The Singapore Court of Appeal (SGCA) in its recent judgment on 9 June 2023 in The Republic of India v Deutsche Telekom AG, 2 analysed the availability of confidentiality protections after information about the arbitration (whose confidentiality is sought to be protected) is already available in the public domain.
Background to the dispute.
Deutsche Telekom AG (DT), a German multinational company and a former shareholder of Devas Multimedia Private Limited (Devas) was in an agreement with Antrix Corporation Ltd. (Antrix), an Indian state-owned entity, for leasing communication satellites. After the termination of the agreement between Antrix and Devas, DT commenced arbitration proceedings seated in Geneva, Switzerland, against India, contending that India’s annulment of the agreement was in violation of a bilateral investment treaty between India and Germany. Following an interim award in favour of DT, India unsuccessfully attempted to set aside the award in the Swiss Federal Supreme Court. Eventually, after the final award was issued in DT’s favour, DT commenced enforcement proceedings in Singapore and obtained an ex parte order allowing DT the leave to enforce the final award on 3 September 2021 (Leave Order). Thereafter, DT applied for the enforcement proceedings to not be heard in open court and sought that information regarding parties and their identities not be revealed, court files be sealed, and that any publication of the judgment or ground of decision be redacted. India subsequently applied to set aside the Leave Order. Proceedings were transferred to the Singapore International Commercial Court (SICC) which dismissed India’s application to set aside the Leave Order. India then brought an appeal against SICC’s dismissal.
Meanwhile, DT had commenced enforcement proceedings against India regarding the final award in the United States of America and Germany, and Antrix had commenced winding-up proceedings against Devas in 2021 before India’s National Company Law Tribunal (NCLT). The NCLT ordered that Devas be wound up, and this order was upheld by the National Company Law Appellate Tribunal (NCLAT) and by the Supreme Court of India. The SGCA’s judgment is summarised and analysed below, specifically, for the following aspects:
I. Loss of Confidentiality
India asserted that despite the limited online availability of the dispute’s information, its confidentiality was intact and not “entirely lost”. It was further contended that information relating to the arbitration had been misused by third parties to negatively portray India, and any subsequent dissemination of information publicly may further damage its reputation, and this justified invoking the court’s inherent powers. DT argued that open justice should be a predominant concern since the dispute was an investment treaty arbitration hinging on matters of public interest.
The SGCA noted that parties were already involved in several related legal proceedings that were public knowledge and there had already been disclosures of significant information related to the arbitration on the internet, including awards, court decisions, and articles. Further, the decisions of the NCLT, NCLAT, and the Supreme Court of India to wind up Devas in India were publicly available. The parties to the arbitration were particularly disclosed via news reports and the LinkedIn post of the counsel representing India. These disclosures led to a substantial loss of confidentiality in the arbitration proceedings.3 Given the extensive information about the arbitration that was publicly available, the court concluded that there was insufficient basis to maintain confidentiality in the enforcement proceedings in contrast to the strong underlying interest in open justice. More so, once information has entered, what is usually called the public domain, the principle of confidentiality can have no application to it.4
The SGCA placing reliance upon Re Tay Quan Li Leon, 5 Singapore High Court addressed the balance between privacy and open justice in arbitration-related proceedings under the [Singapore] International Arbitration Act (IAA). The principle of open justice holds that justice demands transparency in the use of official power as underlined in Bentham’s idea—‘Publicity is the very soul of justice’.6 The court acknowledged its inherent powers to issue sealing orders but clarified that such orders should be exceptions, not the norm, as open justice is fundamental for reinstating public confidence in the judicial system. The SGCA also noted the decision in BBW v BBX, 7 that where the ends of justice so required, the court could seal and redact a case file pursuant to its procedural powers, as the evidence adduced in a case may compromise the confidentiality of any related arbitration between the plaintiff and a non-party.
In the same vein, the SGCA in the present judgment, was of the opinion that, parties who opt for arbitration rather than litigation are likely to be aware of and be influenced by the fact that the former are private hearings while the latter are open hearings. Instead of saying that there is nothing inherently confidential in the arbitration process, it is more in keeping with the parties’ expectations to take the position that the proceedings are confidential, and that disclosures can be made in the accepted circumstances.8
Further, the SGCA reiterated that the default position, as established by Section 22(1) of the IAA is that proceedings under the IAA are private.9 However, the court can order open hearings under Section 22(2) of the IAA on its own motion, without the need for any application by a party. Where proceedings are to be heard in private, the court may issue further directions pursuant to Section 23 of the IAA to permit the disclosure of information in a way that would protect each party’s reasonable interest in confidentiality. This position is in consonance with the UNCITRAL Model Law on International Commercial Arbitration which does not expressly provide for the confidentiality of arbitral awards and leaves it to the discretion of respective countries.
II. Public Interest Considerations
The SGCA failed to consider the nexus of public interest with confidentiality demands beyond the open justice principle. While disclosures made to third persons signify private interests, disclosures made in formal legal proceedings are tied to public interests in accessing information pertaining to fact-finding, policy recourses, regulation and adjudication conducted by the government.10 The public interest takes precedence over all other competing interests in Australian courts, including commercially sensitive material and a commercial entity's natural desire to engage in a secret arbitration.11 The English courts, on the other hand, have favored a balanced approach to confidentiality. According to the balancing method, the exception of public interest must be assessed against the justifications for retaining anonymity. In The Chartered Institute of Arbitrators v. B, C & D case, the court authorised publication of all information because the public interest outweighed the confidentiality interest.12 This led to the English principle that disclosure of material contested by a party should be authorised only when there is a compelling justification.
