OVERVIEW
In an anonymised decision handed down in the High Court on 8 May 2025 (A Corporation v Firm B [2025] EWHC 1092 (Comm)), Mr Justice Foxton refused to grant an application for interim relief in the context of arbitral proceedings (Arbitration 2), which sought, inter alia, to prevent confidential information arising out of an earlier, concluded arbitration (Arbitration 1) from being shared in Arbitration 2. The decision will be of interest to international arbitration practitioners navigating complex real-life issues of arbitral confidentiality involving intertwined facts, issues and stakeholders.
Arbitration 1, from which the confidential information arose (including details of the issues and allegations, and the level of settlement offers that had been made) was between A Corporation and B Corporation, and settled in September 2024. Arbitration 2 is between C Corporation and D Corporation, with the latter being in the same ultimate ownership as A Corporation. Both Arbitrations related to alleged breaches of vessel sale agreements, in particular as to their condition on delivery. Firm B's London office had acted for B Corporation in Arbitration 1 and its Asia Office had been asked to act for C Corporation in Arbitration 2.
A Corporation applied to the Court for interim relief requiring Firm B:
- not to act for C Corporation in Arbitration 2;
- to "cleanse" the Arbitration 2 case file of confidential information;
- to refrain from sharing confidential information with Corporation C; and
- to swear an affidavit on what confidential information had already been shared.
Mr Justice Foxton undertook a comprehensive survey of the English case law and legal principles addressing arbitral confidentiality: how it arises (whether as an implied duty or as part of the lex arbitrii); to what documents and information the duty extends; and the exceptions to the rule, including in relation to disseminating 'without prejudice' communications (in this case, in connection with the settlement of Arbitration 1) to third parties. In doing so, the Judge provided a number of useful reminders in relation to vexed questions arbitration practitioners frequently find themselves faced with, including:
- whether the fact that a commercial dispute leads to the commencement of an arbitration of itself makes the existence of the dispute, the events giving rise to it and the existence of the arbitration itself, confidential (it does not);1
- whether particulars of claim and other arbitral documents, such as witness statements and expert reports, which simply recount such non-confidential facts (and no other information) may be disseminated free of the obligation of confidentiality (they may not, as their confidential status derives from the fact that they came into being as part of the arbitral process);2 and
- whether it is permissible to use material falling within the scope of arbitral confidentiality to try to elicit similar fact evidence from a third party who is believed to have similar complaints against the opposing party (Mr Justice Foxton considering that to be most unlikely, as it would be "very surprising if the ability to advance a case of this kind was made more difficult in commercial arbitration than court proceedings").3
After analysing each of the alleged misuses of confidential information arising in Arbitration 1 and applying the usual American Cyanamid principles applicable to interim injunctions, Mr Justice Foxton denied each element of the application:
- The prejudice to C Corporation (which it had no opportunity to oppose) in not being able to have its choice of solicitor heavily outweighed any prejudice to D Corporation (assuming any prejudice suffered by the latter was even relevant to the analysis);4
- The case file had already been sufficiently "cleansed", and there was no utility in repeating the task;5
- The evidence indicated that there was no realistic possibility of further confidential information being shared with C Corporation by the lawyers who had worked on Arbitration 1;6
- No further affidavit was required, given the evidence from Firm B's partner confirming what information had already been shared.7
This is an important judgment, and not only because of the concise yet complete manner in which Mr Justice Foxton considered the relevant and competing principles regarding arbitral confidentiality, including by the use of worked examples, making this case an important point of reference. It also serves as valuable guidance as to the analytical approach to alleged individual breaches of the duty and their relative impact the courts will take, including by reference to the "level of protection" to be afforded by the courts to different types of confidential material. For example, the disclosure of a parties' own filings or reports is likely to be deemed "less intrusive than disclosure of material produced by another party or which draws on that material (with material produced by that other party under legal compulsion in the arbitration coming at or near the most sensitive end of the spectrum)".8 The result is "a sliding scale of arbitral confidentiality, with the ease of establishing exceptions and the appropriateness of injunctive relief varying accordingly".9
Finally, solicitors with international offices servicing clients globally across the same industry will take particular note of the Judge's examination of the question whether a firm should be precluded from acting where certain of its solicitors were in possession of confidential information that must not be shared with colleagues in other parts of the world:
"The Firm B personnel here work in two different offices located in two different continents. It is for A Corporation to persuade me that there is a real risk of confidential information crossing from Firm B London office to Firm B Asia office in the circumstances as they now pertain, and it has not done so." 10
This pragmatic, real-world appraisal of the matters in dispute is emblematic of the Judge's approach to the complex and sensitive practical confidentiality issues presented in the case more generally which will undoubtedly be welcomed by the international arbitration community, particularly those practising in England and Wales.
Footnotes
1 Paragraphs 18 and 21.
2 Paragraphs 19 and 20.
3 Paragraph 30.
4 Paragraph 58.
5 Paragraph 59.
6 Ibid.
7 Ibid.
8 Paragraph 22.
9 Ibid.
10 Paragraph 57.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
