Do You Think Your Norwegian Arbitration Is Confidential?

In our experience many commercial players seem to mistakenly assume that their Norwegian arbitration is confidential, if they have agreed that the commercial contract shall be kept confidential, or even if the arbitration clause itself states that any proceedings are confidential. Unfortunately, that may not be the case under Norwegian law.

Norwegian Arbitration Act
Section 5 of the Norwegian Arbitration Act (the “Act”) provides that arbitration proceedings and awards are not confidential unless the parties have explicitly agreed that the proceedings and/or the award are subject to confidentiality. The starting point is that both the proceedings and the award may be made public. However, third parties are, as a general rule, not allowed to the hearing itself.[1]

According to the principle of party autonomy, the parties are free to agree that the proceedings and/or award are to be kept confidential. The question is really when and how the parties may agree that their arbitration and subsequent award are confidential.

The wording of Section 5 requires that the confidentiality agreement is entered into for the specific proceedings. A plain reading of the Act requires the parties to agree to confidentiality after arbitration proceedings have been commenced or at the very outset of such proceedings.

The preparatory works also support this interpretation and suggest that this approach allows the parties to model the duty of confidentiality to suit their needs and the specific dispute. Furthermore, the preparatory works also state that a mere reference to a confidentiality clause in the parties’ commercial contract is insufficient, but no specific reasoning is presented to support this statement.

It is thus certain that a general confidentiality clause contained in the parties’ commercial agreement – without any reference to arbitration proceedings – is insufficient to establish an obligation to keep the arbitration confidential. This may come as a surprise but is undisputable based on the wording of the Act and its preparatory notes.

Academic Opinion
However, legal scholars[2] disagree on whether the wording of the Act and the preparatory works are to be read stringently; requiring the parties to agree to confidentiality after the proceedings have been initiated, or if a duty of confidentiality in the arbitration clause itself is sufficient. The latter opinion is perhaps a more practical and commercial approach. Some scholars fear that the parties may have divergent interests when it comes to confidentiality after a dispute has risen, and that one party may use this as leverage in the on-going proceedings. It is, nonetheless, not a strong argument against deviating from the plain reading of the wording of the Act and the preparatory works.

Another similar question to consider is the effect of referring to institutional arbitration rules in the arbitration clause, which may include a general duty of confidentiality. If the stricter approach is adopted, such a reference in the arbitration clause is obviously to no effect. The duty of confidentiality has not been agreed upon after the commencement of proceedings. On the other hand, if the more practical and commercial view should apply, it is still uncertain whether a general duty of confidentiality contained in such rules would be binding upon the parties, if the arbitration clause only makes a reference to the rules. Arbitration rules contain a various set of rules, and the duty of confidentiality is just one out of many. Thus, it may be argued that Section 5, as a minimum, requires the parties to specifically agree on the issue of confidentiality.  However, if the adoption of the institutional arbitration rules comes after or at the time of instituting proceedings, then the parties are more likely to have complied with the requirements of section 5 by agreeing to a set of rules, which includes confidentiality, after proceedings have been commenced.

To summarise, it is at best an open question whether an agreement on confidentiality can be made before the proceedings have been initiated, i.e., in the dispute resolution clause contained in the parties’ agreement,[3] or if confidentiality must be agreed upon after the proceedings have been initiated.  If confidentiality is key, then the safest approach would be to both include the confidentiality obligation in the arbitration clause, as well as repeating it, if and when proceedings are being initiated.

As a final remark, commercial players may rest assured that arbitrations governed by English law are confidential, as confidentiality is an implied term covering both the parties and the arbitral tribunal under English law.[4]

[1] The Norwegian Arbitration Act section 5 para. 2.
[2] See Geir Woxholth, Taushetsplikt og offentlighet i voldgiftsprosessen, Festskrift til Erik Magnus Boe 2013 s. 382-404 and Helge Jakob Kolrud mfl., Voldgiftsloven. Lovkommentar, § 5. Taushetsplikt og offentlighet, Juridika, Borgar Høgetveit Berg mfl., Voldgiftsloven med kommentarer, Oslo 2006, s. 96, and Ristvedt and Nisja, Voldgiftsloven og tvister i forretningsforhold Tidsskrift for forretningsjus 2005 s 3-36 – (TFF-2005-3) s. 34.
[3] Alternatively, by a general reference to institutional arbitration rules containing a duty of confidentiality.
[4] There are some limited exceptions, such as for example, where disclosure would serve public interest or in the interests of justice, or where there has been a challenge to the award.