High Court examines confidentiality of English arbitrations

Confidentiality is often cited as an advantage of arbitration over court proceedings, but what are the parameters of that confidentiality?

In A Corporation v A Firm and Mr W,Foxton J was asked to rule upon an application for various forms of injunction. This arose out of a situation where a law firm's Asia office was acting in an arbitration for a client D against C, where the firm's London office had acted for a related company A in a prior arbitration against a separate defendant B. The firm's London office now represented client C, D's opponent in the live arbitration.

Company A sought to prevent the firm from sharing information with C that it had gained during the first arbitration, relying upon various claimed duties of confidentiality, which included the general principle of confidentiality in English arbitral proceedings. This became the focus of the hearing and is the issue of most interest.

Arbitral confidentiality in England

It was accepted by both sides that parties to an arbitration agreement governed by English law are taken to have impliedly agreed to an obligation of confidentiality (either as a matter of the governing law of the arbitration agreement or as a result of the procedural law, both of which pointed to English law in the current case). However, the fact that a dispute leads to the commencement of an arbitration does not make the fact of the dispute, or the events that led to it, confidential.

It is the confidentiality of the process that matters, rather than any inherent confidentiality in the material to which it attaches. Documents created for purposes outside of the arbitration do not become confidential in the hands of the party to whom they belong just because they are deployed in an arbitration, but would be subject to a duty of confidentiality in the hands of a party who obtained them only through the arbitral process. Documents created for the purpose of the arbitral proceedings will be subject to the duty of confidentiality in either side's hands.

Foxton J referred to a "sliding scale of arbitral confidentiality" with the strength of the duty, and the resulting protection from the courts, contingent on the context in which it arises and the nature of the information in question. The judge held that a stronger duty of confidentiality attaches to documents obtained from the other side than it does to your own, even where they are created for the arbitration.

Ultimately the applicant company A was found not to be entitled to the injunctions it sought. No improper transfer of information had taken place and the judge was not persuaded that there was a real risk of prejudice to A or D as the information in question would confer no lasting benefit upon C.

What is (and isn't) confidential?

The Law Commission has recently reviewed the Arbitration Act 1996, which led to revisions to that Act in the form of the Arbitration Act 2025. A proposal to codify the confidentiality of arbitration formed part of its report, but did not end up forming part of the ultimate reforms. This decision shows that while there is some uncertainty as to how the obligation of confidentiality arises, there is no doubt as to its existence.

The exact scope of the duty is harder to define and Foxton J's "sliding scale" approach illustrates that it is fact-sensitive. The following principles can be ascertained though:

• The fact of a dispute and the factual matrix underlying it cannot become confidential simply because an arbitration has been commenced;

• The fact that the parties have commenced an arbitration is subject to confidentiality, but it is not a breach of duty to disclose the existence of the arbitration where there is a "legitimate reason to do so". We would suggest that the need to disclose the status of a material dispute to shareholders would constitute a legitimate reason;

• When it comes to documents exchanged during the arbitration, a party is not under an implied duty of arbitral confidentiality in respect of its own documents created outside the arbitral process, even if they are then deployed within it;

• Documents created outside the arbitral process received from the other side during the arbitration are subject to a duty of confidentiality;

• A duty of confidentiality applies to any document created for the purposes of arbitral proceedings, but is stronger in its application to documents received from the other side than to a document you have created.

Exceptions to confidentiality

Foxton J also identified a number of exceptions to the obligations of arbitral confidentiality, albeit without undertaking a comprehensive survey.  These exceptions include where it is reasonably necessary for the protection of the legitimate interests of an arbitrating party.  The examples Foxton J cited were:

• founding an issue estoppel from an award against the arbitrating party or their privies in other proceedings;

• permitting statements, reports or transcripts to be deployed where witness or expert evidence is being deployed in one arbitration which is contrary to evidence from the same individual in a prior arbitration; and

• for the purposes of making claims against or defending claims by a third party.

Foxton J also confirmed that confidential materials could be disclosed to interview a non-party to elicit their evidence, and that it was "very strongly arguable" that at least some confidential material could be disclosed to elicit similar fact evidence from a third party who is believed to have similar complaints against the opposing party.

What this means for you

It is worth remembering that any applicable institutional rules may impose their own levels of confidentiality, which may displace implied duties of confidentiality, such as Article 30 of the LCIA Rules, which requires the parties to keep confidential "all materials in the arbitration created for the purpose of the arbitration". This duty is also subject to exceptions, including where a party needs to "protect or pursue a legal right". That exception could include bringing proceedings against an unrelated party.

Foxton J's judgment will therefore assist parties in evaluating whether the use of material from a previous arbitration would be a breach of a duty of confidentiality or whether it may fall within an exception. The nature of the material in question, the legal right to be protected and the likelihood of prejudice to the other party in the previous arbitration will all be relevant factors to consider.