Safeguarding Confidential Arbitration Awards in Uncontested Confirmation Actions

Abstract

Two bedrock principles of American jurisprudence collide when courts are called upon to decide whether to seal confidential awards that prevailing arbitration parties petition to confirm in court. On the one hand, the strong public policy in favor of arbitration dictates that courts should honor arbitration parties' confidentiality agreements by sealing confidential awards that are the subject of confirmation petitions. On the other hand, the public interest in court proceedings suggests that motions to seal should be infrequently granted. Courts continue to struggle with how to harmonize these two important values when they conflict with each other in actions to confirm confidential arbitration awards. To clarify and improve the law in this area, this article proposes the following rule to guide the adjudication of motions to seal confidential arbitration awards in confirmation actions: deny the motions when the losing arbitration party challenges the underlying award and grant the motions when the award is uncontested. Such a rule would provide arbitration parties with clarity, consistency, and the confidence to submit their confidential disputes to arbitration without risking public disclosure in the event they lose and their adversary initiates a confirmation action. It also would prevent prevailing arbitration parties from misusing the confirmation process to engage in undesirable strategic behavior, and empower arbitration parties to request that their arbitrators issue reasoned awards without fear that those awards will end up in the public domain whenever the prevailing party petitions to confirm them.