Emmott v Michael Wilson & Partners Ltd

Flaux J had no jurisdiction to make such an order. There is no jurisdiction to make an order for disclosure of documents in favour of a non-party in proceedings before the court unless such documents are a matter of public record (CPR 5.4(5)), and there is no basis for such a jurisdiction in relation to documents generated in an arbitration: The Eastern Saga [1984] 2 Lloyd’s Rep 373, 379. The only way in which a foreign litigant might obtain documents (or other evidence) generated in a confidential arbitration with its seat in England is under the Evidence (Proceedings in Other Jurisdictions) Act 1975: Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, 633. No such application has been made in this matter, and there is no suggestion that the court in NSW or in the BVI requires the assistance of the English court as regards disclosure of documents.

It is accepted that the court may retain its jurisdiction under section 37 of the Supreme Court Act 1981 to grant an injunction to restrain the breach of the duty of confidence arising in the arbitration context, provided that the jurisdiction is exercised in a manner consistent with the powers in section 44 of the 1996 Act.

It is for the arbitral tribunal to make the determination whether the documents are confidential, and whether any exception applies.

Mr Emmott says that the court had jurisdiction. The court has power to grant permission: Ali Shipping Corporation v Shipyard Trogir, at 327; Glidepath BV v Thompson [2005] EWHC 818 (Comm), [2005] 2 Lloyd’s Rep 549, at [15]; Mustill & Boyd, Commercial Arbitration (2001 Companion Volume), at 113. The court has a power to grant a declaration corresponding to the power to grant an injunction. The power is pursuant to the inherent jurisdiction and/or is part of the court’s jurisdiction to grant negative declarations. The question of whether the application should be made to the arbitrators or the court does not arise in this case because MWP did not seek a stay and has waived any right.

The Evidence (Proceedings in Other Jurisdictions) Act 1975 is irrelevant. The present case has nothing to do with an application by a foreign party, litigating abroad, for the assistance of the English court.

The decision of Flaux J constitutes an unwarranted intrusion into the confidentiality of arbitrations, and has serious adverse consequences for the attractiveness of England as the seat of arbitration.

There was no evidence that MWP was presenting a misleading or inaccurate picture to the NSW or BVI courts. There was no inconsistency between the claim in the arbitration and the allegations in NSW and the BVI. Whilst there is no cause of action in fraud (i.e. deceit) against Mr Emmott, the claims made against him are claims in fraud in the sense that what it is alleged he did was “something dishonest and morally wrong” (Ex p Watson (1890) 21 QBD 301). In NSW it is alleged that there was a conspiracy between Mr Emmott and the third parties to defraud MWP. There is no such plea in the arbitration: such a plea would add nothing to the claims against Mr Emmott because none of his co-conspirators are before the tribunal.

Flaux J was wrong to hold that it was in the interests of justice that the documents be disclosed to the third parties: (1) neither the court in NSW nor the court in the BVI has asked MWP to provide the documents sought by the third parties, although each court is aware that the dispute between Mr Emmott and MWP is being determined in arbitration; (2) the third parties can make an application in NSW and the BVI against MWP as a party to the proceedings for specific disclosure insofar as they consider documents are considered or perceived to be relevant. What does or does not assist the court in NSW or the BVI is a matter for those courts, and not for the English court.

The “interests of justice” exception cannot be used to expand the limited exception in Ali Shipping Corporation v Shipyard Trogir [1999] 1 WLR 314 that disclosure is required for the protection of the legitimate interests of an arbitrating party. The protection of the interests of a non-party is irrelevant. The interests of justice exception is not concerned with documents produced by the parties to the confidential arbitration, but with the evidence of witnesses, who are not themselves parties to it. The interests of justice exception arises not as an exception to the implied duty, but as the basis for a court hearing a subsequent dispute to order that information be disclosed notwithstanding confidence.

The fact that cases may be run differently against different parties is not a reason to permit them to know what is being said in relation to an arbitration to which they are strangers, and the similarity or closeness of disputes is not a good reason to lift the cloak of confidentiality over an arbitration however desirable it may be to permit strangers to it to be able to see what is being said for the purposes of their related disputes: The Eastern Saga [1984] 2 Lloyd’s Rep 373 at 379.

Even if it is in the interests of justice to permit disclosure of the Amended Points of Claim in the arbitration so that the courts in NSW and the BVI are not given a misleading picture as to what claims are advanced in the arbitration against Mr Emmott, this does not justify disclosure of the other documents. Mr Emmott’s Defence is irrelevant as regards that concern. The skeleton argument used by Mr Emmott in support of an application to strike out the Points of Claim at a hearing before the tribunal on October 3, 2007 was not before Flaux J on the application and he did not see it before making his order. In such circumstances it was not possible for him to determine that it was in the interests of justice that this document be disclosed. Since the Points of Claim which were the subject of Mr Emmott’s application have now been amended the skeleton argument is part of the arbitration history, and is of no relevance to or concern of the third parties.

Flaux J failed to recognise that MWP is prejudiced by the use of materials generated in the arbitration in other foreign proceedings. Prejudice will be presumed and, unless exceptional circumstances are established, confidentiality will be upheld.

The judge erred in permitting disclosure of his judgment because it discloses significant confidential information (Moscow City Council v Bankers Trust Co. [2004] EWCA Civ 314, [2005] QB 207) and there was no reason why it needed to be disclosed to the courts in NSW or the BVI or to the third parties.

