Arbitration Awards and Confidentiality Revisited

In reinsurance arbitrations, most parties agree to confidentiality and enter into a formal confidentiality order.  The confidentiality order typically applies to the final award as well as all materials generated in the arbitration.  Some insurance and reinsurance agreements have confidentiality provisions that lead to the same result.  The ARIAS-U.S. Rules for U.S. Insurance & Reinsurance Disputes presumes confidentiality (7.1 and 7.2) and ARIAS has a model confidentiality agreement.Confidential Files

In two previous blog posts, we discussed some of the issues with confidentiality in arbitration and whether arbitration awards and materials should be sealed when there is a petition to vacate or confirm the award.  In a recent case outside of the insurance and reinsurance world, a Missouri federal court addressed a similar question.

In CAA Sports LLC v. Dogra, No. 4:18-cv-01887-SNLJ, 2018 U.S. Dist. LEXIS 214223 (E.D. Mo. Dec. 20, 2018), an employment contract contained a confidentiality provision.  After an arbitration award, the losing party sought to vacate the award in federal court.  The proponent of the petition to vacate moved to seal the arbitration award and supporting documents.

The court denied the motion for two reasons.  First, the court did not believe that the confidentiality provision extended to a court’s review of the arbitration award.  Second, the presumption of public access to litigation outweighed any concern about confidentiality.  The court found none of the exceptions that would allow sealing applied here.  “There is, for example, no suggestion that the arbitration award and supporting materials contain personal identifying information, implicate innocent third parties, or contain routinely protected information such as trade secrets or proprietary data.”  The court noted that, in the context of arbitrations, courts routinely reject arguments to seal based merely to honor the parties’ underlying confidentiality agreements.  The court cited a string of recent cases in the opinion (linked above), including some insurance and reinsurance cases.

But the court did address the issue of arbitration materials that the petitioner claimed had no relevance to the petition to vacate the award.  The court asked the parties to work that out themselves and to come back and move for further relief if they disagree about what materials should come before the court.

While the court followed the growing trend of not sealing arbitration awards and related materials just because there is a confidentiality agreement, it gave the proponent of the sealing application some solace in limiting the arbitration materials to only those that were relevant to the vacatur application.  This may mean that arbitration briefs, depositions, testimony and the like may not need to be filed if both parties (or the court on application) agree that their relevance is limited for the purposes of the court proceeding.  This may help mitigate the public filing of the arbitration award to some degree.  At the very least, the details of the arbitration proceeding may not have to be spread across the public record.

Given the trend in the reinsurance industry of going to court to confirm arbitration awards even if confirmation is not really necessary for enforcement purposes, this court’s practical solution to avoiding the indiscriminate public filing of arbitration materials may be helpful in future cases where there is more to the court action than meets the eye.

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