CYIL 2012

ZUZANA JAHODNÍKOVÁ ȃ ĽUDOVÍT MIČINSKÝ

CYIL 3 ȍ2012Ȏ

1. Introductory Remarks The notion of confidentiality has always been, and undoubtedly continues to be, a two-edged phenomenon in the arbitration world. Given that confidential information generally tends to attract attention, having something categorized as confidential sparks the desire to lift the (legal) veil of confidentiality in order to learn the diversity of this manifold term. Looking at the fundamental characteristics of arbitration, it is unsurprising that confidentiality is regarded as a somewhat lucrative inducement for the business world and often influences the parties’ preference of referring a dispute to this particular resolution system. As some authors describe, confidentiality of both the proceedings and the award is of course one of the attractions of arbitration in the eyes of arbitration users. 1 The exuberant rise of international investment, trade and commerce has brought, among other things, as well the increasing interest of parties to opt for arbitration as a guarantee for a speedy, just and effective end to a conflict accrued between the parties. This statement reflects the interest of legal scholars, practicing lawyers and arbitration enthusiasts in the endeavour to retain and analyze the notion of confidentiality since “confidentiality and privacy have been widely assumed to be fundamental principles for international commercial arbitration.” 2 From a perspective of confidentiality it is necessary to stress, as Rubino-Sammartano is pointing out, that privacy is the automatic consequence of the contractual nature of arbitration, since it is a mechanism for the settlement of the dispute by recourse to “private” instead of “state” adjudication. Henceforth the proceedings are private and confidentiality may be a consequence of privacy but it is not a full synonym for it. 3 The confidentiality of the arbitral process is regarded by some authors as both an obligation imposed upon the arbitrators and a right they can exercise vis-à-vis the parties, any arbitral 1 E. Gaillard, J. Savage (ed.), Fouchard Gaillard Goldman On International Commercial Arbitration, (Kluwer Law International, 1999), pp. 773. As Balaš and Šturma are pointing out, the way international investments are being treated is naturally dependent on the national law. The treatment is governed by the national law of the host state and the legal order of the investor’s home state has no influence on such a sovereign law. From this conclusion it is understandable that the consent to independent, speedy and confidential arbitration is a certain guarantee made to the investors that any treatment which may negatively affect their investments will be submitted to an international forum greatly detached from the national law of the host state. See on the topic of the treatment of international investments: P. Šturma, Mezinárodní dohody o ochraně investic a řešení sporů, 2nd ed. (Linde Praha, 2008), pp. 52 and V. Balaš, P. Šturma, Kurs mezinárodního ekonomického práva , (C. H. Beck, 1997), pp. 193. 2 H. Bagner, “Confidentiality – A fundamental Principle in International Commercial Arbitration?”, 18 (2) Journal of International Arbitration (2001), pp. 243. As stated above confidentiality is assumed to be a fundamental principle of arbitration. It comes therefore as no surprise that in the eyes of investors and States the possibility to “keep hidden the existence of a dispute” is one of the incentives why to opt for investment arbitration. See N. Rozehnalová, Rozhodčí řízení v mezinárodním a vnitrostátním obchodním styku, (Aspi Publishing, 2002), pp. 219. 3 M. Rubino-Sammartano, International Arbitration. Law and Practice, (Kluwer Law International, 2001), pp. 799.

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