Confidentiality in Arbitration: A Cornerstone of Commercial Dispute Resolution in the MENA Region

Introduction

Parties are increasingly opting for dispute resolution clauses referring to arbitration due to the efficiency, flexibility, and confidentiality of the arbitral process. The principle of confidentiality is a key attraction in arbitration proceedings which ensures that the details of a dispute; the proceedings as well as the final determination of the arbitral tribunal remain private. The protection afforded through the principle of confidentiality is particularly valued in the MENA region, where many businesses remain family-owned and individuals are are accustomed to safeguarding sensitive commercial information and maintaining reputational integrity.

However, confidentiality in arbitration proceedings is not absolute. Courts and arbitral tribunals must balance confidentiality with principles of justice, transparency, and with the public interest. This article explores the importance of confidentiality in arbitration, its enforcement in MENA jurisdictions, and the exceptions that courts have recognised in case law.

The Importance of Confidentiality in Arbitration

Several key considerations include:

1. Protection of Sensitive Information: Litigation often requires the disclosure of sensitive business information, such as trade secrets, intellectual property, or financial data. Confidentiality in arbitrations ensures that such information remains protected and is not exposed to competitors or the public. This protection fosters a secure environment where parties can fully disclose relevant information without fearing its misuse.
2. Preserving Business Relationships: Confidentiality helps maintain the professional relationships between parties involved in a dispute. Public litigation can create long term antagonism, damage reputations, and make future collaboration difficult. However, in arbitration, the privacy of proceedings ensures that sensitive business matters are resolved discreetly, allowing parties to continue their professional ties without external pressures, press interest or scrutiny.
3. Encouraging Openness and Trust: Parties to arbitration in the UAEare more likely to provide full testimony and to share relevant evidence in the knowledge that their statements will not be made public. This open exchange allows arbitrators to make more informed decisions, contributing to a more equitable and effective dispute resolution process.
4. Flexibility: Arbitration allows parties to set their own confidentiality rules. This flexibility is particularly beneficial in international disputes where different legal systems may have varying confidentiality standards. Parties can negotiate and agree on the level of privacy required, ensuring that both their legal and commercial interests are safeguarded.
5. Avoiding Reputational Damage: Public litigation often attracts media attention which can potentially harm the reputations of the businesses and individuals involved in the dispute. Confidentiality in arbitration protects against media exposure and ensures that details about a dispute remain protected

Judicial Trends

In recent years, courts in various jurisdictions have generally upheld the principle of confidentiality in arbitration, though the level of protection varies and judicial trends are not entirely uniform. Courts have also made exceptions to the confidentiality principle when public interest or justice requires disclosure, particularly in cases involving fraud or criminal behavior. This illustrates the balance that must be struck between maintaining privacy and upholding public interest.

Challenges to Confidentiality

The confidentiality of arbitrations seated in England is long-established in English law. English law recognises an implied obligation on parties and arbitrators to maintain the confidentiality of the hearing, the award and other materials produced in the proceedings (Dolling-Baker v Merrett [1990] 1 WLR 1205; and Ali Shipping Corporation v Shipyard Trogir [1999] 1 WLR 314).

However, a recent decision of the English Commercial Court reminds parties there is no absolute right to confidentiality of an arbitration. In Mordechai Ganz v Petronz FZE and Abraham Goren [2024] EWHC 1011 (Comm), the Court published an unanonymised and unredacted judgement detailing challenges to an arbitration award.  This judgment suggests that publication of such challenges may occur in other cases, notwithstanding the confidentiality of the underlying arbitral proceedings.

Further considerations include:

1. Legal Exceptions: Confidentiality in arbitration is not absolute. There are instances where arbitrators or parties may be compelled to disclose certain information. For example, a court may override the confidentiality agreement made between the parties to allow disclosure if the arbitration involves public interest, such as health and safety violations or fraud.
2. Enforcement of Confidentiality Agreements: Whilst parties involved in arbitration may agree to the principle of arbitral confidentiality, enforcing such agreements can be challenging. Jurisdictions have varying standards for enforcement, and some national courts may not fully uphold the confidentiality of arbitration proceedings, especially in cross border disputes.
3. Limited Protection Post-Award: Confidentiality usually extends to the arbitration proceedings themselves, although the final award may be exempt. An arbitration award may become a public document in some jurisdictions, especially if it is subject to judicial review or enforcement. This can reveal details of the final resolution of the dispute to the public thereby potentially undermining the confidentiality of the arbitration process
4. Third-Party Involvement: In some cases, third parties, such as expert witnesses, stenographers and translators may be involved in the arbitration process. While confidentiality agreements can protect the primary parties, maintaining confidentiality can be challenging when multiple external participants are involved, particularly where these are from different jurisdictions with other legal standards.

Our Expertise

Bolz Arbitration understands the importance of confidentiality in arbitration and is committed to ensuring that every dispute resolution is handled with the utmost discretion and professionalism.

Conclusion

Confidentiality is a cornerstone of of arbitration in the UAE and globally, providing important protection for sensitive information and fostering trust between parties, thereby ensuring that business relationships remain intact. However, it is essential to acknowledge that confidentiality has its limitations, including legal exceptions and challenges in enforcement. Parties involved in arbitration should ensure that they are fully aware of the confidentiality rules governing their specific arbitration proceedings to maximize the benefits of this key arbitration principle.