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30 May 2019
In Chartered Institute of Arbitrators v (1) B (2) C (3) D,(1) the High Court held that, notwithstanding the obligation of confidentiality that would otherwise apply, it should:
On 4 February 2013 CIArb appointed B (a fellow of CIArb) as the arbitrator in a dispute between C and D. Following queries by C about B's relationship with D, B convened a hearing in April 2015 to determine whether the arbitral tribunal had been properly constituted. Following the hearing, B confirmed that the arbitral tribunal had been properly constituted and that he had no conflict of interest.
C subsequently applied to the court pursuant to Section 24 of the Arbitration Act 1996 for an order for the removal of B as arbitrator on the grounds that circumstances gave rise to justifiable doubts as to his impartiality (the Section 24 Application). In February 2016 Justice Hamblen concluded that there was a real possibility of apparent bias and that B should be removed. B subsequently resigned as arbitrator.(2)
CIArb's professional conduct committee brought several charges against B, claiming that he had:
In the context of these disciplinary proceedings, CIArb sought certain arbitration documents and declarations.
CIArb made two applications:
C acknowledged that:
C consented to CIArb obtaining copies of documents from the Section 24 Application (to the extent that they were on the court file) and to CIArb being entitled to rely on them. However, while C did not oppose CIArb's application, it could not provide the documents without D's permission.
Discretion of the court to grant permission to obtain documents
Justice Moulder decided, by reference to Rule 5.4C(2) of the Civil Procedure Rules and following Cape Intermediate Holdings Ltd v Dring,(3) that a non-party to the arbitration proceedings (such as CIArb) is entitled to copies of the statement of case. However, access to the witness statements (including exhibits), written submissions and skeleton arguments was held to be a matter of discretion that required the court's permission. In the alternative, Moulder stated that documents which had been read out and/or read by the judge in open court could be provided under the court's inherent jurisdiction, provided that there was an effective public hearing in which the documents had been deployed.
In deciding whether to exercise his discretion in favour of providing the documents sought, Moulder noted that it was clear from Cape that the essential purpose of granting access to such documents was to provide open justice. The court must consider the non-party's reasons for seeking copies of the documents and, assuming that CIArb had a legitimate purpose, balance that against the party to the proceedings' private interest in preserving their confidentiality.
The court concluded that CIArb had sought the documents for a legitimate interest. While noting the general rule of an implied obligation of confidentiality arising from the nature of arbitration itself, the interest of justice constitutes an exception to this implied obligation.
Moulder held that there was a general public interest in maintaining the quality and standards of arbitrators that extended beyond the interests of the parties in a particular case to the wider section of the public who chose to refer their disputes to arbitration. No distinction was to be drawn between an institution which regulated all members of the profession and voluntary membership of an institution which regulated only a section of the profession. The general public is entitled to expect that arbitrators who belong to a recognised body meet certain minimum standards as laid down by that body and that those standards will be enforced. Moulder further stated that arbitration is a quasi-judicial process for the resolution of disputes and the interests of justice lie in supporting the integrity of this alternative dispute resolution mechanism.
Based on these considerations, the court granted CIArb access to:
However, the court declined access to the skeleton arguments because the disciplinary proceedings were not based on the findings in the Section 24 Application and were therefore unnecessary.
Declaratory relief concerning documents
The court first considered that it had the jurisdiction to make the declaration sought by a non-party, pursuant to Section 19 of the Senior Courts Act 1981.
As to the substance of the declarations sought, it would have to be in the public interest to override the confidentiality obligation in the underlying arbitration. The court concluded that CIArb and B were entitled in the context of the disciplinary proceedings to refer to and/or rely on the documents which the court had ordered to be disclosed. However, the court refused to make a declaration in relation to the circumstances of B's nomination and appointment insofar as it extends to arbitration proceedings other than as between C and D; other parties to previous arbitrations in which B had been nominated or appointed had not been notified of the application, so the court could not be satisfied that all sides of the argument would be fully and properly put.
This case illustrates the limits to the implied duty of confidentiality arising out of arbitration proceedings in English law.
While the court was clearly supportive of the general principle that arbitration proceedings are to be treated as confidential, it also demonstrated its willingness to depart from this general principle should one of the identified exceptions apply – in this instance, that relating to the interests of justice.
The interest of justice exception will only apply if:
In upholding this interest of justice exception to the general rule that arbitration proceedings are confidential – in the context of disciplinary proceedings brought by CIArb – the court has nevertheless demonstrated its pro-arbitration stance by emphasising the public interest in maintaining the quality and standards of arbitrators.
For further information on this topic please contact Marie Berard or James Dingley at Clifford Chance LLP by telephone (+44 20 7006 1000) or email (firstname.lastname@example.org or email@example.com). The Clifford Chance website can be accessed at www.cliffordchance.com.
Tom Dopstadt, trainee solicitor, assisted in the preparation of this article.
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