If the documents were not disclosed to the courts in NSW and the BVI, there was a real risk that these courts would be seriously misled and this would also be to the detriment of Mr Emmott. Preventing courts from being misled – whether they be English courts or foreign courts – is a paradigm example of the interests of justice exception to confidentiality recognised in Ali Shipping Corporation v Shipyard Trogir. The exception is not concerned solely with the evidence of witnesses who are not party to the arbitration.

MWP has no legitimate interest in preserving the confidentiality of the documents if in fact it is preventing the courts in NSW and the BVI from learning that they are being misled and/or in hiding from those courts the true way in which its case is put in the London arbitration.

MWP’s submission that the judgment should have been confidential to the parties because it discloses significant confidential information fails to identify what that confidential information might be.

The starting point is that appellate courts should not generally entertain purely moot or academic points between private litigants: Sun Life Assurance Co of Canada v Jervis [1944] AC 111, at 113-114. Appeals which cannot affect the position as between the parties should not be heard: there should be a matter in actual controversy which is a live issue.

The point arises because the documents have been made available to the courts in NSW and the BVI. Following Flaux J’s judgment, the Amended Points of Claim and the skeleton argument were filed with the BVI court by the lawyers for the defendants on November 27, 2007. The hearing in the BVI was on December 5 and 6, 2007, when these documents (and the Defence) were made available to the court, and the hearing was adjourned for further evidence to be put in. The documents were also filed with NSW court very shortly after Flaux J’s orders.

All three documents had, therefore, been made available in NSW and the BVI by the time the application for permission to appeal, with a skeleton argument dated December 6 and signed by counsel, was filed with the Court of Appeal on December 7, 2007.

In section 8 of the application for permission a stay of execution was applied for, and it was said “if the learned judge was wrong to make the orders on 23 November 2007 and 4 December 2007 confidential documents will be placed in the hands of third parties who have no right to them.” The application also asked for an order that in the event that MWP was successful on its appeal, Mr Emmott be ordered to take such steps as were necessary to recover all copies of documents which had been disclosed by him to third parties after being given permission to do so by the judge.

It was only in a footnote that the skeleton argument pointed out that the judge had refused a stay of execution, and that MWP had consented during the course of the hearing on November 23, 2007 to disclosure of the Amended Points of Claim to the third parties in NSW and the BVI.

The order made by Rix LJ on December 17, 2007 made it clear that he was treating the application as one for permission to appeal and a stay of execution, and he granted a stay and also ordered expedition because “if disclosure has to be made, it is needed in ongoing litigation.” Plainly, therefore, Rix LJ was not told, and did not appreciate, that the documents had actually been handed over. It is likely that he was misled by the failure to disclose that the documents had been handed over, and by the application for a stay.

Nevertheless, although that might have been a ground for setting aside the permission to appeal (Nathan v Smilovitch [2002] EWCA Civ 759, at [9]; Barings Bank plc v Coopers & Lybrand [2002] EWCA Civ 1155) no application to that effect has been made, and this is not a case in which this court should adopt that course of its own motion, since the court has not been fully informed about which of MWP’s advisers were aware of what had happened.

Nor is this, in my judgment, a case in which this court should refuse to hear the appeal because it has become academic. It is possible that either side may wish to disclose more arbitration documents to one or more of the courts hearing aspects of this dispute. The determination of the appeal might give some guidance if further disclosure were requested. I accept that the exercise may be fact-sensitive, and (as will appear below) somewhat different considerations may apply to the disclosure of documents such as those relating to the business of MWP, or dealings between MWP and Mr Emmott, or commercially confidential information. I also accept that it may be important in any future dispute on the subject of confidentiality between the parties to distinguish between different types of confidentiality which attach to different types of document or to documents which have been obtained in different ways: Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2000] UKPC 11, [2003] 1 WLR 1041, at [20].

Consequently a judgment on this appeal may not be purely academic. But I hope that this situation will not recur. I have to say that this seems to be a case where each of the parties has reached the point where they will not concede an inch to the other. Why MWP and Mr Wilson were so keen to preserve the confidentiality of the pleadings and the skeleton argument in the London arbitration is mystifying, particularly when they had already told the court in Sydney that they had endeavoured to bring “a level of parity” between the proceedings in New South Wales and the London arbitration. Apart from the material which has been redacted from the Defence, there is nothing commercially sensitive in the documents, and I do not see how MWP could have been prejudiced by their disclosure.

The uncontroversial starting point is that in English law arbitration is a private process. In Russell v Russell (1880) 14 Ch D 471 at 474 Sir George Jessel MR said of arbitration: “As a rule, persons enter into these contracts with the express view of keeping their quarrels from the public eyes, and of avoiding that discussion in public, which must be a painful one, and which might be an injury even to the successful party to the litigation, and most surely would be to the unsuccessful.” This is the principle which underlies the decision in The Eastern Saga [1984] 2 Lloyd’s Rep 373, which was an application to set aside an order made by arbitrators that the hearing of the arbitration between the parties (owners and charterers) should take place concurrently with that between the charterers and the sub-charterers. It was held that the arbitrators had no power to order concurrent hearings without the consent of the parties. It was implicit in the concept of private arbitration that strangers would be excluded from the hearing and conduct of the arbitration. The only powers which an arbitrator enjoyed related to the reference in which he had been appointed. Leggatt J said (at 379):

“The concept of private arbitrations derives simply from the fact that the parties have agreed to submit to arbitration particular disputes arising between them and only between them. It is implicit in this that strangers shall be excluded from the hearing and conduct of the arbitration and that neither the tribunal nor any of the parties can insist that the dispute shall be heard or determined concurrently with or even in consonance with another dispute, however convenient that course may be to the party seeking it and however closely associated with each other the disputes in question may be.”

