CYIL 2012

CROSSING THE RUBICON: ON THE CORRELATION OF THE PRINCIPLE OF TRANSPARENCY… contract to support the confidentiality of a commercial arbitration. The logic behind the decision is founded on the assumption that a general duty of confidentiality does not exist in arbitration- neither as an inherent part of the proceedings nor as an expression of ius naturalis appertaining to the legal nature of arbitration. The High Court went on by stating that if the parties wished to secure confidentiality in the proceedings, they were supposed to establish the confidentiality of their potential arbitral proceedings through the channels of a special provision incorporated in their arbitration agreement. 10 Confidentiality, based as a result of the parties’ will as expressed in an agreement, was acknowledged as well by the follow up decision made by the Court in Commonwealth of Australia in Cockatoo Dockyard Pty Ltd. 11 An especially noteworthy aspect is the salient key part of the reasoning according to which the public interest demands transparency in government actions and that private agreements concerning the establishment of confidentiality cannot exclude from the public domain matters which prove to be of legitimate concern. 12 Plausibly, to assess confidentiality, in the view of Australian courts, means to perceive arbitration as a private process, which does not necessarily flow into confidentiality, especially when a matter of legitimate public interest is at hand. The Swedish approach was shaped similarly by a series of decisions rendered in the Bulbank v. AIT 13 case. With this in mind, it is worth turning our focus to the manifold diversity of opinions presented in this case, since every instance brought its own twist to the duty of confidentiality and its (non)existence in the arbitral system. Firstly, the Stockholm City Court held that an arbitration agreement gives rise to an inherent duty of confidentiality between the parties and any breach of this duty should be regarded as a material breach of contract, giving the other party the right to set aside the arbitration agreement. 14 Nullification of the award would therefore be, not without any controversy, the only outcome not lacking the “teeth” to ensure a proper and just remedy that could provide for the safeguarding of the fundamental principle of arbitration- confidentiality. Note, however, that the Appeal Court, following the examination of the applicable law, came to the conclusion that neither the rules applicable to the proceedings (in 10 Report of High Court of Australia Decision in 11 Arb. Int’l 3, at 245 (1995). 11 Cockatoo Dockyard Pty Ltd , (1995) 36 N.S.W.L.R. 662. 12 See: E.U.UDOBONG, “Confidentiality in International Arbitration: How valid id this Assumption?”, pp. 16, available at: , pp. 16; last visit: 19 April 2012; M. Pongracic-Speier, “Confidentiality and the Public Interest Exception: Considerations for Mixed International Arbitration”, available at: , pp. 15; last visit: 19 April 2012. 13 Case T-6-111-98, Bulgarian Foreign Trade Bank Ltd vs. A.I. Trade Finance Inc. 14 Ibid supra note 2, pp. 245.

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