S.41A of the Arbitration Act 2005 (“AA 2005”) was brought into force on 8.5.2018. Prior to that, there was no provision in the AA 2005 to address confidentiality in arbitration proceedings.
S. 41A (1) prohibits parties from publishing, disclosing or communicating information relating to the arbitral proceedings under the arbitration agreement and the award made in those proceedings unless otherwise agreed by the parties. However, in S. 41A (2) there are exceptions to the restriction imposed whereby where the publication, disclosure or communication is made:
- in legal proceedings before a court or other judicial authority either in Malaysia or outside to protect or pursue a legal right or interest of the party, or to enforce or challenge the award;
- to any government body, regulatory body, court or tribunal where the party is obliged by law to make the publication, disclosure or communication; or
- to a professional or any other adviser of any of the parties.
In Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd  1 LNS 1452, Nautilus sought to rely on s 41A of the AA 2005 to expunge the reference and use of documents prepared by Ferrier Hodgson MH Sdn Bhd on the ground that the documents were prepared for the purposes of an arbitration where the Defendant was one of the parties. The Defendant argued that it did not consent to the publication, disclosure or communication of the impugned documents. The Defendant also contended that the confidentiality obligation extends even to a third party such as the Plaintiff who is not a party to the arbitration.
The Plaintiff, on the other hand, took a two-pronged argument against the expungement of documents sought. On the one hand, the Plaintiff submitted that since the documents were intended for use in legal proceedings, therefore had the Plaintiff been a party to the arbitration, it would have been permitted under s.41A of the AA 2005 to rely on the said documents.
On the other hand, being a non-party to the arbitration proceedings, therefore the confidentiality of arbitration documents would not apply to the Plaintiff.
The Court agreed with the Plaintiff, holding that s 41A of the AA 2005 only applied to parties to the arbitration proceedings and not to non-parties. Whilst the Court’s findings seem justified given the express words of s 41A, nevertheless it does raise the question as to whether arbitration proceedings are in fact confidential after all. For example, a party to an arbitration proceedings could decide to file all arbitration documents in court as part of its application to register the award for purposes of enforcement. Once the documents are filed, they become public documents (unless otherwise directed by Court) and third parties therefore would be entitled to rely on these documents for their own purposes because they would not be bound by any confidentiality obligations.
Clearly, Malaysian jurisprudence would need to be further developed to better protect the confidentiality of arbitration proceedings, as s 41A of the AA 2005 as it presently stands is extremely limited in its scope.
Written by : Azhana Khairudin ([email protected])