COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH
DIVISION – COMMERCIAL COURT (COOKE J.)
London, WC2A 2LL
B e f o r e :
LORD JUSTICE MANCE
LORD JUSTICE CARNWATH
| DEPARTMENT OF ECONOMIC POLICY AND DEVELOPMENT OF THE CITY OF MOSCOW
and THE GOVERNMENT OF MOSCOW
|- and -
|BANKERS TRUST COMPANY
and INTERNATIONAL INDUSTRIAL BANK
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Michael Bloch QC (instructed by Clifford Chance LLP) for the Respondent (BTC)
Mr Michael Sullivan (instructed by Watson Farley & Williams) for the Respondent (IIB)
Crown Copyright ©
Lord Justice Mance:
"…. are founded on the following principles, and shall be construed accordingly-
(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
(c) in matters governed by this Part the court should not intervene except as provided by this Part".
"apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award".
Pursuant to The Civil Procedure (Amendment No. 5) Rules 2001 S.I. No. 4015 (L32), the relevant rules governing such applications have since 25th March 2002 been CPR 62.2 to 62.10 ("Section I" of Part 62). For the purposes of claims under the 1996 Act, CPR 62.2 contains a wide definition of "arbitration claim", which includes any application under s.68:
"62.2-(1) In this Section of this Part "arbitration claim" means-
(a) any application to the Court under the 1996 Act;
(b) a claim to determine-
(i) whether there is a valid arbitration agreement;
(ii) whether an arbitration tribunal is properly constituted; or
what matters have been submitted to arbitration in accordance with an arbitration agreement;
(c) a claim to declare that an award by an arbitral tribunal is not binding on a party; and
(d) any other application affecting-
(i) arbitration proceedings (whether started or not); or
(ii) an arbitration agreement.
(2) This Section of this Part does not apply to an arbitration claim to which Section II or III of this Part apply."
CPR 62.10 provides:
"(1) The court may order that an arbitration claim be heard either in public or in private.
(2) Rule 39.2 does not apply.
(3) Subject to any order made under paragraph (1) -
(a) the determination of -
(i) a preliminary point of law under section 45 of the 1996 Act; or
(ii) an appeal under section 69 of the 1996 Act on a question of law arising out of an award,
will be heard in public; and
(b) all other arbitration claims will be heard in private.
(4) Paragraph (3)(a) does not apply to -
(a) the preliminary question of whether the court is satisfied of the matters set out in section 45(2)(b); or
(b) an application for permission to appeal under section 69(2)(b)."
CPR 62.11 to 62.16 ("Section II") regulate pre-1996 Act arbitration claims and include no equivalent of CPR 62.10.
"25.4 Hearings shall be held in camera unless the parties agree otherwise.
32.2 The awards shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out the award without delay.
32.5 The award may be made public only with the consent of both parties".
The arbitration took place in private, and the award was published only to the parties. Bankers Trust's and IIB's application under s.68 were themselves heard "in private" under CPR 62.10(3)(b). No contrary application or order was made under CPR 62.10 (1).
The judgment under appeal
"31. ….. The effect of a public hearing, or of automatic publication of proceedings challenging an award, would be to militate against the legitimate pursuit of any challenge to an award where a fundamental basis for agreeing to arbitrate was the requirement of privacy, and would cut across the parties' agreement for the private resolution of their dispute."
"35. …. Where matters fall prima facie within the privacy provisions of CPR 62.10 which applies in default of a court order, the issue, if raised, is nonetheless to be determined on equivalent criteria to those of CPR 39.2, Scott and Article 6 … and the other matters to which I have referred, but without the presumption of Scott, and with perhaps, if anything, a presumption in favour of privacy given in the rule itself".
Further, he said:
"38. …. the policy which gives rise to private hearings may also be one which the court would wish to carry over into any judgment given.
