Petroleum licences: Should the Government be entitled to keep arbitral awards confidential?
The Welsh Government has declined to release the award or provide substantive details of an arbitral award between several onshore petroleum licence holders and the Welsh Ministers. In doing so, it has relied on exemptions to public disclosure obligations contained in the Environmental Information Regulations 2004 (“EIR”).
United Kingdom Continental Shelf hydrocarbons licences provide for arbitration in the event of a dispute between the licensee and relevant government licensor without an express requirement for confidentiality. The approach of the Welsh Government highlights the tension between dealing with potentially confidential information and the public interest in open and transparent decision-making, particularly when the dispute concerns the management of national resources, such as oil and gas reserves. The decision will be of interest beyond those involved in onshore oil and gas developments, such as stakeholders in the offshore oil and gas industry and other regulated sectors, where licensing frameworks also make similar provision for arbitration or other private dispute resolution processes.
Background
The Petroleum Act 1998 provides the framework for regulation of petroleum exploration, development and production in the UK. In 2018 the powers under the 1998 Act relating to onshore petroleum licensing in Wales were devolved to the Welsh Ministers. The Welsh Government subsequently announced that it would not support new onshore petroleum extraction or issue new Petroleum Exploration and Development Licences (“PEDLs”), citing climate change and decarbonisation objectives as the primary reason for this decision.
Although the Welsh Government continues to administer the PEDLs granted by the UK Government before devolution, companies engaged in the onshore oil and gas industry have argued that the post-2018 policy effectively prevents development under those existing licences. It is understood that this forms the backdrop to arbitration proceedings brought against the Welsh Government by a group of licence holders.
The arbitration
Limited EIR disclosures and independent reporting indicate that arbitration proceedings were brought against the Welsh Ministers by UK Onshore Gas Limited, Coastal Oil and Gas Limited, Adamo Energy (UK) Limited, UK Methane Limited and Thistle Gas Limited. These companies hold PEDLs covering extensive land in South Wales. The EIR disclosures also confirm that the arbitration was seated in London and conducted under LCIA procedure and the 2021 UNCITRAL Arbitration Rules. They further identify persons acting for the parties during the arbitration and in the subsequent challenge.
No information has been provided on the claims advanced, the relief sought or the tribunal’s findings, all of which remain confidential. In addition, no disclosure has been made for the reason of the confidentiality (absent an express confidentiality provision in the relevant licences).
While the details of the claims have not been disclosed, it is understood that the central claim is that the Welsh Government’s policy stance has the effect of preventing development under their existing licences. Lord Neuberger, the former President of the UK Supreme Court, issued a partial award earlier in 2025 acting as sole arbitrator and the partial award is now the subject of a challenge in the High Court, listed under case number CL-2025-000178.
EIR requests and the extent of disclosure
A number of requests have been made for disclosures relating to the partial award, including by CMS. The responses to three EIR requests[1][2][3] provide the basis for the information that is publicly available in relation to the arbitration.
The first response describes that the request sought basic information regarding the existence of the arbitration, its participants and the outcome. The Welsh Government’s response confirmed the identity of the parties, the appointment of Lord Neuberger as sole arbitrator and the legal teams representing each party, but declined to disclose the nature of the relief sought or any summary of the partial award. In withholding these details, the Welsh Government relied on EIR 12(5)(b), which aims to protect the course of justice. The Welsh Government highlighted that the case was ongoing and subject to challenge, and asserted that the release of the requested information would breach “the terms of the arbitration” (without further explanation).
A second request is described in the relevant response as seeking further procedural detail, including information about expert witnesses, the grounds of the award challenge and the legal costs incurred by the Welsh Government. Some further information was disclosed in response, including the seat and governing rules of the arbitration and the case number for the High Court challenge. However, the Welsh Government again withheld information directly connected to the substance of the claim, relying on EIR 12(5)(b) for the same reasons as set out in its response to the initial request.
A third request directly asked whether the Welsh Government held a copy of the partial award and, if so, whether it could be disclosed (if necessary, in redacted form). The Welsh Government confirmed that it holds the award but declined to release it. In doing so, it relied on two EIR exemptions: First, it relied on regulation 12(4)(d), on the basis that the document remains “unfinished” while related legal processes continue; second, it relied on regulation 12(5)(b), on the basis that disclosure could undermine the confidentiality and integrity of the arbitration, and affect the ability of the parties to reach a settlement, as was said to be “required by the terms of the arbitration”. The Welsh Government acknowledged that transparency considerations weigh in favour of release but concluded that these were outweighed by the public interest in protecting the fairness of ongoing proceedings and maintaining the confidentiality inherent in arbitration.
