In addition to the ease of enforceability of an arbitral award, privacy and confidentiality of arbitration proceedings are often cited as further major advantages of arbitration over state court litigation.
1. Privacy of Arbitration
The basic concept ofprivacy provides that third parties are not allowed to participate in arbitral proceedings - especially that third parties are not allowed to attend oral hearings. Austrian law does not contain any provisions as to the privacy of the arbitration proceedings. However, it is well recognized that arbitration hearings are, in general, to be conducted in private (in camera).
This general principle is indirectly confirmed by Austrian statutory law, as the Austrian Code of Civil Procedure stipulates that the exclusion of the public is permissible in state court proceedings concerning arbitration matters.
The concept ofconfidentiality deals with the question of whether the participants to an arbitration are obliged to keep confidential the contents of the arbitration, or even the existence of the dispute, towards third parties. Austrian arbitration law is silent in relation to confidentiality. Similarly, also the 2018 Vienna Rules do not contain any explicit provision in relation to confidentiality.
2.1 Express of Confidentiality Agreement
As there is no express statutory regulation – according to the principle of party autonomy – the participants to an arbitration are in general free to agree whether and to what extent an obligation exists to keep the proceedings themselves, and the documents pertaining to them, confidential. However, party autonomy in this regard is limited by the parties’ rights to protect and/or pursue their rights and claims. Hence, a confidentiality agreement cannot restrict a party in relation to the initiation of enforcement proceedings, or to bring setting aside proceedings against the arbitral award. If such proceedings are public proceedings – despite an agreement to keep the arbitration proceedings confidential – a party is free to bring any evidence to pursue its claims. However, the mala fide initiation of state court proceedings, with the mere intent to bypass a confidentiality obligation, could lead to a claim for damages.
2.2 Implied Obligation of Confidentiality
If the parties have not concluded an express agreement concerning the duty to keep the proceedings confidential, it is questionable whether the conclusion of an arbitration agreement implies such a duty. An implied obligation of confidentiality has been inter alia repeatedly recognized by English and French courts. In line with this, it is often argued in English legal literature that, according to the expectations of the parties, the arbitration agreement implicitly contains a confidentiality duty regarding all information of the arbitral proceedings, as well as, of the arbitral award. Whether Austrian courts would follow this line of reasoning is unknown, especially as Austrian scholars are mainly of the opinion that such an implied duty of confidentiality has no basis in Austrian law. Hence, parties are well advised to include an explicit confidentiality agreement in their arbitration agreement.