NECESSITY AND IMPORTANCE OF CONFIDENTIALITY CLUBS

Confidentiality clubs have become the new norm in litigation/legal proceedings across the world, be it in the field of tech-licenses, trade secrets, data protection, arbitration involving business agreements, etc.

In today’s world of globalization, where competition is at its peak, the organizations may not be inclined to disclose trade secrets/confidential agreements or its details, it had entered with different parties lest may cause serious prejudice to such parties because of competition involved. A trade secrets may make or break a company hence need to be protected. Once such disclosure is made or is misused by a competitor no order of the Court can save the company from loss or could retrieve it to its original position.”

The above-stated observation 1 made by the Delhi High Court pithily describes the importance of protecting commercially sensitive information in today’s day and age. Disclosure of such information to a competitor could cause a deleterious effect on the business of the disclosing party and thus, to ensure that none of the parties are in any manner prejudiced and no one can steal a march over the other, the courts have formulated the concept of confidentiality clubs to protect the commercially sensitive information of a business entity.

In fact, with global expansion of businesses, such practices have been adopted by courts world over as breach of confidentiality will have adverse implications for a party and its operations in various jurisdictions. As a result, confidentiality clubs have become the new norm in litigation/legal proceedings across the world, be it in the field of tech-licenses, trade secrets, data protection, arbitration involving business agreements, etc.