A Corporation v Firm B & Anor

Arbitral confidentiality protects the private use and deployment of material in the arbitral process, including hearings, disclosed documents, documents prepared for the arbitration, awards and information derived from such material. It does not generally make pre-arbitration facts or a party’s own independently created documents confidential merely because they are used in an arbitration.

The obligation is subject to exceptions, including consent, court order, reasonable necessity for protecting legitimate interests and the interests of justice. Its application is fact-sensitive and may operate on a sliding scale according to the sensitivity of the material.

Where a solicitor obtained confidential information as the opponent’s solicitor, an injunction restraining the solicitor’s continued representation of another party is exceptional. The applicant must show a real risk of prejudice, and the court must consider less onerous relief and prejudice to the current client.

A Corporation sought interim injunctions against Firm B and Mr W. Firm B’s London office had acted for B Corporation in a concluded arbitration involving Vessel 1. Firm B’s Asia office was acting for C Corporation in a related arbitration involving Vessel 2. A Corporation alleged that confidential information from the first arbitration had been disclosed within Firm B and to C Corporation.

The application sought to restrain Firm B from acting, require a file-cleansing exercise, prohibit further disclosure and require an affidavit from Mr W. The parties relied principally on the implied obligation of confidentiality arising from arbitration under English law. The central issues were the scope of that obligation, the relevance of alleged breaches, and whether interim injunctive relief was justified.

1. Application dismissed. The court refused to restrain Firm B from acting for C Corporation, declined to order a further file-cleansing exercise and found that no further affidavit was required. Firm B’s undertaking that lawyers involved in the Vessel 1 Reference would not act in the Vessel 2 Reference was accepted.
2. The application was governed by the principles in American Cyanamid v Ethicon Ltd [1975] A.C. 396. There was a serious question to be tried, but because the interlocutory decision would substantially determine the practical outcome, the court also considered the apparent likelihood of success at trial, following NWL Ltd v Woods [1979] 1 WLR 1294.
3. The implied obligation of arbitral confidentiality extends to hearings, disclosed documents in the hands of other parties, documents generated or prepared for and used in the arbitration, awards and information derived from confidential material. A party’s own documents, created independently of the arbitration, do not become confidential merely because they are disclosed or deployed in it.
4. The obligation is subject to recognised exceptions, including consent, court order, reasonable necessity for protecting legitimate interests and the interests of justice. The sensitivity of the material matters. Information produced by another party under compulsion is generally more sensitive than a party’s own filings or reports.
5. Lawyers may use experience acquired from arbitration practice without thereby misusing confidential information. The court also accepted that use of confidential material to obtain similar-fact evidence was strongly arguable as falling within an exception.
6. In a no-relationship case, the burden remains on the applicant to show a real risk of prejudice from the opposing party’s solicitor having access to confidential information. The court must balance prejudice to the applicant and current client and consider whether an injunction limited to use of the information would suffice, applying Glencairn IP Holdings Ltd v Product Specialities [2020] EWCA Civ 609.
7. The settlement information had already reached C Corporation and offered limited utility. Other alleged disclosures either probably fell within an exception, had already been known in substance, or were unlikely to confer an enduring advantage. There was no realistic prospect of further disclosure, while removing Firm B would cause significant prejudice to Firm B and C Corporation. The threshold for mandatory injunctive relief was therefore not met.