Confidentiality in Arbitration and the

Public Interest Exception

by A N D R E W T W E E D D A L E *

These three give place in court of conscience

Fraud, accident, and breach of confidence 1

I. I N T R O D U C T I O N
T H E QUESTION whether arbitral proceedings are, or ought to be confidential,
has been the source of much academic debate and was recently reviewed by the
ICC Commission on Arbitration. 2 In much of Europe the prevailing view is that
arbitral proceedings are confidential. However, even if they are confidential, that
confidentiality cannot be absolute. As noted by Paulsson and Rawding, this would
result in a paradox. 3 If the parties to an arbitration ever sat down and thought
about the issue of confidentiality, they would inevitably conclude that neither of
them would want a rule that arbitrations were confidential without exception.
The parties may need to show the award to insurers or to a parent company. The
parties may also want to enforce the award if it is not honoured and the only way
to do this is in the courts, which will often be a public forum.
In a number of countries which adopt the position that arbitrations are
confidential there will be a list of exceptions to the confidentiality obligation.
Some countries consider that where the arbitration raises issues which have
a public interest, then this should be an exception to the confidentiality
obligation. This 'public interest exception' has been considered recently in three
international arbitrations. O n each occasion the argument that there ought to
be a public interest exception was rejected. This article does not seek to re-visit
the question of whether there is or ought to be a duty of confidentiality in

* Senior Associate in the dispute resolution department of Norton Rose, London.

1
A sixteenth-century English rhyme.
2
ICC Commission on Arbitration, Report on Confidentiality as a Purported Obligation of the Parties in Arbitration
(April 2002).
3
Jan Paulsson and Nigel Rawding, 'The Trouble with Confidentiality' in (1995) 11 Arbitration International 303.

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arbitration. 4 Its focus is on one question; namely, should there be an exception to

the duty of confidentiality where the arbitration raises issues of public interest?

II. T H E P U B L I C I N T E R E S T E X C E P T I O N A N D
CONFIDENTIALITY U N D E R ENGLISH LAW
English common law has consistently maintained that a duty of confidentiality
exists within arbitral proceedings. In the recent case of City of Moscow v. Bankers
Trust Company,5 the English Court of Appeal referred to privacy and confidentiality
being implicit in the parties' choice of arbitration. The court stated that the fact
that the parties had come to the courts to challenge the award on the basis of a
serious irregularity or lack of jurisdiction did not mean that confidentiality in
the arbitral proceedings or in the award had been waived. While judgments of a
court should generally be given in public, there may be times when a party could
show that there was a requirement for keeping the judgment confidential.
However, the court did not address the issue of whether there were circumstances
when the subject matter of the arbitral proceedings should be disclosed, and in
particular if there was a public interest exception to the confidentiality obligation.
That issue was, however, touched upon in Ali Skipping v. Shipyard Trogir6 five years
earlier. However, Potter LJ elected not to provide an answer and, instead, stated
that 'it may fall to the English court at a future time to consider some further
exception to the general rule of confidentiality based on wider considerations of
public interest, it is not necessary to do so in this case'.
The recent Privy Council decision of Associated Electric & Gas Insurance Services
Ltd v. European Reinsurance Company of Zurich7 also fails expressly to address the
question of a public interest exception to the confidentiality obligation. T h e
Privy Council, however, analysed how the confidentiality obligation arose. Lord
Hobhouse stated that '[generalisations and the formulation of detailed implied
terms are not appropriate' in determining whether a document is or is not
confidential. It appears implicit from this statement that the Privy Council

