Advocate Eric Dunn, SC, is the editor of this e-periodical.  Eric is a member of the Maisels Group of Advocates and a senior member of the Johannesburg Bar.  He is a Fellow of the Association of Arbitrators (Southern Africa) NPC and a member of the Society of Construction Law for Africa.  Eric has a predominantly commercial practice, but over the past decade he has also focused on construction and engineering matters.

Eric has acted as a High Court judge on numerous occasions and has also appeared in many prominent reported cases in the High Court, Supreme Court of Appeal and Constitutional Court.


Confidentiality viewed from a different perspective

Welcome to Arbitrarily Speaking!

We are almost at the end of a most turbulent year.  In many respects 2020 has been an ‘annus horribilis’ for mankind.  The lives and livelihoods of many millions of people around the world were, and still are, under threat by the COVID pandemic.  In many instances, millions of lives and livelihoods actually have been lost as a result thereof.  Despite this turmoil and uncertainty, we have succeeded in adapting to our changed world, albeit with the use of technology as a vital tool in the quest to continue functioning effectively.

In the September 2020 issue of this e-periodical – under the caption ‘Rethinking confidentiality’ – attention was drawn to the need for arbitrators, adjudicators, mediators, umpires and referees (collectively ‘arbitrators’) to exercise additional caution in preserving the confidentiality of parties and the dispute resolution process they are involved in.

It has long been accepted that the privacy in which dispute resolution proceedings can be conducted is one of its greatest advantages.  The advantages of privacy and confidentiality can expressly be provided for in an arbitral agreement, or in the rules the parties adopt to govern the dispute resolution proceedings, e.g. the Standard Procedure Rules (SPR)[1] of the Association of Arbitrators (Southern Africa) NPC (AoA).  Even in the absence of such an express provision, the authors Butler and Finsen[2] are of the view that an implied term to this effect is likely be found to exist in a private arbitration agreement.

This approach of English law in private arbitrations appears to have been well-settled, albeit subject to five recognised exceptions.[3]

A useful survey of the legal position across various jurisdictions is also contained in Alina II, MV: Transnet Ltd v MV Alina II[4] (MV Alina II).

However, the concepts of privacy and confidentiality are not to be confused with one another.  In the case of Esso Australia Resources Ltd and Others v Plowman and Others[5] (Esso) the High Court of Australia (per Mason, CJ, Brennan, Dawson, Toohey and McHugh, JJ) rejected the English approach of a broad implied obligation of confidentiality applying to all documents and information provided in and for the purposes of arbitration.  In the course of his judgment, Chief Justice Mason, alluded to the two concepts in the following terms:

‘33. An obligation not to disclose may arise from an express contractual provision.  If the parties wished to secure the confidentiality of the materials prepared for or used in the arbitration and of the transcripts and notes of evidence given, they could insert a provision to that effect in their arbitration agreement.  Importantly, such a provision would bind the parties and the arbitrator, but not others.  Witnesses, for example, would be under no obligation of confidentiality.

34. Absent such a provision, it is difficult to resist the conclusion that, historically, an agreement to arbitrate gave rise to an arbitration which was private in the sense that strangers were not entitled to attend the hearingPrivacy in that sense went some distance in bringing about confidentiality because strangers were not in a position to publish the proceedings or any part of themThat confidentiality, though it was not grounded initially in any legal right or obligation, was a consequential benefit or advantage attaching to arbitration which made it an attractive mode of dispute resolutionThere is, accordingly, a case for saying that, in the course of evolution, the private arbitration has advanced to the stage where confidentiality has become one of its essential attributes so that confidentiality is a characteristic or quality that inheres in arbitration.

35. Despite the view taken in Dolling-Baker and subsequently by Colman J in Hassneh Insurance, I do not consider that, in Australia, having regard to the various matters to which I have referred, we are justified in concluding that confidentiality is an essential attribute of a private arbitration imposing an obligation on each party not to disclose the proceedings or documents and information provided in and for the purposes of the arbitration.’

In South Africa, our courts have not yet tackled the issue head-on.  Both in Replication Technology Group v Gallo Africa Ltd[6] (Replication Technology) and MV Alina II one or more of the recognised exceptions[7] allowed the courts (despite them being willing to assume the correctness of the approach in English law purposes of argument) to invoke such an exception in each instance.[8]

The recognised exceptions referred to relate to circumstances where disclosure of what is, or might be regarded as, confidential data takes place either: (i) by consent of the parties; or (ii) by virtue of a court order relative to the proceedings or the award or both; or (iii) due to the reasonable necessity of enabling a party to the arbitration agreement to protect its rights against a third party; or (iv) because the interests of justice reasonably demand it; or (v) because the enforcement of confidentiality would operate against the public interest.

Although, as we have observed, the AoA’s rules provide for both privacy and confidentiality, they inevitably would yield to permit disclosure of confidential data under one or more of these recognised exceptions if the occasion for that were to arise.  Although privacy will readily be recognised by the courts, it is most unlikely that they will pay obeisance to a provision requiring confidentiality for the mere sake thereof.