The Departmental Advisory Committee on Arbitration Law, Report on the Arbitration Bill, 1996 (reprinted in Mustill and Boyd, Commercial Arbitration, 2nd edition, 2001 Companion, Appendix 1) said (at para 10) that privacy and confidentiality in arbitration had not been included in what became the Arbitration Act 1996, because they were unsettled and better left to the common law to evolve. The Committee said (at para 12) that there was “no doubt whatever that users of commercial arbitration in England place much importance on privacy and confidentiality as essential features of English arbitration” and approved what Sir Patrick Neill QC (as he then was) had said in a lecture, reprinted in (1996) 12 Arb Int 287, namely that it would be difficult to conceive of any greater threat to the success of English arbitration than the removal of the general principles of confidentiality and privacy. The Committee said (at para 16) that in English arbitration “the exceptions to confidentiality are manifestly legion and unsettled in part”; any provisions as to privacy and confidentiality would have to deal with the duty of a company to make disclosure of, for example, arbitration proceedings and actual or potential awards which had an effect on its financial position. But it concluded (at para 17) that “none doubt at English law the existence of the general principles of confidentiality and privacy” and that “whilst the breadth and existence of certain exceptions remains disputed, these can be resolved by the English courts on a pragmatic case-by-case basis.”

Parties who arbitrate in England expect that the hearing will be in private, and that is an important advantage for commercial people as compared with litigation in court: see Hassneh Insurance Co of Israel v Mew [1993] 2 Lloyd’s Rep 243, at 246-7; Economic Department of City of Moscow v Bankers Trust Co [2004] EWCA Civ 314, [2005] QB 207, at [2] and [30], Mance LJ emphasised that privacy and confidentiality were implicit in parties’ choice to arbitrate in England, and valued by them. See also Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 128 ALR 391, at 398, per Mason CJ.

The privacy of arbitration is underlined by CPR 62.10(3)(b), which provides that subject to the power of the court to order that an arbitration claim (i.e. a court claim concerning arbitration) may be heard in public or in private, all arbitration claims will be heard in private except the hearing of a preliminary point of law under section 45 of the Arbitration Act 1996 or an appeal on a question of law arising out of an award under section 69. The starting point is that the parties’ wish for confidentiality and privacy outweighs the public interest in a public hearing: Economic Department of City of Moscow v Bankers Trust Co. So also CPR PD62.5.1 provides that an arbitration claim (i.e. an application to the court under the Arbitration Act 1996 or an application affecting arbitration proceedings or an arbitration agreement or arbitral award: CPR 62.2(1)) may only be inspected with the permission of the court: see Glidepath BV v Thompson [2005] EWHC 818 (Comm), [2005] 2 Lloyd’s Rep 549.

The privacy of arbitration is almost universally recognised by institutional rules. Thus the privacy of the hearings is provided for in Article 19(4) of the Rules of London Court of International Arbitration (“LCIA”) ; Article 21(3) of the Rules of the Court of Arbitration of the International Chamber of Commerce (“ICC”); Article 53(c) of the arbitration rules of the World Intellectual Property Organisation (“WIPO”); and Article 25(4) of the UNCITRAL Rules.

The confidentiality of the award is provided for by Article 30(1) of the LCIA Rules and also by the principle of non-publication of the award in Article 30(3); by Article 28(2) of the ICC Rules; by Article 75 of the WIPO Rules; and by Article 32(5) of the UNCITRAL Rules.

In the last 20 years or so the English courts have had to consider the consequences of the privacy of the arbitral process and the scope of the obligations of confidentiality in several different contexts. It is apparent that the English jurisprudence on this subject (as distinct from the confidentiality of awards, which is much discussed in other countries) is much richer than that of any other important arbitration centre, and that it constitutes a major contribution to the development of the law of international arbitration. There have also been important decisions in Australia, France and Sweden. There are valuable discussions of the international practice in ICC Commission on Arbitration, Forum on ICC Rules/Court: Report on Confidentiality as a purported obligation of the parties in arbitration, 2002; Fouchard, Gaillard, Goldman, International Commercial Arbitration (ed Gaillard and Savage, 1999), para 1412; Lew, Mistelis and Kröll, Comparative International Commercial Arbitration (2003), paras 24-99 et seq.

Only a minority of arbitration rules in the major centres deal expressly with confidentiality of material generated in an arbitration, some of which are plainly influenced by the English case law, to which I refer below. Article 30(1) of the LCIA Rules provides:

“Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain - save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.”

The Swiss Rules of International Arbitration provide (Art 43(1))

“Unless the parties expressly agree in writing to the contrary, the parties undertake as a general principle to keep confidential all awards and orders as well as all materials submitted by another party in the framework of the arbitral proceedings not otherwise in the public domain, save and to the extent that a disclosure may be required of a party by a legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a judicial authority. This undertaking also applies to the arbitrators, the tribunal-appointed experts, the secretary of the arbitral tribunal and the Chambers.”