39. …. The same policy reasons which would lead to a court deciding that a hearing should take place in private may be equally relevant to the question of publication of the judgment but until the judgment is known, neither the court nor the parties may appreciate the extent to which there are issues of public importance, and the extent to which there may be sensitive matters raised within the judgment which will create problems for the parties if published. Self-evidently, it does not automatically follow that, because the hearing of an arbitration claim has taken place in private, the judgment in relation to it should not be available for publication."
"41. ….The whole subject with which the court was concerned was an arbitration which in itself was confidential. Everything raised in relation to it was confidential. If publicity would damage that confidentiality, then the court may rightly consider privacy both for the hearing and for the judgment to be necessary in the interests of justice. Such matters can constitute special circumstances where publication of the judgment would prejudice the interests of justice, not only because of the impact on the parties concerned, but also on the future administration of justice in relation to arbitration claims, because of the potential deterrent effect for those who have a legitimate grievance to pursue in respect of the conduct of an arbitration, the conduct of a tribunal or in relation to a serious irregularity in the award. Persons entitled to justice at the hands of the court could reasonably be deterred from seeking it, if the court was uniformly to adopt an approach that the confidential nature of the information with which it was concerned did not justify privacy both for the hearing and for the judgment. Indeed, such persons might be dissuaded from arbitration under the supervision of the English court. Each application, hearing and judgment, will be required to be examined by the court to ascertain whether or not a private or public hearing or a private or public judgment is appropriate in the light of the criteria to which I have already referred."
"45. Whilst IIB and Bankers Trust could provide little evidence of actual detriment should the judgment be published, Moscow has provided equally no good reason for requiring publication either, since it can freely state the end result of the arbitration and the end result of the litigation. In these circumstances, the confidentiality of the arbitration, by which the parties set so much store, is the dominant factor in determining that the hearing and the judgment itself should be private. In many arbitrations the position may be different, but the terms of CPR 62.10, for the reasons given, provide a strong pointer to the way in which the courts should approach such matters. It is the very terms of the rule when the word "private" is seen as meaning "in camera" which has weighed most heavily with me in coming to this conclusion."
He went on to dismiss Moscow's submission that any privacy had been forfeited by Bankers Trust or IIB by the previous publication of information about the arbitration, or by such publication as Lawtel had effected.
The common law and statutory background
"…. that the administration of justice would be rendered impracticable by [the public's] presence, whether because the case could not be effectively tried, or the parties entitled to justice would be reasonably deterred from seeking it at the hands of the court."
On the second question, he considered that the court could treat as contempt "any wilful and malicious publication" (p.448).
"that the place where the case is to be heard shall be a private chamber, not a public court. …. The order was, I think, spent when the case terminated, and had no further operation beyond that date." (p.453)
Lord Shaw shared the Lord Chancellor's approach to the first question. He concluded that it was beyond the judge's power to hear the case in camera, and that, even if such an order had been within his power:
"…. it was beyond his power to impose a suppression of all reports of what had passed at the trial after the trial had come to an end" (p.476).
At p.477 he quoted extensively from Bentham, including the famous lines:
"Publicity is the very soul of justice. …. It keeps the judge himself while trying under trial." (Benthamia, or Select Extracts from the Works of Jeremy Bentham (1843) p.115)
"There is no greater danger of usurpation than that which proceeds little by little, under cover of rules of procedure, and at the instance of the judges themselves." (pp.477-8)
"12(1) …. (e) where the court (having power to do so) expressly prohibits the publication of all information relating to the proceedings or of information of the description which is published."
"12 (3) In this section …. references to a court sitting in private include references to a court sitting in camera or in chambers."
The references in s.12(1)(e) and (2) to a court "having power" expressly to prohibit the publication takes one back to the common law principles indicated in Scott v. Scott. A similar phrase appears in the Contempt of Court Act 1981, which provides:
"4(2) In any proceedings the court may, where it appears to be necessary for avoiding a substantial risk of prejudice to the administration of justice in those proceedings, or in any other proceedings pending or imminent, order that the publication of any report of the proceedings, or any part of the proceedings, be postponed for such period as the court thinks necessary for that purpose.