4
For a review of the case law on the duty of confidentiality in arbitrations see G. A'ita v. A. Ojjeh (1986) 4 Revue
de I'arbitrage 583; Dolling-Baker v. Merrett and another [1990] 1 WLR 1205; Hassneh Insurance Co. of Israel v. Steuart
J Mew [1993] 2 Lloyd's Rep. 243; Hyundai Engineering v. Active Building and Civil Construction (Pte) Ltd (in
liquidation), unreported, 9 March 1994 (see (1995) 11 Arbitration International 232); Insurance Co. v. Lloyd's Syndicate
[1995] Lloyds Rep. 272; London & Leeds Estates Ltd v. Paribus Ltd (No. 2) [1995] EG 134; Ali Shipping v. Shipyard
Trogir [1999] 1 WLR 314; Associated Electric & Gas Insurance Services Ltd v. European Reinsurance Company of Zurich
[2003] UKPC 11; City of Moscow v. Bankers Trust Company [2004] EWCA Civ. 314; United States v. Panhandle
Eastern Corp., 118 F.R.D. 346 (D. Del. 1988); Global Trade Watch v. Office of the US Trade and US Department of
State, District Court of Columbia, 13 September 2001; Providence Journal Co. v. United States Dep't of the Army,
981 F.2d 552, 556 (1st Cir. 1992), 32; Galleon Syndicate Corp v. Pan Atlantic Group Inc., 6 Mealey's Lit. R.:
Reinsurance 73, 74 (N.Y. App. Div., Dept. 1) (13 February 1996); Bulgarian Foreign Trade Bank Ltd v. AT. Trade
Finance Inc. ('Bulbank') (2001) XXVI Yearbook Commercial Arbitration 291; Commonwealth of Australia v. Cockatoo
Dockyard Pty Ltd (1995) 36 NSWLR 662; Esso Australia Resources Ltd v. Plowman, 7 April 1995, no. 95/014,
(1996) XXI Yearbook Commercial Arbitration 137; Myanma Young Chi Oo Co. Ltd v. Win WinNu [2003] SGHC 124;
Television New Zealand Ltd v. Langley Productions Ltd [2000] 2 NZLR 250.
s [2004] EWCA Civ 314.
6
[1999] 1 WLR 314.
7
Privy Council Appeal No. 93 of 2001 (judgment delivered on 29 January 2003).
 Confidentiality in Arbitration and the Public Interest Exception 61

considered that the confidentiality obligation was not imposed on the basis of
contract law and that the general duty arises as a matter of tort or equity. If the
obligation of confidence arises in tort, it would be analogous to a duty of care in
negligence. However, in such circumstances, the defence of public interest for
breach of confidence would be available to a party disclosing information. 8 There
is therefore no clear authority under English law as to whether there is a public
interest exception to the confidentiality obligation.

III. T H E R A T I O N A L E F O R T H E PUBLIC
INTEREST EXCEPTION
The rationale for a public interest exception to the confidentiality obligation
has been considered by the courts in Australia. In Esso Australia Resources Ltd v.
Plowman,9 Mason CJ referred to a legitimate expectation that the public may
have in knowing what transpired in an arbitration. He referred to this as the
'public interest exception'. He then stated that different criteria applied when
considering governmental secrets rather than personal secrets and that the courts
had to consider governmental secrets 'through different spectacles'. He explained
the rationale for this as follows:10

[TJn the public sector '[t]he need is for compelled openness, not for burgeoning secrecy'. The
present case is a striking illustration of this principle. Why should consumers and the public of
Victoria be denied knowledge of what happens in these arbitrations, the outcome of which will
affect, in all probability, the prices chargeable to consumers by the public utilities.

In Commonwealth of Australia v. Cockatoo Dockyard Pty Ltd,11 Kirby J expressed the

opinion that the public interest demanded transparency in relation to governmental
actions. He stated: 'Can it be seriously suggested that [the parties] private
agreement can, endorsed by a procedural direction of an arbitrator, exclude from
the public domain matters of legitimate concern'. His answer was an emphatic
no. The clarion call for openness and transparency where matters of public
interest arise has been taken up by the Law Commission of New Zealand in its
review of arbitration law in New Zealand. 12 However, the recommendations of
the Law Commission appear to go further than those expressed in Esso v. Plowman
or Commonwealth of Australia v. Cockatoo. The Law Commission recommended that
there should not only be a public interest exception where governments are
involved but also where there are public bodies exercising governmental functions.
The Law Commission stated: 13

8
See Halsbury's Laws of England vol. 8(1) Confidence and Data Protection, para. 405.
9
7 April 1995, no. 95/014, (1996) XXI Yearbook Commercial Arbitration 137.
10
(1996) XXI Yearbook Commercial Arbitration 137 at 153 referring to Prof. Finn, 'Confidentiality and the "Public
Interest" ' in (1984) 58 Australian Law Journal 497 at 505.
11
(1995) 36 NSWLR 662.
12
Law Commission of New Zealand, Improving the Arbitration Act 1996 (February 2003).
13
ibid. p. 22.
62 Arbitration International, Volume 21 Number 1

