Confidential Material From Separate Arbitration Cannot Be Relied Upon Merely Because ICC Rules Don't Bar It: Delhi HC

The Delhi High Court has held that confidential material from a separate arbitration cannot be relied upon in another arbitral proceeding merely because the International Chamber of Commerce (ICC) Rules do not expressly prohibit its use.

It upheld an arbitral award in favour of Alstom Transport India Limited after finding that the arbitral tribunal was justified in refusing to admit such material.

Justice Harish Vaidyanathan Shankar observed, "A statutory mandate enacted by Parliament therefore cannot be diluted, displaced or overridden by institutional rules framed by an arbitral institution. Consequently, the learned Tribunal was fully justified in treating Section 42A of the A&C Act as controlling and binding irrespective of any interpretation sought to be placed upon the ICC Rules."

The dispute arose from the Eastern Dedicated Freight Corridor Project. In July 2015, the Dedicated Freight Corridor Corporation of India Limited awarded Alstom the principal contract for electrification, signalling, telecommunication, and allied works.

Alstom later entered into a back-to-back subcontract worth about ₹34 crore with JPC Infrastructure and Constructions Private Limited for civil, electrical, and related works.

Following disputes over delays and site access, Alstom terminated the subcontract in January 2017, after which the parties commenced arbitration under the ICC Rules.

During the arbitration, JPC sought to rely on a June 7, 2017 letter that Alstom had addressed to DFCCIL in a separate arbitration. It argued that the letter supported its case that delays were attributable to Alstom because encumbrance-free access to project sites and necessary project particulars had not been made available.

The arbitral tribunal declined to admit the letter, holding that it formed part of confidential arbitral proceedings protected under the Arbitration and Conciliation Act. While the tribunal partly allowed some of JPC's claims and rejected Alstom's counterclaims, it rejected JPC's claims for geotechnical investigation costs, topographical survey expenses, overheads, and loss of profits.

JPC challenged the award before the High Court. It argued that the confidentiality provision under the Arbitration and Conciliation Act imposed only a duty to maintain confidentiality and did not create a rule making such documents inadmissible. It also contended that the letter had entered the public domain and that the ICC Rules contemplated only a discretionary confidentiality framework.

Alstom argued that the confidentiality obligation under the Arbitration and Conciliation Act was mandatory and could not be diluted by the ICC Rules. It also maintained that the tribunal had rightly refused to rely on the document.

Rejecting JPC's challenge, the court held that confidentiality is one of the defining features of arbitration and that Parliament intended to prevent arbitral material from being freely disseminated or utilised outside the proceedings in which it was produced.

"Confidentiality constitutes one of the fundamental features of the arbitral process and the provision seeks to preserve the integrity of that process by ensuring that materials forming part of arbitral proceedings are not freely disseminated or utilised outside the proceedings for which they were produced," the court observed.

The court held that accepting JPC's interpretation would substantially undermine the statutory confidentiality regime by allowing parties to procure documents from one arbitration and rely on them in separate proceedings.

"The learned Tribunal was justified in holding that permitting reliance upon such material would undermine the very confidentiality regime which Section 42A of the A&C Act seeks to protect. To hold otherwise would substantially undermine the confidentiality obligation recognised under Section 42A of the A&C Act and render the statutory protection susceptible to circumvention," it held.

The court further held that the tribunal was entitled to determine whether reliance on the document was legally permissible before considering its evidentiary value. It ruled that refusing to admit the letter was an exercise of the tribunal's evidentiary discretion and did not amount to a jurisdictional error, patent illegality, or perversity.

The court also rejected JPC's contention that the letter had lost its confidential character merely because it had been filed in judicial proceedings, observing that filing a document before a court does not automatically strip it of confidentiality.

Finding no ground to interfere with the award, the court dismissed JPC's petition and upheld the arbitral award in favour of Alstom Transport India Limited.

For Petitioner (JPC Infrastructure and Constructions Private Limited): Advocates Manini Brar and Muskaan Chawla.

For Respondent (Alstom Transport India Limited): Advocates Dinesh Pardasani, Aishwary Kumar Tiwari, Siddharth Chechani and Amrit Singh.