Confidentiality under the Arbitration Amendment Bill 2018 & the Right to Information

The Right to Information Act, 2005 (2005 Act) is an important legislation through which transparency is ensured. It is an important tool in the fight against corruption. Reasons for non-transparency can also exist in the context of government contract and arbitration. It is precisely why the 2005 Act includes "contracts", "records", "documents", and generally "any material in any form" to include contracts, documents or records thereunder and even arbitral awards. Since public procurement in India is substantial, it is important that government actions through the records, including arbitration and court litigation, are accessible to public.

In Rama Aggarwal v. Delhi State Legal Services Authority, the Chief Information Commission held that the Right to Information Act, 2005 overrode the provisions of the Arbitration and Conciliation Act, 1996 (para 17/ 18).

This position is now likely to be upset owing to the upcoming Arbitration and Conciliation (Amendment) Bill, 2018 that is likely to be discussed in the Parliament this winter session. Section 9 of the Bill seeks introduction of Section 42A to the Arbitration and Conciliation Act, 1996 (1996 Act). Section 9 reads:

"Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall keep confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award."

A bare perusal of the proposed section conveys that the parties are mandated to keep the arbitral proceedings confidential irrespective of any law in force, except the award, which can be disclosed for the purpose of implementation and enforcement. The non-obstante clause theoretically includes the 2005 Act also. This has serious implications on transparency in government contracting and pursuit of government litigation. 

While the right to information is a constitutional right, Section 42A, if enacted in the current form, would only be a statutory right. Therefore, notwithstanding the notwithstanding form of Section 42A, courts are likely to hold that the duty of the Government to disclose the arbitral proceedings and the award overrides the duty to maintain confidentiality in Section 42A. But this is likely to take some years for the courts to decide. Meantime, the Information Commissioners will have a free ride in rejecting information relating to arbitration proceedings. 

Lawyers and others in the field need to write to the Government to exempt the Right to Information Act, 2005 from the operation of Section 42A with appropriate modifications. The provision can be modified by adding the phrase "but subject to the provisions of the Right to Information Act, 2005" in Section 42A in the following manner:

"Notwithstanding anything contained in any other law for the time being in force, but subject to the provisions of the Right to Information Act, 2005 (No. 22 of 2015) the arbitrator, the arbitral institution and the parties to the arbitration agreement shall keep confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award."

A problem with this wording would be that it could seem to allow disclosure even by the arbitrator or by the arbitral institution as well. Instead, a provsio could be added to Section 42A to the effect that: "Provided that nothing contained in Section 42A shall affect the Right to Information Act, 2005 (No. 22 of 2015)."

Readers may peruse the decision of the Australian High Court's decision in Esso Petroleum v Plowman which discusses confidentiality in arbitral proceedings and the public interest in disclosure of governmental actions.