W10: Selected Procedural Issues

Question 1

Confidentiality

Answer 1

1. Confidentiality of arbitral proceedings has traditionally been considered to be one of the imp. advantages of arb.
2. An int’l arb. is not a public proceedings - essentially a pvt. process, thus has potential for remaining confidential
3. Increasingly tho, confidentiality cannot generally be relied upon a clear duty of parties to arbitral proceedings
   - Parties would do well to include confidentiality provisions into their arb. agreement, or in a separate confidentiality agreement concluded at outset

Question 2

Confidentiality: Privacy and Confidentiality

Answer 2

As far as the hearing is concerned, the major institutional rules are in agreement: hearings are pvt.

• ICC Rules Art. 26(3)
• Rules of ICDR, LCIA, ICSID, WIPO: similar provisions
• Rules of commercial arb. orgs.: Australian Federal Economic Chamber, the Swiss Chambers’ Arb. Institution, China Int’l Economic and Trade arb. Commission (CIETAC), Japanese Commercial Arb. Assn. (JCAA)
• UNCITRAL Rules Art 28(3)

Question 3

Confidentiality: Classical Position

Answer 3

• Dolling-Baker v Merret: general principle of confidentilaity in arbs. u/English Law said to represent classical view
• Hassneh Insurance Co. of Israel v Mew: English HC recognised existence of an implied duty of confidentiality as the natural extension of the undoubted privacy of the hearing in ICA
• Ali Shipping Corp. v ‘Shipyard Trogir’: classical position reaffirmed; however, ‘the boundaries of the obligations of confidence which arise have yet to be delineated’
• John Foster Emmot v Michael Wilson and Partners Ltd.: classical position reaffirmed; nevertheless, the duty of confidentiality in arb. proceedings was NOT absolute and considers limitations
• Constant Theme in English Arbs. on Implied Duty of Confidentiality: it exists, but is sub: limitations that remain to be determined on a case-by-case basis
• S’pore courts adopted similar approach: accepting existence of implied duty of confidentiality, but stipulating imposing such duty only to the extent that it is reasonable to do so

Question 4

Confidentiality: Current Trend

Answer 4

1. To diminish - or at least Q - confidentiality of proceedings as a whole
2. Considerably influenced by arbs. which would effect the general public
   * Esso Australia Resources Ltd. v The Hon’ble Sidney James Plowman and Ors.
   * The Commonwealth of Australia v John Fairfax and Sons Ltd.
   - Reversal of onus of proof: the govt. must prove that public interest demands non-disclosure
   - Public Health and Environment Issues

US LAW: the FAA nor the Uniform Arb. Act contain a provision requiring the parties or arbitrators to keep secret proceedings

• Consequence: unless parties’ agreement/applicable arb. rules provide otherwise, parties are NOT reqd. by US Law to treat proceedings and what transpires in them confidential
• US v Panhandle Easten Corp.

SWEDISH LAW: The SC has also rejected the idea of a general implied duty of confidentiality in arb. proceedings

NORWEGIAN LAW: Absent a contrary agreement, arb. proceedings and decisions by tribunal NOT sub: any duty of confidentiality

Question 5

Award

Answer 5

1. Some institutional rules of arb. (e.g. ICSID) provide that the award may be made public only w consent of parties
2. Recognised that there are circumstances in which an award may need to be made public, e.g., for purpose of enforcement by a national court
   * Hassneh Insurance Co. of Israel v Mew
3. Other than disclosure reqd. by law, disclosure of a kind takes place when an arb. institution (e.g. ICC) published ‘edited and redacted’ copies of arb. awards as a guide for benefit of lawyers and arbitrators
   - ICDR Rules Art. 27(4): award made public only by consent of parties/required by law
   * Aegis v European Re: Pricy Council HELD - legitimate use of an earlier award in a later, also pvt. arb. b/w same parties was not the kind of mischief against which confidentiality agreement was directed
   * Aita v Ojjeh: Paris Cour d’Appel HELD - mere bringing of court proceedings to challenge an ward violated principle of confidentiality; i.e., caused a “public debate of facts which should remain confidential” (highest degree of discretion I resolution of pvt. disputes as agreed by parties)
   * Nafimco: Claimant failed to “show the existence and foundation of such a duty in French Int’l Arb. Law”

