Commercial Arbitration and Information Security

August 6, 2024

1. Regulations on confidentiality in commercial arbitration

Confidentiality is also a traditional and widely respected arbitration practice in different countries, and has been stipulated in relevant legal documents and in most arbitration procedural rules of arbitral institutions. domestic and international finance. In Vietnam, regarding the provisions of the law, Article 4 “Principles for resolving disputes by arbitration” of the 2010 Commercial Arbitration Law, clause 4 stipulates: “Dispute resolution by Arbitration shall be conducted not made public, unless otherwise agreed by the parties”, and in Clause 5, Article 21 “Rights and Obligations of Arbitrators” stipulates that the arbitrator has the obligation: “Keep the content of the dispute confidential that we resolve, except which information must be provided to competent state agencies according to the provisions of law”.

Confidentiality content in arbitration can be understood to include: (1) Disputing parties are Vietnamese or foreign individuals, agencies, and organizations participating in arbitration proceedings as plaintiffs and defendants. Arbitration proceedings have no parties with relevant rights and obligations, and no third parties; (2) The arbitration organization or the arbitration council, the arbitrator, and the parties in the dispute are obliged to keep the entire arbitration process confidential and not make it public. Including the petition, the plaintiff’s lawsuit file, the self-defense statement, and the defendant’s counter-complaint sent only to the other party (defendant or plaintiff), sent to the arbitration council to resolve the dispute through the secretariat of the arbitration organization; (3) Participants in the dispute resolution meeting are only the plaintiff, defendant and/or their representatives. The parties have the right to invite defenders of legitimate rights and interests and witnesses to participate in the dispute resolution meeting, but must notify the arbitration council to resolve the dispute before the opening date of the resolution session resolve the dispute. The arbitration council, on its own or at the request of the parties has the right to invite organizations and individuals to assess and value assets and experts to attend the meeting to resolve the dispute. In case of agreement of the parties, the arbitral tribunal may allow other people to attend the dispute resolution session. This content shows that the arbitration council respects the right to information confidentiality as agreed by the parties during the arbitration proceedings; (4) Arbitrators are obliged to keep confidential the content of the dispute they resolve, except when required to provide information to competent state agencies according to the provisions of law. The arbitrator must declare his independence and impartiality during the dispute resolution process. During the arbitration proceedings, the arbitrator shall not meet or communicate privately with any party; Neither party may meet or communicate privately with the arbitrator to discuss issues related to the dispute. This regulation helps make arbitration proceedings more secure, impartial and transparent. This is also a fundamental difference with civil proceedings in court. According to the current Civil Procedure Code, judges are allowed to meet, record testimonies, request the handover of evidence, and have direct contact… with everyone who participating in the proceedings, such as plaintiffs, defendants, people with related rights and obligations, people with independent claims…; (5) Dispute resolution meetings, including the final meeting are not public, unless the parties agree otherwise; (6) The arbitration award is only sent to the plaintiff and defendant, has final effect and is binding on the plaintiff and defendant. Article 34 of Uncitral’s Arbitration Rules also stipulates: “The arbitration award shall only be made public if there is agreement of the participating parties.”

Confidentiality in arbitration is meaningful to disputing parties in the following aspects:

Maintain business reputation: Businesses choose arbitration to avoid disputes becoming public, which could harm their own business reputation or benefit their competitors. The public does not always have an impartial and objective attitude towards disputing parties. The business reputation of an enterprise is closely related to the financial market, securities, stock prices and the provision of credit financing from banks. Confidentiality in arbitration allows the parties to privately resolve the claims and outcomes of the case, avoiding media coverage or comment. When a party loses a lawsuit, it still retains its reputation, business secrets, dispute content, etc., which helps businesses maintain their business reputation.

Avoid allowing businesses to have more disputes: Businesses will likely have similar disputes during the business investment process. If one of the disputes has been litigated, if not by arbitration but in court, the claims, facts and substance of that dispute may be challenged by the other parties to the dispute knowing the same dispute, they can easily use the judgments, evidence, and decisions in the existing judgment to start a similar lawsuit. The confidentiality of dispute resolution by arbitration can reduce lawsuits and requests for similar lawsuits.

Political significance: The origin of the establishment of state-owned enterprises often has political elements, in order to carry out political tasks, so the security of the business investment process is often given special attention. In case a dispute arises from a project related to national livelihoods, it will likely have a negative impact on the domestic political economy. Therefore, the method of resolving disputes by arbitration with its inherent confidentiality is often chosen by state-owned enterprises investing and doing business abroad.

2. How to ensure information security in commercial arbitration

To ensure information security during the commercial arbitration process, implementing a series of synchronous and effective measures is essential. First, the parties should enter into separate confidentiality agreements or integrate confidentiality clauses into the arbitration contract. This agreement needs to be drafted in detail, clearly stipulating how information is collected, used and protected because having a clear legal framework will create a solid foundation to protect rights. of all stakeholders.

