l{ules and because of an (implied) understanding between the parties in 111<'

". ., -,- --- --~dings to observe confidentiality. The Federal Court rejected
nd ordered disclosure. Case-note on Esso/BHP v. Plowman (Supreme
m clearly reached the correct result. Further, in my opinion,
:s had expressly agreed that the arbitration proceedings were
Court of Victoria)
even if the arbitral ll'ibunal had 'imposed on the parties au
fidentiality, a court in the United States, upon application of a
ly or official, would and should direct disclosure of information by PROFESSOR HANS SMIT'
~lerwise private arbitration proceeding when such information
.the proper discharge of the public task assigned to that body 0"

Tience, the practice in the United States and in various other CONFIDENTIALITY is often touted as one of the advantages of arbitration
COUllU H:::~ 1;') \..vu"onant with this rule. For eXaInple, in a major case in which I "vel' litigation. But what confidentiality means in this context, what its legal basis
participated as an arbitrator, involving a Swiss utility and American purveyor of is, and to what it extends, have rarely been the objects of penetrating analysis.
uranium, the arbitral tribunal directed the parties to keep the arbitral The decision in Plowman v. &so Austrah'a Resources Ltd marks a promising
proceedings and the award secret. The American purveyor, shortly after the rhange. Mter a detailed analysis, the Court held that, in a contemplated
award wa., rendered, filed a report witll the US Securities and Exchan~e IIrbitration between a state-owned utility and purveyors of gas, the parties would
Commission providing information about the proceedings and the award. it was
1101 be restricted from disclosing to the Minister for Energy and Minerals
~enerally assumed tI'at this disclosure was proper and that the private il\l(,rmation obtained in the course of the arbitration. Although its actual holding
confidentiality order had to give way to the public interest in disclosure. is appropriately narrow, the case did prompt a wide-ranging discussion of the
Similarly, in the fast-track proceedings referred to in paragraph 3 above, the r"l\eept of confidentiality in arbitration.
tribunal ordered secrecy, but it was understood that the parties could make
In light of an apparently rather general, although undifferentiating,
appropriate disclosure of ti,e proceedings and award to tlleir shareholders and assumption that arbitration is confidential, it is perhaps surprising tI,at the
customers.
I'Ol\lidentiaiity of arbitration, such as it is, normally does not rest on a statutory
hasis. Neither ti,e applicable Australian arbitration law, nor ti,e laws prevailing in
1Il0st leading commercial nations, provide that arbitration is confidential. To ti,e
l'stent that confidentiality is an attribute of arbitration, it must therefore be found
i1\ the applicable arbitration rules or arbitration agreement. In the case at hand,
there was no explicit contractual provision providing for confidentiality. The
question was therefore wh"ther confidentiality was in some manner implied, by
l'l\stom or otherwise. On this question, the Court received affirmative opinions
hy leading experts. 2
Of course, to the extent confidentiality rests on a contractual basis, it must give
IV"y to demands for disclosure based on law. For a private contractual

FilM Professor of Law and Director, Parker School of Foreign and Comparative L'l.w, Columbia University.
The editors acknowledge tlle kind pernlission of the auilior to republil'ih this case-note, which appeared in
(1991) 2 American Revicw of Intcrnational Arbitration 490.
Case No. 7371 of 1992 (Sup. Ct. ofVicloria). The decision in this case has been published in 8 1nt'} Arb.
Rep. No. 1-H-1 (993).
I\mong these were Mr Stewart Boyd, co-author of the well·known work. of Mustill & Boyd. Commercial
:\,./Jitration (1989 2nd cd.) and Stephen Bond, for many years the Secretary·General of the ICC Court of
International Arbitration.

