Confidentiality in Arbitration: Navigating Its Implementation in Indian Courts

Introduction

Confidentiality has long been celebrated as one of arbitration’s defining attributes, shaping why commercial actors, investors, and corporations often favour it over traditional litigation. In an age where public allegations, leaking of sensitive documents, and reputational risks can decisively influence market standing, confidentiality acts as a protective buffer around business strategy, financial information, and ongoing disputes. Yet, as arbitration increasingly interacts with national courts—particularly in the context of interim relief, enforcement, or challenges to awards—the promise of confidentiality begins to collide with the principles of open justice. Indian arbitration law reflects this tension acutely, and recent controversies, including the high-profile Amazon–Future Group dispute, have reignited questions about whether confidentiality can truly be protected once a matter enters the judicial domain.

Why Confidentiality Matters in Arbitration

Commercial entities gravitate towards arbitration partly because the process ensures a shielded environment. Confidentiality not only protects the content of proceedings, but also the mere fact that a dispute exists—an element critical for companies operating in sectors where brand perception and investor confidence are sensitive to litigation signals. For creative industries, a publicised copyright dispute can derail a film production house; for consumer-facing businesses, unverified allegations can undermine customer trust; and for investors, leaked negotiations or strategy documents may compromise market positions. The preference for secrecy therefore goes beyond privacy, which merely keeps outsiders out of hearing rooms—it extends to an affirmative obligation not to disclose anything about the proceedings, documents, submissions, transcripts, evidence, or even the award, unless an exception applies.

The International Landscape

Globally, confidentiality in arbitration is highly fragmented. While some jurisdictions, such as Singapore, New Zealand, Scotland, Hong Kong and France, expressly recognise confidentiality through statute, others rely on judicial precedent or do not recognise the obligation at all. England, for instance, has developed an implied duty of confidentiality through case law, whereas the United States neither statutorily endorses nor judicially enforces such an obligation. Arbitral institutions reflect the same diversity: WIPO provides one of the most comprehensive confidentiality regimes; LCIA and SIAC include robust clauses; CAMCA extends the duty only to arbitrators and administrators, not parties. Conventions governing arbitration, including the New York Convention and European Convention, are silent on confidentiality because harmonising procedural norms across jurisdictions remains complex.

This patchwork means that confidentiality obligations often arise from a combination of institutional rules, national statutes, and party agreements rather than a universal doctrine. Parties entering cross-border arbitrations must therefore remain alert to where their proceedings might ultimately be scrutinised.

Section 42A and India's Statutory Framework

India attempted to give statutory shape to confidentiality through Section 42A of the Arbitration and Conciliation Act, 1996, introduced via the 2019 Amendment. The provision obliges arbitrators, institutions, and parties to maintain confidentiality of “all arbitral proceedings,” with the sole exception being disclosure of the award when necessary for its implementation or enforcement.

However, this seemingly expansive mandate is troubled by significant gaps. The statute does not extend the duty to stenographers, witnesses, experts or other supporting persons who are routinely exposed to sensitive information. It also fails to specify whether confidentiality covers the mere existence of the proceedings. Further uncertainties arise when arbitration intersects with court processes under Sections 9, 34 or 37: the law does not clarify whether filings, pleadings, or evidence submitted to courts retain their confidential character. While the legislative intent was to strengthen India’s arbitration ecosystem, the drafting’s narrow exception and ambiguous scope dilute the provision’s practical value.

Reconciling Confidentiality With Transparency and Public Interest

A recurring theme across the material is the need to strike a balance between confidentiality and transparency. Absolute secrecy is neither feasible nor desirable, particularly in cases involving public companies, fiduciary duties, statutory disclosures, or matters implicating public interest. For instance, SEBI’s Listing Obligations require prompt disclosure of material events; annual reports must document pending material litigation; and companies owe duties to shareholders and creditors that may necessitate disclosing adverse awards. In such cases, insisting on absolute confidentiality may conflict with other mandatory legal obligations.

International institutions and foreign statutes provide useful models: several jurisdictions employ a calibrated approach that distinguishes between confidential materials, redacted documents, and disclosures justified by public interest. Courts frequently rely on proportionality tests—asking whether disclosure is necessary, whether public interest outweighs private confidentiality, and whether alternative mechanisms like anonymisation could achieve similar goals.

Enforcing Confidentiality Before Courts

Once arbitration materials are brought before a court, confidentiality becomes both more important and more vulnerable. Courts often follow the principle of open justice, under which proceedings are presumptively accessible to the public. To maintain confidentiality in this context, a more structured framework is necessary. Suggestions emerging from the material include introducing statutory clarity on what exactly must be kept confidential: the existence of proceedings, the documents, transcripts, expert reports, and the award. Several foreign instruments—such as the Scottish Arbitration Rules, New Zealand’s Arbitration Act, and WIPO Rules already provide detailed templates for such distinctions.

The tension becomes sharper in the case of public-listed entities, where disclosure duties under securities law may override confidentiality. A solution proposed in the document is adopting a threshold-based disclosure model: if the monetary value of the dispute is low and the probability of success is high, companies may reasonably maintain confidentiality of the arbitration’s existence. Conversely, high-stakes disputes or those with potential market impact may require disclosure.

The Amazon–Future Group Dispute as a Practical Illustration

The Amazon–Future Group dispute provides a vivid example of how confidentiality fractures when arbitration migrates to courts. The disagreement stemmed from Future Group’s decision to sell retail assets to Reliance, which Amazon claimed violated contractual restrictions under a shareholder agreement. The matter escalated into an SIAC arbitration, where an Emergency Arbitrator issued interim orders favourable to Amazon. These proceedings, despite involving confidentiality clauses, were widely reported and scrutinised once they reached Indian courts for enforcement.

The controversy demonstrates that confidentiality cannot be preserved through contractual clauses alone; without a supportive judicial infrastructure and clear statutory principles, sensitive disputes inevitably become public when challenged or enforced in court. The case underscored the need for courts to harmonise confidentiality with open justice while respecting party autonomy in arbitration.

Conclusion

Confidentiality remains one of arbitration’s central attractions, but its implementation requires more thorough and explicit safeguards. Section 42A signals legislative recognition of this necessity, yet its vague drafting and limited exceptions fall short of the clarity required to protect sensitive information effectively. As arbitration increasingly intersects with corporate regulation, market disclosure obligations, and judicial oversight, India must move toward a more nuanced statutory architecture, one that accommodates legitimate public interest without diluting the integrity of arbitration.

Adopting clearer statutory language, expanding the scope of confidentiality obligations, allowing calibrated disclosures, and developing judicial practices such as sealed records and redacted filings would significantly improve the regime. With such reforms, India can strengthen its aspiration to become a leading arbitration hub where confidentiality is preserved not just in theory, but in practice.