Next, choosing an arbitration agency also plays an important role in protecting information. Arbitration agencies often have their own security regulations, and choosing an agency with high security standards will help increase information security. Parties should thoroughly research the policies and regulations of the arbitration institution they intend to choose, ensuring that confidentiality procedures are strictly followed.

During the arbitration process, specific security measures such as information encryption, user authentication and access control should also be applied. Encryption is an effective method to protect sensitive data, preventing unauthorized access. Parties should also establish additional layers of security, such as multi-factor authentication, to ensure that only authorized people are allowed access to important information.

In addition, organizing closed hearings is one of the practical measures to protect information. When trials are held behind closed doors, only those directly involved such as lawyers, experts and participating parties are allowed to attend, helping to minimize the disclosure of information to the outside world. To do this, there needs to be strict controls on access to the courtroom.

Besides, restricting access to information is also an important issue. The parties need to ensure that only those who are absolutely necessary have access to information related to the case. This not only helps protect information but also prevents information from being used for improper purposes.

Information security training and awareness for all those involved in the arbitration process is also important. This helps them better understand the importance of information security and know how to take necessary security measures. Workshops, training and tutorials should be held periodically to ensure everyone is kept up to date on changes in security policies and related regulations.

Using modern security tools and services is also important in protecting information. New technologies, such as secure cloud storage and encrypted data transmission systems, can help protect sensitive data from unauthorized access. Parties need to regularly evaluate and update the security tools they are using to ensure that they remain effective. Furthermore, it is also essential to perform periodic security testing and assessments. Parties should conduct regular assessments to identify security vulnerabilities and have timely remediation plans. This not only helps protect information but also creates a safe and trustworthy environment for all parties involved.

Finally, applying strict sanctions for information security violations is an indispensable factor. Having clear sanctions will create deterrence and ensure that parties strictly comply with security regulations. This not only protects the interests of the parties but also protects the reputation of the entire arbitration process.

In summary, combining all of the above measures will help ensure information security in commercial arbitration. When information is protected securely, parties will feel more secure in the dispute resolution process and thereby achieve fairness and transparency in arbitration decisions.

3. Security risks that may be encountered in commercial arbitration

During the arbitration process, participating parties may face many different security risks. First of all, one of the biggest risks is the leakage of sensitive information. Information such as business strategies, financial data, and confidential agreements, if leaked can cause serious damage to the parties involved.

The next risk is unauthorized access. Without effective security measures, arbitration data can be accessed by unauthorized persons. This can happen through computer system intrusion, email hacking, or through other electronic media. Cyber attacks such as phishing, malware, or ransomware are also a constant threat to arbitration information storage and transmission systems, causing data loss, information destruction, or even extortion money.

Another risk comes from internal employees. Employees or others participating in the arbitration process may accidentally or intentionally disclose sensitive information. This can happen through improper sharing of information or failure to comply with security regulations. Using unsafe tools and services is also a risk. If the parties use unsecured software, data storage or transmission services, information may be lost or exposed. This is especially dangerous when using cloud services or unencrypted communication platforms.

Security risks can also come from insecure information handling. Without proper security measures when handling information, including data storage, transmission and destruction, information can be stolen or accessed illegally. Lack of security knowledge and training is also a major problem. Employees and stakeholders who are not adequately trained in security measures may incorrectly implement procedures, leading to security risks. Lack of understanding about security threats also increases your exposure to risk.

Participating parties’ IT systems may also contain security vulnerabilities, allowing attackers to exploit and access sensitive information. Not updating software and not having regular security checks also contribute to this risk. Besides, not complying with security regulations can lead to the risk of information being leaked. This can occur due to a lack of clear security procedures or due to poor enforcement of existing security policies.

Finally, risks can also come from third parties. Third parties involved in the arbitration process such as lawyers, experts, and service providers may also pose security risks if they do not comply with security measures or do not have security systems in place honey is strong enough.

The above risks require parties participating in arbitration to have comprehensive and effective security measures to protect sensitive information and ensure the dispute resolution process takes place safely and securely.

4. How to resolve disputes using Bigboss International Commercial Arbitration Center

To resolve disputes by commercial arbitration at BBIAC. Customers can write in the contract one of the following two contents:

4.1. Model Arbitration Clause

In addition, the parties may add:

(a) the number of arbitrators is [one or three].

(b) the place of arbitration is [city and/or country].

(d) the arbitration language is [ ].** Note: *

Only applicable to disputes with foreign elements **

Only applies to disputes with foreign elements or disputes in which at least one party is a foreign-invested enterprise.

4.2. The Model Arbitration Clause applies to summary proceedings

“Any dispute arising out of or in connection with this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Rules of Arbitration. The parties agree that the arbitration proceedings will be conducted in accordance with the Summary Procedures set out in Article 37 of the BBIAC Arbitration Rules.”

In addition, the parties may add:

(a) the place of arbitration is [city and/or country].

(b) the law applicable to the contract is [ ].*

Note:

* Only applies to disputes with foreign elements

** Only applies to disputes with foreign elements or disputes where at least one party is a foreign-invested enterprise