,\ltHITRATION INTERNATIONAL, Vol. 11, No.3

.", LCIA. 1995

299
-'----------
 300 Arbitration International Volume 11 Number 3 Case-Note on Esso/BHP v. Plowman 301
arrangement cannot shield information from disclosure required by law. Till! !bllr'" olhers are resolved. The principal case provides an example in point.
holding in the principal case can comfortably rest on this rather more narroll' iT""IIII', the resolution of a dispute involving a public utilily and its suppliers
basis. Under the applicable Australian law, the Victorian Minister of Energy alld .'I'oll",'rning the price for gas charged by the suppliers is likely to have a significant
Minerals was charged with the execution of the State of Victoria's energy policy ~JJllpat'1 on the utility's customers, who have an interest in knowing how decisions
and the supervision of those engaged in providing energy to the public at larg(\, "Jlll'o-..' illg them are reached. Furthermore, tl,e publication of awards may
By virtue of this legal position, he was held authorised to require the disclo,"I'(' \'I<lIll'1hllle substantially towards ensuring consistent and principled adjudication
of information that might have an important bearing on the price for ga' 'hat " 'lllld I'"vards opening to public scrutiny the conduct of those involved in tl,e
consumers would have to pay.3 Similarly, in the United States, it has been held filthll rid process. And this public interest in openness may affect significantly the
that the asserted confidentiality of arbitration cannot justify refusal to colllply U!I\I'\ preparedness to honor claims of confidentiality.
,vith a demand for information made by a public agency.' More generally, il f' Allolher interesting question is who ,viII ma1<e the ultimate determination on
would appear that the asserted confidentiality of arbitration cannot, withollt iii II' ",'ent to which arbitration is confidential. Insofar as confidentiality rests on a
more, justify non-compliance with a subpoena duces tecum or other judicial 1'0111 ractual provision, whether express or implied, the decision might be left to
order that is based on law. s Nit" arhitral tribunal. But to the extent the public interest, whether or not
Whether, in the absence of a demand for disclosure based on lall', ' {'xpl'l'"ed in tl,e law, imposes restraints on confidentiality, the ultimate decision
confidentiality shrouds arbitration very much depends on the nature and SCOpl' \I'ill Ilave to be rendered by the courts.
of the concept. Confidentiality may denote a right or an obligation to kecp 'l'I,c ,jme seems ripe for a more detailed and systematic evaluation of the need
secret. But the concept gains substantive content only in particular facillal 1'0" :OIld desirable scope of, confidentiality in the context of arbitration. The
conditions. When used in connection ,vith arbitration, it may denote the privacy !I.... ;,ion in the instant case may provide a proper starting point.
of the proceedings. However, the privacy of the proceedings may entail only Ihe
right to keep strangers out, not the obligation to keep secret what occurred in th,'
proceedings. Perhaps, in the absence of a compelling public interest requiri II~
openness, arbitration proceedings could be considered confidential in this sen".,
An obligation not to disclose, however, is much more difficult to deli II,',
Particularly important questions include on whom the obligation rests and who i"
to be precluded from receiving the information.
In determining on whom the obligation mal' rest, a distinction may be mad,'
between the members of the arbitral tribunal and those who appear before ii,
whether as parties or ,vitnesses. A ,vitness in an arbitration normally appe;II"
voluntarily and is not subject to any obligation originating in the agreement 10
arbitrate. Parties may have to disclose what occurred Or is likely to occur in all
arbitration in order to safegnard their interests. 6 Generally, the arbitrators will
have the least reason for not preserving confidentiality, but may be driven hl'
concern for the public weal or professional obligation to ma1<e disclosure. The
point is that the nature and scope of confidentiality may vary with the situation
presented and that it is therefore difficult to ma1<e generalisations.
In determining to what extent arbitration is confidential, proper consideration
must also be given to the public interest in knmving how disputes are settled. It i,
no coincidence that judicial proceedings are universally open to the public and
the press. TI,ere is a significant public interest in knmving how disputes that mal'

3 The author had submitted an affidavit to this effect.

4.
5
See e.g. USA v. Panhandle Eastern Corp et al. 188 FRD 346 (0 Del 1988).
See at ibid. 349-50.
,.
c:~"
6 e.g., executive officers may have to report to the Board of Directors or the shareholders.
..~