Confidentiality in investment-treaty arbitration: the Singapore position

The Singapore High Court on 8 October 2020 delivered an important ruling that discusses confidentiality in investment-treaty arbitration. In short, Singapore’s common law imposes a general obligation of confidentiality in all arbitrations, commercial and investment-treaty. But considerations that apply to commercial arbitration may not apply with equal force to investment-treaty arbitration, which it is often said may involve larger issues of public interest and public policy.

The case arose out of the Republic of India’s application for cross-disclosure of documents in two related investment-treaty arbitrations. One of the arbitrations, Cairn v India, was seated in the Netherlands, and the other, Vedanta v India, was seated in Singapore. Both Tribunals issued procedural orders permitting cross-disclosure of documents. But the Cairn Tribunal’s ruling was broader than the Vedanta Tribunal's.

• In Cairn, the Tribunal recognised that Dutch law (which was the law of seat) does not impose a general obligation of confidentiality. As a result, the Tribunal imposed an open document disclosure regime under which the Cairn Tribunal will uphold objections to disclosure only rarely.
• In contrast, the Vedanta Tribunal found that Singapore law did impose a general obligation of confidentiality, and therefore cross-disclosure could only be permitted on a case-by-case basis.

Singapore being the seat of the Vedanta arbitration, India sought a declaration from the Singapore High Court that it would not breach confidentiality if it were to disclose for the purpose of the Cairn arbitration any of the documents generated in the Vedanta arbitration.

The Singapore High Court upheld the Vedanta Tribunal’s decision. The key takeaways are:

1. In Singapore law, unless the parties otherwise agree, a general obligation of confidentiality arises in common law in all arbitrations.
2.  As held in the earlier Singapore High Court decision in AAY v AAZ (2011), the general obligation of confidentiality is subject to the following non-exhaustive exceptions:
   • where there is express or implied consent to disclosure;
   • where disclosure is permitted by a tribunal order, or with the leave of the court;
   • where disclosure is reasonably necessary for the protection of the legitimate interests of a party to the arbitration; and
   • where the interest of justice require disclosure.

Disclosure in public interest is a possible addition to the list of exceptions.

Although the general obligation does not distinguish between commercial and investment-treaty arbitration, considerations that apply to a private arbitration do not apply with equal force to investment-treaty arbitrations. A different approach may well be warranted in investment-treaty arbitration, given the different stakeholders and the sovereign and public interests implicated.

The Singapore High Court accepted the Vedanta Tribunal’s holding that, in the context of that case: (a) there is a strong public interest and a degree of transparency in investment-treaty arbitration; and (b) although common law was to prefer a narrow interpretation of the public interest / interests of justice exception, new exceptions can be created according to the needs of the situation as well as with regard to public policy.

The Singapore High Court also made an important observation on a tribunal’s role in developing Singapore’s common law. India had argued that the Vedanta Tribunal developed Singapore’s common law of arbitration beyond the AAY v AAZ (2011) principles by extending the application of the general obligation of confidentiality to investment-treaty arbitrations. Rejecting this argument, the Singapore High Court held that a Singapore-seated tribunal is “entitled and empowered”, and even “duty-bound” to ascertain, develop and apply the common law.

1. An arbitral tribunal plays an adjudicatory role, which entails the findings of facts, ascertaining the law, developing the law if necessary and applying the law as ascertained or developed to the facts to resolve the dispute.
2. An arbitral tribunal cannot fulfil its adjudicatory role without the power to apply legal principles to the facts at hand. “Where a tribunal must apply a common law, and is faced with an ambiguity or a lacuna in that law, it is entirely within a tribunal’s power to ascertain that principle, develop it in fullness of the common law tradition and to apply it to the facts as found”.
3. It is absurd to suggest that, every time a tribunal is faced with a gap in a common law it must apply, it must throw its hands up in defeat and terminate its legal analysis. This approach does not reflect the reality of the common law. It also does not reflect the demands on arbitration as a dispute-resolution procedure.

To find out more about Freshfields’ international arbitration practice – including as regards investor-state disputes – click here.