August 4, 2021

Does Arbitration Hinder the Growth of Common Law Jurisprudence?


There are a number of conceptions about arbitration and its coexistence with common law jurisprudence. However, the most popular are usually one of two assessments. One, associate it with confidentiality and assert that its existence is detrimental for the evolution of law. Thus, “Whatever else arbitration may be, it is not ‘law’—the kind of findable, studiable, arguable, appealable, restateable kind of law” that courts produce.[1] Second, The conceptions of arbitration’s law-making capacity are expansive, even raising the possibility that some systems of arbitration inevitably yield “substantive results that have a systemic character.” Hence, This [2] stands without dispute that both theoretically and empirically, arbitral precedent remains a poorly understood phenomenon[3]. The question this paper deals with is regarding the coexistence of both law systems arbitration as soft law and litigation.

Foremost, the first contention is with regard to the confidentiality and how it hinders development of common law.

“the diversion of more claims from the courts to arbitration reduces the potential for the courts to develop and explain the law-transforming the common law from a living instrument into ‘an ossuary’”. Lord Chief Justice, Lord Thomas, 2016[4]

Common law procedure is essential as it makes the constitution a living document. It helps in setting precedents and invokes a uniformity in law. It helps also in developing principles with changing times. arbitration is a fairly recent development that has its own jurisprudence. However, despite this, court decisions and arbitral proceedings sometimes overlap. Courts cite various other awards given in various landmark decisions. However, partial and unfair accessibility to the awards hinders the growth of common law.

Rather than publication if made accessible, the arbitral reasoning will only strengthen common law jurisprudence. The competent national courts will take note of the content of the arbitration. Moreover, they will hear the case, applying the rules of the common law in terms of publicity, the judge will decide on the non-public nature of the proceedings, at the request of the parties.

The reduction in court cases impedes public understanding and scrutiny of the law. If a certain issue is repeatedly arbitrated but never litigated, the public or the parliament may not become aware of it. If that issue had instead been litigated, it would have been enabled for public scrutiny of the issue, thereby increasing the prospects of the law being changed as a consequence of parliamentary intervention[5].

If arbitral decisions were not to be considered by judicial courts, the State would be failing at one of its most crucial duties – delivering justice through its courts, for they would be reporting to incomplete, stale laws, thus creating a parallel legal context in which former solutions are to be ignored, while the reasoning of solutions found without using all possible tools would be legally binding. The contractual nature of arbitral courts should not imply that they be excluded from the idea of jurisdictional system. The consistency is essential in the Common Law family – on the concept of preceding rulings being, at some extent, taken into account by decision-makers. [6]

In conclusion of the first contention, by the reason stated by Sir Bernard Rix, 2015 “it is in my opinion inevitable that the public interest is being and will increasingly be damaged as more and more decisions on areas of commercial law become inaccessible to the public arena.” [7]Hence, it is increasingly important for transparency in arbitration procedure.

The second contention is that of uncertainty of setting precedence in a system of arbitration. Herewith, the role of an arbitrator comes into the picture. The arbitrator is assumed to be the parties’ agent and is obligated to reach a solution according to their unique agreement.

Subsequently, all the following factors are taken into account: competence, judgment, and impartiality. So more often than not arbitrators may wish to avoid the appearance of giving excessive weight to other arbitrators’ decisions. Most will quite correctly “perceive that they have been chosen to serve because of their judgment”.

This again questions the possibility of setting a precedent. Moreover, without any clear norms governing their use, reliance on past awards raises a number of fundamental questions: Without a doctrine of stare decisis, why is the award entitled to any weight at all in the arbitrator’s decision? How much weight should it receive? What considerations are even relevant to this question of weight? How will system users perceive extensive engagement with past awards—as evidence of diligence and expertise, or as evidence that the arbitrator has merely “augmented the cost” of arbitration by play-acting like a judge?

Lack of clarity and development is another reason how arbitration may be hindering the common law procedure[8]. With regard to the situations where the parties might settle for something less than what they deserve and that becoming a precedent is problematic in arbitrations. However, that argument would not hold weight because the same is true for normal court proceedings as well.

Next, the foremost argument presented in favour of arbitration as a hindrance to common law is that arbitration encapsulates in confidentiality. What most people tend to misunderstand and therefore are often misled are the facts that confidentiality is not inherent in most arbitration practices and secondly, that confidentiality here does not equate itself to non-publication and privacy. Primarily, confidentiality is not protected by most countries and is only available at the option of the parties. There are numerous cases of various countries that have held the same[9].

In fact, even the UNCITRAL Model Law on ICA also does not have any specific provisions protecting the confidentiality in it. For the Indian scenario though, with the 2019 amendment to the 1996 arbitration and conciliation act, confidentiality has been made inherent by the insertion of the section 42A[10], and provides an exception of disclosure only for the purpose of implementation and enforcement of the award. Despite that, confidentiality, its scope and content may vary depending on a case to case basis, on the duty cast by the rules and code of ethics and format being followed.

Further, since most arbitration cases are referred to the English and the US law, [11]these become more or less binding to the majority of the cases. Even the Federal Arbitration Act and the Uniform Arbitration Act in the United States, that is adopted as a model by most States, has no imposition of confidentiality. The ICC rules, via article 6 of Appendix 1 and article 1 of appendix 2 impose this duty on the arbitrators and the staff of ICA, but not on the parties and Article 22.3 clearly states confidentiality can be evoked at the request of the parties.