Public policy concerns about transparency (achieved through disclosure of information) with
regard to business enterprises operated in both the public and private sector must be recognised
in formulating any recommendations which we make. For example, we suggest that it would be
wrong for state-owned enterprises not to be required to make available relevant information
arising out of an arbitration if that arbitration raised issues of public concern. Similarly, we
believe that information derived from an arbitration which is relevant to the regulatory
functions of the New Zealand Stock Exchange should also be disclosed. Those examples are not
intended to be exhaustive.
It is necessary to ensure that administration of justice considerations are not undermined by
making the obligation of confidence too rigid. Where information, which has emerged from the
arbitration, is required to enable justice to be done between the parties, confidentiality must
yield in favour of the public interest concerning the administration of justice.

IV T H E D I S A P P E A R I N G VEIL O F C O N F I D E N T I A L I T Y
The need for openness and transparency where the actions of a state are involved
is a view which is gaining acceptance internationally, and in particular where the
actions of the state have a public interest element. In Australia and New Zealand v.
Japan Southern Bluefin Tuna,14 which has been described as being 'unprecedented
in departing from what has in the past seemed a fundamental principle of the
privacy of arbitration proceedings', 15 the President of ICSID announced certain
preliminary procedural matters which had been agreed to by the parties. The
preliminary matters included the publication of the pleadings and award on the
ICSID website and the admittance of the public to the oral hearing. Similarly,
in Ireland v. United Kingdom,^ the parties agreed for the hearings to be open to
the public and that the written pleadings would be made available on the PCA
website. The parties also agreed that the arbitral tribunal's award should be
made public.
The issue of greater transparency in relation to the resolution of disputes
between states was raised in an international forum in the Doha Declaration of
November 2001 by the World Trade Organization. In April 2002, as a response
to the Doha Declaration, the European Community advocated more transparency
in the resolution of international disputes. This recommendation was taken up by
the USA and on 1011 September 2002 it tabled a proposal also recommending
a more open and transparent process for the resolution of disputes. The proposal
included opening up hearings to the public, providing access to submissions and
reports as well as formalizing the handling of amicus briefs.17 Surprisingly, it was
many of the developing countries which raised strong objections to the proposal.
The trend towards transparency in dispute resolution processes, including
arbitration, has since found expression in a number of recent trade agreements. A
Free Trade Agreement between Singapore and the USA dated May 2003 includes

14
See www.oceanlaw.net/cases/tuna2.htm.
15
(2001) 16 International Journal of Marine and Coastal Law 239.
16
See www.pca-cpa.org; an arbitration under the OSPAR Convention pursuant to the request of Ireland dated
15 June 2001.
17
See the United States' submission of 9 August 2002 (TN/DS/W/13).
 Confidentiality in Arbitration and the Public Interest Exception 63

an express provision requiring transparency in any arbitral proceedings arising

under the investor-state provisions. 18 The dispute resolution provisions permit
claims to be submitted under the ICSID Rules of Procedure for Arbitration
Proceedings; or under the ICSID Additional Facility Rules; or under the
UNCITRAL Arbitration Rules; or to any other arbitration institution or under
any other arbitration rules which the parties may agree. The rules then proceed
to state that: 'The tribunal shall have the authority to accept and consider amicus
curiae submissions from any persons and entities in the territories of the Parties
and from interested persons and entities outside the territories of the Parties'. 19
Under some arbitration rules the tribunal can only hear amicus curiae submissions
if the parties expressly agree. This Free Trade Agreement now places the power
with the arbitral tribunal. 20
The Free Trade Agreement between Singapore and the USA furthermore
includes express provisions relating to the disclosure of information to the public.
The parties are placed under a mandatory requirement to make the pleadings
and any written submissions, orders, awards, decisions and transcripts available to
the public. The Free Trade Agreement also contains a requirement that the
hearings shall be conducted in public. However, information which is confidential
business information or information that is privileged or otherwise protected from
disclosure under a party's law may be designated as 'protected information' and
appropriate measures are then implemented to protect the information from
disclosure.21 Provisions identical to the Free Trade Agreement between Singapore
and the USA are also included in a Free Trade Agreement between the USA and
Chile dated June 2003.