11. In any case where a court (having power to do so) allows a name or other matter to be withheld from the public in proceedings before the court, the court may give such directions prohibiting the publication of that name or matter in connection with the proceedings as appear to the court to be necessary for the purpose for which it was so withheld."
The restriction on the prejudice relevant under s.4(2) reflects the tenor of Scott v. Scott, although the reference in s.12(1) to national security involves an interest not expressly mentioned in Scott v. Scott, which would not, as it seems to me, fall within a narrow understanding of the exception there identified for cases where privacy was necessary to ensure that justice is done.
"The concept of a secret judgment is one which I believe to be inherently abhorrent. Only in cases where there is a cause for secrecy, such as in a trade secrets case, can it in general be right that a judgment should be regarded as a secret document. Even then it may only be a part of the judgment which needs to be secret. I conclude, in the absence of binding authority to the contrary, that when judgments are given in chambers they are not to be regarded as secret documents. There is in principle all the difference between a judgment given in camera (i.e. a judgment which the judge has specifically ordered, for cause, to be treated as secret) and a judgment given in chambers merely for administrative reasons"
He concluded that Chadwick J had ordered the matter to go into camera and ordered that his judgment should be regarded as given in camera. However, Chadwick J had not been asked to rule on the question whether leave might be given for its use in relation to complaints made by the other party to professional organisations or others. On that basis, Jacob J said:
"…. starting, as I do, with a bias in favour of the publication of judgments, coupled with the legitimate interest of these defendants in sending the judgment to the parties named, I think I should give leave."
"The general position is that any judgment including a judgment in chambers is normally a public document. This is the position notwithstanding that under RSC Ord 63, r 4(1) there is no right to inspect a judgment so given without leave.
A distinction has to be clearly drawn between the normal situation where a court sits in chambers and when a court sits in camera in the exceptional situations recognised in Scott v Scott  AC 417 or the court sits in chambers and the case falls in the categories specified in s 12(1) of the 1960 Act (which include issues involving children, national security, secret processes and the like). Section 12(1) also refers to the court having prohibited publication. Such proceedings are appropriately described as secret; proceedings in chambers otherwise are not appropriately so described.
Proceedings in chambers, however, are always correctly described as being conducted in private. The word 'chambers' is used because of its association with the judge's room so as to distinguish a hearing in chambers from a hearing in open court. While the public in general are normally free to come into and go from a court (as long as there is capacity for them to do so) during court hearings the same is not true of chambers hearings. Other than the parties and their representatives the public need the permission of the judge to attend."
Lord Woolf there used the description "private" and "secret" to reflect the distinction expressed in the traditional terms "in chambers" and "in camera". However, the CPR discards these terms, and in my view uses the word "private" in a sense corresponding with Lord Woolf's description "secret".
"3. …. While Viscount Haldane L.C. in Scott v. Scott  AC 417, 435 emphasised that the limits to the exceptions to the general principle that proceedings should be conducted in public could not depend on "the individual discretion of the judge," there are an immense variety of situations in which it is appropriate to restrict the general rule. These situations depend very much on their individual circumstances. So if a judge adopts the correct approach in determining any particular application, indicated by the passages from Scott v. Scott and the Leveller Magazine case  AC 440 already cited, the Court of Appeal will not interfere with the decision of a judge on an issue of this nature."
He then commented (at p.977C-E) on the danger of a court simply acceding to parties' wish for privacy:
"4. …. Sometimes the importance of not making an order, even where both sides agree that an inroad should be made on the general rule, if the case is not one where the interests of justice require an exception, has been overlooked. Here a comment in the judgment of Sir Christopher Staughton in Ex parte P., The Times, 31 March 1998; Court of Appeal (Civil Division) Transcript No. 431 of 1998, is relevant. In his judgment, Sir Christopher Staughton states: "When both sides agreed that information should be kept from the public that was when the court had to be most vigilant." The need to be vigilant arises from the natural tendency for the general principle to be eroded and for exceptions to grow by accretion as the exceptions are applied by analogy to existing cases. …..
5. Any interference with the public nature of court proceedings is therefore to be avoided unless justice requires it. …."
