In recent years there has been a huge increase in the use of binding arbitration as a means of resolving commercial disputes. In fact, arbitration generally is the preferred method of resolving disputes in areas such as employment, securities, energy and reinsurance. Although arbitration is regarded as more cost-effective and expeditious than litigation, one of the key benefits of commercial arbitration is confidentiality. For decades, companies have included arbitration agreements in their contracts as a means of preserving the privacy of their business dealings and disputes. Kevin J. Hamilton and Harry H. Schneider Jr., “Confidential Arbitration Agreements for High-Profile Clients and Senior Executives,” Litigation, Fall 2016, at 39, 40.
Although parties to a commercial arbitration might desire, and contract for, confidentiality, in recent years it has often proven ephemeral when one or both of the parties seeks to confirm or vacate the arbitration award in court. Indeed, the federal courts have increasingly refused to uphold the confidentiality of arbitration awards.1 A new rule recently proposed by the Administrative Board of the New York State Courts for the New York Supreme Court, Commercial Division (Proposed Rule 11-h, 22 NYCRR Sec. 202.70(g), Rule 11-h), however, might offer parties a means of maintaining the desired confidentiality.
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