The WIPO Arbitration Rules contain in Article 52 elaborate provisions for the protection of confidential information “of commercial, financial or industrial significance”, and the Rules provide by Article 73:

“(a)

Except to the extent necessary in connection with a court challenge to the arbitration or an action for enforcement of an award, no information concerning the existence of an arbitration may be unilaterally disclosed by a party to any third party unless it is required to do so by law or by a competent regulatory body, and then only:

(i)

by disclosing no more than what is legally required; and

(ii)

by furnishing to the Tribunal and to the other party, if the disclosure takes place during the arbitration, or to the other party alone, if the disclosure takes place after the termination of the arbitration, details of the disclosure and an explanation of the reason for it.

(b)

Notwithstanding paragraph (a), a party may disclose to a third party the names of the parties to the arbitration and the relief requested for the purpose of satisfying any obligation of good faith or candor owed to that third party.”

and by Article 74(a):

“In addition to any specific measures that may be available under Article 52, any documentary or other evidence given by a party or a witness in the arbitration shall be treated as confidential and, to the extent that such evidence describes information that is not in the public domain, shall not be used or disclosed to any third party by a party whose access to that information arises exclusively as a result of its participation in the arbitration for any purpose without the consent of the parties or order of a court having jurisdiction.”

Some important arbitral rules are silent on confidentiality, such as the ICC Rules and the UNCITRAL Rules. But the UNCITRAL Notes on Organizing Arbitral Proceedings, in Redfern and Hunter, International Commercial Arbitration (4^th ed. 2004), App D, say (at para 31) that it is widely viewed that confidentiality is one of the advantageous and helpful features of arbitration; there is no uniform answer in national laws as to the extent to which the participants in an arbitration are under the duty to observe the confidentiality of information relating to the case; and parties who have agreed on arbitration rules or other provisions that do not expressly address the issue of confidentiality cannot assume that all jurisdictions would recognise an implied commitment to confidentiality. The Notes conclude that an arbitral tribunal might wish to discuss that with the parties and, if considered appropriate, record any agreed principles on the duty of confidentiality.

It is not always easy to distinguish confidentiality and privacy, and it is also important to bear in mind the context of the decisions. The context in which the question may arise is important, because quite different rules may apply in different contexts.

First, a party to litigation in the courts may seek discovery or disclosure of documents generated in an arbitration. Confidentiality of documents is, of course, not in itself a reason for withholding disclosure, but the court will compel disclosure only if it considers it necessary for the fair disposal of the case: Science Research Council v Nassé [1980] AC 1028. Dolling-Baker v Merrett [1990] 1 WLR 1205 (CA) involved, in part, an appeal from an order requiring discovery in litigation of documents generated in an arbitration. The action was for money due under a policy of reinsurance for which the first defendant was one of the insurers and the second defendants were the placing brokers. The application was for an order that the first defendant should make a list of all documents relating to an arbitration in which a similar policy (where the first defendant was also an insurer and the second defendants were also the placing brokers) had been an issue. It was held that the documents were not relevant to the issues in the action, and even if they were relevant, producing them for inspection was not necessary for disposing fairly of the issues.

The main ground of the decision was that the plaintiff had not made out a case sufficient to enable the court to frame any acceptable order because there was a mass of documents covered by the order which could not conceivably be relevant to the issues in the action. But Parker LJ also considered the position on the assumption that his conclusion as to relevance was incorrect. Having said that there was an implied obligation on the parties to arbitration not to disclose or use for any other purpose any documents disclosed or generated in an arbitration, he said (at 1213):

“It must be perfectly apparent that, for example, the fact that a document is used in an arbitration does not confer on it any confidentiality or privilege which can be availed of in subsequent proceedings. If it is a relevant document, its relevance remains. But that the obligation exists in some form appears to me to be abundantly apparent. It is not a question of immunity or public interest. It is a question of an implied obligation arising out of the nature of arbitration itself. When a question arises as to production of documents or indeed discovery by list or affidavit, the court must, it appears to me, have regard to the existence of the implied obligation, whatever its precise limits may be. If it is satisfied that despite the implied obligation, disclosure and inspection is necessary for the fair disposal of the action, that consideration must prevail. But in reaching a conclusion, the court should consider, amongst other things, whether there are other and possibly less costly ways of obtaining the information which is sought which do not involve any breach of the implied undertaking.”

A United States decision said to be inimical to confidentiality in arbitration is a case of this kind. In United States v Panhandle Eastern Corp., 118 FRD 346 (D Del 1998) it was held, in a civil action by the US Federal Maritime Administration, that the defendant was not entitled to withhold from discovery documents generated in a Swiss ICC arbitration. One of the grounds of the decision was that the defendant had not shown that the effect of the ICC Rules was to impose an obligation of confidentiality. See also Caringal v Karteria Shipping Ltd, WL 874705 (ED La 2001); ContshipContainerlines Ltd v PPG Industries, Inc, WL 1948807 (SDNY 2003); Lawrence E Jaffe Pension Plan v Household International, Inc, WL 1821968 (D Colo 2004).

