The case of the day is Aioi Nissay Dowa Insurance Co. v. ProSight Specialty Management Co. (S.D.N.Y. 2012). ProSight was an aviation insurance company, and Aioi was its reinsurer. The reinsurance contracts had an arbitration clause requiring arbitration in New York. The parties had also made an agreement to “make good-faith efforts to limit the extent of disclosures, if any, to be made” of an arbitral award.
ProSight had insured American Airlines, United Airlines, and Boeing for liability arising out of the September 11 attack. Aioi and ProSight had a dispute about whether the attack was a single “event” under the reinsurance contrats, with a single retention and a single limit under the reinsurance contracts, or two events. The tribunal’s award found that because the losses “occurred within one 24 hour period and within a 10 mile radius”, they were a single “event”.
Aioi sought to confirm the award. Its initial petition did not attach the award as an exhibit. But Aioi later submitted the award and a copy of the parties’ confidentiality agreement to the court, noting that Aioi, in its own view, had no argument under Second Circuit precedent that the award should be sealed. ProSight accused Aioi of violating the confidentiality agreement and moved to seal the award.
The judge granted the motion to confirm without much discussion—there was no argument, really, against confirmation under the New York Convention. The interesting issue was whether the petition to confirm, or even just the award itself, should be sealed. Under Second Circuit precedent, there is a common law right and a “qualified First Amendment right” of public access to judicial documents and judicial proceedings. This right promotes accountability to the public. A party can overcome this right by “showing that higher values overcome the presumption of public access.” ProSight argued that publication of the award would injure its business. While the court noted that ProSight might or might not have a claim for breach of contract against Aioi—it made no findings on that point one way or the other—it noted that ProSight had not identified any particular harm and that enforcement of contracts is not a “higher value” that outweighs the public’s right to access.
I think the court’s decision is basically right as a broad rule when a party seeks confirmation of an award so as to force the losing party to pay money damages or for another clear purpose. It could be that in this case the only real purpose of seeking confirmation was to put the award in the public domain. The award was declaratory and did not award Aioi damages. If Aioi’s purpose was to circumvent the confidentiality agreement—if Aioi didn’t get anything else out of the petition to confirm—then perhaps the decision is a bit naive. One easy answer would be to say that if there is no real dispute that an award is entitled to confirmation, the petitioner simply need not submit it to the court at all, whether under seal or not under seal. But Article IV of the Convention seems expressly to require the petition to file a copy of the award, so this approach likely would not work, at least as to awards subject to the Convention.