The Chartered Institute of Arbitrators v B and others: The “Interests of justice” exception to the general obligation of confidentiality in arbitral proceedings

On March 7, 2019, Justice Moulder of the England and Wales High Court (Commercial Court) handed down the decision in The Chartered Institute of Arbitrators v B and others.[1] This decision addressed the circumstances under which a UK court will exercise its discretion to permit non-parties to access and use documents from arbitral proceedings notwithstanding the obligation of confidentiality that would otherwise apply. In the result, Justice Moulder allowed the non-party The Chartered Institute of Arbitrators (the “Institute”) access to certain documents from an arbitration proceeding for use in disciplinary proceedings against an arbitrator.

Background

The Institute is a professional body that promotes and facilitates the resolution of disputes through arbitration and alternative means worldwide. While membership with the Institute is voluntary, the Institute regulates its members through supervision and monitoring of performance, and has the power under its Royal Charter to discipline members.

In January 2013, “D” applied to the Institute for the appointment of an arbitrator in respect of a dispute with “C” over a contract between C and D. The Institute confirmed the appointment of B for the arbitration of the dispute. In February 2015, C’s counsel sought information concerning the nature and extent of the professional relationship between B and D.

Various correspondence flowed between C’s counsel and D and B in respect of requests for information. B then called an arbitral hearing to determine whether the tribunal in the contract dispute between C and D had been “properly constituted” (the “Constitution Hearing”), further to which B ruled that he had no conflict of interest and that the tribunal was indeed properly constituted. Nevertheless, C’s counsel asked B to recuse himself. C then brought an application under section 24(1)(a) of the Arbitration Act1996 for the removal of B as arbitrator of the dispute (the “Section 24 Application”). On February 17, 2016, Justice Hamblen issued judgment in respect of the Section 24 Application, concluding that there was a real possibility of apparent bias and therefore the grounds for removal of B as arbitrator were made out.[2]

After receiving a complaint from a third party, the Institute laid disciplinary charges against B and referred the matter to a disciplinary tribunal. The Institute then brought two applications which were the subject of Justice Moulder’s decision in this case. First, an application for an order under Civil Procedure Rule (“CPR”) 5.4C(2) for copies of certain documents from the Section 24 Application, namely the statements of case, witness statements (including exhibits), written submissions and skeleton arguments (the “Documents”). Second, the Institute sought declarations that the Institute and B are entitled to rely on the Documents as well as the circumstances of B’s nomination and appointment in matters concerning D in B’s disciplinary proceedings before the Institute, and that the use of such documents is in the public interest.

Decision

On the first application, the court considered the exercise of judicial discretion under CPR 5.4C and the inherent jurisdiction of the court to allow non-parties access to documents not forming part of records of the court.

Justice Moulder quickly ruled on the statements of case, finding the Institute was entitled to copies of these on the basis of CPR 5.4C(1), which expressly entitles a non-party access to such documents.[3] With respect to the witness statements and exhibits, Justice Moulder initially found these were “records of the court” that could be obtained under CPR 5.4C(2), not as of right, but with permission from the court in an exercise of its discretion.[4] In the alternative, if the witness statements were not “records of the court”, the court could rely on its inherent jurisdiction to order access by a non-party to documents that had been read by the judge or read in open court.[5] Again, this required the court to consider the issue of whether it should exercise its discretion to grant access to the documents sought.[6]

In determining whether to exercise the court’s discretion, Justice Moulder followed the approach which calls for a balancing of the non-party’s reasons for obtaining copies of the documents against the private interest of the party to the proceeding in preserving confidentiality. This balancing engages a number of factors including:

  • The extent to which the open justice principle is engaged;
  • Whether the documents are sought in the interests of open justice;
  • Whether the applicant has a legitimate interest in seeking copies of the documents and, if so, whether that interest is a public or private interest;
  • The reasons for seeking to preserve confidentiality; and
  • The harm, if any, which may be caused by ordering access to the documents.[7]

With reference to these factors, Justice Moulder found that the Institute, in its function of supervising and monitoring the performance of members and the exercise of disciplinary control through disciplinary proceedings, had a legitimate interest in the Documents, and that this interest could be said to be a public interest.[8] In balancing the Institute’s legitimate interest against the reasons in favour of preserving confidentiality, Justice Moulder noted the implied obligation in arbitral proceedings to treat documents produced, used or disclosed in the course of arbitration as confidential.[9] However, an exception to the general rule of confidentiality in arbitration proceedings provides that disclosure may be ordered by the court where it is “in the interests of justice”.[10]

As a quasi-judicial process for the resolution of disputes, Justice Moulder held that the interests of justice favored supporting the integrity of the alternative dispute resolution mechanism.[11] In this regard, Justice Moulder noted that the public had a legitimate expectation that arbitrators who belonged to a recognized body would meet certain minimum standards and that those standards would be enforced.[12]

With respect to the second application, given the determination that the public interest overrode the confidentiality obligation applicable to arbitral proceedings, Justice Moulder made the limited declaration that the Institute and B were entitled in the disciplinary proceedings against B to refer to and/or rely on the documents ordered to be disclosed pursuant to the order made in respect of the Institute’s first application.

Conclusion

This decision has implications for the general obligation of confidentiality of arbitral proceedings.

Parties involved in arbitration should be aware that there are circumstances in which a court may allow a non-party access to documents disclosed in an arbitration, despite the implied obligation of confidentiality in those proceedings. In matters involving a significant public interest, a court may order access to documents for use in another proceeding notwithstanding the obligation of confidentiality that generally applies.

For further reading on confidentiality of arbitration proceedings, see our previous post: Larsen v. Citibank FSB, 871 F.3d 1295 (11th Cir. Sep. 26, 2017)

[1] [2019] EWHC 460 (Comm) [Institute v B], online: https://www.bailii.org/ew/cases/EWHC/Comm/2019/460.html.

[2] [2016] EWHC 240 (Comm), online: https://www.bailii.org/ew/cases/EWHC/Comm/2016/240.html.

[3]Institute v B, supra note 1 at para 24.

[4]Ibid at paras 25-27, citing Cape Intermediate Holdings Ltd v Dring, [2018] EWCA Civ 1795 at paras 36-41 [Dring], online at https://www.bailii.org/ew/cases/EWCA/Civ/2018/1795.html. Dring is currently under appeal to the Supreme Court.

[5]Ibid at paras 28-30, citing Dring at paras 107-108.

[6]Ibid at para 30.

[7]Ibid at para 35, citing Dring at paras 127-129.

[8]Ibid at paras 40-41.

[9]Ibid at para 42.

[10]Ibid at paras 44-46, citing Glidepath BV v Thompson, [2005] EWHC 818 (Comm) at paras 15-16, 18 online at https://www.bailii.org/ew/cases/EWHC/Comm/2005/818.html.

[11]Ibid at para. 48.

[12]Ibid  at para 48.

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