The recent case of Westwood Shipping Lines Inc and another v Universal Schiffartsgesellschaft MBH and another [2012] EWHC 3837 (Comm) has confirmed the previous English authority on when the court will order that materials produced in arbitration be disclosed.

In reaching the decision to order disclosure, the court considered and applied the principles laid out in Emmott v Michael Wilson Partnership [2008] EWCA Civ 184 as to when disclosure is permissible, namely:

  • where there is consent, express or implied;
  • where there is an order or leave of the court;
  • where it is reasonably necessary for the protection of the legitimate interests of an arbitrating party; and
  • where the interests or justice, and also perhaps, the public interest, requires disclosure.  

The first claimants, Westwood Shipping Lines, had initiated an arbitration in London against a German company, GMB, for breach of a main and sub-charter. Westwood was successful in the arbitration, receiving an award for US$11m. Westwood sought to enforce that award in the English courts. As a result, GMB went into liquidation, and a liquidator was appointed.

Subsequently, Westwood sought to bring a claim in the Commercial Court against GMB’s ultimate parent company and a number of other entities and individuals for unlawful means conspiracy. Westwood needed to rely on the materials and documents produced in the earlier arbitration to make its claim. Westwood sought an order from the English court that the materials could be used, claiming that confidentiality in the documents had been waived as they had been referred to at a creditors’ meeting for GMB, or that they had entered the public domain in the enforcement of the award. Alternatively, Westwood argued that, applying the four principles in Emmott, an order for disclosure should be made. GMB’s liquidator requested that further time be given before any order was made to investigate the allegations made and whether it too should be making a claim.

Flaux J considered the liquidator’s request, but found that he had already had sufficient time. Turning to the application, Flaux J did not consider Westwood’s first two arguments convincing. However, applying the principles in Emmott, he considered that Westwood had a very strong case for disclosure. Flaux J considered that Westwood had a legitimate interest in pursuing its claim which was, on its face, arguable, and one which relied to a considerable extent on the detail of the arbitration. Furthermore, in circumstances where there was an arguable case of unlawful actions or conduct, the court should not allow arbitral confidentiality to restrict a party from making out its claim. It was therefore appropriate to allow Westwood’s application and make the order.

Comment

This case does not set out anything new in terms of arbitral confidentiality under English law, but it does provide a further example of the application of the Emmett principles. What remains interesting about the Emmott principles is their flexibility. Whilst the English court will generally maintain the confidentiality of arbitral proceedings and their materials, Emmott affords the court fairly broad scope to lift that confidentiality should it consider it just to do so.

For parties concerned about confidentiality, it remains advisable to insert express confidentiality provisions in their arbitration agreements or adopt institutional rules with strong confidentiality requirements, rather than relying on the implied obligation of confidentiality under English law. However, even the strongest confidentiality clauses will contain a provision that overrides such confidentiality if so ordered by the court. It is difficult to balance the parties’ choice of arbitration in the interests of confidentiality on the one hand and the interests of justice on the other. The flexibility of Emmott enables the English court to strike that balance.