February 27, 2013 Articles

The Battle over Confidential Arbitration

The controversy about the Delaware Court of Chancery's business arbitration program moves to the Third Circuit

by Jason J. Rawnsley

The Delaware Court of Chancery's business arbitration program was barely underway when the Delaware Coalition for Open Government, a state affiliate of the National Freedom of Information Coalition, brought suit to nullify one of its central features: confidentiality of proceedings. The coalition alleged that the confidentiality provisions of the arbitration statute and the corresponding Court of Chancery rules violated the presumptive right of public access to judicial proceedings protected by the First Amendment. Complaint, Del. Coal. for Open Gov't, Inc. v. Strine, No. 11-1015-MAM, 2012 WL 3744718 (D. Del. Aug. 30, 2012).

The U.S. District Court for the District of Delaware agreed, and the case is now on appeal to the U.S. Court of Appeals for the Third Circuit. The case is being closely watched by those who see the program as a significant benefit of incorporation in Delaware, as well as by those concerned about First Amendment rights and public access to government proceedings.

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