V R E C E N T CASE LAW O N T H E PUBLIC

INTEREST EXCEPTION
It is perhaps ironic that many of the arbitration cases which have addressed the
issue of a public interest exception have concluded that the arbitration proceedings
remain private and confidential and yet these awards are now publicly accessible
on the internet. The issue of a public interest exception was recently considered
in the case Methanex Corporation v United States of America.2,2- The dispute was referred
to arbitration under the UNCITRAL Arbitration Rules pursuant to Article
1120(l)(c) of NAFTA. 23 The facts of the case were that Methanex produced
methanol which was used to make methyl tertiary-butyl ether ('MTBE'). MTBE
was used in petrol to control emissions. Following a leakage of MTBE into the
subsoil, the State of California, after obtaining an evaluation and report, banned

18
Section B of Chapter 15.
19
Chapter 15, para. 15.19.3.
20
The arbitral tribunal also has the power to accept amicus curiae submissions under the UNCITRAL
Arbitration Rules.
21
Chapter 15, para. 15.20.4.
22
See www.state.gov/s/l/c5818.htm.
23
North American Free Trade Agreement.
64 Arbitration International, Volume 21 Number 1

the use of MTBE in petrol. Methanex commenced arbitral proceedings and

claimed that the ban was unfounded and that it would suffer loss and damage. A
number of interested bodies petitioned the arbitral tribunal to be allowed (i) to file
an amicus brief (preferably after reading the parties' submissions); (ii) to make oral
submissions; and (iii) to have observer status at the hearings.
On the issue of permission to have observer status at the hearing, the arbitral
tribunal held that this was expressly covered by article 25(4) of the UNCITRAL
Arbitration Rules, which stated that hearings were to be held in camera unless both
parties consented otherwise. The arbitral tribunal concluded that it had no power
to permit the petitioners access to the hearings in the absence of the parties'
agreement. Similarly, the arbitral tribunal concluded that it had no power to
order that the parties disclose to the petitioners documents generated in the
arbitration because the parties had made an agreement that restricted disclosure.
The arbitral tribunal proceeded to consider whether it could accept amicus
briefs. Article 15(1) of the UNCITRAL Arbitration Rules permits the arbitral
tribunal to conduct the arbitration in such manner as it considers appropriate.
This power is, however, limited by the requirement that the parties be treated
with equality and that they be given a full opportunity of presenting their cases.
The arbitral tribunal stated that article 15(1) was a procedural provision which
gave the arbitral tribunal great flexibility. It could not, however, be used to permit
additional parties to be joined in the arbitration or to give non-parties substantive
rights or privileges.
The arbitral tribunal stated that the question whether it could permit the
submission of amicus briefs was not expressly addressed within the UNCITRAL
Arbitration Rules. The issue therefore fell to be determined considering the
procedural powers that the arbitral tribunal possessed. It reviewed authorities,
and in particular decisions of the Iran-US Claims Tribunal on article 15(1) of the
UNCITRAL Arbitration Rules, and concluded that it had a discretion whether
to permit amicus briefs. The arbitral tribunal then considered whether it should
exercise that discretion. An overwhelming feature of the arbitration was that there
was a public interest element. The arbitral tribunal stated that this factor must be
balanced against other factors such as additional costs or burdens on the parties.
The arbitral tribunal held that 'it could be appropriate to allow amicus written
submissions from these Petitioners'. It decided that it would not make a final
decision on whether to permit amicus briefs from the petitioners but consider
whether they might be of assistance at a later date, and also seek further
representations from the parties regarding any limitation that might be imposed
on the size of, or the areas to be addressed by, the amicus briefs.
The issue was again revisited in October 2001 in the case of United Parcel Service
of America v. Government of Canada.^ Once again this was an arbitration under
NAFTA and the U N C I T R A L Arbitration Rules. In addition to the submission
of amicus briefs and the disclosure of documents, the third parties affected by the