Nor is confidentiality an absolute bar in a second type of case, where a party to an arbitration may seek the assistance of the court to obtain through a witness summons material deployed in another arbitration, as in London and Leeds Estates Ltd v Paribas Ltd (No 2) [1995] 1 EGLR 102 (Mance J) and Council of the Borough of South Tyneside v Wickes Building Suppliers Ltd [2004] EWHC 2428 (Comm) (Gross J). But in such cases the court will take into account the strong policy in favour of confidentiality in arbitration.

Third, issues may arise about the disclosure of documents on the court file relating to an arbitration (Glidepath BV v Thompson [2005] EWHC 818 (Comm), [2005] 2 Lloyd’s Rep 549, Colman J) or whether the judgment of a court given in relation to an arbitration should be published (Economic Department of City of Moscow v Bankers Trust Co [2004] EWCA Civ 314, [2005] QB 207). Here the privacy of arbitration will be an important, but not a decisive, factor.

In each of those three cases the court exercises a discretion in which privacy or confidentiality is an important factor in the balance.

Fourth (and most relevant to the present case), a party to an arbitration may have an interest (commercial or otherwise) in disclosing documents generated in an arbitration (including the award itself) to third parties (Hassneh Insurance Co of Israel v Mew [1993] 2 Lloyd’s Rep 243, Colman J; Insurance Co v Lloyd’s Syndicate [1995] 1 Lloyd’s Law Rep 272, Colman J) or in another arbitration (Ali Shipping Corporation v Shipyard Trogir; Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2000] UKPC 11, [2003] 1 WLR 1041), and the other party to the arbitration may seek to restrain disclosure by injunction.

Three legal concepts or categories have been in play in these cases. The first is privacy, in the sense that because arbitration is private that privacy would be violated by the publication or dissemination of documents deployed in the arbitration. The second is confidentiality in the sense where it is used to refer to inherent confidentiality in the information in documents, such as trade secrets or other confidential information generated or deployed in an arbitration. The third is confidentiality in the sense of an implied agreement that documents disclosed or generated in arbitration can only be used for the purposes of the arbitration. The distinction between the second and third cases may be illustrated by the case (not far from this one) where the relevant documents in the arbitration (such as the Defence) do not contain anything in themselves which is confidential: nevertheless the parties are under an obligation not to use it for any purpose other than the arbitration, and that obligation is described in the authorities as an obligation of confidence.

Some of the authorities treat as equivalent privacy and confidentiality in the present context: e.g London and Leeds Estates Ltd v Paribas Ltd (No 2) at 105-106, 109; Hassneh Insurance Co of Israel v Mew at 246-247. Others draw a distinction between privacy and confidentiality: Dolling-Baker v Merrett at 1213-1214. In Ali Shipping Corporation v Shipyard Trogir at 326, Potter LJ said that “the obligation of confidentiality … arises as an essential corollary of the privacy of arbitration proceedings.”

Documents in arbitration may, as I have said, be inherently confidential, as where they contain trade secrets. But it is clear that what has emerged from the recent authorities in England is that there is, separate from confidentiality in that sense, an implied obligation (arising out of the nature of arbitration itself) on both parties not to disclose or use for any other purpose any documents prepared for and used in the arbitration, or disclosed or produced in the course of the arbitration, or transcripts or notes of the evidence in the arbitration or the award, and not to disclose in any other way what evidence has been given by any witness in the arbitration, save with the consent of the other party, or pursuant to an order or leave of the court: Dolling-Baker v Merrett at 1213-1214; Hassneh Insurance Co of Israel v Mew at 246; London and Leeds Estates Ltd v Paribas Ltd (No 2) Ltd at 106; Ali Shipping Corporation v Shipyard Trogir at 326 (where the defendants had conceded the existence of the implied term: see at 328). The obligation is not limited to documents which contain material which is confidential, such as trade secrets. The obligation arises, not as a matter of business efficacy, but is implied as a matter of law: Ali Shipping Corporation v Shipyard Trogir at 326, disapproving Hassneh Insurance Co of Israel v Mew on this point.

In Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 128 ALR 391 a majority of the High Court of Australia rejected this approach and decided that there was no such implied obligation except as regards documents produced compulsorily pursuant to an order of the tribunal.

The formulation of the implied obligation in arbitration is plainly influenced by the English rule in court proceedings (now in CPR 31.22; on the history see Home Office v Harman [1983] 1 AC 280) that a party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed: see especially Hassneh Insurance Co of Israel v Mew at 247. Breach of the rule of court is a contempt, but the court has a power to give permission for the document to be used, particularly when it is in the public interest. The analogy cannot be taken too far, because it has never been suggested that the implied obligation in arbitral proceedings is subject to the contrary direction of the arbitral tribunal, and plainly breach of the obligation cannot engage the power of the court to punish for contempt.

The implied agreement is really a rule of substantive law masquerading as an implied term. But if the implied agreement of the parties is to be taken as the basis of the obligation of confidentiality (at any rate where English law is the law governing the arbitration agreement) it ought to follow that disputes about its limits are within the scope of the arbitration agreement and should be determined by the arbitral tribunal. On the evidence of the reported cases, however, it seems that whenever a dispute has arisen as between the parties as to the applicability and extent of confidentiality it has been resolved by an application to the court for an injunction to restrain disclosure: Hassneh Insurance Co of Israel v Mew; Insurance Co v Lloyd’s Syndicate; Ali Shipping Corporation v Shipyard Trogir. The application in the present case should be regarded as the mirror-image of such an application, i.e. it should be treated as a claim for a declaration that the confidentiality obligation did not apply. No stay was sought of that application.

