Nordisk Skibsrederforening

Do You Think Your Norwegian Arbitration Is Confidential?

Part II: A Cautionary Tale to Commercial Parties and Lawyers alike

In the August 2022 edition, we looked at the requirements set out in Section 5 of the Norwegian Arbitration Act (the “Arbitration Act”) to ensure that the arbitration proceedings and/or the award are subject to confidentiality. We concluded that it was 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, or if the duty of confidentiality must be agreed upon after the proceedings have been initiated. The recommended approach, for parties who want their arbitration to be confidential, was to specifically agree on the duty of confidentiality at the outset of the arbitration proceedings. That conclusion may have come as a surprise to some.

In this follow up article, we address the legal consequences of bringing an action to set aside an award that is confidential. The starting point for this discussion is that the parties have validly agreed that the arbitration award is to be kept confidential.  The question is what happens to the confidentiality after such an action has been made?

The answer is clear when looking at the applicable legislation, but the answer does – according to our experience – still come as a surprise to both lawyers and their clients. Once an action to set aside the award is brought before the Norwegian courts, the award becomes publicly available. It is not published in any way, but anyone may request access to the award.

The public’s right to request access to certain court records and documents is set out in Section 14‑2 of the Norwegian Dispute Act (the “Dispute Act”). The right to access includes access to evidence that has been relied upon by either party. When an action is brought against an arbitration award, the award itself becomes part of the evidence. Paragraph 3 of Section 6 of the Arbitration Act provides that the rules in the Dispute Act apply whenever the courts deal with arbitration proceedings or an application to set aside an award. Following this simple line of reasoning, the courts are obliged to give anyone access to the award if such a request is put forward.

However, there are a few exceptions to the public’s right to request access to court documents in Section 14-4 of the Dispute Act. The only relevant exceptions for commercial arbitration awards are (i) trade or business secrets or (ii) a statutory duty of confidentiality.  Assuming the award does not contain any trade or business secrets, we are left with the statutory duty of confidentiality. We will then have to assess whether there is any such duty applicable to arbitration awards.

The earlier article explained how Section 5 of the Arbitration Act states that the award is not confidential unless the parties have specifically agreed to make it confidential. Party autonomy means that the parties may of course agree on a duty of confidentiality but such a contractual duty is not a statutory duty of confidentiality.

The Supreme Court has also confirmed that a contractual duty of confidentiality does not affect a witness’ duty to testify in court.[1] Applying the same line of reasoning, this means that a contractual duty of confidentiality has no effect on the public’s right to access to documents as set out in Section 14-2 of the Dispute Act.[2]

If the courts were to acknowledge a contractual duty of confidentiality as a basis for limiting the public’s right of access to court documents, the courts would unreasonably limit the fundamental Norwegian principle that court proceedings and hearings are public.

Conclusion
Consequently, an arbitration award becomes publicly available to anyone if an action to set aside the award is made. The decision by the court when dealing with such an application may even be made public on Lovdata and the existence of the award will be made known. If anyone then wishes to read the award itself, they may request that the court send a copy of the award.

The threshold of succeeding with an action to set aside an award is very high to begin with, but both the parties and their lawyers should also take into consideration that the award will then become publicly available if an application to set aside the award is made.

 

[1] See Rt. 2002 s. 385 and Rt. 1964 s. 1423

[2] This was recently confirmed by Hordaland District Court (22-133191TVI-THOD)