Breach of Confidentiality as a Ground for Avoidance of the International Agreement – Vol. 11 No. 4

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AuthorHans Smit*

Published: October 2000

Arbitral Awards
Confidentiality and Publication
Agreement to Arbitrate

Description: Confidentiality in arbitration has gained significant attention in recent years. And recent decisions by Swedish courts have prompted comprehensive consideration of the subject. That consideration is attempted here.

On March 30, 1999, the Svea Court of Appeal in Sweden, rendered a most important decision. It reversed a judgment by a lower court to the effect that the publication in Mealey’s of an interlocutory arbitral award on the question of whether an arbitration clause traveled with the assignment of a loan agreement constituted a fundamental breach, and warranted avoidance, of the arbitration agreement.

The Svea Court of Appeal, in dealing with the arguments advanced for the reversal of the lower court’s decision, failed to address and rejected some and accepted others. It did adopt the view that the parties who had agreed to arbitrate assumed a duty of good faith not to make public information concerning the arbitration, but that “great importance should be attached to what kind of information is made public.” It also stated that account should be taken of “whether there was an acceptable reason for the publishing, to what extent the other party has been caused damage by this and, should it occur, whether the information was given with the purpose of harming the opposing party.” Reviewing the circumstances of the case at hand, it then reached the conclusion that, if there had been any breach of an obligation to maintain confidentiality, it was not of such a nature as to warrant avoidance of the arbitration clause. It thus put to an end the impact of a decision that had caused significant turmoil in international arbitration circles, but left open a number of questions that concern the subject of confidentiality in arbitration which, in recent times, has occasioned a great deal of discussion, both in the courts and the literature.

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*Stanley H. Fuld Professor of Law, Columbia University.