Switzerland: Confidentiality Of Swiss Supreme Court Review Of Arbitral Awards

Arbitration practitioners, both counsel and arbitrators, are ever conscious that their best laid plans to protect the privacy and confidentiality of an arbitration may be thwarted if a question in relation to the arbitration lands before a State court, the rules of which will often require the publication of aspects of the arbitration, such as its existence, the identity of the parties, and the facts underlying the matter in dispute.

In a recent decision on an action for annulment of an arbitration award regarding valuable manufacturing know-how, the Swiss Supreme Court refused an application for certain confidentiality protection and invited the applicant to re-apply for certain other confidentiality protection. It took the opportunity to review a number of aspects of the law on confidentiality of judgments, in particular where the Swiss Supreme Court deals with arbitration awards. In doing so it provided important indications on what confidentiality protections parties before it may expect, and how to argue an application for confidentiality.

The procedure for applications for the annulment of Swiss arbitration awards is in writing alone, save in exceptional circumstances. There are five means by which the Supreme Court’s judgments in such cases are publicized. The Supreme Court confined its review to the three principal ones. They are as follows:

• A record of proceedings before judgment (" l’intitulé " in French) and the order part of the judgment (" le dispositif " in French) can be consulted by any member of the public for a period of thirty days following the handing down of the judgment. For that same period of thirty days, upon application, third parties may also view the entire judgment.
• The reasoning in the most important judgments is published in the Supreme Court’s official law reports.
• Since 2000, the complete text of about two-thirds of the Supreme Court’s judgments have been posted on the internet, generally with the parties’ names excised.

Swiss law recognizes not just a right of the parties, under the European Convention on Human Rights ("ECHR") and the Swiss Constitution, to public proceedings but a right enuring to the general public to know how justice is administered. Therefore the parties cannot simply waive such right but rather they must demonstrate that their interest in confidentiality outweighs this public interest.

The Supreme Court recalled that Art. 6(1) of the ECHR tolerates no exception to the principle of the publicity of judgments, but neither the ECHR nor municipal Swiss law prescribes the form that that publicity must take. It judged that the existing measures of publicity represent a fair balance of interests in the abstract. In relation more concretely to arbitration, the Supreme Court expressly recognized that there often exists a heightened need for discretion on the basis of which the parties’ names may be removed, provided good cause for this is demonstrated in the individual case.

In the present case, one party sought confidentiality protection and the other party and the arbitral tribunal supported this request. The case for confidentiality was that "highly confidential technology, business and manufacturing secrets" were at issue in the arbitration and in the proceedings before the Supreme Court.

In brief, the Supreme Court found that this was not relevant as regards the suppression of the parties’ names from publication, but that it could serve as material grounds for the non-dissemination of information on the technology.

On this basis, the Supreme Court rejected the request for the removal of the parties’ names from the record of proceedings and from the order part of the judgment made available for public consultation at the Court’s building outside of Lausanne.

As regards the possibility for third parties upon request to view the entirety of a Supreme Court judgment in matters involving arbitration, the Supreme Court declared that it would never be proportionate, in view of the public interest in publicity of judgments, to suppress access to the text of a judgment altogether. Rather, the proper course where a party demonstrates a protection-worthy interest in confidentiality, is to remove the parties’ names and any passages describing facts worthy of confidentiality protection, or from which the identity of the parties might be inferred. In the instant judgment, the Supreme Court assessed that no such interest was present, at least as regards a text from which the parties’ names had been removed.

The Supreme Court then went on to identify the public interest behind the posting of judgments on the internet and their publication in law reports as relating principally to the "development or consistency of the case law". Such an interest is present where a judgment deals with a legal question of general significance. In such a case, in principle, the judgment must be published, but the almost invariable practice is for the parties’ names to be removed from it. The Court held that the instant judgment contained considerations of general interest, and, as earlier mentioned, featured no passages from which the parties names could be inferred nor facts worthy of confidentiality protection.

The Court thereupon enunciated its willingness to accept a renewed application from the parties, to have publication of their names removed from the versions available for consultation at the Supreme Court’s premises.

From this case it is clear that if parties do not apply for the suppression of their names and confidential information it will be possible for third parties to learn these facts. Nonetheless, the Supreme Court is generally disposed to grant applications for the removal of parties’ names in relation to arbitration cases – it accepts in principle that the parties have an interest in discretion in such cases, and there will usually be no countervailing public interest in knowing those names. Moreover, the Supreme Court will grant applications for the removal of passages of its judgments relating to confidential information, such as descriptions of know-how, providing that this does not excessively interfere with the understanding of the judgment and its legal significance. By contrast, the Supreme Court will never accede to an application for the absolute non-publication of a judgment.

Source: Decision of the Swiss Supreme Court of June 19, 2006, 4P.74/2006/ast, currently available in German from the website of the Swiss Supreme Court, www.bger.ch (direct link to full text on:
http://www.bger.ch/fr/index/juridiction/jurisdiction-inherit-template/jurisdiction-recht/jurisdiction-recht-urteile2000.htm - search term "4P.74/2006").

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.