Solomon on Keeping The Wraps On Confidential Arbitral Awards
Posted on October 25, 2011
Louis M. Solomon has an interesting post up about the problem with maintaining the confidentiality of an arbitral award when you want to ask a US court to confirm it (or to vacate it, for that matter). He points out, correctly I think, that it’s very difficult to persuade a court to seal an award. He suggests as a solution language in the agreement to arbitrate in which the parties agree, ex ante, to permit each other to submit the award under seal if it is necessary to put the award before a court.
I don’t think the suggestion necessarily solves the problem. The parties may have whatever agreement they wish about confidentiality, but while they can bargain away their own rights, I don’t see that they can, by agreement, compel a court to keep documents in its records impounded, particularly because in deciding whether to impound, the courts are not considering the rights of the parties in a vacuum, but are weighing them against the common law and First Amendment rights of the public. If the award itself contains trade secrets, commercially sensitive pricing data, or whatever, then I suppose there is an argument for impoundment. But if the parties simply wish for the amount of the award not to be known—well, if you want justice from the courts, you have to play by their rules, and one of their most important rules is openness to the public.