Introduction
A key feature of arbitration as a dispute resolution option is that it offers parties the opportunity to have their dispute resolved in private. Even when arbitral proceedings spill over into court, for instance by way of an application to set aside the arbitral award, there are implements to safeguard the parties’ privacy. In Singapore, the Arbitration Act 2001 (2020 Rev Ed) (“AA“) provides that proceedings under the AA are to be heard in private by default and imposes restrictions on the reporting of proceedings heard in private.
These protections may not apply if the confidentiality of the underlying arbitration has already been lost. The courts will not go through an empty exercise to protect confidentiality if there is already nothing left to protect.
In Karan Chandur Tilani v Maarten Hein Bernard Koedijk and another [2024] SGCA 46 (“Tilani“), the Court of Appeal found that the confidentiality of the arbitration had already been lost, as the full award had been disclosed in non-arbitration-related proceedings. It therefore dismissed the appellant’s application for a sealing order in relation to his application to set aside the award.
Tilani highlights the importance of obtaining sealing orders in a timely manner and to be conscious of any disclosures made that might compromise the confidentiality of the arbitration.
The respondents were successfully represented by Partner Devathas Satianathan, together with Associates Sandi Tun and Louis Lau, from Rajah & Tann Singapore’s International Arbitration Practice.
Background
The appellant commenced arbitration proceedings (“Arbitration“) against the respondents for non-payment under two contracts concerning an investment into a synthetic diamond. The respondents counterclaimed, alleging fraud. In the Final Award, the arbitrator dismissed the appellant’s claim and allowed the respondents’ counterclaim.
The appellant applied to set aside the Final Award under section 48 of the AA and, in the course of those High Court proceedings, applied for a sealing order. The High Court granted the sealing order (by consent) and eventually dismissed the setting aside application, awarding costs to the respondents. For more details on the setting aside proceedings, in which Rajah & Tann also successfully represented the respondents, please see our April 2024 article titled “All That Glitters is Not Gold: Singapore High Court Upholds Arbitral Award, Dismissing Allegations of Bias and Prejudgment“.
Subsequently, three sets of proceedings arose:
- On 1 April 2024, the appellant filed CA 22, his appeal against the High Court’s decision not to set aside the Final Award.
- On 6 June 2024, the appellant commenced the Statutory Demand Proceedings (“SD Proceedings“), where the appellant sought to set aside a statutory demand (“SD“) the first respondent had served on him for the costs of the setting aside application. As part of the SD Proceedings, the appellant filed a supporting affidavit dated 5 June 2024 exhibiting a full copy of the Final Award.
- On 12 July 2024, the appellant filed a sealing application (“Sealing Application“), the focus of this note, to restrain the publication of any information relating to CA 22. This was initially framed as only being applicable “pending the hearing” of CA 22. The appellant sought to amend it on 5 August 2024 by framing it in final rather than interim terms, removing the “pending the hearing” language.
On the substance of the Sealing Application, the appellant submitted that the Court of Appeal should grant the Sealing Application under the AA because the confidentiality of the Arbitration remained intact and remained of paramount importance. Alternatively, the appellant submitted, the Court should grant the application in exercise of its inherent powers.
The respondents resisted the Sealing Application on two grounds: first, that the confidentiality of the Arbitration had already been lost due to the appellant’s disclosure of the Final Award in the SD Proceedings. Second, the appellant had not explained his delay in bringing the Sealing Application.
Decision of the Court of Appeal
The Court of Appeal dismissed the Sealing Application. It emphasised that the appellant had to show that the confidentiality of the Arbitration was still intact as the courts would not “go through an empty exercise to protect confidentiality where there is nothing left to protect”. It found that in this case, the confidentiality of the Arbitration had indeed been lost.
The disclosure of the Final Award in the SD Proceedings, the Court noted, meant that the Final Award had become part of the court record and therefore was publicly accessible. A third party could access it upon request, while the appellant would have no say to resist any such request. Moreover, customary background checks for commercial transactions would reveal the SD Proceedings and likely trigger a request for inspection of the court record.
Further, the appellant had not explained his failure to obtain a sealing order in relation to the SD Proceedings, notwithstanding the guidance from the Assistant Registrar in those proceedings. Nor had he explained why the Sealing Application was only filed over three months after CA 22 was filed.
In relation to the court’s inherent powers to grant a sealing order, the appellant did not identify any basis to exercise such powers except for the (already-compromised) confidentiality of the Arbitration. The Court of Appeal therefore declined to do so and dismissed the Sealing Application altogether.
Concluding Remarks
Tilani reinforces the importance of consistently maintaining the confidentiality of an arbitration, even in tangential proceedings. While a sealing order had been granted in relation to the setting aside application before the High Court, the appellant’s failure to obtain a sealing order in relation to the SD Proceedings, coupled with his decision to disclose the Final Award in those proceedings, essentially negated all previous and future sealing orders.
For more information on how the Singapore courts uphold the privacy of arbitration-related court proceedings, please see our July 2023 article titled “Privacy and Confidentiality in the Enforcement of Arbitral Awards“, as well as a cross-jurisdictional overview in our December 2023 article titled “Confidentiality in Arbitration-related Court Proceedings – Positions in Singapore, Malaysia and China“.
This article was authored by Devathas Satianathan. A PDF version is available here.
