Cross-Border Data Transfers and Trade Secrecy in International Commercial Arbitration

Abstract

The rapid digitization of global commerce has introduced complex legal challenges into the domain of international commercial arbitration, particularly in relation to cross-border data transfers and the protection of trade secrets. Arbitration, traditionally valued for its confidentiality, now confronts a rapidly evolving regulatory landscape shaped by competing national laws on data protection, digital sovereignty, and cybersecurity. This paper critically examines how international arbitral proceedings are impacted by legal regimes such as the European Union’s General Data Protection Regulation (GDPR), the U.S. CLOUD Act, and emerging data localization mandates across Asia and Africa. These frameworks not only complicate the lawful transfer and storage of sensitive information across jurisdictions but also risk undermining core procedural safeguards in arbitration.

The research investigates how trade secrets—such as proprietary algorithms, source code, customer databases, and financial models—can be effectively protected within arbitral processes that involve parties, institutions, or data located in multiple legal regimes. It evaluates the existing safeguards under leading institutional rules, including those of the ICC, LCIA, SIAC, and HKIAC, and assesses the adequacy of confidentiality protocols, protective orders, and data security measures.

Drawing on doctrinal analysis and comparative legal methodology, this study identifies several areas of vulnerability: inconsistent enforcement of confidentiality obligations across borders, lack of standard technical protocols for secure data transmission, and ambiguities in arbitrator duties related to data handling. The paper further explores how arbitral tribunals and institutions can integrate cybersecurity frameworks, use secure digital platforms, and adopt harmonized guidelines to navigate these cross-jurisdictional risks. Recommendations are made for reforming institutional rules, adopting model clauses on data protection, and enhancing arbitrator training in digital evidence and cybersecurity.

Ultimately, this research contends that the legitimacy and functionality of international arbitration in the digital era depend on a careful balance between confidentiality, data protection, and procedural transparency. By addressing the dual imperatives of protecting trade secrets and respecting divergent data governance regimes, this paper proposes a forward-looking legal framework capable of sustaining arbitration’s role in resolving high-value, cross-border commercial disputes in the information age.