As opposed to private commercial arbitrations, investment arbitrations and arbitrations in which there is a clear public interest element – such as there was in Esso – show that demands for increased transparency in such proceedings can be expected.  Professor David Butler,[9] referring, as an example, to the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (2013), has already commented that ‘Because of the public interest in transparency in such cases, modern rules applicable in investment arbitration exclude confidentiality and contain provisions designed to promote transparency.’

Given the tension between confidentiality, on the one hand, and transparency, on the other, it is suggested that an appropriate balance nonetheless needs to be struck and maintained between these two competing requirements, i.e. irrespective of how investment arbitrations, and arbitrations in which there is a clear public interest element, might still evolve in the future.

The Tools of the trade section in this edition of Arbitrarily Speaking! contains the last of Ms Maritza Breitenbach’s four-part series of essays devoted to logical reasoning and critical thinking.  Building on the knowledge readers already derived from her previous three essays, she now takes on the challenge of award writing.  In this final essay, entitled ‘How to test and improve the quality of critical thinking and logical reasoning in award writing’, Ms Breitenbach explains how the most important principles of critical thinking and logical reasoning are to be applied to the complex topic of award writing with the objective of making reasoned awards that can be considered beneficial to commercial arbitration at both an individual and systemic level.  We are most appreciative to Ms Breitenbach for the wealth of knowledge her series of essays has brought to our members.

The inimitable Uncle Oswald has agreed to provide a quick reference guide of all the topics he covered in his popular forum in the course of this year.  To the obvious delight of one Ms Penny Pincher, Uncle Oswald also provides her with nuggets of wisdom in his letter to her concerning the enforcement of a foreign arbitral award that she obtained against a foreign respondent.  In his detailed response to Ms Pincher’s query he traverses vital provisions of the International Arbitration Act, No. 15 of 2017.

Our regular feature column, A case in point: Recent case reports, contains an analysis and summary of Namasthethu Electrical (Pty) Ltd v City of Cape Town and Another[10] by AoA Fellow, Adv Kiki Bailey, SC.  It is an important case on alternative dispute provisions that are contained in an arbitration agreement and the impact that fraudulent conduct by one of the contracting parties may have on such provisions and any steps taken under them.

Members are reminded that the purpose of this e-periodical is intended to serve their interests.  As such, this e-periodical necessarily will benefit from their contributions and they are therefore encouraged to share their knowledge, skill, and experiences of their specific disciplines, as well as their knowledge of and involvement in alternative dispute resolution.

We remain committed to serving your interests and appreciate your continued support for Arbitrarily Speaking! and trust that you will enjoy this edition – Happy reading!

Eric Dunn, SC

Editor


[1]

Rule 4.0 of the SPR (Sixth Edition), or in Articles 28.3 and 34.6 of the last two editions of the SPR, i.e. the seventh and eighth editions thereof.  Article 28.3 (SPR, 8th Edition) provides that, unless the parties otherwise agree ‘Hearings shall be held in camera’, while Article 34.6 thereof provides, among other things, that: ‘… 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’.

[2]

David Butler and Eyvind Finsen, ‘Arbitration in South Africa – Law and Practice’, Juta & Co Ltd, 1993, at p. 213, citing Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The Eastern Saga) [1984] 3 All ER 835 (QB Com Ct) 842c.

[3]

Dolling-Baker v Merrett and others [1991] 2 All ER 890 (CA) at p. 899, where Lord Justice Parker stated (Fox and Ralph Gibson, LJJ, concurring): ‘As between parties to an arbitration, although the proceedings are consensual and may thus be regarded as wholly voluntary, their very nature is such that there must, in my judgment, be some implied obligation 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 indeed not to disclose in any other way what evidence had 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.  That qualification is necessary just as it is in the case of the implied obligation of secrecy between banker and customer.’ (Emphasis added).  See too: Hassneh Insurance Co of Israel v Mew (1993) 2 Lloyd’s Rep 243 at pp. 246 – 247; Ali Shipping Corporation v Shipyard Trogir [1998] 2 All ER 136 (CA) at pp. 146j; and John Forster Emmott v Michael Wilson and Partners Ltd [2008] 2 All ER (Comm) 193 (CA).

[4]

2013 (6) SA 556 (WCC) at paras [27] to [42], pp. 565 F – 569 C.

[5]

[1995] HCA 19 at para 35 (1995) 128 ALR 391; (1995) 69 ALJR 404; (1995) 183 CLR 10).  Available at https://jade.io/article/67885 (Accessed 18 October 2020).

[6]

2009 (5) SA 531 (GSJ).

[7]

Ali Shipping Corporation v Shipyard Trogir , supra, at pp. 147 – 148, where Lord Justice Potter (with whom Brooke and Beldam, LJJ, concurred) articulated five (5) exceptions that had been recognised or tentatively recognised by the English courts.

[8]

MV Alina II at para [44], p. 569 H – p. 570 C; and Replication Technology at para [17], p. 548 C – p. 549 A.

[9]

Arbitration’ at para 125, Vol 2, LAWSA, Third Edition.

[10]

Case no. (201/19) [2020] ZASCA 74 (29 June 2020).

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