Confidentiality in International Commercial Arbitration by Kyriaki Noussia

Author:Kyriaki Noussia
Language: eng
Format: epub
Publisher: Springer Berlin Heidelberg, Berlin, Heidelberg

4.3.4.2 USA

In the USA, the confidentiality of international arbitral awards, is not a presumption and does not exist as an implicit term of the parties’ arbitration clause.

In United States v Panhandle Eastern Corp.,434 the district court was faced with a US government request, for the production of documents related to a previous arbitral proceeding held under the ICC Rules. The court ruled that, because the arbitration agreement and applicable arbitration rules did not provide for the confidentiality of the proceedings, the government could access the documents. The decision should not be considered surprising, because the genesis of the court’s reasoning appears in the domestic arbitration court cases.

A review, of domestic, arbitration-related, court decisions, reveals the standard on which the Panhandle court was relying.435 For example, in A.T. v State Farm Mutual Automobile Insurance,436 the appellate court had no difficulty in supporting the district court’s determination, to apply the generally accepted lack of confidentiality, afforded to documents and awards without an express agreement. The court concluded that, because the arbitration statute provides for an arbitration award to be filed, enforced, and challenged in court, thus, an arbitration record may become an open public record. Therefore, because the plaintiff did not obtain a confidentiality, or protective order, or agreement, the record was available for use, by State Farm, in later, separate litigation. The State Farm court’s reasoning, is not unique, within the domestic arbitration law of the United States.

In Parilla v IAP Worldwide Services, VI, Inc.,437 it was determined that, the parties had agreed to protect as confidential the disputing parties names, and, thus, without subsequent agreement to the contrary, the names could not be released; and, in Hutcherson v Sears Roebuck & Co.,438 it was reasoned that, because the parties had not selected rules that afforded protection to the arbitration award, the award was capable of being released.

Moreover, the US courts have found no difficulty in extending the general rule, which requires parties to expressly agree to confidentiality of documents and awards, to arbitration with an international nexus, such as the case was in the Panhandle court decision. Thus, although, clearly, a distinction should be made between international and domestic arbitration, in the area of confidentiality afforded awards and documents, the distinction is not as clear. Therefore, the domestic decisions can be important to examine, if, for no other reason, than to, again, recognize that the definition of confidentiality and the scope of protection, afforded under the auspices of confidentiality, is not as clear as a business may desire.439

US courts, have used the doctrine of unconscionability, to limit arbitration clauses that require the award to remain confidential, when the parties are of unequal bargaining power. Although these cases, admittedly, draw on neither international nor business-to-business contracts, the emerging view in the USA remains important, because it shows the uncertainty of the term “confidentiality”. Moreover, these cases begin to explore the “repeat player” concept, which recognizes the importance of arbitration participants, who are involved in numerous arbitrations.440

In the case of Luna v Household Finance Corp.

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