Published On: October 15th 2025
Authored By: Sarah Kazi
Rizvi Law College
Abstract
Confidentiality is known as a cornerstone of arbitration, promising parties privacy, shielding sensitive commercial information, and enabling dispute resolution away from the glare of public scrutiny. In the Indian context, the Arbitration and Conciliation (Amendment) Act, 2019—specifically Section 42-A—played a significant role in this expectation of confidentiality. Yet, the statutory language remains imprecise.
This article critically explores the current legal framework, relevant judicial interpretations, and institutional approaches to confidentiality within Indian arbitration, drawing comparisons with established international standards. Persistent challenges—such as weak enforcement mechanisms, the drive for judicial transparency, involvement of multiple actors, and complications arising from cross-border matters—undermine the effectiveness of confidentiality measures in practice.
The analysis identifies gaps in the regime and provides recommendations. These include providing more precise statutory definitions, reinforcing enforcement mechanisms, aligning institutional rules, integrating data protection standards, and carefully balancing confidentiality with the public interest and transparency. Ultimately, while confidentiality remains central to the attractiveness of arbitration in India, there is a pressing need for a more coherent and robust regulatory structure—one that reconciles privacy with the foundational principle of open justice.
Introduction
Arbitration has become a popular way for parties to resolve disputes because it is efficient, flexible, and private. Unlike court proceedings, arbitration allows parties to settle conflicts away from public scrutiny, which helps maintain business relationships and protect sensitive information. Confidentiality, which many see as a key feature of arbitration, safeguards proprietary data, trade secrets, and private interests. In India, as in many other places, parties often choose arbitration with the expectation of confidentiality. However, the legal foundations and enforcement of confidentiality in Indian arbitration are still developing and debated. This article looks at the state of confidentiality in Indian arbitration, reviews statutory and judicial frameworks, compares approaches with major foreign jurisdictions, discusses practical challenges, and offers suggestions for reform.
Confidentiality in Arbitration
Confidentiality in arbitration, in essence, means that the proceedings, exchanged documents, and arbitral awards are intended to remain private, only accessible to third parties if enforcement or legal challenge makes it unavoidable.
There are two main reasons for this emphasis on confidentiality. First, it protects sensitive business information—like trade secrets, commercial strategies, or contract details—from public exposure. Parties are more likely to be forthcoming if they know their disclosures won’t end up as public knowledge. Second, confidentiality supports more efficient dispute resolution. When discussions and negotiations are protected from outside scrutiny, parties can communicate more openly, consider settlements, and resolve issues faster, without worrying about reputational repercussions or external interference.
In most jurisdictions, confidentiality is the default which arises either through case law or institutional regulations; in some it is statutory. English law, for instance, gives effect to an implied duty of confidentiality (subject to exceptions) by cases such as Ali Shipping Corp v Shipyard Trogir.[1]
Legal Frameworks in India
Statutory Law:
The arbitration system in India is mainly governed by The Arbitration and Conciliation Act, 1996, which is partly based on the UNCITRAL Model Law. While confidentiality was not discussed originally in the Act, A High-Level Committee (HLC) chaired by Justice B.N. SriKrishna in 2017 recommended to legally mandate confidentiality. In response, A notable change occurred with the Arbitration and Conciliation (Amendment) Act, 2019, Section 42-A: Statutory Mandate for Confidentiality.
Added by the 2019 Amendment, Section 42-A states:
“Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution, and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings, except for the award where its disclosure is necessary for the purpose of implementation and enforcement of award.”[2]
In simple terms, Arbitration proceedings must remain private. Only the final decision known as the award, can be made public and only if it is necessary to enforce it. This provision is the first clear legal requirement for confidentiality among all main participants—arbitrators, arbitral institutions, and parties.
In Kamal Gupta & Anr. v. L.R. Builders & Anr. (2025), the Supreme Court clarified that individuals who are not signatories to the arbitration agreement have no entitlement to attend arbitration proceedings. The Court referenced Section 42A, underscoring the obligation of arbitrators, arbitral institutions, and the parties themselves to uphold the confidentiality of all proceedings. Permitting non-signatories to be present would, in the Court’s view, constitute a breach of this duty. [3]
Institutions:
Leading arbitral institutions in India such as the MCIA, ICA, and even the SIAC (although based in Singapore, is frequently utilized in India) maintain robust confidentiality protocols.
