The Chartered Institute of Arbitrators -v- B; C and D [2019] EWHC 460 (Comm)

The Commercial Court in this case considered an application by the Chartered Institute of Arbitrators (CIA) under CPR 5.4C(2) to obtain copies of certain documents and for declarations concerning their use in disciplinary proceedings against the first respondent (B). 

Factual background

In February 2013, B, a fellow of the CIA, was appointed as an arbitrator in relation to a contractual dispute between C and D, the second and third respondents respectively. In early 2015, C raised some queries about B’s relationship with the third respondent (D) which led B to call an arbitral hearing to determine whether the arbitral tribunal was ‘properly construed’. The hearing took place on 17 April 2015 and B issued a ruling confirming that the tribunal was properly constituted and that he had no conflict of interest (the Arbitration Hearing).

C brought an application pursuant to section 24(1)(a) of the Arbitration Act 1996 for the removal of B as arbitrator on the grounds that circumstances gave rise to justifiable doubts as to his impartiality (the Section 24 Hearing). Hamblen J heard C’s application and concluded that there was a real possibility of apparent bias and that B should be removed. Following that judgment, B resigned as arbitrator; however, the Professional Conduct Committee of the CIA brought six charges against B and referred the matter to a disciplinary tribunal (the Disciplinary Proceedings).

In support of the Disciplinary Proceedings, the CIA applied under CPR 5.4C(2) to obtain copies of documents from the Section 24 Hearing that related to the arbitration (the First Application). These included among others the following: the witness statements and skeleton arguments referred to in the Section 24 Hearing; the Arbitration Hearing transcript and correspondence relating to B’s nomination and appointment as arbitrator in matters concerning D (together the Documents). The CIA also sought declarations that the Documents and the circumstances of B’s nomination and appointment could be relied on in the Disciplinary Proceedings because it was in the public interest (the Second Application).

C consented to the CIA and B being able to refer to and/or rely on the Documents and the circumstances of B’s nomination and appointment as arbitrator, while D did not object. 

Legal issues

The first application – access to Documents

CPR 5.4C(2) provides that ‘a non-party may, if the court gives permission, obtain from the records of the court a copy of any other document filed by a party, or communication between the court and a party or another person’. Mrs Justice Moulder found that witness statements and exhibits filed in an application to remove an arbitrator are ‘records of the court’ and provided that permission is granted by the court, they could be obtained by the CIA, Cape Intermediate Holdings Ltd -v- Dring (Dring) [2018] EWCA Civ 1795 followed. Alternatively, the court held that if the Documents do not fall within ‘records of the court’ then the position is that documents which have been read out and/or read by the judge in open court may be provided under the court’s inherent jurisdiction.

The question then arose whether the court should exercise its discretion and grant permission. The court found that the essential purpose of granting access to documents is to provide open justice. Mrs Justice Moulder applied the approach followed in Dring and reviewed the non-party’s reasons for seeking copies of the documents. The judge considered whether the applicant had a legitimate purpose and proceeded to balance that against the private interest in preserving their confidentiality of the party to the proceedings. The court held that the CIA had a legitimate interest in seeking copies of the Documents and continued to balance this against the reasons for seeking to preserve confidentiality. In her judgment, Mrs Justice Moulder applied the decisions in Ali Shipping Corporation -v- Shipyard Trogir [1999] 1 WLR 314 (CA) and Glidepath BV -v- Thompson [2005] EWHC 818 (Comm), and noted that the exceptions to the general rule of arbitral confidentiality included the interests of justice.

The court then had to consider whether the present case fell within the ‘interests of justice’ exception. The judge found that there is a general public interest in maintaining the quality of and standards of arbitrators which extends beyond the interests of the parties in the current proceedings to the wider section of the public who decide to refer their disputes to arbitration. The court rejected the submission that a distinction should be drawn between an institution which regulates all members of a profession such as the SRA and an institution, membership of which is voluntary, which regulates only a section of the profession. The court suggested that the general public is entitled to expect that arbitrators who belong to a recognised body meet certain minimum standards as laid down by that body and that those standards will be enforced. It held that the interests of justice lay in supporting the integrity of alternative dispute resolution mechanisms like arbitration, a quasi-judicial process employed for the resolution of disputes.

The court concluded that it would be impossible to pursue the disciplinary charges against B unless the Arbitration Hearing transcript, the correspondence and the witness statements were made available to the CIA. The Judge commented that it was necessary in the interests of justice to grant access to the transcript as the charges relied on the evidence of the transcript as to what transpired in the course of the Arbitration Hearing and there was minimal harm, if any, which would be caused by granting access since it was referred to publicly. The court further held that the correspondence it did not contain details of the underlying dispute and any harm to D resulting from the breach of confidentiality would be minimal. Similarly, the witness statements had been read by the judge and referred to in the transcript of the court proceedings. However, Mrs Justice Moulder found that the Disciplinary Proceedings were not based on the findings of Hamblen J and the arguments advanced before him during the Section 24 Hearing; therefore, it was not in the interests of justice to give access to the skeleton arguments.

The Second Application – Declarations 

Section 19 of the Senior Courts Act 1981 empowers the court to grant final declarations. The court rejected the argument that there was no jurisdiction on a Part 23 application to make the declaration sought, since there would be jurisdiction if the applicant were required to bring its application for a declaration in the form of a Part 8 claim. The judgment of Teare J in The “STYLIANI Z” [2016] 1 Lloyd’s Law Rep 395 was considered and it was decided that it was in furtherance of the overriding objective to use the broad power under CPR 3.10 to allow the application for a declaration to be treated as if it had been made in Part 8 proceedings. 

However, a distinction was drawn between the declarations which sought to allow the CIA and B in the context of the disciplinary proceedings to refer to and/or rely on the (i) Documents and (ii) the circumstances of B’s nomination and appointment as arbitrator in matter concerning D. The court approved the declaration for the former and held that the Documents for which a right of access was granted pursuant to CPR5.4 could be referred to and/or relied on in the context of the Disciplinary Proceedings by reason of the public interest. While the latter declaration was refused insofar as it extended to arbitration proceedings other than as between the second and third respondents. The judge commented that parties to the other arbitrations in which B was nominated and/or appointed had not been notified of the application for the declarations which sought to lift the obligation of confidentiality by reason of the public interest. Therefore, the court could not be satisfied that there were no considerations which would lead the judges to conclude that the obligation of confidentiality in the arbitrations outweighed the public interest.

Comment  

The Commercial Court in this case examined a conflict between the duty of confidentiality in arbitrations and the public interest in obtaining documents related to the arbitration. The judgment clarified when the exceptions to the implied duty of confidentiality will apply and focused on the ‘interests of justice’ exception.