The Court also observed that the more limited the interference with the general rule of publication, the less objectionable any restriction may be (p.978B-C); that the nature of the proceedings is always relevant: interlocutory and financial and other family disputes were "normally of no interest to anyone other than the parties" (p.978C-D); and that another relevant factor is whether it is the plaintiff, the defendant or a third party whose anonymity is at issue (p.978E-G).
"39.2 General rule—hearing to be in public
(1) The general rule is that a hearing is to be in public.
(2) The requirement for a hearing to be in public does not require the court to make special arrangements for accommodating members of the public.
(3) A hearing, or any part of it, may be in private if—
(a) publicity would defeat the object of the hearing;
(b) it involves matters relating to national security;
(c) it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality;
(d) a private hearing is necessary to protect the interests of any child or patient;
(e) it is a hearing of an application made without notice and it would be unjust to any respondent for there to be a public hearing;
(f) it involves uncontentious matters arising in the administration of trusts or in the administration of a deceased person's estate; or
(g) the court considers this to be necessary, in the interests of justice.
(4) The court may order that the identity of any party or witness must not be disclosed if it considers non-disclosure necessary in order to protect the interests of that party or witness."
Parallel provisions permitting privacy include CPR 32.13 (inspection of witness statements used in chief) and RSC O.52(6) (sc 56.6) (committal proceedings).
"1.9 If the court or judge's room in which the proceedings are taking place has a sign on the door indicating that the proceedings are private, members of the public who are not parties to the proceedings will not be admitted unless the court permits.
1.10 Where there is no such sign on the door of the court or judge's room, members of the public will be admitted where practicable. The judge may, if he thinks it appropriate, adjourn the proceedings to a larger room or court.
1.11 When a hearing takes place in public, members of the public may obtain a transcript of any judgment given or a copy of any order made, subject to payment of the appropriate fee.
1.12 When a judgment is given or an order is made in private, if any member of the public who is not a party to the proceedings seeks a transcript of the judgment or a copy of the order, he must seek the leave of the judge who gave the judgment or made the order.
1.13 A judgment or order given or made in private, when drawn up, must have clearly marked in the title:
"Before [title and name of judge] sitting in Private"
The Practice Direction describes the incidents of privacy, where ordered under CPR 39.2, in terms which appear to me to make clear that "private" in this context is meant in the sense of "secret" as used by Lord Woolf in Hodgson. In other words, it may be equated with the old "in camera" procedure, rather than the old "in chambers" procedure.
"22. …. It is plain from reading it that [CPR] 39.2 is facultative. It permits in certain limited circumstances the judge to sit in private, always to be assumed subject to that being in the interests of justice; and that is subject to the general rule in r.39.2(1). The general rule is that the hearing is to be in public. It follows that this part of the Civil Procedure Rules 1998 does not in any event breach the principle of legality because it does not in itself legislate inconsistently with the content of the rule in Scott v. Scott AC 417, for the reasons I have indicated."
More far-reachingly, he added:
"23. That is the end therefore of this point, but in any event I would go on and say that it is clear from reading them, and clear from any informed knowledge of their origin, that it was the intention of Parliament in the Civil Procedure Act 1997, and the intention of those who made the Civil Procedure Rules 1998 carrying out Parliament's intention as set out in that Act, to make a new start in those areas of practice to which the ambit of the rule applies. It may well be a necessary inference, to use the formulation adopted by Lord Hoffmann in Simms, from that circumstance that the general rules made in the Civil Procedure Rules 1998, were it in fact the case that they in turn were inconsistent with the Scott principle, had indeed properly reversed, replaced, or at least put another aspect on that principle. I do not need finally to conclude that point for the reasons that I have already indicated, but in considering the vires and status of the Civil Procedure Rules 1998 generally, it seems to me that the potency and the novelty that Parliament clearly intended to attach to the Civil Procedure Rules 1998 cannot be overlooked."
I return to the latter passage in paragraph 33 below. Buxton LJ also concluded that CPR 39.2 was (because of its facultative nature) consistent with article 6 of the Human Rights Convention.