For example, the MCIA’s Rule 46 says that all aspects of the arbitral process and resulting award are to remain confidential, except where disclosure is necessary by law.[4] Similarly, the ICA enforces confidentiality but allows for exceptions in situations involving legal obligations or enforcement.
In essence, unless disclosure is necessary for legal compliance or enforcement, the details of arbitration proceedings are intended to remain private.
Prior Regulatory and Judicial Approaches
Before the introduction of Section 42-A, confidentiality obligations in India commonly came from:
– Contractual Arrangements: Parties frequently included confidentiality clauses in arbitration agreements.
– Institutional Rules: Organizations such as the Indian Council of Arbitration and the Mumbai Centre for International Arbitration (MCIA) included confidentiality in their rules.
– Judicial Precedent: Indian courts supported the idea of confidentiality in arbitration, particularly in commercial cases, but did not see it as a binding rule without clear statutory backing.
International Frameworks
– UNCITRAL: It acts as a foundational framework for arbitration, widely recognized and implemented by over 120 jurisdictions, including India. Its adoption encourages uniform standards across different legal systems. This uniformity simplifies cross-border arbitration and reduces potential legal ambiguities. However, It does not directly impose confidentiality obligations but provides the necessary clauses that parties may use voluntarily.[5]
– International Institutions: The LCIA, for example, takes a strict stance on confidentiality—binding not just the parties and tribunal, but even the institution itself. Of course, there are exceptions carved out for legal compliance or if someone needs to enforce or challenge an award, but by and large, confidentiality is the rule. On the other hand, the ICC doesn’t automatically impose a sweeping confidentiality requirement. Instead, their approach is more nuanced: they address data protection, ensure hearings stay private, and tightly control what gets published, all as outlined in the ICC Rules and further clarified in the ICC Note to Parties. Hence, there’s no universal approach—each institution sets its own priorities and boundaries.
Scope and Limitations
Section 42A marked some progress regarding confidentiality in arbitration, but its effectiveness is quite restricted. By its own wording, it binds only the arbitrators, the parties, and arbitral institutions; other key players—like tribunal secretaries, witnesses, experts, and even legal counsel, aren’t explicitly covered. This gap leaves significant room for uncertainty. Additionally, the Act does not talk on penalties for breaches of confidentiality. Critics have described Section 42A as “vague and limited,”. There are simply no clear instructions about what happens if confidentiality is violated, nor does the provision clarify procedures for handling confidential materials when parties seek the court’s assistance. In practice, parties frequently approach courts for interim relief (under Section 9), appointment of arbitrators (under Section 11), or evidence collection (under Section 27); these applications often include documents that originated in confidential arbitral proceedings. The Act, however, provides no mechanism for keeping such court filings sealed or protected. Essentially, while the statute imposes a duty of secrecy on main participants, it leaves substantial gaps in enforcement and practical application
Institutional Rules & Other Sources: Most Indian arbitral institutions attempt to address these deficiencies by introducing their own confidentiality provisions. For example, the Mumbai Centre for International Arbitration (MCIA) Rules 2017 and the Delhi International Arbitration Centre (DIAC) Rules 2023 both impose confidentiality requirements much like Section 42A, though they usually contain specific exceptions. In reality, enforceable confidentiality standards in Indian arbitration tend to depend more on these institutional rules than on the statutory framework itself.
Challenges in Confidentiality of Arbitration in India
- Enforcement Mechanism: Enforcement mechanisms under the Act are quite underdeveloped. There’s no clear framework for addressing breaches of confidentiality—no statutory penalties, no direct remedies spelled out. Instead, parties are left to pursue contractual claims or seek damages and injunctions through the courts, which is sometimes inefficient.
- Judicial Transperancy: Judicial transparency brings its own complications. When parties approach the court whether for interim measures, to challenge awards, or to enforce them, the principle of open justice tends to prevail over confidentiality. Court documents and hearings are typically accessible to the public. While parties can request in-camera proceedings or the sealing of records, these are granted at the court’s discretion, and such protections aren’t common.
- Multiplicity of Participants: The involvement of multiple forums and participants only increases the complexity. Arbitration can draw in expert witnesses, third-party funders, and sometimes even government entities. This multiplicity makes maintaining confidentiality much harder, especially since protections around data and disclosures to third parties aren’t always clear-cut.