DT asserted the court decision pertaining to winding up of Devas and India’s steps invariably led to a loss of reputation for DT. This assertion triggered public interest and fairness considerations in making information from proceedings in Singapore publicly available. The court, however, refrained from catalysing ‘public debate’ and limited itself to the function of applying statutory rules preventing India from the presumptive statutory entitlement to a private hearing.13
Diverging from any other principle, the court focused on discerning the legislative history and intent for Section 22 and 23. It posited that amended Sections 22 and 23 of the IAA are intended to maintain the confidentiality of the arbitration itself, and the interest in keeping any enforcement procedures quiet under the IAA is basically a derivative interest intended to protect the confidentiality of the underlying arbitration. For India, the court found no compelling interest—public or of the interested parties and that the cloak of privacy was already lifted. This legislative route enabled the open justice principle to prevail.
III. Default Position and Opting Out
India demanded a private hearing which is established as the default rule under amended sections 22 and 23 of the IAA vide Courts (Civil and Criminal Justice) Reform Bill (Bill No 18/2021). Now, in the absence of an application by either party to 'opt-out' of this default mechanism, there was no legal obligation on India to initiate an application to enforce the default position. The court may still have ordered open court proceedings on its own motion. However, Sections 22 and 23 provide no direction for using such court's discretion. The SCA dodged the opportunity to delve into guiding factors to be considered when departing from the default position, such as preservation of any party's rights, public interest, or justice.
IV. Balancing ‘Substantially Lost’ Standard with ‘Not Entirely Lost’ Claims
India's unique submission that the confidentiality had not been "entirely lost remained unaddressed by the SGCA. This occurred in light of insufficient discussion to demarcate when the standard of “substantially lost” confidentiality comes into effect. The court needed to strike a balance between these non-competing claims of not ‘entirely lost’ and ‘substantially lost’ by providing practical meaning to the ‘substantially lost’ standard. This assumes relevance because under the previous ‘opt in’ regime, when Consent Order was issued, the confidentiality was considered ‘substantially lost’ as information regarding ancillary proceedings and challenge to the interim award and enforcement in other jurisdictions was publicly available. Now, such a void awaits future jurisprudence to shape and apply this standard. Related proceedings in jurisdictions with relaxed confidentiality requirements like Switzerland and United States, may render the confidentiality in Singapore court proceedings lost. Even in stricter jurisdictions, like Hong Kong, statutory and customary exceptions prevail.14India itself partook in disclosing certain information which should have called its claim to privacy into doubt, but the court held it as immaterial The SCA’s position that parties that make such public disclosures instantly forfeit the right to confidentiality for any judicial proceedings under the IAA raises concerns of mala fide publication. Party opposing a confidentiality application can broadcast the information about the arbitration online to deny confidentiality orders. The SCA did not provide any protections against such disclosures, which might render the IAA amendments to Sections 22 and 23 redundant.
V. Inherent powers of Court
The SGCA held that the inherent powers of the court must be exercised judiciously based on the touchstone of necessity.15 The position could be otherwise if there was some other independent basis which warranted invoking the inherent powers of the court, but that was not the situation in the present case. An intrinsic feature of open justice is that the conduct of all parties is open for scrutiny by those who may be interested. The private interest of a party to not be seen in an adverse light does not warrant a departure from the principle of open justice.
Singapore law recognises privacy as well as confidentiality as essential and foundational tenets of arbitration. The Singapore courts have ruled that the principle of open justice would not outweigh the need to preserve confidentiality in international arbitration.16 However, in the present case, it was held that as far as there was controversy surrounding DT’s enforcement efforts, it would likely be in India’s interest to apprise the public with its side of the story.
- The court has clarified that where the confidentiality of arbitration has been lost already, then the principle of open justice would prevail, and the cloak of privacy provided for in the IAA would not be applicable. Therefore, the threshold for upholding confidentiality as set by Singapore courts is whether the confidentiality of the arbitral proceedings has already been lost.
- Where the information sought to be kept private is already available through multiple public disclosure, the court would not make a futile effort to protect information that is already in the public sphere.
- The SGCA in the present judgment stated that the default position now as established by Section 22(1) of the Singapore IAA is that proceedings under the IAA are private. Rather than relying on a vague implied duty, the parties' expectations would arguably be better served if only explicit confidentiality agreements were recognised.
- The Singapore law provides that if a written judgment is given on a matter referred to the court and the court is of the view that the matter is of major legal interest, the court may authorise its publication (in redacted form) in professional legal journals.17 Where, however, a party reasonably wishes to conceal certain matters, including its identity, the court may give directions for restricted or sanitised publications.
- While some jurisdictions recognise an implied duty of confidentiality,18 disclosure of material which would otherwise be confidential is permissible if there is consent between the parties, there is an order/leave of the court, or the interests of justice require disclosure or (possibly) the public interest requires disclosure. For example, in the laws of Hong Kong, there is a stipulation of a rather express duty of confidentiality as exhibited in Section 18 of the Arbitration Ordinance. (Cap. 609).
- The court failed to carve out a balancing test for ‘substantially lost’ confidentiality and ignored the claims of India in contending that confidentiality was ‘not entirely lost’. This leaves room for opening of this question.
- The principle of open justice was argued predominantly using legislative intent and history underlying Section 22 and Section 23 as interpretative tools. The court delved into the independent and intrinsic interest of confidentiality in court proceedings vis-à-vis arbitration but the arguments on public interest were dismissed.