Transfield Philippines Inc v Pacific Hydro Ltd

• Author: Sarah Catherine Derrington
• Position: Associate Professor, T C Beirne School of Law, University of Queensland
• Pages: 188-190

(2007) 21 A & NZ Mar LJ 188

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AN ILLUSORY DISTINCTION – THE AUSTRALIAN & ENGLISH APPROACHES

TO CONFIDENTIALITY IN ARBITRATION: TRANSFIELD PHILIPPINES INC & ORS

v PACIFIC HYDRO LTD & ORS [2006] VSC 175

Sa rah C De rring ton*

The distinction between the Australian and English approaches to confidentiality in arbitration is well known.1 It

has long been assumed to be implicit in the choice to arbitrate in England that privacy and confidentiality will be

assured throughout the process. Confidentiality and privacy are manifestations of the parties’ power to control

the scope of the tribunal’s power embodied within the notion of party autonomy. Does the same hold true where

parties have chosen to arbitrate in Australia? The purpose of this note is to examine the Australian approach in

light of the decision of the Victorian Supreme Court in Transfield Philippines Inc & Ors v Pacific Hydro Ltd &

Ors (the Transfield case)2 and to assess whether parties who choose to arbitrate in Australia are in fact more

likely to lose the desired degree of confidentiality in those arbitral proceedings than parties who choose England

as their forum.

1 The Approac hes to the Obligation of Confidentiality & Privac y

The fact that the Arbitration Act 1996 (UK) is silent on the question of confidentiality does not detract from the

premise that the obligation is assumed to be implicit in the choice to arbitrate in England. What then is the

nature of the obligation? The obligation imposes a duty not to use documents obtained in the course of an

arbitration for any purpose other than the dispute in which they were obtained.3 The juridical basis of this

obligation is said to arise from an implied term attaching as a matter of law as a necessary incident of the

contract to arbitrate.4 As so described, the English formulation of the juridical basis of the obligation has been

accepted in Singapore5 and also, but perhaps only tacitly, in Hong Kong.6 New Zealand is also in accord with

the English approach, indeed giving it a statutory basis,7 whilst the Canadian Courts have not yet felt it

necessary to express a particular view one way or the other.8

By contrast, the High Court of Australia has concluded that confidentiality is not an essential attribute of private

arbitration imposing an obligation on each party not to disclose the proceedings or documents and information

provided in and for the purposes of arbitration.9 The rationale for the approach of the High Court is, essentially,

that confidentiality is unachievable because:

1. no obligation of confidentiality attaches to witnesses, and

2. there are various ways in which an award may come before a court involving disclosure to the court by

a party to the arbitration and publication of the court proceedings.

In other words, it is futile to purport to impose an obligation of confidence which, in reality, cannot be enforced.

Such a simplistic recitation of the decision in Esso Australia Resources Ltd v Plowman is to misstate the

position. The consequence of the Australian approach is not that no confidentiality attaches to anything

produced in the course of arbitration. The High Court was clear that documents produced by a party

compulsorily pursuant to a direction of the arbitrator would attract the same confidentiality that would attach to

them if they were litigating their dispute, subject only to the legitimate interest of the public in obtaining

information about the affairs of public authorities.10

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* Associate Professor, T C Beirne School of Law, University of Queensland.

1 Derrington, SC & Turner, JM, The Law & Practice of Admiralty Matters (2007), 11.23-11.29.

2 [2006] VSC 175.

3 Dolling-Baker v Merrett [1990] 1 WLR 1205, 1213.

4 Ibid; Ali Shipping Corp v Shipyard Trogir [1999] 1 WLR 314.

5 Myanma Yaung Chi OO Co Ltd v Win Win Nu [2003] 2 SLR 547.

6 Oriental Press Group Ltd v Next Magazine Publishing Ltd [1998] 40 HKCU 1.

7 Arbitration Act 1996 (NZ), s 14.

8 Adesa Corporation v Bob Dickenson Auction Services Ltd (2002) 73 OR (3d) 787.

9 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, 34 per Mason CJ, 34 per Brennan J.

10 Ibid 33 per Mason CJ, 47 per Toohey J.