Having been invited to be a member of one of the panels on the topic above, together with other Brazilian and foreign colleagues, event sponsored by the Global Arbitration Review (GAR) in São Paulo, I take the chance to share with the readers some of the points and concerns about the issue in the context of international arbitration (in view of the potential diversity and complexity of the legislation to be applied), but also of relevance and significance in the domestic setting.
In general, it seems reasonable to say that situations involving privilege and confidentiality in different countries of the Western world find a corresponding or at least a similar ruling. To illustrate, in addition to the issue of exclusion of the privilege against self-incrimination (that is, ensuring that no one will be compelled to produce evidence against themselves), attention should be drawn to the attorney-client relationship; to the relationship between the parties in negotiations; the relationship involving industrial and commercial privilege, typical of the competition among market agents; and possibly those relationships involving confidentiality intended to preserve the public interest. Likewise, concerns about the admissibility or exclusion of evidence may happen in such situations.
A first and relevant question is whether the right to privilege – which confers a person the prerogative of non-disclosure of facts and information – would be a matter of procedural or substantive law. This is a relevant matter, not only because of issues related, for instance, to intertemporal law and to interpretation criteria, but specifically to determine the applicable legislation, considering that some relevant elements of a given conflict involve different sources and nationalities. To a certain extent, this is due to the proximity of the statutes involved, especially in the context of evidence production, which is itself regarded as a material phenomenon, sometimes procedural.
Based on that, and if I am not mistaken, although it is a matter of considering whether the evidence is admissible (documentary or even oral), the rules on privilege and confidentiality are essentially situated in the substantive area. This is because the law or the will of the parties establishes if and which information can be disclosed, which, for instance, seems to explain, in the international setting, the importance that is given to the parties’ expectations concerning the confidentiality at the time of dealing the business. Hence it may be possible to invoke the objective good faith as a relevant element in the settlement of disputes in order to decide whether or not there is a genuine duty of disclosure in a particular situation.
Another truly thorny question is whether the rules on privilege and confidentiality would be of public policy and, as such, strictly observed by the arbitrators. This may be relevant, for example, regarding the enforcement of a foreign arbitral award by the Superior Court of Justice, having in mind that the above policy is one of the limits and that it is likely to permit the rejection of the official seal and, therefore, prevent the foreign award from being effective before the Brazilian legal system.
Far from attempting to solve such an intricate problem, but on the premise that the rules on privilege and confidentiality include, at least at a first glance, substantive law, it will be necessary to consider and respect the substantive law applicable to the controversy, even if it is a foreign one, and may possibly be different from that set forth by the Brazilian legal system. In general, this seems to be the tendency of the jurisprudence from the Superior Court of Justice, when it enforces the awards based on foreign law.
Last but not least, there are typically procedural issues involved.
In the case of privilege or confidentiality between the parties, it is up to the arbitrators to decide whether and to what extent disclosure should be made, particularly in the case of documents. Once the duty of disclosure is established, an eventual refusal should be decided by the admission of veracity of the facts that were alleged, and that the party intended to prove by means of evidence, as it is in force in the Brazilian legal system and, in a way, as it is recognized at the international level, when it is established that the unjustified refusal of the party allows the arbitral tribunal to conclude that the refused document would be “adverse to the parties’ interests” (Articles 9, 5 and 6 of the International Bar Association Rules in International Arbitration).
In the case of a third party, however, it must be considered that that party is not subject to the arbitration agreement and that, if there is a refusal to disclose information, it will be necessary to make use of the judiciary, which, in this case, will not be limited to complying with an arbitration award, but it will judge whether or not the disclosure obligation is borne by the third party.
Anyway, as mentioned in the title, these are just very brief notes in order to provoke, who knows, the interest for a more in-depth study of the subject by the Brazilian doctrine.