Wider Implications
Clause 6 of the model clauses for landward petroleum exploration licences granted by the Welsh Ministers (see Schedule 3B of the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014) provides that if a dispute, disagreement, or question arises at any time between the Licensee and the Secretary of State or the OGA in relation to the model clauses, or their respective rights and obligations under them, should be referred to arbitration unless expressly provided otherwise. Any such arbitration must be conducted by a single arbitrator. No arbitration rules are identified, such that no confidentiality clause is imported by reference to arbitral rules requiring confidentiality.
The response to the second request states that “LCIA procedure/UNCITRAL Arbitration Rules (2021)” applied in this case. It is not clear what this means and whether that was by agreement of the parties, or decision of the arbitrator.
Under Article 28(3) of UNCITRAL Arbitration Rules (2021),[4] hearings are private by default, unless the parties agree otherwise. Article 34(5) provides that arbitral awards are not automatically public and may only be disclosed with the consent of all parties or where disclosure is required by legal duty, to protect or pursue a legal right, or in court or regulatory proceedings.
Under the LCIA Rules,[5] Article 19.4 provides that hearings are held in private unless the parties agree otherwise in writing. Under Article 30, the parties undertake to keep confidential all awards, arbitration materials and documents produced by another party that are not in the public domain, subject only to limited exceptions where disclosure is required by law, to protect or pursue a legal right, or to enforce or challenge an award. The LCIA will not publish any award without the prior written consent of all parties and the Tribunal.
In practice, an arbitration usually follows one set of rules, not two at the same time. It is not explained whether the case was run under the UNCITRAL Rules with the LCIA playing a limited role, such as helping with the administrative aspects, or whether the LCIA rules applied in full. This makes it challenging to understand which confidentiality terms were in place, especially as the licences themselves do not require the arbitration to be confidential.
Although confidentiality will often be a key factor in the selection of arbitration by commercial counterparties, issues of transparency arise where it is used in determining a dispute concerning decision-making by a public body. Unlike in court proceedings, which, with limited exceptions, are public in nature, there is no clear route by which members of the public may access information regarding the substance of arbitration proceedings. Although the Welsh Government has confirmed the existence of the arbitration, the identity of the parties and some procedural aspects, no information relating to the substance of the claim or the nature of the award has been made available.
While this position reflects the longstanding practice in private commercial arbitration that arbitration proceedings are confidential unless the parties agree otherwise, in this case, confidentiality sits against a backdrop of significant public interest in how decisions in respect of significant natural resources are taken. The Welsh Government’s decision not to provide fuller details in response to the requests made demonstrates its assessment that the confidentiality of arbitration proceedings outweighs these public interest considerations. Information that would be particularly relevant to any stakeholders who may find themselves in a similar position is therefore not available. In addition, a decision with potentially significant ramifications for issues of wider public interest remains closed to analysis and scrutiny by the public, press, industry and other stakeholders.
There are broader implications for the energy sector. For example, offshore oil and gas, carbon capture and storage, and hydrogen licences typically include arbitration as the forum for dispute resolution. As the UK progresses towards net zero and considers the future of petroleum production, disputes like this may occur far more frequently – if resolved by reference to arbitration, then key decisions regarding the industry’s future may remain private.
The dispute also illustrates the complex regulatory issues arising where a regulator (such as the Welsh Government) seeks to manage existing licences in accordance with the Petroleum Act 1998 and the terms of those licences, while also pursuing wider environmental and planning policies.
Conclusion
Although the EIR responses have disclosed certain procedural aspects of the arbitration, the substance of the dispute remains confidential. The case highlights the issues concerning transparency of arbitration proceedings when involving government decisions. There is no general requirement that an arbitration must be private. In fact, the International Centre for Settlement of Investment Disputes, whose rules are regularly used for investment treaty disputes between investors and governments, publishes awards with the result that those awards are made available for public comment and analysis. It is always open to private parties to agree confidential dispute resolution processes for private law contracts. However, when the government is dealing with natural resources that are the property of the state, careful thought should be given to whether all or part of an award should properly be kept confidential, or should be more widely available to allow proper scrutiny. Where particular details comprising commercially sensitive information are at issue, the English High Court has repeatedly shown that judgments can be made public, appropriately redacted and with confidentiality rings used during that open process which can be tailored on a case by case basis to appropriately protect genuinely confidential information.
Prepared with the assistance of Fraser Mackay, trainee solicitor in our Energy Disputes team.
[1] ATISN 25027 - atisn25027 _0.pdf
[2] ATISN 25190 - atisn25190.pdf
[3] ATISN 26278 - atisn26278 .pdf
[4] UNCITRAL Arbitration Rules, Expedited Arbitration Rules and Rules on Transparency in Treaty-based Investor-State Arbitration
