residence, or a business establishment in Switzerland, and a foreign
party may validly agree on an unreasoned award in the sense of Article 189 PILA.
However, the same parties could not validly waive the possibility to challenge the
award; see Article 192(1) PILA.
24 See Chapter 4 below.
84
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
although the issuance of an unreasoned award without the agreement
of the parties is not in and of itself grounds for challenge.25
Concerns related to the enforcement of the award also militate in
favor of obtaining the parties’ consent prior to the issuance of a fully or
partially unreasoned award. While the lack of stated reasoning is not
in itself an obstacle to enforcement (not even necessarily in
jurisdictions where reasons are mandatorily required),26 problems may
still arise if an unreasoned decision is either not covered by an
agreement of the parties or is invalid under the lex arbitri (Article V (1)
(d) NYC).27
Arbitral tribunals should be careful when accepting agreements
by the parties under which one party may provide the tribunal only
with confidential or restricted data the tribunal must not share with the
other party, but upon which it may nevertheless rely for the award
without illustrating this in its reasoning; in practice, disclosure to the
tribunal only rarely ever occurs but various other configurations of
restricting access to confidential or restricted information are observed
in practice.28
25 MOLINA, in: Arroyo (ed.), ARBITRATION IN SWITZERLAND: THE PRACTITIONER’S GUIDE,
2013 ad Article 189 PILA, p. 197 N 54; POUDRET/BESSON, COMPARATIVE LAW OF
INTERNATIONAL ARBITRATION 669 N 748 (2nd ed., 2007); BSK ZPO-MRÀZ, Article 393
N 72; DFSC 4A_10/2010 of 20 December 2010; DFSC 4A_550/2009 of 29 January 2010;
DFSC 134 III 186 at consid. 6.1 and further references; DFSC 133 III 235 at consid 5.2;
DFSC 116 II 373 at consid. 7b; DFSC 130 III 125 at consid. 2.2.; DFSC 4P.114/2004 of
13 September 2004, at consid. 4.
26 See DFSC 101 Ia 521 p. 530, which explicitly states that a lack of reasons in an arbitral
award rendered in a foreign jurisdiction (in this particular case, it was Great Britain) is
not sufficient grounds for refusing enforcement for public policy reasons. Confirmed in
DFSC 116 II 373, p. 375; see also BORN, INTERNATIONAL ARBITRATION: CASES AND
MATERIALS 1008 (2011) citing decisions from France, Italy, Germany and England and
SCHERER, in: Wolff (ed.), THE NEW YORK CONVENTION ON THE RECOGNITION AND
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS, 2012, Article V(1)(b), p. 304, citing
decisions from Netherlands, France, Germany and Spain. Contra, INFANTINO,
INTERNATIONAL ARBITRAL AWARDS’ REASONS: SURVEYING THE STATE-OF-THE-ART IN
COMMERCIAL AND INVESTMENT INTERNATIONAL DISPUTE SETTLEMENTS JOURNAL OF
INTERNATIONAL DISPUTE SETTLEMENT 176 (2014). For a list of jurisdictions that have
mandatory rules requiring an award to be reasoned, see footnote 44 below.
27 See, for example, X S.A. v. Y, Tribunal Supremo of 14 January 1983, 11 Y.B. COM. ARB.
(1986) 523, where the Spanish Supreme Court decided the Spanish respondent had failed
to prove that an unreasoned award was contrary to the law of the place of arbitration.
Thus, the Spanish Supreme Court did not refuse enforcement of the award.
28 See, Baizeau/Richard, Addressing the Issue of Confidentiality in Arbitration Proceedings:
How Is This Done in Practice?, at p. 53 of the present volume, Chapter 2.2.
CONFIDENTIAL AND RESTRICTED DATA IN THE AWARD
4.
85
PROTECTING CONFIDENTIAL AND RESTRICTED DATA
IN ARBITRAL AWARDS IN PRACTICE
This chapter does not purport to list all possible methods for
protecting confidential and restricted information in the arbitral
award. The best approach will always depend on the problems posed
in the individual case. However, the five approaches described below
are used in practice and do not appear to have encountered any
difficulties. To the authors’ knowledge, the frequency with which they
have been applied to date remains too low to be able to definitively
state they constitute good practice. However, in many cases, they do
represent useful approaches where confidential and restricted data is a
concern.
The order in which the following examples are presented follows
the degree by which they curtail transparency. Method 1 (notification
of the award to a limited number of recipients) entails hardly any
restriction of transparency whereas methods 4 and 5 (both involving
the issuance of an unreasoned award) deviate significantly from the
normal case where neither the circle of recipients nor the content of the
award is restricted.