24
See www.state.gov/s/l/c3749.htm.
 Confidentiality in Arbitration and the Public Interest Exception 65

arbitration also requested to be joined into the arbitration so that they would
have the status of parties. The parties to the arbitration accepted that under
article 15(1) of the UNCITRAL Arbitration Rules the arbitral tribunal was
authorized to accept written submissions of third parties as amicus curiae but that
there was no provision within Chapter 11 of NAFTA which gave the arbitral
tribunal the power to join third parties to the arbitration. Canada, however,
strongly agued that in respect of NAFTA Chapter 11 disputes there ought to
be greater transparency as there is a public interest in the resolution of these
disputes.
The third parties sought to distinguish Methanex by arguing that Article 1131(1)
of NAFTA required that the arbitral tribunal decide the dispute in accordance
with principles of international law and where principles of international law
were in conflict with the UNCITRAL Arbitration Rules then the principles of
international law would prevail. The arbitral tribunal held that there were no
principles of international law which mandated that these third parties had a
right to be joined in as parties and therefore, following the decision in Methanex,
concluded that it had no authority to order joinder. It did, however, conclude that
it had the power to accept amicus briefs and held that it would decide whether to
request such briefs at the merits stage of the hearing. In relation to the issue of
disclosure of confidential information the arbitral tribunal simply held that this
was a matter which was yet to be resolved.25
The recent case of Aguas Del Tunari v. Republic of Bolivia2^ raises a number of
issues similar to those raised in Methanex and United Parcel Service. There has
been a great deal of public interest in this case because the dispute arises out
of the problems with the supply of water to Cochabamba in Bolivia. A dispute
arose regarding the privatization of the water services. Within weeks of the
privatization, water rates were substantially increased. There were widespread
demonstrations as a result. The Government of Bolivia declared a state of
emergency and suspended constitutional rights. The protests continued and the
government used violence to suppress them. Over 100 people were injured and a
17-year-old boy was killed. Aguas Del Tunari had its concession terminated and
left the country. It subsequendy commenced an arbitration against the Government
of Bolivia for the loss of anticipated profits in the sum of US$25 million.
Over 300 interested bodies petitioned the arbitral tribunal to be allowed to
intervene in the proceedings. Relying on Esso v. Plowman, the petitioners requested
that (i) they had standing to participate as parties; alternatively (ii) they had the
right to participate in the proceedings as amici curiae; (iii) there had to be full
public disclosure of all pleadings, reports and transcripts; (iv) the arbitration had
to be open to the public; (v) the arbitral tribunal should hold public hearings in
Bolivia to ascertain the facts underlying the dispute; (vi) the petitioners should
have the right to respond to all arguments regarding the petition to be joined; and
(vii) leave to amend the petition should be granted. ICSID received the petition

25
ibid. para. 68.
26
ICSID Arbitration Case no. Arb/02/3 (2002).
66 Arbitration International, Volume 21 Number 1

to intervene in the proceedings on 29 August 2002 and forwarded the petition

to the arbitral tribunal. O n 29 January 2003, the arbitral tribunal wrote to the
petitioners refusing their request. 27 The arbitral tribunal stated:

the consensual nature of the arbitration places the control of the issues you raise with the parties,
not the Tribunal. In particular, it is manifestly clear to the Tribunal that it does not, absent the
agreement of the Parties, have the power to join a non-party to the proceedings; to provide
access to hearings to non-parties and, a fortiori, to the public generally; or to make the documents
of the proceedings public ...
We hold this view without in any way prejudging the question of the extent of the Tribunal's
authority to call witnesses or receive information from non-parties on its own initiative.

The reasoning of the arbitral tribunal in Aguas Del Tunari appears to follow the
approach adopted in the Methanex and the United Parcel Service cases. However, the
Aguas Del Tunari case is different in one major respect. In Methanex and the United
Parcel Service cases there were no principles of international law to which the
arbitral tribunal could refer in order to found jurisdiction to permit third parties
to be joined in the dispute. In Aguas Del Tunari there were some principles of
international law which could have assisted the third parties. 28

VI. I N T E R N A T I O N A L LAW A N D H U M A N
RIGHTS LEGISLATION

a. The Sources of International Law

The sources of international law can be found within Article 38 of the Statute of
the International Court of Justice. This states that:

1. The Court, whose function is to decide in accordance with international law such disputes
as are submitted to it, shall apply:
a. international conventions, whether general or particular, establishing rules expressly
recognized by the contesting states

An international convention, in this context, means a treaty. Article 2(1 )(a) of

the Vienna Convention on the Law of Treaties 1969 defines the word treaty as
follows: ' "treaty" means an international agreement concluded between States in
written form and governed by international law, whether embodied in a single
instrument or in two or more related instruments and whatever its particular
designation'. In the context of the supply of water there are a number of conventions
and treaties which are pertinent to the issues raised in Aguas Del Tunari.

