Arbitration and Conciliation Act, 1996

Section 42A of the Arbitration Act: Confidentiality of Information

Section 42A of the Arbitration and Conciliation Act, 1996 requires confidentiality in arbitral proceedings. It applies to the arbitrator, the arbitral institution and the parties to the arbitration agreement, while permitting disclosure of an arbitral award where disclosure is necessary for implementation and enforcement.

Section 42A: Confidentiality of Information

Notwithstanding anything contained by any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentially of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award.

Section 42A was inserted by section 9 of the Arbitration and Conciliation (Amendment) Act, 2019 and came into force on 30 August 2019.

Meaning and Scope of Section 42A

Section 42A creates a statutory confidentiality obligation for arbitral proceedings. The provision begins with a non-obstante clause, which gives the confidentiality requirement overriding effect against inconsistent provisions in other laws for the time being in force, subject to the interpretation and application of other binding legal requirements.

  • The confidentiality obligation covers arbitral proceedings.
  • The persons expressly identified are the arbitrator, the arbitral institution and the parties to the arbitration agreement.
  • The section creates an express exception for an award when disclosure is necessary for its implementation or enforcement.
  • The section does not state that every disclosure of an award is unrestricted; the statutory exception is linked to necessity for implementation and enforcement.

Who Must Maintain Confidentiality?

Arbitrator: The neutral decision-maker appointed to resolve disputes submitted to arbitration under the arbitration agreement and the Act.

Arbitral institution: An institution administering an arbitration in accordance with its applicable rules or institutional framework.

Parties to the arbitration agreement: The persons or entities bound by the arbitration agreement under which the dispute is referred to arbitration.

Exception for Disclosure of the Arbitral Award

Section 42A expressly separates the award from the general confidentiality rule where disclosure is necessary for implementation and enforcement. This is important because enforcement of an award may require production of the award before a competent court or other authority.

Practical point: Parties should distinguish between confidentiality of the arbitral proceedings and disclosure that is genuinely required to implement or enforce the award. Any disclosure should be limited to what is necessary in the relevant legal or enforcement process.

What Does the Non-Obstante Clause Mean?

The words "Notwithstanding anything contained by any other law for the time being in force" indicate that Section 42A is intended to operate with overriding force where another legal rule is inconsistent with the confidentiality obligation. The precise effect of the clause in a particular case depends on the nature of the competing legal requirement and the facts of the dispute.

Section 7 - Arbitration Agreement

Section 7 defines an arbitration agreement as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or may arise between them in respect of a defined legal relationship, whether contractual or not.

Section 42 - Jurisdiction

Section 42 deals with the court having jurisdiction over applications arising from an arbitration agreement and the related arbitral proceedings once an application under Part I has been made in a competent court.

Section 42B - Protection of Action Taken in Good Faith

Section 42B protects an arbitrator from suit or other legal proceedings for anything done or intended to be done in good faith under the Act or the rules or regulations made under it.

Official Statutory Source

The current statutory text of Section 42A may be verified from the Government of India's India Code version of the Arbitration and Conciliation Act, 1996. The provision appears after Section 42 and before Section 42B and records that it was inserted by Act 33 of 2019 with effect from 30 August 2019.