"It would appear, although we have not heard argument on the point, that CPR 39.2 is wider than section 12 of the Administration of Justice Act 1960 and that the exceptions set out in rule 39.2(3), may be treated as heard in secret and that the information about them may not be made public without the permission of the court. I do not however consider that it is necessarily the position with regard to cases heard in private in chambers under the 1991 Rules."
I comment that I prefer the analysis of CPR 39.2 in the first sentence of this passage to the President's apparent assimilation earlier in her judgment (in paragraph 18) of hearings in private under CPR 39.2 to the old in chambers procedure.
"It cannot properly be a blanket protection of non-publication in all cases heard in private in chambers under the 1991 Rules. It can however apply not only to the actual case before the court but also to groups of cases arising out of the same type of circumstances, see Lord Edmund-Davies in Attorney-General v Leveller Magazine  AC 440, 465."
When instancing cases in which an order might be made, she referred to applications for occupation orders in which the welfare of children was likely to be a major issue or often the major issue, and cases where "the financial affairs of any of the parties have to be investigated". She concluded:
80. ….. The statutory framework, providing the procedures in civil and family cases, recognises the necessity to hold some proceedings in private and that there should be protection against publication of some of those proceedings. Such protection must be proportionate to the requirements of the administration of justice. It might be thought to be inconvenient and time-consuming to have to look at this problem in individual cases heard in private. There are groups of cases in which the answer is obvious and, in my view, there will only be a small number of cases, in particular under Part IV, where the advocates and the court may have to consider the point."
Article 6 of the European Convention on Human Rights
"6(1) In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgement shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice."
The Strasbourg jurisprudence establishes that:
i) "The public character of court hearings constitutes a fundamental principle enshrined in paragraph (1) of Article 6": Häkansson v. Sweden (1990) 13 EHHR 1, paragraph 66; Werner v. Austria (1997) EHHR 310, paragraph 45.
ii) The rationale, as stated in Werner v. Austria, paragraph 45, is that
"This public character protects litigants against the administration of justice in secret with no public scrutiny; it is also one of the means whereby confidence in the courts can be maintained. By rendering the administration of justice transparent, publicity contributes to the achievement of the aim of Article 6(1), namely a fair trial, the guarantee of which is one of the fundamental principles of any democratic society …."
iii) Although article 6(1) states as a general rule that proceedings should take place in public, it is not inconsistent with this for a state to designate an entire class of case as falling within one of the recognised exceptions, subject always to the court's control: B. v. United Kingdom (2002) 34 EHHR 19, paragraph 39; and cf domestically, in proceedings under s. 97 of the Children Act 1989, P v. BW  EWHC 1541 (Fam);  2 WLR 509 (Bennett J).
iv) Nevertheless, as Häkansson v. Sweden also establishes:
"…. neither the letter nor the spirit of this provision prevents a person from waiving of his own free will, either expressly or tacitly, the entitlement to have his case heard in public. However, a waiver must be made in an unequivocal manner and must not run counter to any important public interest." (paragraph 66).
v) More fundamentally, nothing in article 6 conflicts with the voluntary waiver by parties of court proceedings in favour of arbitration, although even such a waiver "should not necessarily be considered to amount to a waiver of all rights under Article 6": Osmo Suovaniemi v. Finland (Decision as to the Admissibility of Application No. 31737/96), where the European Court of Human Rights added, with reference to Håkansson v. Sweden, that:
The issue in Suovaniemi was whether parties could waive "the fundamental right to an impartial judge", which the Court concluded that they could in arbitral proceedings, without deciding whether they could also do so in the context of purely judicial proceedings."…. it is clear that the right to a public hearing can be validly waived even in court proceedings. …. The same applies, a fortiori, to arbitration proceedings, one of the very purposes of which is often to avoid publicity."
vi) Although on a literal reading of article 6 it might appear that there is an absolute obligation to give judgment publicly,
"the form of publicity given under the domestic law to a judgment must be assessed in the light of the special features of the proceedings in question and by reference to the object and purpose of Article 6(1)"
See B v. United Kingdom (2002) 34 EHHR 19, at p.529, paragraph 45.
