It Is Time to Unseal Sealed Offers in International Arbitration - As a Negotiation Strategy or Pressure Tactics?

This article traces the origin and history of the use of ‘sealed offers’ as part of the ongoing negotiations between the parties engaged in litigation, with an objective to identify common principles which may be adopted in conducting international arbitrations. In common law jurisdictions, the sanctity of ‘without prejudice’ communications, is widely supported under the Evidence Acts, as well as by English case law. As an allegory to ‘without prejudice’ communications, the treatment of Sealed Offers and Calderbank Offers are established in English Courts as Civil Procedure Rules; and in Commonwealth countries, as Rules of Courts. However, the treatment of ‘Sealed Offers’ in International Arbitrations is generally not regulated under the Arbitration Acts or in the Institutional Rules of Arbitrations, save for a few exceptions like in the Malaysian Arbitration Act. There have been some complexities in treating sealed offers and challenges faced by the arbitrators over the last five decades. The ambiguities and the treatment of sealed offers vary with the jurisdiction, and the background of, not only the arbitral tribunals but also the counsels of the parties represented. This article identifies the need for establishing common guidelines for practicing international arbitrators and discusses the findings, based on the review of cases and the survey of arbitration laws and procedures, of some major seats of arbitrations