4.1 Issuance of an (Unredacted) Award (Only) to Proper
Recipients
Depending on the nature of the data one party seeks to protect, it
may be enough to restrict the circle of recipients of the award, or at
least of the unredacted version of it. If, for example, the sensitive data
must not be known outside a certain group of people – such as the
parties’ senior management, or the engineers involved in a certain
project – the most efficient way of protecting the data in question
might be to identify a limited number of persons who will have access
to the (full) award. This restricted group (the so-called “confidentiality
club”) will generally be identical to the group that also had access to
the data during the proceedings. Normally, these persons will have
already executed confidentiality agreements concerning the confidential
or restricted data at issue.29
Limiting the circle of recipients of the (unredacted) award will
make it unnecessary for the arbitral tribunal to omit the portion of
reasoning in its award requiring discussion of the confidential or
restricted data.
29
JOLLES/CANALS DE CEDIEL/STARK-TRABER, op cit., p. 151.
86
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
The following example illustrates how this method is implemented
in practice. It limits the distribution of the full award to a pre-defined
group of recipients. The example is taken from ICSID Case No.
ARB(AF)/04/05, but can also be employed in the context of commercial
arbitration.30 The relevant procedural order reads in part as follows:
1.
Any document (including a file in electronic form) submitted
by the Parties during the course of the proceeding that
contains Confidential Information shall be designated as
confidential by the submitting party. All such documents (the
“Confidential Documents”) and all information derived there
from, but not from any source independent of the
Confidential Documents, are to be treated as confidential
pursuant to the terms [of the] present Order. Confidential
Documents and information derived therefrom shall be
subject to this Order except if they (i) are already in the public
domain at the time of designation; (ii) subsequently become
public through means not in violation of this Order; or (iii)
are disclosed to the receiving party by a third party who is
not bound by any duty of confidentiality and who has the
right to make such disclosure.
2.
[...]
3.
Prior to the receipt of Confidential Documents or any
information derived there from, any person authorized under
paragraph 4(b), (c) and (d) below, shall execute a declaration
substantially in the form of the declaration annexed hereto as
Exhibit A.
4.
Confidential Documents or the information contained therein
may be disclosed or described only to the following persons:
a) The Tribunal and its staff, including the staff of the
International Centre for Settlement of Investment
Disputes (“ICSID”);
b) Attorneys, counsel, paralegals and other staff of counsel
for each Party;
30 ICSID Case No. ARB(AF)/04/05 Archer Daniels Midland Company and Tate & Lyle
Ingredients Americas, Inc. v. The United Mexican States, Procedural Order No. 1
“Concerning Confidential Information”, reproduced in the arbitral award on p. 32,
available at https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&
actionVal=showDoc&docId=DC782_En&caseId=C43, last accessed on 6 April 2014.
CONFIDENTIAL AND RESTRICTED DATA IN THE AWARD
c)
87
Representatives of the Parties (including in the case of
Respondent government officials and employees) who
are actively engaged in, or who are responsible for
decision-making in connection with, the present
arbitration; and
d) Fact witnesses and consulting or testifying experts of the
Parties.
5.
[...]
6.
[...]
7.
Each party shall be responsible for preparing a public version
of its documents containing confidential information from
which such information has been redacted.
8.
All Confidential Documents and all information derived
therefrom shall be securely stored by the persons authorised
under paragraph 4 of the present Order when not actively in
use, in such manner as to safeguard their confidentiality and
to ensure they are accessible only to those persons.
9.
If the Tribunal makes use of Confidential Documents or
information derived therefrom in any decision, including an
arbitral award, it shall designate the portions relating to such
document or information as confidential, and place them
between brackets; the portions so designated shall not be
disclosed by either party or any person authorised under
paragraph 4 of the present Order.
10. Within 30 days after the final conclusion of the dispute
(including any appeals or settlement), counsel for each Party
shall destroy (and shall certify in writing to counsel of the
other Party that it has destroyed) all Confidential Documents
and any copies thereof, as well as any information derived
therefrom, in whatever form, and that no person authorised
under paragraph 4b), (c) and (d) of the present Order remains
in possession of such document or information. The Tribunal
and its staff (excluding the staff of ICSID), shall destroy such
documents and information within the same period of time,
without prejudice to the provisions of paragraph 7.
In addition to restricting the number of recipients of the (full)
award, other protective measures may be taken. For example, the
tribunal can number the original copies of the award and track the
service of each copy to authorized recipients only. In a case brought to
88
ASA NO. 43 CONFIDENTIAL AND RESTRICTED ACCESS
the authors’ attention, the ICC accepted that counsel had to personally
retrieve the award at the ICC against a signed receipt.