vii) Thus, where, in that case, applications for a residence order had been conducted in chambers to protect the privacy of children and to avoid prejudice to the interests of justice, it was sufficient that:
"…. anyone who could establish an interest could consult or obtain a copy of the full text of orders and/or judgments of first instance courts in child residence cases and that judgments of special interest were routinely published, thereby enabling the public to study the manner in which the courts generally approach such cases and the principles applied in deciding them". (paragraph 47)
In these circumstances, public pronouncement of judgments:
"…. would not only be unnecessary for the purposes of public scrutiny but might even frustrate the primary aim of Article 6(1), which is to secure a fair hearing".
viii) Also in B v. United Kingdom Judge Bratza in a concurring opinion observed that the wording and historical background to the Convention showed that:
"…. stricter standards have been imposed as regards the publication of court judgments than as regards the public character of the underlying proceedings …..reflecting 'the view that some of the factors which might justify a secret hearing would not justify delivery of the judgment in private." (paragraph O-17)
Nonetheless, he was prepared to read into the Convention a similar qualification, relating to the interests of juveniles, to that expressed in article 14 of the International Covenant on Civil and Political Rights, on the ground that:
"There is, as the majority judgment recognises, a logical relationship between the public nature of the proceedings and the public pronouncement of the judgment which is the result of the proceedings. If the public may legitimately be excluded from the hearing for the purpose of protecting the interests of children or the private lives of the parties to a matrimonial dispute, the requirement that the judgment should be pronounced publicly should not be interpreted in such a way as to undermine that protection." (paragraph O-19)
ix) The exceptions formulated in article 6(1) are permissive. However, in so far as they contemplate the possibility of private hearings to protect Convention rights, such as "the private life of the parties", which do not feature directly in Scott v. Scott, they seem to require the Court (having regard to section 6(1) of the Human Rights Act 1998) to consider whether the strictness of the rules in Scott v. Scott require some qualification. The alternative, supported perhaps by Lord Woolf's statement of principle in ex p. Kaim Todner (paragraph 20 above) and the President's approach in Clibbery v. Allan (paragraph 26 above), is that they involve a more developed understanding of the interests of justice than Scott v. Scott might suggest. It is not surprising that principles now recognised in the Human Rights Convention, particularly those relating to privacy, should involve a somewhat expanded or developed view of such interests in certain contexts. The Strasbourg jurisprudence considered in sub-paragraphs (iii) and (iv) above can also be seen as taking a more relaxed view of the possibility of parties waiving publicity where this does "not run counter to any important public interest". However, there is nothing in Strasbourg jurisprudence, any more than in Scott v. Scott, to suggest that parties can by simple agreement insist on a court restricting publication.
Application of these principles
"There may be some cases where the Court, in having to exercise a discretion as to whether to order suppression of some material in a particular case, might have regard to the fact that the proceeding in the Court had its genesis in an arbitral process in which confidentiality was an essential ingredient. Considering the way in which the parties have blown "hot and cold" from time to time no such concern arises in this case."
The last passage is relevant to the issue on this appeal, although delivered in a context lacking the added impetus of CPR 62.10. In contrast, in Aegis Ltd. v. European Re  UKPC 11;  1 WLR 1041, the Privy Council mentioned Bermudan arbitration legislation which expressly empowers courts to hear proceedings under such legislation in private, and to restrict reporting or publication of the proceedings, and commented that this enabled "the rights of privacy of the parties to be protected, notwithstanding the court proceedings". There is no such legislation in England, but CPR 62.10 represents a step in that direction.
The judge's decisions
"sensitive matters of greatest confidentiality".
He said at paragraph 27:
"It was repeatedly emphasised to me during the course of the hearing that the arbitration itself raised highly sensitive political issues so far as Moscow itself was concerned, and highly sensitive commercial issues so far as both the other parties were concerned, which were inevitably, in the circumstances which obtained, referred to in the judgment."
Lord Justice Carnwath: