A Scottish local authority involved in arbitration proceedings with a building company following a dispute over a construction contract has had an application for a court order prohibiting disclosure of the identity of the parties refused.

In the arbitration application to the Court of Session against an arbitrator’s part 5 award, the petitioner North Lanarkshire Council sought an order prohibiting the disclosure of the identity of any party to the proceedings in terms of section 15 of the Arbitration (Scotland) Act 2010.

The respondent Stewart & Shields Limited opposed the motion on the basis that reference had been made to the arbitration in the notes to the petitioner’s financial accounts, and that a prohibition on being able to refer to the outcome of the arbitration would be prejudicial to its commercial interests.

The judge noted that the names of the parties had already been made public and refused the motion after ruling that there was “no duty of confidentiality” in respect of “non-confidential information”.

Lady Wolffe heard that the parties had entered into a contract for certain construction works, however after a period of time the council purported to terminate the contract on the basis that the contractor had failed to proceed regularly and diligently with the works.

The dispute was referred to arbitration and the outcome of the arbitration proceedings thus far had been in favour of the respondent.

In particular, it was explained that by his part 1 award, the arbitrator found that the council’s notices of termination were ineffective to terminate the contractor’s appointment and by his part 3 award, he had determined that on the merits the ground for termination (the asserted failure to proceed regularly and diligently with the works) was also ill-founded.

The part 2 and 4 awards of the arbitrator related to the expenses of the part 1 and 3 awards, respectively, while the subject matter of these proceedings was the arbitrator’s part 5 award, which dealt with loss and quantification.

However, the court was told that the council’s published annual accounts for the period to which the early part of the arbitration proceedings related, being 2015/16, included the outcome of the part 1 award.

There was no suggestion that these details were not sufficient to identify the parties and the contract works referred to.

It was also explained that at the time of terminating the contract between the parties, the fact and basis of the council’s termination of the contract had been reported in the newspaper.

Nevertheless, the council made an application for anonymity in terms of section 15 of the 2010 Act, which provides that a party to any civil proceedings relating to an arbitration…may apply to the court for an order prohibiting the disclosure of the identity of a party to the arbitration in any report of the proceedings.

Reference was also made to rule 26 of the Arbitration Rules, which concerns confidentiality, and states that disclosure by a party of confidential information relating to the arbitration is actionable as a breach of an obligation of confidence.

On behalf of the council it was submitted that rule 26 was a “default” rule, and parties had agreed that it should apply.

The only matter that was in the public domain was that the council had not been entitled to terminate the contractor’s appointment under the contract between the parties, but no other awards of the arbitrator were in the public domain and the petitioner was entitled to keep this information confidential.

Turning to the statutory provisions, counsel for the local authority noted that in section 15 of the Act there was no proviso that the information had never been in the public domain, as there was at the end of rule 26(4) of the Arbitration Rules.

Had the drafter wished to provide for an additional exception in section 15(2), on the basis that the information was in the public domain, he could readily have done so as a further sub-paragraph in section 15(2).

Therefore, it was argued that the court should place no weight on the fact that the council had put into the public domain the identity of the parties in the previous, and he argued separate, arbitration proceedings.

On behalf of the contractor it was argued that what was in the public domain for the purpose of rule 26 was impliedly in the public domain for the purposes of section 15 of the Act, and, in any event there had been disclosure to the whole world of what should have remained confidential.

The judge refused the motion as the information sought to be anonymised, being the identity of the parties, was already in the public domain.

In a written note, Lady Wolffe said: “In terms of rule 26, this may be analysed either as a permissible breach of the duty of confidentiality or as meaning that the ‘confidential information’ element of the threshold test in rule 26(1) can no longer be satisfied. Be that as it may, the additional consequence, at least in circumstances where there has been a permissible disclosure to the world, is that no order of the court under section 15 purporting to prohibit disclosure of the identities of the parties in the report of these proceedings can achieve the statutory purpose of anonymity.”

The judge added: “I accept submission that the arbitration is a single ongoing process, encompassing the several awards made and to be made, and that this is supported by the fact that the arbitrator is not functus until he issues his final award. In any event, by reason of the notes to the Annual Accounts published by the petitioner, there has been disclosure of the identity of parties to the arbitration, even if that has not extended to disclosure of the outcome of all of the awards. That is sufficient to render the making of an order under section 15(1) inept.”