Are arbitrations always confidential?

Arbitrations are often favoured by companies as an alternative to the Courts in order to resolve disputes. The main reason for this preference is that arbitrations subject to English law are confidential in nature. This protects the commercial parties from any negative publicity and safeguards confidential information such as operational processes as well as the reason for the dispute itself (which could be commercially harmful). This is why many commercial contracts have arbitration clauses - this ensures that any dispute is resolved by arbitration in the first instance.

However, the established English law principle that arbitrations are confidential was recently exposed by the High Court in the case of Symbion Power LLC v Venco Imitiaz Construction Co [2017] EWCA 348 (TCC).

The normal established principle is that no details of the arbitration are permitted to be disclosed to third parties, which includes documents produced for or disclosed during the arbitration. This ring-fencing measure secures the confidentiality of such oftentimes sensitive information. These principles are also reflected in the rules governing the main arbitration institutions, such as The International Chamber of Commerce (ICC) and The London Court of International Arbitration (LCIA).

In Symbion, one party challenged the ICC award (judgment) against them. The ICC tribunal that determined the award was based in London and therefore subject to English law (and England was the nominated jurisdiction selected in the relevant contract). Symbion, having lost, challenged the award in the English High Court alleging serious irregularity. The High Court was the appropriate forum of appeal due to the English law jurisdiction clause in the contract.

Due to the custom of High Court decisions being published, Symbion requested that any such published judgment be anonymised, that is, not contain the names of the parties in order to preserve the confidentiality afforded by the ICC arbitration. In response, the Court laid out the factors it would consider which included the concern that there is a public interest in publishing judgments concerning arbitrations to ensure that standards remain high in the conduct of arbitrations, especially in light of their confidential status. The Court went on that this factor has to be weighed up against the parties' understandable interest in confidentiality.

However, the Court chose to reject Symbion's submission that the judgment be anonymised as the ICC award had already been made public in the US and commented upon publically by the parties stateside. Therefore the Court concluded that this behaviour contradicted Symbion's concern regarding confidentiality.

This case is a stark reminder that the confidentiality of arbitrations is not set in stone. Concerns regarding confidentiality should be raised at the outset of any arbitration appeal to the English Courts and necessary orders attained to ensure such confidence. In addition, conduct of the parties, especially regarding public pronouncements, should be carefully monitored if arbitration is underway or anticipated.

The pitfalls of serving claim forms

Dear readers

For all budding litigators, I would highly recommend reading the excellent Civil Litigation Brief blog by Gordon Exall - http://www.civillitigationbrief.com/

Gordon is a very experienced litigator and barrister and one of the nation's foremost experts on civil litigation.

His latest blog entry is a very useful recap on the dangers to watch out for when serving claim forms and particulars of claim. If this is not done properly (and it is easy to slip up as it seems innocuous when it is not!), then the claim can be struck out. Which means a very angry client and possibly a negligence suit to boot!

Please find the blog entry here - http://www.civillitigationbrief.com/2017/08/12/stopping-problems-with-service-of-the-claim-form-springing-up-10-key-points/

Personal liabilities of directors expanding under new corporate governance proposals

Directors can be liable for their conduct or if they breach certain rules and regulations imposed by English or EU law. These liabilities can range from the risk inherent in personal guarantees and warranties of authority to legislation directly relating to directors' duties (such as the 'best interests of the company' requirement in section 172 of the Companies Act 2006), bribery, financial services, corporate manslaughter, employees or environment.


The government's campaign to galvanise corporate governance requirements is set to expand the personal liabilities of directors. For example:


- fines of up to £500,000 per director for companies engaged in excessive nuisance calls


- legal action to hold company directors to account regarding their full range of duties, with proposals to include:


            - company reports on how directors have complied with their duty to promote the success of the company  


            - company reports on how boards 'have regard' for stakeholder interests (such as employees, the local community and environment)


            - company reports to shareholders exposing any failings of the board


            - company adherence to corporate governance codes (which the government proposes to make mandatory and also apply to private companies)


Directors now need to be extra vigilant regarding their increased exposure to personal liability and should take legal advice to better understand their risk profile in order to avoid any future litigation.    

Ensure you entitle contract negotiation communications 'subject to contract'

The Court of Appeal has provided a useful reminder on what constitutes a formed contract when engaging in contract negotiations. In the recent case of Global Asset Capital Inc v Aabar Block S.A.R.L [2017] EWCA Civ 37, the Court of Appeal justices pointed out that when negotiating a contract, any communications should be headed 'subject to contract' so as to avoid a contract being inadvertently formed on the wrong terms.


In English law, for a contract to be properly formed the 'Four Corners' need to be in place, namely; (i) an intention to create legal relations; (ii) offer; (iii) acceptance; and (iv) consideration (that is, a 'quid pro quo' or trade of something of value between the parties). If you are still in the course of negotiating a contract, it is possible for the Four Corners to be triggered without you having agreed all the relevant terms. A contract does not need to be in writing so this increases the risk of these mandatory requirements being in place inadvertently, especially if the negotiation takes place over the phone.


To safeguard against a contract being formed inadvertently in this way, the Court of Appeal emphasised the need to entitle any such communications as 'subject to contract'. This then protects the parties from a contract being formed until the terms are finalised in an agreed contract, preferably in writing signed and dated by both parties.


The Court of Appeal also confirmed that the 'whole course of negotiations' should be considered by the Court when deciding if a contract has been formed. However, if the contract terms are agreed formally between the parties then subsequent negotiations will not be taken into account.


This is an important warning, especially for sole traders and small companies, to make sure that all negotiations are entitled 'subject to contract' right up until the point where you are happy with the final terms and the contract is agreed, preferably in writing. This is especially important as once a contract is formed in English law, especially a business to business contract negotiated at 'arm's length', the validity of such a contract is difficult to challenge.