Challenges to arbitral awards in the English courts: risking loss of confidentiality?

It is a common observation that one of the distinguishing features of commercial arbitration, when compared to litigation before the English courts, is that it provides parties with the means to resolve their disputes in private. The importance of such privacy to users of the arbitral process is difficult to overstate. In its Report on the Arbitration Bill of February 1996, the Departmental Advisory Committee (DAC) observed that “there is … no doubt whatever that users of commercial arbitration in England place much importance on privacy and confidentiality as essential features of English arbitration” and that “it would be difficult to conceive of any greater threat to the success of English arbitration than the removal of the general principles of confidentiality and privacy”.[1]


Although the DAC Report is now over 20 years old, recent empirical evidence suggests that confidentiality remains important to users, with a third of respondents to the QMUL’s International Arbitration Survey 2021 citing “confidentiality and cybersecurity concerns” as a main disadvantage of the move to virtual hearings that has been accelerated by the Covid-19 pandemic.[2]


The confidentiality of the arbitral process is enshrined in a number of institutional rules. For example, Article 19.4 of the LCIA Rules provides that hearings shall take place in private, unless the parties otherwise agree in writing. Further, Article 30.1 of the LCIA Rules provides:


“The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority. The parties shall seek the same undertaking of confidentiality from all those that it involves in the arbitration, including but not limited to any authorised representative, witness of fact, expert or service provider.”

This confidentiality is, however, less absolute if and when the supervisory jurisdiction of the English courts is engaged. The extent to which arbitral proceedings may remain confidential once they are the subject of a challenge before the courts was the subject of the recent decision of the Court of Appeal in Manchester City Football Club Ltd v The Football Association Premier League Ltd [2021] EWCA Civ 1110 (“Manchester City”).


The facts


In December 2018, the Football Association Premier League Limited (the “Premier League”) commenced a disciplinary investigation into Manchester City Football Club Limited (“Manchester City”). Manchester City was a shareholder in the Premier League and the relationship between them (and other member clubs) was governed by the Premier League’s articles of association and the Rules of the Premier League (the “Rules”).


The Premier League’s investigation was commenced following reports in the European media which disclosed details of confidential documents obtained from a hack of Manchester City’s email servers. Those reports, according to the Premier League, contained information suggesting breaches of the Rules by Manchester City. During the course of its investigation, the Premier League requested disclosure of information and documents from Manchester City. That request was resisted. The Premier League commenced arbitration under the Rules seeking a declaration that Manchester City was contractually required to provide the documents and information sought and an order for specific performance requiring delivery up of the same.


Manchester City objected to the jurisdiction of the arbitral tribunal formed under the Rules to hear the Premier League’s request on the basis that it lacked substantive jurisdiction to hear the claim. It also objected on the basis that the tribunal lacked the appearance of impartiality. Both challenges were dismissed by the tribunal in an award dated 2 June 2020. That award was then challenged on an application to the Commercial Court under ss 67 and 68 of the 1996 Act. The challenge was also accompanied by an application under s 24 of the Act to remove the arbitrators.


The hearing of Manchester City’s applications took place confidentially and in private. Subsequently, Moulder J dismissed the applications in her judgment dated 17 March 2021 (the “Merits Judgment”). In circulating the draft of her judgment, the Judge had indicated that she was minded to publish the Merits Judgment, and sought submissions from the parties. Both Manchester City and the Premier League resisted publication.


The decision at first instance


In her judgment dated 24 March 2021 (the “Publication Judgment”), Moulder J held that the Merits Judgment should be published. In reaching that conclusion, the Judge applied the principles set out in the judgment of Mance LJ in City of Moscow v Bankers Trust Co [2005] 2 QB 207 (“Bankers Trust”). In the Judge’s view, the following key principles could be derived from that judgment:[3]


“i) "Whatever the starting point or actual position during a hearing, it is, although clearly relevant, not determinative of the correct approach to publication of the resulting judgment" (at [37]).


ii) "Further, even though the hearing may have been in private, the court should, when preparing and giving judgment, bear in mind that any judgment should be given in public, where this can be done without disclosing significant confidential information. The public interest in ensuring appropriate standards of fairness in the conduct of arbitrations militates in favour of a public judgment in respect of judgments given on applications under s.68 . The desirability of public scrutiny as a means by which confidence in the courts can be maintained and the administration of justice made transparent applies here as in other areas of court activity under the principles of Scott v. Scott and article 6. Arbitration is an important feature of international, commercial and financial life, and there is legitimate interest in its operation and practice…" (at [39]) [emphasis added].


iii) "The factors militating in favour of publicity have to be weighed together with the desirability of preserving the confidentiality of the original arbitration and its subject-matter" (at [40]).


iv) A party inviting the court to protect evidently confidential information about a dispute must not necessarily prove positive detriment, beyond the undermining of its expectation that the subject-matter would be confidential (at [46]).”


Manchester City accepted that these were the applicable principles, but submitted that the Merits Judgment ought not to be published because it contained “significant confidential information”. More particularly, it would reveal (i) “the existence of a dispute between [Manchester City] and the [Premier League] and (ii) “confidential and sensitive matters relating to the Premier League’s ongoing investigation”.[4] Manchester City further submitted that, even though it did not need to establish that it would suffer detriment from publication, it would in fact suffer detriment because publicity would be prejudicial to the ongoing investigation and had the potential to materially damage its reputation with current and prospective commercial partners.[5] The Premier League supported Manchester City’s opposition to publication but did not advance any additional reasons as to why publication should be refused.[6]


Moulder J rejected Manchester City’s submissions, holding that publication would not lead to the disclosure of “significant” confidential information. Importantly, the existence of the Premier League’s investigation into Manchester City was already in the public domain; the Premier League itself had issued a public statement in March 2019 responding to press reports.[7] The Premier League’s request for documents and information from Manchester City was not in the public domain, but any reasonable reader of the Premier League’s public statement would conclude that “an investigation might involve the production of documents and information”.


Moulder J accepted that the existence of the parties’ dispute about disclosure, and the arbitration itself, was confidential and would be disclosed as a result of the publication of the Merits Judgment. However, given that it was already public knowledge that the underlying investigation was taking place, and that the Merits Judgment did not contain any significant details as to the substance of the disclosure dispute, this confidential information could not be regarded as significant.[8]


The Judge went on to have regard to the prejudice which Manchester City said would result from publication (although she accepted that it was not necessary for Manchester City to prove this). On the facts, the Judge concluded that “it is difficult to see any real prejudice from disclosure of the existence of the dispute as to the production of documents and information” from publication, given that the underlying investigation was already in public knowledge.[9] The Judge also rejected the submission that there would be prejudice to the future investigation as there were safeguards in the Rules regarding the independence of the relevant individuals.[10]


The decision on appeal


Moulder J refused permission to appeal. However, Males LJ granted Manchester City permission to appeal on the following grounds: (i) the Judge erred by ordering the publication of the Merits Judgment and the Publication Judgment; and (ii) in the alternative, the Judge erred by failing to stay publication of the Merits Judgment and the Publication Judgment pending the conclusion of the Premier League’s investigation. On 20 July 2021, an eminent Court of Appeal comprising Sir Geoffrey Vos MR, Sir Julian Flaux C and Males LJ dismissed the appeal on both grounds.


As a preliminary matter, the Court of Appeal accepted that it had jurisdiction to hear the appeal. Whilst the effect of ss 67(4), 68(4) and 24(6) of the 1996 Act was that the Court of Appeal could not entertain an appeal against the Merits Judgment (because the effect of those sections was to restrict appeals to cases where the court at first instance gave leave), the decision of the Judge that the Merits Judgment and the Publication Judgment ought to be published was not a decision of the court under sections 24, 67 or 68. Rather, it was “an application of common law principles” as set out in Bankers Trust.[11] Accordingly, the limitations on rights of appeal in ss 67(4), 68(4) and 24(6) were inapplicable.


Sir Julian Flaux (giving the lead judgment) held that Moulder J “had made the correct evaluative assessment … for a series of inter-related reasons”.[12] These were as follows:


1. First, the Judge was correct that publication would not lead to disclosure of significant confidential information. Further, since the first instance judgment, there had been press articles revealing the existence of a dispute and the arbitration, and that Manchester City was arguing in that arbitration that it could not have a fair hearing. In those circumstances, it was “unreal” to suggest that what would be disclosed by publication was significant confidential information.[13]


2. Second, Manchester City’s submission that there was no public interest in publication because “the Club’s complaint was specific to the Club’s case” was rejected. There was a legitimate public interest in how disputes between the Premier League and member clubs were resolved and, in particular, the allegation of structural bias that appeared to have led to a change in the Rules regarding the appointment of arbitrators.[14] As regards Manchester City’s application under s 24, there was a public interest in maintaining appropriate standards of fairness in the conduct of arbitrations. Finally, there was also a public interest in there being some explanation for the delay in the underlying investigation.[15]


3. Third, whilst the fact that the parties were both opposed to publication was of some weight, the parties’ wishes could not be accepted without scrutiny. The court had to be most vigilant to attempts to keep information from the public where the parties were both opposed to publication.[16]


4. Fourth, in so far as the Merits Judgment confirmed the Premier League’s entitlement to seek specific performance from member clubs, that was in itself a point of public interest and significance.[17]


5. Fifth, the Judge was right to treat Manchester City’s case that publication would cause prejudice or detriment with “considerable scepticism”.[18]


Males LJ gave a concurring judgment, adding “a few comments in view of the interest and importance of this case in ensuring the correct balance between the confidentiality of arbitration proceedings and the principle of open justice for court proceedings”.[19] Whilst Males LJ agreed with the reasons given by the Chancellor for dismissing the appeal, he gave an additional reason of wider application:


“More generally, it seems to me that public scrutiny of the way in which the court exercises its jurisdiction to set aside or remit awards for substantial irregularity under section 68 of the 1996 Act is itself in the public interest. In City of Moscow Mance LJ addressed a concern that publication of judgments would upset the confidence of the business community in English arbitration. He was sceptical about the extent to which, if at all, this would be so. I share his scepticism, for two reasons. First, the business community will see that, just as in this case, Commercial Court judges can be trusted to ensure that genuinely confidential information is not published. Second, publication of such judgments will confirm the pro-arbitration stance consistently taken by the English courts and thus will enhance the confidence of the business community in English arbitration. It will demonstrate that the section 68 gateway is a very narrow one, not only in theory but in practice, and that it is only in cases of real injustice that arbitral awards can be successfully challenged in the English courts.”[20]

In addition, Males LJ considered the condition imposed by the Premier League in return for its opposition to publication (that it would be free to rely upon the judgment against other member clubs) was “fatal to this appeal”.[21] If the precedent was to be available to some, it had to be available to all.


Discussion


The decision of the Court of Appeal in Manchester City is a timely reminder that, once the process of the court is engaged, it may be difficult to keep certain matters relating to the underlying arbitration out of the public domain.


On one view, Manchester City can easily be confined to its facts. First, the underlying arbitration concerned the resolution of a dispute between the Premier League and one of its member clubs, which was arguably in itself a matter of public interest. That public interest was further strengthened by the fact that the dispute concerned the manner in which such disputes are resolved by the Premier League, a decision-making body of public importance. Second, the existence of a dispute and the arbitration itself was already in the public domain, as was the fact that Manchester City was arguing in the arbitration that it could not have a fair hearing. Third, the Merits Judgment confirmed the Premier League’s entitlement to seek specific performance from member clubs, and so its publication could be justified on the additional ground that it confirmed a point of law of general importance. Fourth, the court appears to have been influenced by concerns regarding delay in the progress of the underlying investigation, with Males LJ describing the lack of progress as “surprising” and “a matter of legitimate public concern”.[22]


That being said, however, there are a number of points that arise from the judgment which suggest that the analysis of the Court of Appeal in Manchester City will be of wider importance:


1. First, whilst the Court of Appeal accepted that every case requires a fact sensitive evaluation of all the circumstances, the court adopted a “pro publication” approach. As Males LJ put it, “[i]n general, the imperative of open justice, involving as it does the possibility of public scrutiny as a means by which confidence in the courts can be maintained and the administration of justice can be made transparent, will require publication where this can be done without disclosing significant confidential information”.[23] As the Court of Appeal observed,[24] Moulder J had taken care to draft the Merits Judgment in a way that avoided revealing information about the underlying dispute. If the same approach is adopted more widely and confidentiality concerns are “pre-empted” by the courts, the balance in favour of publication is likely to be tilted even further.

2. Second, the Court of Appeal gave helpful guidance as to the factors that will be taken into account in determining whether or not to order publication. As already noted, a key consideration is likely to be the amount of material already in the public domain. If key facts are in the public domain, it may be difficult to argue that publication will result in the disclosure of “significant” confidential information. This is an important point because, as practitioners will be aware, it is not at all uncommon for the existence of an otherwise confidential arbitration, or its general subject matter, to find its way into the public domain. For example, listed companies often report their involvement in arbitrations as part of their regulatory disclosures, and those disclosures are in turn reported in the legal press. It is possible that a court might take the view that, in such a case, there is sufficient material in the public domain to prevent the publication resulting in the disclosure of “significant” confidential information.

3. Third, the courts may, in light of Manchester City, take a more generous approach to assessing whether there is a public interest in publication. In his concurring judgment, Males LJ suggested that there is an inherent public interest in the manner in which challenges to arbitral awards are resolved, at least as regards those claims alleging serious irregularity under s 68 of the Act. Relatedly, Sir Julian Flaux’s observation that there is a public interest in maintaining appropriate standards of fairness in the conduct of arbitrations suggests that a similar approach may obtain in respect of applications to remove arbitrations under s 24, at least where impartiality is in issue. Both statements suggest that the public interest, and therefore the case for publication, may be stronger where a judgment arises out of applications under ss 24 and 68 of the 1996 Act than in other cases.


4. Fourth, it is of interest that the Court of Appeal thought it significant that there was an important point of law arising out of the underlying arbitration, namely the ability of the Premier League to obtain specific performance against its member clubs. It is possible that courts may rely upon this reasoning to order publication in cases where publication of the court’s judgment has the potential to contribute to the material development of the law or give helpful guidance to practitioners. In that sense, the court’s reasoning perhaps reflects the concerns expressed by Lord Thomas in his 2016 BAILII lecture,[25] in which his Lordship observed that the current relationship between the courts and arbitration has resulted in “ a serious impediment to the development of the common law”.


5. Fifth, it should be noted that Manchester City concerned only the publication of judgments arising out of arbitration claims. It did not address the related issue of whether the hearing of an arbitration claim should take place in public or private. In Bankers Trust, the Court of Appeal accepted that these were distinct issues, with Mance LJ noting that “[a] reasoned judgment following the hearing in private of an arbitration claim stands at a different point in the spectrum to the hearing itself, and so raises distinctly different considerations”,[26] and Sir Andrew Morritt V-C noting that the fact that the hearing of an arbitration claim had been held in private was “a necessary precondition to the judgment being withheld from the public”, but “it is not a sufficient justification”.[27] Unlike the position in relation to publication (as it appears post Manchester City), the effect of CPR r 62.10 is that the hearing of arbitration claims should take place in private (unless the court orders otherwise), with the exceptions being the hearing of a preliminary point of law under section 45 of the 1996 Act or an appeal on a question of law arising out of an award under section 69. In Bankers Trust, Mance LJ took care to describe this as a starting point rather than a presumption, but in Newcastle United Football Company Ltd v The Football Association Premier League Ltd [2021] EWHC 349 (Comm) (“Newcastle United”), HHJ Pelling QC (sitting as a judge of the High Court) described a private hearing as the “default position”.[28]Newcastle United is also a helpful illustration of the practical consequences that can result from the different approaches of the courts to publication and hearings: in that case, HHJ Pelling QC did not consider that the fact the existence of the arbitration and its subject matter had entered the public domain to be a sufficient reason for deviating from the starting point in CPR r 62.10, i.e. that the hearing of an arbitration claim should take place in private, but went on to order publication of the resulting judgment because the Premier League’s expectations of confidentiality “had been circumscribed by what is in the public domain already”.[29]


One thing that is clear from the decision in Manchester City is that the confidentiality of a judgment arising out of an arbitration claim cannot be presumed, even where the parties are both opposed to publication. Those considering a challenge to an arbitral award should be mindful of this risk.

[1]DAC Report, § 12. [2]QMUL and White & Case 2021 International Arbitration Survey: Adapting arbitration to a changing world, p. 24. [3]Manchester City Football Club Ltd v The Football Association Premier League Ltd [2021] EWHC 711 (Comm) at § 11. [4][2021] EWHC 711 (Comm) at § 6. [5][2021] EWHC 711 (Comm) at § 8. [6][2021] EWHC 711 (Comm) at § 10. The judgment of the Court of Appeal notes ([2021] EWCA Civ 1110 at § 52) that this support was conditional upon Manchester City’s agreement (which was given before the Judge and the Court of Appeal) that any order as to privacy should be subject to an exception allowing the Premier League to rely upon the Merits Judgment in other relevant proceedings between it and other member clubs and to disclose it to other member clubs as confirmation by the Commercial Court that the Premier League was entitled to bring specific performance proceedings against member clubs under the relevant section of the Rules.

Moeiz Farhan

27 August 2021




[7] [2021] EWHC 711 (Comm) at § 13(i). [8] [2021] EWHC 711 (Comm) at §§ 13(ii) and 14. [9] [2021] EWHC 711 (Comm) at § 17. [10] [2021] EWHC 711 (Comm) at § 18. [11] [2021] EWCA Civ 1110 at § 40. [12] [2021] EWCA Civ 1110 at § 53. [13] [2021] EWCA Civ 1110 at § 54. [14] [2021] EWCA Civ 1110 at §§ 45, 55. [15] [2021] EWCA Civ 1110 at § 55. [16] [2021] EWCA Civ 1110 at § 56. [17] [2021] EWCA Civ 1110 at § 57. [18] [2021] EWCA Civ 1110 at § 59. [19] [2021] EWCA Civ 1110 at § 61. [20] [2021] EWCA Civ 1110 at § 65. [21] [2021] EWCA Civ 1110 at § 64. [22] [2021] EWCA Civ 1110 at § 66. [23] [2021] EWCA Civ 1110 at § 62. [24] [2021] EWCA Civ 1110 at § 63. [25] https://www.judiciary.uk/wp-content/uploads/2016/03/lcj-speech-bailli-lecture-20160309.pdf [26] [2005] QB 207 at § 43. [27] [2005] 2 QB 207 at § 52. [28] [2021] EWHC 349 (Comm) at § 17. [29] [2021] EWHC 450 (Comm) at § 21.