+91 70422 91256






With rise in number of disputes and litigations the burden of courts has eventually increased and there has been a growing trend among people to settle their matters outside the court. In desire of speedy trials and easy resolution of their matter the parties in dispute have these days started opting for Alternate Dispute Resolution (ADR) mechanisms like arbitration and mediation. Even though there are some differences between these two different modes of ADR but primarily in both the proceedings there is a neutral third party who tries to bring the two parties in dispute to a settlement through discussions. Apart from many other benefits, confidentiality of such proceedings is the biggest incentive that motivates the parties to opt for them.

Need for Confidentiality

In order to bring the parties in dispute to an amicable settlement the first requirement is that they should feel safe to discuss their matter in entirety and without hesitation. It is therefore necessary that they shall trust that their statements or opinions expressed during the proceeding shall not be jeopardised and used against them at any later stage or in open court. Therefore there is a need to bind all the parties to dispute along with any other person they bring to proceedings and the neutral third party (mediator/arbitrator) from disclosing anything discussed during the proceedings.

How Mediation and Arbitration Agreements Ensure Confidentiality?

To ensure privacy and confidentiality there are certain requirements of arbitration/mediation proceedings like contrary to court proceedings third parties don’t access mediation procedures. The mediator’s interference is private regardless of whether it delivers the settlement and determines the question. Similarly, the parties are expected to keep all issues that describe the mediation procedures as private. Hence, there is always a clause in arbitration agreement that any person attending the proceeding shall be bound to keep all the details as confidential and none of such detail shall be admitted in courts.

Confidentiality under Arbitration and Conciliation Act, 1996

Arbitration and Conciliation Act, 1996 (hereinafter the ‘Act’) was enacted in India in line with the UNCITRAL Model Law. Article 75 of the Act provides that the mediator and the parties should keep private all problems or issues determined with the pacification procedures including the settlement understanding, aside from where its announcement is essential for reasons of usage and requirement.

Legal Position in India

Arbitration and Conciliation Act, 1996 enacted in India in line with UNCITRAL Model Law states that the arbitrator along with the parties shall keep the proceeding as confidential including the settlement agreement[1].

Further, Mediation and Conciliation Rules 2004 were laid down by the Delhi High Court in order to elaborate the process and requirements of such proceedings. Rule 20 of the document states that the mediator shall not disclose any information that it has received from one party under the disclaimer of it being confidential. Further, the mediator cannot be compelled to disclose the details of proceedings or any information from the proceedings before any court, tribunal or group of persons. The rules also bind the parties to keep all the details of the proceedings as confidential and not to disclose any information or express their opinion before any third parties. The rule also clarifies that the proceeding or the statement of any witness during the proceeding shall not be recorded.

Moti Ram (D) Tr. LRs and Anr. v Ashok Kumar and Anr[2], a landmark Supreme Court judgement offers legal authority on the point of confidentiality. In this case the Hon’ble court clarifies that apart from the settlement agreement no details of mediation proceeding shall be admitted in the court as it is confidential. It has also been proposed to include this statement of court in Arbitration and Conciliation (Amendment) Bill, 2018[3]. The court further stated that in case the settlement could not be reached, the mediator shall only state this fact as it is.

In another important judgment of Rama Aggarwal vs. PIO, Delhi State Legal Service Authority,[4] it was held that information about mediation proceeding cannot be obtained even through an RTI. This is an exception to general rules relating to RTI and it was further clarified that such an exception was in greater interest of general public.

Advantages of Confidentiality
  1. It ensures the security of parties that anything they say during the proceeding would not be used against them later.
  2. It develops a faith in mediator as well as he cannot use any statement or opinion from the proceedings in favour of one party and against another.
  3. The corporations or organisations have the faith that their trade secrets or inside information are safe and will not be leaked so as to jeopardise their customers or clients resulting in a probable loss of goodwill.
  4. Hence confidentiality in mediation or arbitration proceedings ensures the full disclosure and frank discussion between the parties so as to reach an amicable settlement.


Disadvantages of Confidentiality
  1. Confidentiality of mediation or arbitration proceedings is sometimes misused by parties in a way that they try to mould the facts of case in such a way that it favours them. This is possible only because they know that any of their statements during the proceedings cannot be used in court.
  2. Another disadvantage is that because of keeping these proceedings confidential, any details of it cannot be used in normal courts and if the matter cannot be solved during the proceeding itself, entire process might have to be repeated in the court obviously may cause undue delay.

Hence confidentiality is an important aspect of arbitration, mediation and other ADR methods and laws in India are in compliant with the requirements of confidentiality in such proceedings according to international standards. There are certain disadvantages of confidentiality in such proceedings but it is surely the biggest incentive to bring parties to settle their disputes out of the court.

[1] S. 75 of Arbitration and Conciliation Act, 1996

[2] (2011) 1 SCC 466

[3] S. 42A of Arbitration and Conciliation (Amendment) Bill, 2018

[4] CIC/SA/A/2015/000305