The petition and the response have been published on the Internet, see www.ciel.org.
Article 42 of the ICSID Convention provides that the arbitral tribunal shall decide the dispute in accordance
with such rules of law as may be agreed by the parties. In the absence of such agreement, the tribunal shall
apply the law of the contracting state party to the dispute (including its rules on the conflict of laws) and such
rules of international law as may be applicable.
 Confidentiality in Arbitration and the Public Interest Exception 67

b. International Covenant on Civil and Political Rights

In Aguas Del Tunari, the petitioners argued that they ought to be permitted to be
joined into the arbitration as parties on the basis of Article 14 of the International
Covenant on Civil and Political Rights. They were unsuccessful in this argument.
Although the arbitral tribunal did not fully set out its reasons for rejecting
this argument, it is assumed that the argument was rejected on the basis that
arbitration is an exception to the right to a public trial. Article 14 of the
International Covenant on Civil and Political Rights provides that:

All persons shall be equal before the courts and tribunals. In the determination of ... rights
and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a
competent, independent and impartial tribunal established by law.

The petitioners argued that the issues raised in the arbitration would affect
their rights and therefore they had a right to participate in the arbitration. Article
14 is similar to Article 6(1) of the European Convention on Human Rights. The
European Court of Human Rights has considered Article 6(1) in a number of
cases. In Deweer v. Belgium,^ the Court stated that the right to a public hearing
before a country's national courts is subject to implied limitations. One of those
limitations is where the parties agree to have their disputes resolved other than by
a public hearing before a state's national courts. Arbitration clauses therefore
created an exception to the general rule that disputes must be resolved by way
of public hearing. The court stated that this exception 'which has undeniable
advantages for the individual concerned as well as for the administration of justice,
does not in principle offend against the Convention'. The European Court of
Human Rights, however, then proceeded to state that there would be exceptions
to the right to waive a public trial. The court stated that: 'In an area concerning
the public order (ordre public) of the member States of the Council of Europe,
any measure or decision alleged to be in breach of Article 6 (art. 6) calls for
particularly careful review'. Equally, in Hakansson v. Sweden,30 the court stated that
'a waiver ... must not run counter to any important public interest'.
A similar decision was arrived at by the European Commission of Human Rights
in Jakob Boss Sohne KG v. Federal Republic of Germany.31 The Commission held that
the effect of a voluntary arbitration agreement was that the parties had renounced
their right to have disputes determined in the civil courts. However, the agreement
did not mean that the obligations of a state under the European Convention of
Human Rights had been completely excluded. The Commission stated:

the arbitration award had to be recognised by the German courts and be given executory effect
by them. T h e courts thereby exercised a certain control and guarantee as to the fairness and
correctness of the arbitration proceedings which they considered to have been carried out in

29
Application no. 6903/75.
30
(1990) 13 EHHR 1 at para. 66.
31
Application no. 18479/91.
68 Arbitration International, Volume 21 Number 1

conformity with fundamental rights and in particular with the right of the applicant company
to be heard.

The right to privacy and confidentiality in arbitral proceedings is therefore not a

breach of Article 6(1) of the European Convention on Human Rights per se.
However, this is subject to the caveat that where the dispute raises 'fundamental
rights' or 'public order' issues then this issue requires careful review. It appears,
therefore, that the parties to an arbitration agreement could not opt out of having
a fair trial under the human rights legislation. However, there is no public order
issue or question of fundamental rights being affected simply because an investor
and a state have agreed to resolve their disputes by arbitration. It is assumed that
the arbitral tribunal in the Aguas Del Tunari case also arrived at this conclusion.

c. International Covenant on Economic, Social and Cultural Rights

Article 11 of the International Covenant on Economic, Social and Cultural Rights
(CESCR) states that:

The States Parties to the present Covenant recognize the right of everyone to an adequate
standard of living for himself and his family, including adequate food, clothing and housing, and
to the continuous improvement of living conditions. The States Parties will take appropriate
steps to ensure the realization of diis right, recognizing to this effect the essential importance of
international co-operation based on free consent.