It is plain that there are limits to the obligation of confidentiality. An award may fall to be enforced, or challenged, in a court. The existence and details of an arbitration claim may need to be disclosed to insurers, or to shareholders, or to regulatory authorities. What, then, are the limits of the obligation to use documents in an arbitration only for the purposes of the arbitration?

Before setting out the possible exceptions, two points should be stressed. First, the applicable rules accepted by the parties may provide the answer, or at any rate an answer. I have already set out the LCIA and WIPO Rules, each of which restates the basic confidentiality principle subject to exceptions.

The second point to be stressed is that it is particularly important that what has been said about the possible exceptions to confidentiality must read in context. I take two examples. First, if a court decides in the context of a witness summons (as it did in London and Leeds Estates Ltd v Paribas Ltd (No 2)) that the “public interest” may outweigh the confidentiality of arbitration documents, it does not necessarily follow that a party may voluntarily disclose documents to third parties on the ground that it is in “the public interest.” Second, it does not follow from the fact that a court refers to the possibility of an exception for the order of the court or leave of the court in a case where it has the power to make the order or give leave (as in Dolling-Baker v Merrett or Glidepath BV v Thompson) the court has a general and unlimited jurisdiction to consider whether an exception to confidentiality exists and applies.

The English courts have been strongly influenced in the development of exceptions to the basic rule of confidentiality in arbitration by the principles of banking confidentiality in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461 (CA), where in a famous passage, Bankes LJ said:

“In my opinion it is necessary in a case like the present to direct the jury what are the limits and what are the qualifications of the contractual duty of secrecy implied in the relation of banker and customer. There appears to be no authority on the point. On principle I think that the qualifications can be classified under four heads: (a) where disclosure is under compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of the bank require disclosure; (d) where the disclosure is made by the express or implied consent of the customer.”

Scrutton LJ formulated (c) in terms of what was “reasonable and proper for its own protection” (at 481) and Atkin LJ in terms of what was “reasonably necessary for the protection of the bank’s own interests” (at 486). The limits of those exceptions have not been the subject of much subsequent decision: see Paget, Law of Banking, 13^th ed. 2007, paras 8.3 et seq. But it is plain that the exceptions (especially the cases of “duty to the public” and “interests of the bank”) are potentially very wide indeed.

The application to arbitration of the principles of banking confidentiality started with Dolling-Baker v Merrett, continued with Hassneh Insurance Co of Israel v Mew, and culminated in the judgment of Potter LJ in Ali Shipping Corporation v Shipyard Trogir, who formulated a series of exceptions closely modelled on Tournier.

In Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2000] UKPC 11, [2003] 1 WLR 1041 the Privy Council, speaking through Lord Hobhouse, expressed reservations about this approach. There were two arbitrations in Bermuda between the same parties, but with differently constituted panels. In the first arbitration the agreed procedural directions included an express confidentiality provision for the result not to be disclosed to non-parties. In the second arbitration European Re wanted to rely upon the award in the first arbitration. Associated Electric contended that they were not at liberty to do so and that European Re might not show any part of the first award to the second arbitrators as it would breach the confidentiality of the first arbitration. Associated Electric sought an injunction, which was discharged by the Court of Appeal of Bermuda. It was held that the first award gave rise to an issue estoppel upon which the successful party could rely upon in the second arbitration, and for Associated Electric to raise again the same dispute in the second arbitration amounted to a failure by it to recognise and perform the earlier award.

The legitimate use of the award did not raise the mischief against which the confidentiality agreement was directed, and was not prohibited by it. The case did not therefore involve the more general issues of confidentiality. But Lord Hobhouse said (at [20]) about Ali Shipping:

“However Potter LJ … having followed Dolling-Baker v Merrett … affirming the privacy of arbitration proceedings, went on to characterise a duty of confidentiality as an implied term … and then to formulate exceptions to which it would be subject …. Their Lordships have reservations about the desirability or merit of adopting this approach. It runs the risk of failing to distinguish between different types of confidentiality which attach to different types of document or to documents which have been obtained in different ways and elides privacy and confidentiality. Commercial arbitrations are essentially private proceedings and unlike litigation in public courts do not place anything in the public domain. This may mean that the implied restrictions on the use of material obtained in arbitration proceedings may have a greater impact than those applying in litigation. But when it comes to the award, the same logic cannot be applied. An award may have to be referred to for accounting purposes or for the purpose of legal proceedings …. or for the purposes of enforcing the rights which the award confers … Generalisations and the formulation of detailed implied terms are not appropriate.”

Subject to that reservation, in the present context, the Tournier principles have been applied so as to recognise the following exceptions.

The first exception in Tournier, compulsion by law, was adapted in the context of a discovery application in Dolling-Baker v Merrett to refer to the order or leave of the court. In Ali Shipping Corporation v Shipyard Trogir an order for disclosure of documents generated by an arbitration for the purposes of a later court action was said to be a clear example. London and Leeds Estates Ltd v Paribas Ltd (No 2) is an example of the order for the disclosure of documents in one arbitration for use in another: contrast Council of the Borough of South Tyneside v Wickes Building Suppliers Ltd. Glidepath BV v Thompson is an example of the leave of the court, pursuant to express provision for disclosure in CPR 5.4(5).

Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 128 ALR 391 would, but for the High Court of Australia’s rejection of the English approach to confidentiality, have been a case within this category. It was a claim by the Minister for Energy and Minerals for declarations against Esso/BHP and the Gas and Fuel Corporation of Victoria (GFC) and the State Electricity Commission of Victoria (SEC) that GFC and SEC were not restricted from disclosing to the Minister information disclosed to them in the course of arbitrations between each of them and Esso/BHP. The Minister had a statutory right to information from SEC: see at p 394. Brennan J (at 407) thought that both SEC and GFC had a least a moral duty to account to the public.

The second exception in Tournier, duty to the public requiring disclosure, has a counterpart in the public interest/interests of justice exception recognised in London and Leeds Ltd v Paribas Ltd (No 2) and Ali Shipping Corporation v Shipyard Trogir.

In London and Leeds Estates Ltd v Paribas Ltd (No 2) Mance J. held that a party to an arbitration was entitled to call for the proof of an expert witness in a previous arbitration in a situation where it appeared that the views that had been expressed in that proof of evidence were at odds with the views which he was expressing in the present arbitration. This was an application by the plaintiff landlords and their expert to set aside subpoenas directed to the expert to produce in rent review arbitration between the plaintiffs and the defendants proofs of the expert which he had used as a witness in two earlier arbitrations between different parties.

Mance J held that confidentiality was not an absolute bar to the enforcement of the production of documents by subpoena, but it was a relevant consideration in deciding whether such a subpoena was necessary for the fair resolution of the proceedings and should be permitted. Privacy and confidentiality could be overridden “in the interest of individual litigants and in the public interest” where a witness had given inconsistent evidence in the arbitrations: at 109.

Australian cases also support a “public interest” exception. In Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 128 ALR 391 Mason CJ said that in any event any duty of confidence (which he rejected except in relation to documents compulsorily produced) would have to be subject to a “public interest” exception. Brennan J took direct inspiration from Tournier in holding that one of the exceptions was where there was a duty, albeit not a legal duty, to the public to disclose. Toohey J accepted the implied term as formulated by the English court, but agreed with Mason CJ that there was a “public interest exception.” See also Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662, in which the Court of Appeal of New South Wales decided by a majority that an arbitrator had no power to make a procedural direction imposing an obligation of confidentiality which would have had the effect of preventing the government (a party to the arbitration) from disclosing to a state agency, or to the public, information and documents generated in the course of the arbitration which ought to be made known to that authority or to the public, because public health and environmental issues were involved.

In Ali Shipping Corporation v Shipyard Trogir Potter LJ referred to London & Leeds Estates Ltd v. Paribas (No. 2), which, he said, tentatively recognised an exception where the “public interest” required disclosure, and went on (at 327-328):

“It seems to me clear that, in that context, Mance, J. was referring to the ‘public interest’ in the sense of ‘the interests of justice’, namely the importance of a judicial decision being reached upon the basis of the truthful or accurate evidence of the witnesses concerned. Whereas the issue in the Paribas case related to a matter of expert opinion rather than objective fact, I see no reason why such a principle, which I would approve, should not equally apply to witnesses of fact who may be demonstrated to have given a materially different version of events upon a previous occasion. As a matter of terminology, I would prefer to recognise such an exception under the heading ‘the interests of justice’ rather than ‘the public interest’; in order to avoid the suggestion that use of that latter phrase is to be read as extending to the wider issues of public interest contested in Esso Australia Resources Ltd. -v- Plowman ….While it may well fall to the English court at a future time to consider some further exception to the general rule of confidentiality based on wider considerations of public interest, it is not necessary to do so in this case.”

The third exception in Tournier, interests of the bank requiring disclosure, was adapted in Hassneh Insurance Co of Israel v Mew and Ali Shipping Corporation v Shipyard Trogir to mean that disclosure was permissible when, and to the extent to which, it was reasonably necessary for the establishment or protection of an arbitrating party’s legal rights vis-a vis a third party in order to found a cause of action against that third party or to defend a claim, or counterclaim, brought by that third party. It would be this exception which would apply where insurers have to be informed about the details of arbitral proceedings.

The fourth exception (consent) is of course entirely uncontroversial. In Ali Shipping Corporation v Shipyard Trogir Potter LJ (at 327) spoke of the express or implied consent of the party who produced the document, but the present case shows that there may be circumstances in which the party who produced the document may be under a duty of confidentiality because it contains material relating to the other party’s documents.

The position can be summarised as follows. The conduct of arbitrations is private. That is implicit in the agreement to arbitrate. That does not mean that the arbitration is private for all purposes. Prior to the modern arbitration legislation some of the most important cases in the law of contract or in the conflict of laws were decided in the context of cases stated by arbitrators for determination by the court. Those decisions identified the parties and the nature of the dispute: e.g. Suisse Atlantique Soc. d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 (fundamental breach of contract); Cie d’Armement Maritime SA v Cie Tunisienne de Navigation SA [1971] AC 572 (proper law of the contract).