- Variation in Institutions: Each institution—be it MCIA, ICA, SIAC, LCIA—has its own approach to confidentiality, remedies, and procedural safeguards. This inconsistency means that parties can’t rely on a uniform standard and may face unexpected gaps in protection.
- Matters of Public Interest: When disputes touch on public interest or regulatory issues, confidentiality often takes a back seat. Matters involving state entities, regulatory compliance, or allegations of corruption can trigger statutory disclosure requirements, such as those under the Right to Information Act or SEBI regulations. In these scenarios, legal obligations to disclose overrule any private agreement or Section 42-A protections.
- Cross-Border complexity: Cross-border enforcement adds another layer of difficulty. Enforcing an Indian arbitral award overseas often demands some level of disclosure, and the patchwork of foreign laws and divergent standards can seriously undermine confidentiality, particularly in disputes that span multiple jurisdictions.
Recommendations
- Clarifying Statutory Provisions: Section 42-A requires greater precision. It is important for the statute to explicitly define proceedings, outline clear exceptions, and address its application to interim orders, expert opinions, and disclosures by non-parties. Such clarification would minimize interpretive ambiguity and foster consistent practice.
- Strengthening Enforcement Mechanisms: Effective statutory provisions require robust enforcement. The Act should incorporate a comprehensive remedial framework, including penalties for breaches, interim relief measures, and the possibility of damages or cost orders. The adoption of standardized protocols for sealing or redacting records would further enhance procedural integrity.
- Reforming Judicial Practice: Judicial practice in this domain requires structured guidance. The courts should develop clear protocols for handling arbitral materials—such as in-camera proceedings, anonymized reporting, and secure record management—thus balancing the imperative of confidentiality with the principles of open justice.
- Harmonizing Institutional Rules: Arbitral institutions should align their confidentiality protocols, establishing a shared understanding of scope and exceptions. Incorporating best practices from leading global centers such as anonymized award databases would contribute to both consistency and flexibility.
- Integrating Data Protection Legislation: India’s emerging data protection regime, particularly under the Digital Personal Data Protection Act, 2023, should be harmonized with arbitration confidentiality standards. Explicit guidance on permissible disclosures and compliance obligations is essential to avoid legal conflicts and ensure procedural clarity.
- Promoting Education and Awareness: Stakeholders including counsel, arbitrators, and parties require targeted education on confidentiality obligations and entitlements. Enhanced clarity in drafting arbitration agreements and institutional rules can prevent disputes.
- Balancing Public Interest and Privacy: In matters involving governments or regulatory bodies, statutory exceptions must be articulated to balance confidentiality with the demands of transparency and public interest. Clearly defined conditions for mandatory disclosure would provide much-needed guidance in such contexts.
Conclusion
Confidentiality sits at the heart of arbitration, acting as a shield that distinguishes it from court litigation. The Indian legal system, much like others worldwide, is still searching for a functional middle ground. What’s needed is a well-defined framework that spells out exactly when confidentiality prevails and when transparency must take priority. Without this, parties may find themselves uncertain—never quite sure if what happens in the hearing room will stay there. In summary, while confidentiality remains a cornerstone of arbitration in India, its boundaries are increasingly shaped by evolving case law and shifting societal expectations. Striking a workable balance will require not just legislative clarity, but also practical guidance from courts and arbitral institutions. Only then can both privacy and the public interest be meaningfully protected.
References
[1] (Leading Boutique International Arbitration Law Firm • Aceris Law LLC) <www.acerislaw.com/wp-content/uploads/2025/05/Ali-Shipping-Corporation-v-Shipyard-Trogir-1997-EWCA-Civ-3054.pdf> accessed 20 August 2025
[2] (India Code: Home) <www.indiacode.nic.in/bitstream/123456789/1978/3/a1996-26.pdf> accessed 20 August 2025
[3] ‘Supreme Court on Confidentiality in Arbitration in India’ (IndiaLaw LLP) <www.indialaw.in/blog/arbitration-and-conciliation/supreme-court-on-confidentiality-in-arbitration-in-india/> accessed 20 August 2025
[4] (Home :: MCIA) <http://mcia.org.in/pdfs/MCIA-Rules-2025.pdf> accessed 20 August 2025
[5] ‘UNCITRAL Arbitration Rules | United Nations Commission On International Trade Law’ (United Nations Commission On International Trade Law |) <https://uncitral.un.org/en/texts/arbitration/contractualtexts/arbitration> accessed 20 August 2025