1. Introduction

• Definition: Arbitration is an alternative dispute resolution mechanism focusing on confidentiality and flexibility outside traditional courts.
• Debate: While arbitration is efficient and private, critics argue it limits the growth of common law jurisprudence by reducing opportunities to develop legal precedents.

2. Confidentiality and its Impact on Common Law

• Reduction of Precedents:
  • Arbitration's private nature limits opportunities for setting legal precedents.
  • Critical issues remain hidden, reducing public scrutiny and legislative intervention.
• Role of Arbitral Reasoning:
  • Valuable legal reasoning in arbitral awards remains inaccessible due to confidentiality.
  • Publishing redacted awards could provide insights, strengthening common law.
• Public Interest Concerns:
  • Private resolution of recurring issues may lead to outdated or incomplete laws.
  • Example: Lord Chief Justice, Lord Thomas (2016), warned of turning common law into "an ossuary" through excessive arbitration reliance.

3. Uncertainty in Precedent Setting

• Arbitrators' Role:
  • Not bound by stare decisis (precedent), creating uncertainty about the weight of past awards.
  • Focus on unique party agreements rather than setting legal standards.
• Challenges:
  • Lack of clarity on reliance on previous awards.
  • Arbitrators may avoid precedents to maintain impartiality and flexibility.

4. Confidentiality vs. Transparency

• Misconceptions about Confidentiality:
  • Not inherent in arbitration; depends on agreements and jurisdictional rules.
  • Example: Indian Arbitration and Conciliation Act, 2019 (Section 42A), mandates confidentiality but allows exceptions for enforcement.
• Publication of Awards:
  • Redacted awards balance confidentiality with transparency, enabling public access to arbitral reasoning.
• Exceptions to Confidentiality:
  • Awards often become public during enforcement proceedings or under overriding legal obligations.

5. Hindrance to Public Accountability

• Limited Public Scrutiny:
  • Arbitration shields disputes from public view, reducing accountability and legal evolution.
• Market Awareness:
  • Despite confidentiality, outcomes often become known in business circles, challenging the argument for complete privacy.

6. Proposed Solutions

• Publication of Awards: Make redacted arbitral awards accessible to aid legal development.
• Appellate Mechanism in Arbitration: Introduce appeals within arbitration to ensure consistency and align arbitration with common law principles.
• Increased Transparency: Enhance clarity in arbitrators' reasoning for better accountability.
• Integration with Common Law: Courts should integrate arbitral reasoning into legal decisions, bridging arbitration and common law development.

7. Comparative Perspective

• Soft Law Precedents:
  • Arbitral awards can create "soft law" precedents, indirectly influencing common law without binding authority.
• Binding Precedents in Common Law:
  • Higher courts establish binding precedents for consistency, unlike arbitration.

8. Conclusion

• Balanced Approach: Arbitration’s efficiency and confidentiality must not isolate it from common law development.
• Enhancing Synergy: Transparency, publication of awards, and judicial integration of arbitral reasoning can ensure arbitration complements common law.
• Long-term Vision:
  • A robust arbitration system supporting legal development can strengthen both common law jurisprudence and arbitration frameworks.