Today there is an increasing trend for the privacy of arbitrations to be protected. That is illustrated by the rules in CPR Part 62 and the Practice Direction allowing arbitration claims to be heard in private and restricting (but not prohibiting) access to the court file by strangers to the arbitration. But it is clear from Moscow City Council v Bankers Trust Co. [2004] EWCA Civ 314, [2005] QB 207 that this policy may have to give way to the public interest. Consequently even under the modern law since the 1996 Act there will still be cases where the details of an arbitral dispute may become public, e.g. where a party seeks an injunction to restrain court proceedings brought in breach of an arbitration agreement (e.g. West Tankers Inc v Ras Riunione Adriatica di Sicurta [2007] UKHL 4, [2007] 1 Lloyd’s Rep 391) or where a court deals with a challenge to an award for serious irregularity or an appeal on a point of law (e.g. Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221) or where enforcement of an award is resisted on grounds of public policy (e.g. Westacre Investments Ltd v Jugo-Import-SPDR Holding Co Ltd [2000] QB 288).

But case law over the last 20 years has established that there is an obligation, implied by law and arising out of the nature of arbitration, on both parties not to disclose or use for any other purpose any documents prepared for and used in the arbitration, or disclosed or produced in the course of the arbitration, or transcripts or notes of the evidence in the arbitration or the award, and not to disclose in any other way what evidence has been given by any witness in the arbitration. The obligation is not limited to commercially confidential information in the traditional sense.

As I have said above, this is in reality a substantive rule of arbitration law reached through the device of an implied term. That approach has led to difficulties of formulation and reliance (perhaps, over-reliance) on the banking principles in Tournier.

In my judgment the content of the obligation may depend on the context in which it arises and on the nature of the information or documents at issue. The limits of that obligation are still in the process of development on a case-by-case basis. On the authorities as they now stand, the principal cases in which disclosure will be permissible are these: the first is where there is consent, express or implied; second, where there is an order, or leave of the court (but that does not mean that the court has a general discretion to lift the obligation of confidentiality); third, where it is reasonably necessary for the protection of the legitimate interests of an arbitrating party; fourth, where the interests of justice require disclosure, and also (perhaps) where the public interest requires disclosure.

My conclusion is that the judge had jurisdiction to determine the question of confidentiality, and that the judge was right in the unusual circumstances of this case to authorise the disclosure of the Amended Points of Claim, the skeleton argument, and the Defence, in NSW and the BVI.

I have no doubt that the judge had jurisdiction to make the order. In essence the application was the mirror imagine of what often happens in cases of this kind, namely an application for an injunction by a party seeking to restrain disclosure. In the usual case the party relying on confidentiality is alerted to the danger of disclosure and takes action to restrain disclosure by injunction. In the present case Mr Emmott took the course of seeking directions. MWP did not seek a stay on the ground that it was a matter for the arbitral tribunal. Instead it took the point that the only way in which the documents could be obtained for the NSW and BVI courts was by a request under the Evidence (Proceedings in Other Jurisdictions) Act 1975. There is nothing in this point, since the 1975 Act only applies to requests for evidence and there is no case for suggesting that this material is evidence in that sense.

I have already expressed the tentative view that because the confidentiality rule has developed as an implied term of the arbitration agreement, any dispute as to its scope would fall within the scope of the arbitration agreement. But since MWP did not seek a stay on that ground I do not think that it is necessary to explore this aspect further. Nor is it necessary to explore the question whether the court would have an inherent jurisdiction in relation to these matters or whether section 37 of the Supreme Court Act 1981 or section 44(2)(e) of the Arbitration Act 1996 might have a role to play: Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618, [2005] 1 WLR 3555, at [74]; Elektrim S.A. v Vivendi Universal S.A. (No 2) [2007] 2 Lloyd’s Rep 8, at [67]-[79]; Starlight Shipping Co v Tai Ping Insurance Co Ltd [2007] EWHC 1893 (Comm), at [18]-[19]. I have seen Thomas LJ’s judgment in draft and I see the force of what he says in paragraph 123 below, but since the point does not arise for decision on this appeal I express no concluded view on it.

The factors which lead me to the conclusion that the judge was right on the substance of the case are these: first, MWP had told the NSW court in March 2007 that the underlying contentions in the NSW proceedings and the London arbitration were the same; second, MWP had sought amendments in the NSW proceedings in October 2007 in order to bring a “level of parity” to the proceedings in NSW, BVI and the London arbitration; third, notwithstanding that claims of fraud against Mr Emmott had been dropped in the London arbitration, he was still said in the NSW proceedings to have been guilty of fraud; fourth, without being informed of the London arbitration, there was a danger that the NSW court would be misled. These matters lead me to the conclusion that the interests of justice required disclosure. The interests of justice are not confined to the interests of justice in England. The international dimension of the present case demands a broader view.

I should underline also that, having told the NSW court twice that the allegations in the London arbitration and the NSW proceedings were the same, MWP in fact consented in the course of the application to disclosure of the Amended Points of Claim, and in this combination of facts it is hard to resist the conclusion that MWP could not reasonably object to the document which brought about its amendment and to the Defence (at any rate insofar as the Defence did not disclose any confidential information). But the matter has not been argued on the basis of consent or waiver, and it is therefore not necessary to elaborate on the legal consequences of MWP’s actions.

For those reasons I would dismiss the appeal. There is no reason why Flaux J’s judgment, and (subject to any submissions to be made prior to handing down) the judgment of this court, should not be published. I would also express my hope that any future dispute on the disclosure of documents can be resolved by agreement.

I would add only that the concentration in this appeal, and in this judgment, on the limits of confidentiality in arbitration should not obscure the fact that the overwhelming majority of arbitrations in England are conducted in private and with complete confidentiality.