Confidentiality and privacy in arbitration proceedings

March 1st, 2024

The South African International Arbitration Act 15 of 2017, provides for confidentiality of arbitration proceedings. In contrast thereto, the domestic Arbitration Act 42 of 1965, contains no reference to the private and confidential nature of these proceedings.

Section 11 of the International Arbitration Act

Subsection 11(1) provides that ‘arbitration proceedings to which a public body is a party are held in public, unless for compelling reasons, the arbitral tribunal directs otherwise’. Section 11(2) thereof deals with arbitration held in the private sphere. It requires of parties and the tribunal to keep ‘the award and all documents created for the arbitration, which are not otherwise in the public domain’ confidential, ‘except to the extent that the disclosure of such documents may be required by reason of a legal duty or to protect or enforce a legal right’.

The immediate question that comes to mind is how privacy and confidentiality should be dealt with during an arbitration concluded under the auspices of the Arbitration Act, especially if the arbitration agreement does not provide for privacy and/or confidentiality.

An interesting case, which sheds light on the confidentiality aspect in arbitration, is the matter of Replication Technology Group and Others v Gallo Africa Ltd 2009 (5) SA 531 (GSJ).

In this matter Gallo launched contempt proceedings against the applicant. It wanted to use a number of documents and certain information derived from those documents, which the applicant discovered during an arbitration that preceded the contempt application. Gallo was the applicant in the arbitration and first applicant the defendant.

The applicants sought an interdict prohibiting Gallo from using the said documents and information. The central issue was whether Gallo was entitled to use the arbitration documents and information in the contempt application. The arbitration documents were essential for Gallo to prove a case of contempt against the first applicant.

Malan J, in his judgment, agreed with the statement of Schutz AJ in the matter of Crown Cork and Seal Co Inc and Another v Rheem South Africa (Pty) Ltd and Others 1980 (3) SA 1093 (W): ‘In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purpose of the action in which they are disclosed.’

Malan J then referred to the concept of an implied undertaking, which features in English law. In terms thereof, a party who in discovery proceedings received or produced documents, undertakes not to use them or information derived from them for a collateral or ulterior purpose without leave of court or the consent of the party providing such discovery.

According to Malan J, the purpose of the undertaking is to protect, so far as is consistent with the proper conduct of the action, the confidentiality of a party’s documents. An exception would occur where documents discovered in one action are used in separate proceedings, the sole purpose of the latter being the furtherance of the party’s case in the original action.

Proceedings for contempt of court when breaking an order or undertaking are not collateral to the action in which they are launched (para 10).

As far as the South African legal position is concerned, Malan J remarked that the Arbitration Act, does not treat arbitration proceedings inherently confidential; nothing in it suggests that arbitration proceedings are confidential.

However, Malan J then stated that he did not need to determine whether the English ‘implied undertaking’ forms part of the South African law. According to him there are in any event exceptions.

First, discovery is permitted when, and to the extent to which it is reasonably necessary for the protection of the legitimate interests of an arbitration party. Secondly, English law permits disclosure of arbitration documents and evidence where it is in the interest of justice to do so.

Having surveyed the relevant aspects of English law, Malan J then ruled that in this matter, the use of arbitration documents to find a cause of action for contempt of court against another arbitrating party would be reasonably necessary. In the result he then dismissed the application for an interdict with costs.

The findings in the Replication Technology Group judgment of 2009, foreshadowed the provisions of s 11(2) of the International Arbitration Act in that it found that the veil of confidentiality is lifted from arbitration documents and evidence if it is reasonably necessary to enforce and/or protect a legal right and when it is in the public interest to do so.

An endorsement of the findings in the Replication Technology Group matter by the Supreme Court of Appeal, would bring about a harmonisation of the aspect of confidentiality between the International Arbitration Act and the domestic Arbitration Act. The ideal solution would be to affect an amendment to the Arbitration Act, in order that it accord with s 11 of the International Arbitration Act.

IM Bredenkamp SC BCom Law (Stell) LLB (Unisa) is a legal practitioner at the Pretoria Society of Advocates at the Groenkloof Chambers.

This article was first published in De Rebus in 2024 (March) DR 17.