👉 The Indian Parliament by way of the 2019 Amendment to the Arbitration Act, introduced a new provision, section 42-A, on confidentiality.

It reads:

👉 ‘Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award.’

👉 In its attempt to answer the two foundational questions on the scope of confidentiality, the above definition raises even more questions.

👉 The limited carve-out from the duty to maintain confidentiality that section 42-A envisages is to facilitate the disclosure of arbitral awards alone, and only when it is necessary for implementation or enforcement.

👉 Section 42-A starts with a non obstante clause. It uses the term ‘shall’ to bind the arbitral institution and the parties to the arbitration agreement to maintain confidentiality of all arbitral proceedings, except the award where its disclosure is necessary for the purpose of implementation and enforcement of the award.

👉 There are several other instances where disclosure of details of the arbitration may be required, such as:

• to make an application seeking interim measures from a court during the pendency of the arbitration;

• for termination of an arbitrator,

• for challenging the validity of the award itself under section 34 of the ACA;

• for engaging experts; and

• for consolidation of parallel arbitrations.

👉 The text of section 42-A does not recognise the need for disclosure in any of these and other such occasions.

👉 Section 42-A also fails to exhaustively identify and define the various actors in an arbitration proceeding that must be subject to the discipline on confidentiality.

Confidentiality in International Scenario

👉 The UNCITRAL Model Law on International Commercial Arbitration does not provide for any express provision dealing with confidentiality in the field of arbitration and instead allows the parties to the arbitration to incorporate a clause of confidentiality in the arbitration agreement if they wish to do so.

👉 Confidentiality has not been made mandatory under the uncitral Model Law, on the contrary, party autonomy has been given a higher pedestal.

👉 Opinion: In view of the lacunae in S.42A of the Act and various factors cited as above, confidentiality in Arbitration remains a white elephant in India.

Denounce with righteous indignation and dislike men who are beguiled and demoralized by the charms pleasure moment so blinded desire that they cannot foresee the pain and trouble.

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