Ersan Şen Hukuk ve Danışmanlık - Arbitration in Turkey: Confidentiality Principle During Arbitration Proceedings in Turkey
Arbitration in Turkey: Confidentiality Principle During Arbitration Proceedings in Turkey
27.10.2023 / Doç. Dr. Anıl Köroğlu

1. Confidentiality in Arbitration in General

Confidentiality in arbitration is considered to be one of the key determinants of the desirability of arbitration as an alternative dispute resolution mechanism both in Turkey and in the world. The parties may stipulate in their contract that confidentiality shall be maintained in arbitration and may provide sanctions for breach of this obligation. However, in the absence of such a provision in the parties′ agreement, the question arises as to whether confidentiality can be regarded as an indispensable feature of arbitration. Even though for many years confidentiality was considered to be an indispensable feature of arbitration, nowadays the necessity and limits of confidentiality in arbitration are being questioned.

2. The scope of confidentiality:

The scope of confidentiality in arbitration can be analyzed under three main headings. Firstly, the confidentiality of arbitration proceedings, i.e. hearings. The confidentiality of the hearings means that nobody other than the parties, their counsel, the arbitral tribunal, the secretariat of the arbitral tribunal, experts and witnesses designated by the parties may attend the hearings.

Secondly, confidentiality in arbitration refers to the confidentiality of information and documents obtained by the parties regarding the other party during the arbitration proceedings. In this context, the question of whether the evidence or document obtained in the proceedings can be used outside the arbitration in question comes to the fore.

Thirdly, the scope of confidentiality in arbitration includes the confidentiality of the arbitral tribunal′s awards during and at the conclusion of the proceedings. In this context, the interest of the parties to the arbitration in the confidentiality of the awards obtained in the proceedings conflicts with the public interest in the widespread knowledge of what has been decided in the arbitration proceedings. Moreover, the widespread availability of arbitral awards may also serve the development and dissemination of arbitration.

3. What are the important regulations on confidentiality in arbitration?

Various state regulations and institutional arbitration rules have attempted to clarify the issue of confidentiality, but no consensus has been reached on this issue. These regulations contain different provisions on the existence of a confidentiality obligation or its scope in terms of subject matter and persons.

Some of these regulations can be briefly mentioned as follows:

- Article 30 of the Arbitration Rules of the London Court of International Arbitration (LCIA) contains a provision on confidentiality. According to this provision, as a general principle, the parties are obliged to keep confidential the awards rendered in the arbitration and the information and documents obtained during the proceedings. The same obligation applies, to the extent appropriate, to the arbitral tribunal, the secretariat, and experts.

- There is no explicit provision regarding the confidentiality obligation in the Arbitration Rules of International Chamber of Commerce (ICC). However, according to the third paragraph of Article 22 of the relevant rules, the arbitral tribunal may decide on confidentiality at the request of either party. Again, the first article of the Internal Rules of the International Court of Arbitration that the court′s work is confidential "in character".

- It is possible to find a regulation similar to that in the ICC rules in Article 21 of ISTAC (an arbitration institution based in Istanbul/Turkey) Arbitration Rules and Article 53 of ITOTAM Arbitration Rules. According to these provisions, the arbitrators, the parties, their counsel, and the participants in the proceedings are obliged to maintain confidentiality.

- Furthermore, Article 54 of the ITOTAM Arbitration Rules regulates the publicity of the awards rendered by the arbitral tribunal. According to the relevant provision, the publication of arbitral awards is subject to the authorization of the parties and the Court. However, in no circumstances may the award be made public concerning information specific to the parties, the arbitrators, their counsel, and the proceedings.

- Another provision on confidentiality is found in Article 44 of the Swiss Rules of International Arbitration. Pursuant to the relevant regulation, unless otherwise agreed by the parties, the parties are obliged to keep the awards rendered in the arbitration and the information and documents obtained in the proceedings confidential. The same obligation applies to arbitrators, tribunal-appointed experts, and the secretary. In addition, according to this provision, all or part of the award rendered in the arbitration may not be published unless the parties have consented to this and the information of the parties has been redacted from the award.

- In the Arbitration Rules of the World Intellectual Property Organization (WIPO), confidentiality is also regulated in detail between Articles 75 and 78.

Whether the confidentiality obligation is included in Turkish national arbitration rules:

- The UNCITRAL Model Law on Commercial Arbitration, which forms the basis of many national arbitration laws, do not include an explicit provision on confidentiality. For this reason, many national arbitration laws do not include a provision on confidentiality obligation.

- There is no explicit provision on confidentiality in the Turkish Code of Civil Procedure (HMK), which contains regulations on internal arbitration.

- The International Arbitration Act, which regulates the practice of arbitration with a foreign element in Turkey, does not contain an explicit provision on the confidentiality obligation.

At this point, it should be noted that according to one view, even if there is no provision on confidentiality in the applicable Law or in the agreement between the parties, confidentiality is one of the fundamental principles of arbitration, and therefore, unless the parties agree otherwise, the arbitration proceedings shall be conducted in confidence. However, in this case, it will be difficult to determine the limits of confidentiality and the sanctions for breach of confidentiality. For this reason, it may be useful for the parties to examine the provisions of the applicable arbitration rules regarding the confidentiality obligation and to include a confidentiality clause in the arbitration agreement between the parties.