Request for information about Half Moon Bay Marina arbitration

Confidentiality
Legislation display text:
Local Government Official Information and Meetings Act 1987, s 7(2)(c)(ii)
Agency:
Auckland Regional Council
Ombudsman:
Beverley A Wakem
Case number(s):
287288
Issue date:
Format:
HTML,
PDF,
Word
Language:
English

Section 7(2)(c)(ii) LGOIMA applied—obligation of confidence under Arbitration Act 1996—release would be likely to damage the public interest in maintaining the integrity of the arbitral process, and reduce the effectiveness of arbitration as a means for resolving disputes—no public interest override—good reason to withhold

Background

A requester sought all submissions, affidavits, declarations and other documents held by the Auckland Regional Council in relation to an arbitration award with the Auckland Maritime Foundation (AMF) to fix the annual seabed rental of the Half Moon Bay Marina.

The Council refused the request under section 7(2)(c) of the Local Government Official Information and Meetings Act 1987 (LGOIMA). In so doing, it referred to section 14B of the Arbitration Act 1996, which states that any information that relates to the arbitration proceedings is confidential and must not be disclosed. 

The requester complained to the Ombudsman.

Investigation

The Chief Ombudsman requested a copy of the information at issue and an explanation of the reasons for withholding. The Council indicated that it was willing to release the information, if the AMF consented. However, the AMF refused to waive confidentiality.

Confidentiality

Section 7(2)(c)(ii) of the LGOIMA applies when releasing information that is ‘subject to an obligation of confidence’ would be likely to ‘damage the public interest’.

It was clear that the information at issue was subject to an obligation of confidence in this case, because section 14B of the Arbitration Act provides:

14B         Arbitration agreements deemed to prohibit disclosure of confidential information

(1)           Every arbitration agreement to which this section applies is deemed to provide that the parties and the arbitral tribunal must not disclose confidential information.

‘Confidential information’ means information that relates to the arbitral proceedings, and includes the pleadings, submissions, statements and evidence, any notes about the evidence or submissions, transcripts of oral evidence or submissions, and any rulings or award.[1]

In effect, unless there is agreement to the contrary, section 14B provides for an implied term in arbitration agreements that information relating to the arbitration shall be held in confidence unless the parties agree otherwise (or by Court order). 

The Chief Ombudsman also accepted that release of the information would be likely to damage the public interest in maintaining the integrity of the arbitral process. As contemplated by section 14B of the Arbitration Act, confidentiality, unless the parties expressly renounce it, is seen to be an essential element of the procedure for arbitration. Accordingly, if such confidentiality cannot be maintained where appropriate, the integrity of the arbitral process will be undermined, thus reducing the effectiveness of arbitration as a means for resolving disputes. For example, potential parties to arbitration might well be dissuaded from participating if they had no confidence that confidentiality can be maintained.

The Chief Ombudsman concluded that section 7(2)(c)(ii) applied.

Public interest

Section 7(2)(c)(ii) is subject to a public interest test. This means the need to withhold must be balanced against the countervailing public interest in release. If the countervailing public interest weighs more heavily, the information must be released. If not, it can be withheld.

The Chief Ombudsman acknowledged that disclosure of the arbitration information would promote the accountability of the Council, including with respect to the Public Bodies Leases Act 1969. However, she was not persuaded that this public interest consideration outweighed the need to withhold the information in order to maintain the integrity of the arbitral process.

Outcome

The Chief Ombudsman formed the opinion that section 7(2)(c)(ii) of the LGOIMA provided good reason to withhold the information at issue. The requester argued that this ‘invited public bodies to thwart the intent of the LGOIMA by invoking an arbitral process’. However, this overlooked the considerable incentives that exist for parties to reach agreement in preference to entering arbitration. If similar complaints were received in future, the Chief Ombudsman would again seek to establish whether the parties consented to disclosure, and if not, whether the public interest in disclosure outweighed the need to withhold the information. It did not follow that the outcome would necessarily be the same.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

 

[1]     See s 2 Arbitration Act.

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