4.2 Issuance of Redacted and Unredacted Versions of the Award
In some cases, arbitral tribunals issue two versions of the award—
a redacted version and an unredacted one.
The practice of redacting awards is typically applied in
proceedings where the arbitral award will be published. The primary
goal of redacting or, as it is also denoted, “sanitizing” an award is to
anonymize it, thereby rendering the identification of the parties
impossible.31
The same approach can be (and in fact is32) taken when the award
must be “cleansed” of confidential or restricted data, be it for reasons
of publication or in order to provide specific persons outside the
confidentiality club33 access to the award.
Most examples of redacted awards are found in “public”
arbitrations, i.e., in arbitrations that, as opposed to the vast majority of
private (commercial) arbitration cases, are open to the general public.
In these proceedings, confidential information is usually redacted from
all documents entering the public domain by publication of all relevant
procedural documents on websites, including the award.34 For
example, in an LCIA arbitration between the United States and
Canada, the arbitral tribunal issued a procedural order in which it
provided:
[i]f the Tribunal’s Award discloses Confidential Information,
the Tribunal shall issue two versions of the Award:
(a) a private, Confidential Version of the Award; and
(b) a Public, Non-Confidential Version of the Award, with
Confidential Information redacted.35
31 See, e.g., the Guidelines for the Anonymous Publication of Arbitral Awards of the
Milan Arbitration Chamber, available at http://www.camera-arbitrale.it/Documenti/
guidelines-anonymous-publication-arbitral-awards.pdf, last accessed on 6 April 2014.
32 For publicly available examples, see infra footnote 34.
33 See supra Chapter IV 1 for a discussion of the restriction of access of an award to a
limited group of individuals.
34 See, e.g., Abaclat and Others v. Argentine Republic, ICSID Case No. ARB/07/5 (formerly
Giovanna a Beccara and Others v. The Argentine Republic); Ad Hoc NAFTA Arbitration
under UNCITRAL Rules, Chemtura Corporation. (formerly Crompton Corporation). v.
Government of Canada; Philip Morris Asia Limited v. The Commonwealth of Australia under
UNCITRAL Rules, PCA Case No. 2012-12.
35 LCIA Arbitration 81010, Arbitration proceedings pursuant to the Softwood Lumber
Agreement between Canada and the United States of America, entered into on
CONFIDENTIAL AND RESTRICTED DATA IN THE AWARD
89
There are practical differences between on the one hand sanitizing
an award of elements that would make the identification of the parties
possible, and on the other hand the cleansing of an award of all
confidential or restricted data. In contrast to the former, the latter may
sometimes be demanding and involve difficult decisions that must be
made by the tribunal regarding what should be redacted. Also, while
simple sanitizing for purposes of publication of the award without
disclosing the parties’ identities is often performed by the arbitral
institutions, the issuance of an unredacted and a redacted version must
either be completed by the arbitral tribunal itself or under its close
scrutiny, which adds to the time and cost of the arbitration.36
4.3 Issuance of an Unredacted but “Incomplete” Award
In order to avoid the risks attached to the redaction of an award,
such as the intentional or accidental disclosure to persons who are not to
see the redacted portions, an arbitral tribunal can instead simply opt not
to include any consideration discussing confidential or restricted data.
According to the well-established practice of the Swiss Federal
Supreme Court,37 in order to safeguard the parties’ right to be heard, it
is sufficient for an arbitral tribunal to hear and analyze all the
arguments and alleged factual circumstances presented by the parties
and to consider them in their entirety when reaching its ruling. There
is no requirement to either rely upon each and every single assertion of
the parties or to spell out all the underlying factual considerations of
the award.38 It is enough for the arbitral tribunal to state that the
confidential or restricted data and arguments based thereon have been
taken into account when reaching its decision.39
Therefore, in certain circumstances, the most efficient way to
safeguard confidential and restricted information may be to leave out
altogether a detailed discussion of the arguments and motives
12 September 2006 (the SLA) and the LCIA Arbitration Rules (the LCIA Rules),
Procedural Order No. 2, p. 6, available at http://www.international.gc.ca/controlscontroles/assets/ pdfs/softwood/on-po-02.pdf, last accessed on 6 April 2014. The
redacted version of the award is available at http://www.international.gc.ca/controlscontroles/assets/pdfs/ softwood/on-12.pdf, last accessed on 6 April 2014.
36 For a discussion of this aspect, see LO, On a Balanced Mechanism of Publishing Arbitral
Awards, Contemporary Asia Arbitration Journal, vol. 1, No. 2, 247 (2008), who suggests a
procedure that in his opinion would not significantly increase the workload of the
arbitral tribunal.
37 DFSC 4A_95/2013 of 27 June 2013, at cons. 3.1.
38 DFSC 4A_95/2013 of 27 June 2013, at cons. 3.1.; DFSC 133 III 235 at cons. 5.2; DFSC
121 III 331 at cons. 3b.
39 DFSC 4A_95/2013 of 27 June 2013, at cons. 3.1.
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grounded in confidential and restricted data. A somewhat milder
approach is for the arbitral tribunal to summarize the critical data in a
way that still protects its sensitive nature.40
In the authors’ view, this approach raises no problems in cases
where the award rests on several independent grounds and where at
least one of them is not confidential and can thus be included into the
reasoning of the award.
The situation is different, however, when the award is based
entirely upon reasons connected to confidential or restricted
information that must not be referenced in the award. Leaving a
discussion of the sensitive data out of the award, amounts to an
unreasoned award. Issuing unreasoned awards creates a number of
distinct issues which will be discussed in the following section.
4.4. Issuance of an Unreasoned Award
As already mentioned, Swiss law allows the parties to waive the
right to obtain a reasoned award.41 A number of other jurisdictions
have similar rules in their arbitration acts,42 and the same holds true of
certain institutional arbitration rules.43 Conversely, there are also
arbitration acts44 and arbitration rules45 under which awards must be
supported by written reasoning and which further prevent waiver of
this requirement.
It seems obvious that, where admissible, the most effective way
for parties to protect their confidential or restricted data in an award is
to forego altogether the right to a reasoned award.46 By agreement of
the parties, the arbitral tribunal will merely issue the operative part of
the award (and, as the case may be, also other required formal parts
such as the procedural history or the discussion of the decision on
costs) and thus not discuss any confidential or restricted allegations
and evidence.
POUDRET/BESSON, op cit., p. 669 N 749.
See supra Chapter III 2.
42 Article 31(2) UNCITRAL Model Law; Section 52(4) English Arbitration Act 1996; §1054
German ZPO; §606(2) Austrian ZPO.
43 Article 34(3) UNCITRAL Rules; Article 32(3) Swiss Rules; Article 26(1) LCIA Rules;
Article 27(2) ICDR Rules; Article 36(1) VIAC Rules; Article 62(c) WIPO Rules; see also
MOLINA, op cit., p. 196 N 50.
44 Article 1471 NCPC (for domestic awards); Article 1701 Belgian Judicial Code; Article
26 Brazilian Arbitration Law; Article 31(2) Russian Federation Law on International
Commercial Arbitration.
45 Article 31(2) ICC Rules; Article 47(3) CIETAC Rules.
46 See BALDWIN, Protecting Confidential and Proprietary Commercial Information in
International Arbitration, 31 TEX. INT’L L.J. 451, 488 (1996).
40
41
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91
However, this radical solution comes at a price. While it is
possible to challenge an unreasoned award, the chances of succeeding
in challenge proceedings are significantly reduced.47 What is more,
court decisions have shown that unreasoned awards may in some
circumstances also lead to the exact opposite, namely a higher risk of
vacatur of the award because the state court has no possibility to verify
the rationale of a (seemingly irrational) decision.48
For these reasons, parties are well advised to weigh the advantage
of the absolute protection of confidential and restricted data provided
by an unreasoned award against the significant difficulties parties will
oftentimes subsequently encounter in challenging and enforcing such
an award.
4.5 Issuance of an Unreasoned Award, with Reasoning
Provided Separately
In some types of arbitration, arbitral tribunals issue an
unreasoned award but provide the reasoning in a separate,
confidential document.
This practice was common under English law prior to the
enactment of the English Arbitration Act 1996, which fundamentally
reversed the prior law by stating that now “the award shall contain the
reasons for the award unless it is an agreed award or the parties have
agreed to dispense with reasons.”49 In particular, tribunals in maritime
arbitration cases used to publish the reasons to their awards in a
separate document (the so-called “privileged reasons”).50
An instructive case in this regard is Tame Shipping Ltd v Easy
Navigation Ltd.,51 which involved a dispute over a contract for the
purchase and sale of a vessel. The sole arbitrator rendered an award in
accordance with the then-applicable Small Claims Procedure of the
London Maritime Arbitrators’ Association, which dispensed with the
DFSC 4A_198/2012 of 14 December 2012; see also MOLINA, op cit., p. 196 N 52.
See, e.g., PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., 2009 U.S. Dist.