On its face this Convention would not appear to assist the petitioners in the Aguas
Del Tunari case. There is no mention of any dispute resolution process or to
consolidation or joinder in arbitration proceedings. There is not even any mention
of the right to water. However, the Economic and Social Council of the United
Nations has issued General Comment No. 15 (2002) (the 'General Note') 32 that
deals specifically with the right to water.
The General Note states that:

[ T ] h e right to water is also inextricably related to the right to the highest attainable standard of
health (art. 12, para. 1 CESCR) and the right to adequate housing and adequate food (art. 11,
para. 1 CESCR). The right should also be seen in conjunction with odier rights enshrined in the
International Bill on H u m a n Rights, foremost amongst them the right to life and human dignity.

The General Note proceeds to impose an obligation on a state to protect and

ensure that third parties do not in any way interfere with the enjoyment of the
right to water. The state must therefore prevent third parties 'from compromising
equal, affordable, and physical access to sufficient, safe and acceptable water'. A
violation of this obligation includes 'unaffordable increases in the price of water'.
From these provisions it would appear that the right to affordable water is a right
conferred on the petitioners in the Aguas Del Tunari case under international law.

Issued on 26 November 2002, three months after the petitioners in Aguas Del Tunari submitted their petition
but two months before the arbitral tribunal made its decision.
 Confidentiality in Arbitration and the Public Interest Exception 69

The General Note then deals with remedies and accountability. It states:

Any persons or groups who have been denied their right to water should have access to effective
judicial or other appropriate remedies at both national and international levels (see General
Comment No. 9 (1998), para 4) ...
Before any action that interferes with an individual right to water is carried out by the State
party, or by any other third party, the relevant authorities must ensure that such actions are
performed in a manner warranted by law, compatible with the Covenant, and that comprises:
(a) opportunity for genuine consultation with those affected; (b) timely and full disclosure of
information on the proposed measures.

Therefore, it appears that there is a tension between the requirements of the

CESCR and the provisions of the ICSID Convention and Arbitration Rules. The
CESCR appears to permit the petitioners in the Aguas Del Tunari case to have
effective remedies before the courts or an arbitral tribunal 33 whereas the ICSID
Convention and Arbitration Rules require privacy and confidentiality.34 The
ICSID Convention, however, provides the answer to resolve this tension. It
permits the arbitral tribunal to apply international law.35 This provision should
be construed as amounting to an agreement by the parties whereby the privacy of
the arbitration will be maintained except where it conflicts with any provisions of
international law or the law agreed by the parties.

VII. CONCLUSION
The issues of confidentiality and the public interest exception give rise to a
conflict of principles. There is a general perception that arbitral proceedings
are by their nature private and confidential. Where, however, those arbitral
proceedings affect third parties or involve the workings of a state, then there is a
need for openness rather than secrecy. In the context of a private commercial
arbitration the parties ought to be free to agree to hold their arbitration in private
and that the proceedings should be kept confidential. However, for a state or
multinational corporation to hide behind an arbitration clause in order to conceal
its business dealings, which may affect millions of people, is not an acceptable
course of conduct in the eyes of many people. Most modern countries have
now had to consider the issue of freedom of information. In many countries there
is legislation which would require a government to disclose information that
affected its citizens, even if such information were adduced in an arbitration. The
right to receive information regarding the actions of the government is seen by
many people as a necessary corollary to Article 19 of the Universal Declaration of
Human Rights, which provides that everyone has the right to seek, receive and
impart information and ideas.

33
Bolivia acceded to the CESCR on 12 November 1982. However, it is questionable whether all the
petitioners in the Aguas Del Tunari case have rights under the CESCR.
34
See r. 6(1), r. 15(1) and (2) and r. 32 of the Arbitration Rules.
35
Article 42.
70 Arbitration International, Volume 21 Number 1