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Confidentiality in English-Seated Arbitrations: A Fragile Shield?
The confidentiality of arbitrations seated in England has long been a cornerstone of English arbitration law. Absent an express agreement to dispense with confidentiality, English law implies an obligation on parties and arbitrators to maintain the confidentiality of the hearing, the award, and other materials produced during the proceedings. This principle is well established, with key cases such as Dolling-Baker v Merrett [1990] and Ali Shipping Corporation v Shipyard Trogir [1999] reinforcing the notion that confidentiality is inherent in English arbitration. However, a recent decision by the English Commercial Court in Mordchai Ganz v Petronz FZE and Abraham Goren [2024] EWHC 1011 (Comm) serves as a stark reminder that the confidentiality of arbitration is not an absolute right. This case, which saw the Court publish an un-anonymised and un-redacted judgment concerning challenges to an arbitration award, highlights the circumstances under which confidentiality may be overridden.
The dispute in Ganz v Petronz arose from a share purchase agreement (SPA) involving the sale of shares in a company. The SPA provided for disputes to be resolved by arbitration under the London Court of International Arbitration (LCIA) rules. When Petronz failed to pay the purchase price, Mr. Ganz initiated arbitration, which resulted in a tribunal ruling that the SPA was not a binding agreement, rendering the arbitration agreement invalid.
Mr Ganz subsequently sought to challenge the award under sections 67(1)(a) and 68 of the Arbitration Act 1996, which allow for challenges on the grounds of substantive jurisdiction and serious irregularity. The English Commercial Court dismissed both challenges but faced a further application from Mr Goren, who objected to the judgment's publication on the grounds of confidentiality. The Court, applying the principles from the City of Moscow v Bankers Trust [2004], weighed the factors in favour of publicity against the desirability of preserving the confidentiality of the arbitration. The Court concluded that confidentiality, in this context, could not prevent the publication of its judgment. The Court found that since the SPA was deemed invalid, the expectation of confidentiality under the LCIA rules did not apply. Additionally, the Court emphasized the public interest in the operation and practice of arbitration, which outweighed the private interests of the parties.
The Ganz decision reinforces that while confidentiality is a fundamental aspect of English-seated arbitrations, it is not inviolable. The English Courts have a strong presumption in favour of open justice, particularly when it comes to the publication of judgments. This presumption means that the starting position leans toward transparency, and parties seeking to maintain confidentiality must provide compelling reasons to justify withholding information from the public domain.
Parties engaging in arbitration in England should be aware that their confidential information could be disclosed if the Court's supervisory jurisdiction is invoked. To mitigate this risk, parties should:
The Ganz case serves as a crucial reminder that confidentiality in English arbitrations, while robust, is not absolute. Parties must be proactive in managing their confidentiality expectations and prepare for the possibility that sensitive information may be disclosed if a court challenge arises. As the legal landscape continues to evolve, the principles of open justice and the public interest will likely continue to shape the boundaries of arbitration confidentiality in England.
Tags : #Arbitration #Confidentiality #EnglishLaw #GanzCase #LegalUpdate #OpenJustice #CommercialLaw #LegalChallenges #ArbitrationAct1996 #LCIARules
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