This clause requires that the arbitration process, the evidence presented, and the arbitrator's decision remain private and cannot be disclosed to the public, media, or third parties. It matters because arbitration is private by nature (unlike court cases, which are public), but this clause makes that privacy legally binding and enforceable. For example, you cannot tell your industry peers about unfair practices the other company engaged in, even if you win. This protects both parties' reputations and business secrets, but it can also prevent you from warning others about a dishonest company. UK and US law both respect confidentiality agreements in arbitration, and violating them can result in fines or additional legal claims.
This is generally low-risk and worth accepting, especially if the other party is a competitor or if your own business practices might be scrutinized. However, negotiate an exception allowing you to disclose the award to your accountant, lawyer, or insurer (who need to know for tax or insurance purposes). If you're concerned about the other party's misconduct, try to carve out an exception for disclosures required by law or regulation—this protects you if you're later required to report the conduct to authorities.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires that the arbitration process, the evidence presented, and the arbitrator's decision remain private and cannot be disclosed to the public, media, or third parties.
Why should I care about this clause?
It matters because arbitration is private by nature (unlike court cases, which are public), but this clause makes that privacy legally binding and enforceable.
What are my options?
For example, you cannot tell your industry peers about unfair practices the other company engaged in, even if you win.
How does this affect small businesses?
This protects both parties' reputations and business secrets, but it can also prevent you from warning others about a dishonest company.