Lexis 85046 (E.D. Pa.) and Inter-city Gas Corp. v. Boise Cascade Corp., 845 F.2d 184 (8th Cir.
1988).
49 English Arbitration Act, Section 52; See also BORN, op cit., p. 3040; BINGHAM, Reasons and
Reasons for Reasons, 4 ARB INT’L 141, 145 (1988); HARRIS/BRUCE, ARBITRATION ACT 1996: A
COMMENTARY 250 (4th ed.); see also WAINCYMER, PROCEDURE AND EVIDENCE IN
INTERNATIONAL ARBITRATION 1213 (2012).
50 CHAN, SINGAPORE LAW ON ARBITRAL AWARDS 36 (2011).
51 Tame Shipping Ltd v Easy Navigation Ltd ‚The Easy Rider’, Moore-Bick, J, Commercial
Court [2004] EWHC 1862.
47
48
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requirement for a reasoned award.52 The reasons were given separately
in a document with the following heading:
These Reasons are issued subsequently to and separately
from the Award and do not form part of the Award. They
are given for the information of the parties only and on the
understanding that no use whatsoever is made of them on or
in connection with any proceedings on or related to the
Award.53
Tame Shipping, after reviewing the arbitrator’s reasoning, applied
to have the award remitted to the arbitrator for reconsideration under
section 68 of the English Arbitration Act. The ground invoked was
procedural irregularity. Interestingly, Tame Shipping’s appeal relied
on the reasoning given by the sole arbitrator in the separate document.
Easy Navigation objected by arguing Tame Shipping could not rely on
this reasoning in its application because it was the express
understanding that no such use of the reasons are to be made by either
party.54
Therefore, the judge had to decide on the one hand whether to
look into the separately issued reasons55 and, on the other hand,
whether the applicant could in fact rely on these reasons in the
application when presenting its arguments. The judge held that in
order to avoid the risk of substantial injustice, it was necessary to allow
the applicant to rely on the reasons issued by the sole arbitrator. He
further held this was proper, even if it meant ignoring the parties’
agreement to the contrary, if the privileged reasons were the only
existing source that would allow the determination of the procedural
irregularity.
There appear to be no similar published cases in other
jurisdictions, but it is easily conceivable that courts in other jurisdiction
would follow the English court’s approach and look into the
confidential reasons in challenge—and possibly also in enforcement—
proceedings. Therefore, the protection of confidential and restricted
data provided by the issuance of the reasoning in a separate document
might not be effective where challenge and enforcement proceedings are
undertaken. That being said, there is a good chance the courts dealing
[2004] ArbLR 57, p. 646.
[2004] ArbLR 57, pp. 646 -647.
54 [2004] ArbLR 57, p. 647.
55 This was the case law prior to the enactment of the English Arbitration Act 1996,
namely as illustrated in Mutual Shipping Corp v Bayshore Shipping Co (The Montan) [1985]
1 Lloyd’s Rep 198.
52
53
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93
with challenge and enforcement will be amenable to applications for
protective orders, thus ensuring continued protection.56
5.
CONCLUSION
In cases where confidential or restricted data is a concern, it is
essential the award be drafted in a way that such information is
protected; otherwise, all prior protective measures may be frustrated
when the award is issued.
Arbitral tribunals have a number of options for protecting
confidential and restricted information in the award and will need to
choose the best approach depending on the circumstances of each case.
Apart from methods to ensure the award is served only on
individuals authorized to access confidential or restricted information,
all approaches typically used in practice will result in awards that do
not—or do not fully—contain the arbitral tribunal’s reasoning.
Reasoning containing confidential or restricted data will not appear in
the award or the award will not have reasons at all.
Modern arbitration laws require that an award must give the
reasons for the arbitral tribunal’s decision. Where the award will not be
reasoned or will only be partly reasoned in order to protect sensitive
information, this requires a waiver by the parties.
Therefore, measures to protect confidential and restricted
information in the award must be planned early on and the parties’
consent must be obtained. In the context of protecting sensitive
information in awards in international arbitration, Benjamin Franklin’s
adage from the Poor Richard’s Almanack (1735): “Three may keep a
secret, if two of them are dead” should be adapted to: “Three may
keep a secret, if proper agreements have been concluded.”
56 See, e.g., the recent decision of a Dallas federal trial court The Decapolis Group, LLC v
Mangesh Energy, Ltd, 3:13-cv-01547-M (ND Texas 2014), where the court sealed award
confirmation proceedings on the grounds that the arbitral award contained sensitive
business secrets and was subject to a confidentiality clause contained in the underlying
contract.