03.29The Arbitrator’s Instinct for Confidentiality of the Proceedings
Practitioners and arbitrators in both commercial and investment arbitrations may profit from studying the thorough and sensitive treatment of confidentiality found in a procedural order issued January 27, 2010 in an ICSID arbitration arising under the BIT between Italy and Argentina. (G Beccara et al v. Argentine Republic, ICSID Case No. ARB/07/5, Procedural Order of 1/27/10, published on ICSID website)
The order deals with confidentiality on several levels. The first and perhaps most generally applicable category concerns public discussion of the case during the course of the proceedings. Here the Tribunal’s approach implicitly recognizes a point to which experienced advocates on international arbitration will attest: clients seek to exploit the absence of clear legal rules imposing a confidentiality duty, to pursue extra-arbitral means of resolving the dispute through public exposure of embarrassing facts about the adverse party or its position.
Experience with this phenomenon surely is part of the motivation for approach taken by the Beccara Tribunal, concerning general public discussion of the ongoing proceedings. Thus the Tribunal orders that “[t]he Parties may engage in general discussion about the case in public, provided that any such public discussion is restricted to what is necessary, and is not used as an instrument to antagonize the Parties, exacerbate their differences, unduly pressure one of them, or render the resolution of the dispute potentially more difficult. . . .” This standard was adopted from substantially identical language used by another ICSID Tribunal, in the Biwater Gauff Ltd. v. Tanzania case (ARB/05/22, Proc. Order No. 3 of 9/22/06).
The balance struck between transparency and the integrity of the proceedings is constructive, and appears to reflect values widely shared among arbitrators acting in investment law cases as well as commercial cases.
For counsel in international arbitration, it is not unusual for a client, intent on using media or other public pressure to influence the adverse party to resolve the dispute, to ask counsel for assurance that no laws, rules, or agreements concerning the confidentiality of the arbitration will be violated by such activity. The answer often is that there are no such laws, rules, or agreements (and such was the case in the Beccara v Argentina case under discussion), but that the proposed actions risk antagonizing the Tribunal. It is sometimes difficult to articulate for a client why this may be so.
The orders adopted in Beccara andBiwater Gauff are indicative of a widely shared norm among international arbitrators that efforts to coerce the other party through publication of embarrassing facts may destabilize the arbitration, making the Tribunal’s task of managing the case and achieving a transparently fair process more difficult. (This is reflected in other elements of the Beccara confidentiality order, barring publication without mutual consent of pleadings, motions, and transcripts of proceedings, on the basis that “their uneven publication or distribution carry the risk of giving a moisleading impression….”) Thus the advice to the client may well be that while no law, rule, or agreement is violated by a proposed publicity campaign, the sensibilities of the arbitrators (or some of them) may be influenced quite negatively, because the actions tend to undermine the tribunal efforts to maintain order and a desirable level of courtesy and respect in the written and oral discourse.