Confidentiality Of Arbitration-Related Litigation Proceedings In Singapore.

 

8 October, 2016

 

The High Court of Singapore has recently released a judgment confirming the court's inherent power to make sealing orders in support of arbitration related court proceedings. Ronnie King and Sinyee Ong discuss the implications of this development and the impact on parties arbitrating their disputes in Singapore.

 

Introduction

 

On 9 September 2016, the High Court of Singapore held in BBW v BBX & Ors [2016] SGHC 190 that the Singapore Courts have inherent power to seal the litigation records to ensure confidentiality of a related arbitration proceeding.

 

This is a key development for parties arbitrating their disputes in Singapore. Parties may be assured of the confidentiality of the arbitration proceeding now that records of litigation related to (not just in support of) that arbitration proceeding can be sealed to prevent details of the arbitration proceeding from being leaked.

 

Background

 

The arbitration was between C and BBW (the "Arbitration"). C obtained an award of damages from BBW. BBW then commenced litigation against BBX (the personal representative of B's estate) to seek a declaration that there was a valid indemnity agreement between B and BBW (to indemnify BBW against damages incurred in connection with an arbitration) (the "Litigation").

 

BBW also made an ex parte application to seal all court documents related to the Litigation and to withhold third party access to these records.

 

Analysis

 

The High Court decided that the general power to make sealing orders did not lie within the International Arbitration Act (the "IAA") (Sections 22 and 23). The IAA provides for sealing orders only in respect of litigation proceedings under the IAA. Such proceedings must fall with the provisions of the IAA (i.e., stay of court proceedings, interim measures, enforcement of awards, etc). Section 22 grants parties the right to elect for, and the court is obliged to order, litigation proceedings under the IAA to be heard in camera (i.e., in private). Section 23 then grants parties the right to make an application, and the court may (subject to exceptions) order, to withhold publication of the records of such in camera litigation proceedings.

 

However, the High Court held that the Singapore courts have an inherent power to grant a sealing order. The High Court held that there is no statutory basis for a sealing order, but it is inarguably part of Singapore's civil procedure. In the arbitration context, the Singapore courts may exercise discretion to grant a sealing order if the preservation of confidentiality in arbitration best achieves a just outcome.

 

Judgment

 

Although the parties to the Litigation and Arbitration were not the same (BBW, not BBX, was party to the Arbitration), there was considerable overlap in the facts. BBW's claim for indemnity would inevitably include disclosing details of C's claim in the Arbitration. In the absence of a sealing order, evidence adduced in the Litigation would undoubtedly compromise the confidentiality of the Arbitration.

 

Further, this was a contractual dispute, and there was nothing to indicate that there was any legitimate public interest in not granting the sealing order.

 

Comment

 

This judgment is significant as it confirms the willingness of Singapore courts to support, and to maintain confidentiality of, arbitration proceedings.

 

First, the Singapore courts have confirmed that the confidentiality of litigation proceedings under the IAA are virtually certain.

 

Second, the Singapore courts have expanded the instances where sealing orders may be granted to litigation proceedings (not under the IAA) related to arbitration proceedings. Previous jurisprudence has established that sealing orders may be granted where the same parties are involved in both the litigation and arbitration proceedings (see AZT and Ors v AZV [2012] SGHC 116). Now, it has been clarified that parties need not be the same so long as there is considerable overlap in the facts such that the failure to grant a sealing order would inevitably disclose the details of the arbitration.

 

This will be potentially helpful in multi-party disputes. For instance, in the construction industry, a contractor involved in an arbitration with an employer may seek to seal litigation records if it were to seek contribution from a sub-contractor through litigation proceedings.

 

In short, the attractiveness of Singapore as a commercial dispute resolution hub in Asia will be further strengthened by this decision. 

For further information, please contact:

 

Ronnie King , Partner, Ashurst
ronnie.king@ashurst.com