Singapore High court confirms Singapore's approach to preserving the confidentiality of arbitrations

In a decision handed down this week, the Singapore High Court confirmed that the court has an inherent power to grant sealing orders barring public access to court files and documents in appropriate cases. In this case that power was used to protect the confidentiality of an ongoing arbitration between the applicant and a third party. The Court reached this decision despite there being no express provision to this effect in Singapore's International Arbitration Act (IAA). 

In the case of BBW v BBX and others [2016] SGHC 190, the plaintiff (BBW) applied for an order that all court documents and records in a court action against him be sealed. The action (the Suit) concerned an application for enforcement of an indemnity agreement in connection with a SIAC arbitration in which BBW was being sued by a third party (the Arbitration). BBW argued that he was likely to rely on facts and/or documents relating to the Arbitration for the purposes of the Suit, and it was likely that these would be referred to in the Suit's pleadings and documents in any event.

BBW's application relied on (i) sections 22 and 23 of the IAA; and (ii) the inherent power of the Court to order sealing.

Confidentiality under ss 22 and 23 of the IAA

Sections 22 and 23 of the IAA provide that proceedings under the IAA shall be held "otherwise than in open court" (i.e. they provide for the confidentiality of arbitration), and that where they are not, a court may on the application of a party give directions as to whether any (and if so, what) information relating to the proceedings may be published.

While the Arbitration fell within the scope of the IAA, the Court found that the Suit did not qualify as a proceeding under the IAA, since it was a claim in contract concerning the Indemnity Agreement. Accordingly, ss22 and 23 of the IAA did not apply.

The Court's inherent power to grant a sealing order

While sealing orders are "part and parcel of [Singapore's] civil procedure", the Courts' power to grant sealing orders is not expressly provided for by any statute or rule of court, and the source of this power was noted by Justice Lee to be an "open question". Examining the issue further, and noting academic commentary on the subject, he found that the court must have an inherent power to grant a sealing order – to conclude otherwise would mean that the Singapore courts have been acting ultra vires through the years in granting sealing orders. Furthermore, Justice Lee also found that sealing orders fell within the inherent powers of the Court to achieve a just outcome (per O 92 r 4 of the Rules of Court), and should be used "in exceptional circumstances when there is a pressing need to ensure a just outcome".

Exercise of the Court's inherent powers

Justice Lee noted that the public policy of keeping arbitrations confidential has been affirmed by both the courts and the Singapore Parliament. He explained that, in the arbitration context, the decision to grant a sealing order is made by weighing the principle of open justice against the need to preserve confidentiality in arbitration, noting that sealing orders are fundamentally concerned with a "just outcome".

The Court considered that the fact that the Arbitration was between different parties to the Suit did not make any difference in the circumstances as there was a considerable overlap in the facts – evidence adduced in the Suit would compromise confidentiality of the Arbitration.

Conclusion

The ruling in BBW confirms that protecting the confidentiality of arbitrations is of utmost importance in Singapore, and courts may use their powers to preserve this even in cases which are not brought under the IAA but nonetheless relate to an arbitration. The test in such cases will be whether, on the facts, the need for preserving the confidentiality of an arbitration is outweighed by principles of public interest and open justice.