LEGAL & REGULATORY MATTERS
THE ADVANTAGES OF HAVING A NON-DISCLOSURE AGREEMENT BY ANDRÉS FÍGOLI
T
he presence or absence of a Non-Disclosure Agreement (NDA) among submarine cable owners or with suppliers does not guarantee a problem-free operation — but it can significantly reduce risks. Think of it like owning a luxury home: installing a security system will not prevent every break-in but publicly announcing that you do not have one is an open invitation, even to the most amateur thief. In submarine cable governance, the same logic applies. Transparency and confidentiality must be balanced. Failing to establish clear frameworks around sensitive data — especially regarding infrastructure technology, pricing, outages, or routing — not only invites legal and regulatory uncertainty but can also provoke opportunistic behaviour by other market players or actors with competing interests. Some critics would argue that such agreements stifle business efficiency and create unnecessary bureaucratic hurdles. However, in industries like subsea cables, where the long term investments are high, the advantages of having a well-structured NDA cannot be overstated. An NDA not only protects the company but also its partners, customers, and its proprietary technologies, all of which are vital in a landscape where information leakage can put a carrier in a very difficult position. In this article, we will briefly describe three real-life scenarios in which companies found themselves exposed to avoidable risks — all of which could have been mitigated or minimized by a properly structured NDA policy.
128 SUBMARINE TELECOMS FORUM MAGAZINE
1.
INFORMAL TALKS WITHOUT AN NDA — A COSTLY MISCOMMUNICATION
Two international carriers began exploratory discussions to potentially co-develop a new submarine cable system under a future consortium model. At that stage, no NDA had been signed between the parties, as conversations were still considered preliminary. However, a mid-level employee mistakenly sent an email to the other party explicitly stating that his company had firm intentions
“The execution of any exchange of information or other action taken to give effect to, the Agreement, shall not constitute or imply any promise or intention or commitment by either party to purchase any product or service, to market (now or in the future); to distribute or supply any product or service; or to engage in or commit to any other kind of transaction or agreement with the other party.” Such language explicitly protects both sides from claims of premature com-
Some critics would argue that such agreements stifle business efficiency and create unnecessary bureaucratic hurdles. However, in industries like subsea cables, where the long term investments are high, the advantages of having a well-structured NDA cannot be overstated. to proceed with the project and was actively working to bring in additional consortium members. The email, while not formally authorized, was interpreted as a commitment. When the project did not move forward and no new members materialized, the other party filed a lawsuit claiming breach of promise and financial loss due to reliance on that assurance. Had an NDA been signed, it would likely have included a “No promise” clause, which serves as a critical safeguard in these preliminary discussions. A standard version of this clause reads:
mitment, clarifying that the exchange of ideas or technical evaluations does not constitute a commercial obligation. Lesson learned: Always ensure that employees or representatives involved in these exploratory discussions do so with an NDA in place. Protect your own staff from their own involuntary mistakes. The NDA not only protects the confidentiality of the information exchanged but it also manages expectations and prevents casual or informal language from being misconstrued as binding intent — a risk that can lead to significant legal and financial consequences.