2/26/2022
The possibility of keeping an arbitration proceeding confidential is a preponderant element taken into account by the parties when choosing this institute as a mean of resolving conflicts. There’s no doubt about that. That is why the confidentially in arbitration proceedings is the common rule in most institutional and State arbitration rules.
Nevertheless, the discussion around the disclosure of decisions issued in arbitration proceedings is in vogue globally. Thus, can we assume that this will be the new common practice? If this trend is confirmed, would it be the case for the parties to reconsider choosing arbitration? In our view, it would not.
Despite the undisputed advantage of confidentiality, this is not an irrevocable rule. The Brazilian Arbitration Act (Law nº 9.307/1996) does not establish any obstacles for publicity. The parties, in fact, are free to limit the duties of confidentiality according to their own discretion. And the fact that the parties waive confidentiality so that the arbitral awards may become public does not imply any harm. On the contrary.
If there were any risks, the International Chamber of Commerce (ICC), one of the world’s leading arbitration chambers – if not the main one – would not have adopted a new policy of fully disclosing awards, including the identification of the parties and the object of the controversy,, as it did in January 2019.
A recent research conducted in Brazil by the Brazilian Arbitration Committee and the Ipsos Institute – a renowned French company that conducts market studies – shows the existence of a predisposition in favor of the disclosure of domestic arbitral awards.
When questioned, 73% of lawyers and arbitrators were in favor of the disclosure of arbitration awards. However, they stressed the interest of keeping certain aspects confidential, such as business secrets, sensitive financial and business information, names of the parties, witness statements and the facts of the case.
To the parties, it should be highlighted that, in the end, their freedom of choice prevails. For this reason, the utmost attention should be paid to the choice of applicable rules to the proceeding. If they contain provisions that govern confidentiality, they shall be thoroughly analyzed to assist the parties in deciding whether to keep or exclude them. If the rules are silent on this aspect, then the parties can expressly include confidentiality rules themselves, tailoring their extension according to their interests.
Author: Julia Guimarães Rossetto