Question 6

Interim Measure: Power of Arbitral Tribunal

Answer 6

1. Intended in principle to operate as holding orders and apply only pending the issue of the final award
2. Tribunal has power to issue them
3. Five situations where such powers may be INSUFFICIENT, thus leading to recourse to a national court:
   i. No Powers
   ii. Inability to Act Prior to the Formation of the Tribunal
   iii. An Order Can Affect Only the Parties to the Arbitration
   iv. Enforcement Difficulties
   v. No Ex Parte Application

Question 7

Situations Where Tribunal Powers = INSUFFICIENT

Answer 7

1. NO POWERS:
   - result of antique domestic legislation , e.g. Argentine Code of Civil Procedure Art. 753
2. INABILITY TO ACT PRIOR TO FORMATION OF TRIBUNAL:
   - In time reqd. for constitution, vital assets of evidence may disappear
   - National courts expected to deal w such issues
   - Appointment of emergency arbitrators
3. AN ORDER CAN AFFECT ONLY PARTES TO ARBITRATION:
   - Third-party orders may not be enforceable
   - Multiparty/multi-contract disputes may pose similar probs, requiring national court assistance
4. ENFORCEMENT DIFFICULTIES:
   - Interim awards are unlikely to satisfy finality requirement u/NYC, rendering it unenforceable internationally
   - Consequence: need for int’l enforcement of interim measure, parties consider applying to courts at place of execution/enforcement
   - Notwithstanding this limitation, some states have sought to LABEL certain interim measures as wards, wrt own legislation
   - Recent trend: in favour of tribunals making ‘Orders’ not ‘Awards’
5. NO EX PARTE APPLICATION:
   - i.e., w/out notice to party against whole measure is directed
   - Revised UNCITRAL Model Law offers possibility of ltd. ex parte apps. to tribunal (but will take time to be implemented in diff. states)

Question 8

Interim Measures: Powers of the Competent Court

Answer 8

1. Imp. that a competent court should have the power to issue interim measures in support of arb. process
2. Situations of extreme urgency, in which third-parties need to be involved, or there’s a strong possibility party will not voluntarily execute tribunal;s order
3. Measures requested may incl.:
   i. Granting injunctions to preserve status quo
   ii. Prevent disappearance of assets
   iii. Taking evidence from witnesses
   iv. Preservation of property/evidence

TWO MAIN ISSUES:

i. If a party to arb. agreement makes an app. for interim measure to the court rather than tribunal - is it a breach of arb. agreement?
ii. If the choice is truly an open one, should the app. be made to court or tribunal?

Question 9

Main Issues

[Classifications NOT in detail - read briefly]

Answer 9

1. INCOMPATIBILITY W/ARB. AGREEMENT:
   - Most arb. rules are explicit in confirming that an application for interim relief from a court is NOT incompatible w an arb. agreement
   - ICC Rules Art. 28(2)
   - UNCITRAL Rules Art. 26(9)
   - Model Law Art. 9
2. APPLICATION BE MADE TO NATIONAL COURT OR TRIBUNAL:
   - Depends on the relevant law and nature of relief sought
   - EEA 1996 S. 44(3)-(5)
   i. Urgency: court may, on application of. party/proposed party, make such order it thinks necessary for preserving evidence/assets
   ii. Not Urgency: court shall act only on application of a party - made w permission of tribunal/agreement in writing
   iii. Any Case: court shall act only if/to the extent that tribunal has no power/unable for time being to act effectively
   - Where NOT spelled out, depends upon particular circumstances of each case

OTHER PROBLEMS:

i. Merits of dispute u/foreign law, which local courts be ill-prepared to consider at interim stage
ii. Language of dispute and contract may be different
iii. Chosen court is likely to be at place of execution of order to avoid enforceability concerns - may give rise to problems of bias if measures sought are against a state/local entity in favour of foreign corp,
- Nature of relief sough likely to have an imp. bearing on the Q. of whether to go to court or tribunal

HELPFUL CLASSIFICATIONS:

i. Measures wrt:
a) attendance of witnesses
b) preservation of evidence
c) documentary disclosure
ii. Measures aimed at:
a) preserving the status quo
b) relief in respect of parallel proceedings