Privacy as concept as opposed to confidentiality is that the former pertains to exclusion of a third party to be a part of the proceedings[12], whereas the purpose of the latter is to prevent the existing parties to share details of the proceedings (which include both the proceeding itself and documents and sensitive information that might have been presented as evidence) with a third party. This becomes essential for most parties who approach arbitration tribunals, since they wish to protect their interests.

When we say that parties enjoy the right of confidentiality, it does not imply that the proceeding matters are not to be disclosed or shared by anyone to anyone. What it implies is that information which is of such nature that would be considered sensitive to the parties and whose disclosure would render them to incur a loss, would then impose the duty of confidentiality on the parties. It therefore does not mean the award would not be published, but merely that the award would be redacted to hide any such information.

This becomes an essential advantage to parties approaching a tribunal, as if it were to be the court, sensitive information would be made public (which usually happens, when parties approach the court for implementation and enforcement of the order) and if the same were to be followed in an arbitration proceedings the whole purpose of this institution would be held redundant and it would no longer be a faster and a safer redressal mechanism for the aggrieved parties.

In light of the above discussion, there exists a tension between widespread publication of awards and the highly prized confidentiality associated with arbitration. According to the Queens survey 90% of the population prefers arbitration over litigation for the purposes of confidentiality[13]. However, Lord Thomas correctly points out that the arbitral confidentiality is “overrated”. In reality, he argues, the market is aware of who is involved in arbitration and what the arbitration relates to. Even in cases where confidentiality is preserved during the arbitration, information and even arbitral awards are often subsequently leaked.

Further, if a party seeks to enforce an award, it inevitably enters the public sphere. There are a number of important exceptions to the confidentiality regime which means that notwithstanding confidentiality, the result must be disclosed pursuant to other overriding legal requirements. That obligation usually trumps the obligations in relation to confidentiality[14].

Keeping in mind that the primary goal of both systems is resolution of the dispute it is suggested that taking into account various factors like public interest, consent of the parties, disclosure for legitimate protecting legitimate interests of an arbitrating party, where the interests of justice or the public interest require it, where there is an obligation of disclosure, the arbitral awards must be made more accessible for the purposes of development of common law jurisprudence.[15]

Additionally, a system of appeal in arbitration can be developed in accordance with the common law procedure to make it more coherent. Furthermore, the major hindrance that is caused by arbitration can be easily avoided by increasing transparency in matters of proceedings where the judge’s discretion is involved so as to increase accountability. This way not only does it maintain consistency throughout the awards, it also ensures setting of soft law precedence in arbitration cases.

Binding precedents coming only from higher courts are meant to save the judge from the burden of looking into every past decision and deciding which is best, and are meant also to help enforce judicial certainty and predictability. These assumptions aim to help in the system’s continuity than the specified decision taken. Hence, it is the ultimate goal – rectius, the judge’s duty – of reaching the optimal decision for the case in hands that might lead him or her to decide according to a past decision.[16]

For law notes, Click Here.


[1] Charles L. Knapp, Taking Contracts Private: The Quiet Revolution in Contract Law, 71 FORDHAM L. REV. 761, 766 (2002).

[2][2] Thomas E. Carbonneau, Arbitral Law-Making, 25 MICH. J. INT’L L. 1183, 1205 (2004).

[3] William and Harvard mary review (complete citation)

[4] Radjai, N., 2018. Panel 4: Reforming Commercial Arbitration In Response To Legitimacy Concerns Commercial Arbitration And The Development Of Common Law. [online] LALIVE. Available at: [Accessed 30 March 2020].

[5] HOGAS, D., 2014. What Does Confidentiality Inside The Arbitration Mean?. Revista Romaneasca pentru Educatie Multidimensionala, [online] 06(01), pp.29-38. Available at: .

[6] Silva, P., Vitorino, B., Almeida, F., Marigo, N., Milesi, M., Gatica, S., Lestido, M. and Cruz, M., 2020. Arbitral Precedent: Still Exploring The Path – Kluwer Arbitration Blog. [online] Kluwer Arbitration Blog. Available at: [Accessed 30 March 2020].

[7] Id 4.

[8] Weidemaier, W., 2010. Toward a Theory of Precedent in Arbitration. William and mary Law Review, [online] 51(5), pp.1-65. Available at: [Accessed 30 March 2020]

[9] See also, Esso and others v. Plowman (1995) 128 A.L.R. 391 —High Court of Australia, U.S. v. Panhandle et al.(1988) 118 F.R.D. 346 (D. Del) —in United States, Bulbank v. A.I. Trade Finance (2000) The Supreme Court of Sweden, case T1881-99

[10] Arbitration and conciliation (amendment) act 2019

[11] Geisinger, E., n.d. Confidential And Restricted Access Information In International Arbitration. 43rd ed. Swiss arbitration association, pp.1-32.

[12] Collins, Privacy and Confidentiality in Arbitration Proceedings, 11 Arb. Int’l 321, 322-23 (1995).

[13] Singh, A., 2020. Does Confidentiality In Arbitration Hinder Common Law Growth? YSIAC Organizes Debate. [online] Bar and Bench – Indian Legal news. Available at: [Accessed 30 March 2020].

[14] Chambers Westgarth, C., 2017. Arbitration: Can It Assist In The Development Of The Common Law – An Australian Point Of View | Lexology. [online] Available at: [Accessed 30 March 2020].

[15] HOGAS, D., 2014. What Does Confidentiality Inside The Arbitration Mean?. Revista Romaneasca pentru Educatie Multidimensionala, [online] 06(01), pp.29-38. Available at: .

[16] Id 6.

Author Details: Sharon Sood and Krutamana Pisipati (Jindal Global Law School, Sonipat)

The views of the author are personal only. (if any)


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