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ICSID arbitration confidentiality

20 April 2010

In the case of Giovanna a Beccara & ors v Argentina (ICSID Case No ARB/07/05) – Procedural Order No 3 (Confidentiality Order) of 27 January 2010, contrary to the claimants’ request for a broad confidentiality order, the ICSID Tribunal in this case analysed the types of information in the proceedings and ordered varying degrees of confidentiality/transparency in relation to each.

The Tribunal also prohibited the respondent from relying on expert opinions and testimony from other treaty proceedings in which the respondent (but not the claimants) was involved.

In this ICSID arbitration between Italian bondholders (the claimants) and the Argentine Republic under the Agreement between the Republic of Argentina and the Republic of Italy on the Promotion and Protection of Investments (the BIT), the Tribunal followed the opinion of the Tribunal in Biwater Gauff (Tanzania) Limited v United Republic of Tanzania (Procedural Order No. 3) (the Biwater case) in balancing the competing interests of transparency of international decision making and confidentiality.

The claimants (approximately 180,000 individuals) filed their Request for Arbitration accompanied by a number of annexes, which contained detailed information relating to individual claimants. In order to meet Argentina’s request for access to the online database held in Italy containing the details of all the Claimants (the Database), the claimants required Argentina to enter into a confidentiality agreement. Argentina refused. The claimants asserted that the ICSID Convention and Rules did not sufficiently protect the personal data under the applicable Italian law.

In the course of the continuing proceedings, Argentina submitted documents upon which it wished to rely which contained expert opinions from other treaty arbitrations to which it had been party (the Exhibits). The claimants contended that the selective use of the Exhibits: (i) contravened the principle of equality, as the claimants did not have access to the materials from these arbitrations; and (ii) disregarded duties of confidentiality in respect of the other arbitrations. The claimants requested that the Tribunal order that the parties enter into a confidentiality order protecting the confidentiality of the proceedings in a very broad way. Argentina submitted that: (i) the claimants could not condition their duty to provide a user friendly Database upon Argentina providing a confidentiality agreement; and (ii) it should be permitted to use the Exhibits as they were relevant for impeachment purposes.

The Tribunal ruled on the issue of confidentiality under Rule 19 of the ICSID Rules (which deals with procedural orders). There was no general duty of confidentiality in ICSID arbitration but neither was there any general duty of transparency. The ICSID Convention and Rules “do not comprehensively cover the question of the confidentiality/transparency of the proceedings” and therefore, subject to any agreement by the parties, a tribunal shall decide the matter on a case by case basis balancing the general interest in transparency with specific interests in confidentiality.

The parties did not have a “carte blanche” to disclose information as they saw fit. Different considerations of confidentiality, transparency, public information, equality of the parties’ rights, orderly conduct of the proceedings and other procedural rights may apply depending on the information in question. Further, due consideration must be given to the stage of the proceedings. The sweeping confidentiality order requested by the claimants was thus rejected. The Tribunal instead considered the confidentiality requirements which were justified in respect of various types of information in this case:

  • General public discussion: general discussion was permitted, provided that it was restricted to what was necessary and was not a tactic to antagonise the parties, exacerbate the dispute, unduly pressure one of them, or render the resolution of the dispute potentially more difficult or circumvent the terms of the Order.
  • Decisions, Orders and Directions: the case at hand supported the presumption in favour of publication.
  • Minutes and records of hearings: as there had been no express or implied consent to disclosure, these would be restricted unless the Tribunal ordered otherwise.
  • Documents and Exhibits submitted with pleadings, Written Memorials and Submissions: where no other contractual or confidentiality obligations applied, a party would be free to decide how it published its own documents; however, the same restrictions would apply as applied to general public discussion.
  • Correspondence between the parties and the Tribunal relating to the conduct of the arbitration: publication was restricted as procedural integrity outweighed the needs of transparency, if any.

With regard to the Database, the Tribunal considered the requirements of Italian law and EU law. It ordered that Argentina be given direct access to the claimants’ Database subject to a number of restrictions to protect the confidentiality of the Database.

Balancing Argentina’s right to a defence with the claimants’ right to equality of arms and the general interest in ensuring the integrity of the procedure and, in particular, “finding the truth”, the Tribunal did not permit the Exhibits to be used. The Exhibits were issued in proceedings involving different claimants, relating to disputes arising from different circumstances, concerning claims under BITs with countries other than Italy, and were based on the laws and jurisprudence in effect at the time.

Comment: This practical decision accepts, and expands upon, the principles and analysis in the Biwater case. Given that the ICSID Convention and Rules do not comprehensively cover the competing issues of confidentiality and transparency, it would be worthwhile parties considering whether the ground rules as to disclosure of different types of information should be established at the outset and written into the first Procedural Order. This would especially be the case if one party anticipated the selective or misleading publication of information by the other as a tool for increasing pressure.

Further information

This case summary is part of the Allen & Overy Litigation Review , a monthly update on interesting new cases and leglisation in commercial dispute resolution.  For more information please contact Sarah Garvey sarah.garvey@allenovery.com, or tel +44 (0)20 3088 3710.