Delaware must open arbitration process -U.S. Appeals Court

Tom Hals
Wednesday, 23 Oct 2013 | 10:22 AM ET

Oct 23 (Reuters) - Delaware must open to the public the state's arbitration system that allows judges on its highly respected Court of Chancery to resolve large business disputes essentially in secret, a federal appeals court ruled on Wednesday.

The U.S. Court of Appeals for the Third Circuit upheld a ruling by a federal judge who found the arbitration system was essentially a civil trial in secret, which violated the First Amendment of the U.S. Constitution. That judge, Mary McLaughlin, shut down the system in 2012.

"Because there has been a tradition of accessibility to proceedings like Delaware's government-sponsored arbitration, and because access plays an important role in such proceedings, we find that there is a First Amendment right of access to Delaware's government-sponsored arbitrations," Judge Dolores Sloviter wrote in a 37-page opinion.

Judge Jane Roth dissented in the 2-1 ruling.

(Editing by Maureen Bavdek; )