For a long time, international arbitration was a no man's land in terms of evidentiary issues. There was no uniform practice, as there were no centralized rules that regulated procedural matters extensively, in particular evidentiary matters lay at the epicenter of the conflict. Of course, the authority to decide on evidentiary matters was (and is still) vested in arbitrators' discretion, and lex arbitri prescribed the conduct of parties and tribunals on evidentiary matters to a certain extent (e.g. Article 19 of UNCITRAL Model Law), yet the boundaries remained ambiguous, differing from one jurisdiction to another.
The IBA Rules on the Taking of Evidence in International Arbitration ("IBA Rules") was an initiative taken by international arbitration practitioners in 1999. The main idea underlying the IBA Rules is to minimize the differences and thus find the balance between "common law" and "civil law" origin practitioners, particularly relating to evidentiary matters. In other words, the rules aimed to mitigate unpredictability with respect to evidentiary issues through compromise by codifying the international practice that already existed.
The IBA Rules were first published in 1999 and revised in 2010 and once again in late 2020. Although the rules and revisions thereto were widely accepted, the IBA Rules also received criticism to the extent that another group working on the matter came up with a different set of rules, namely the Prague Rules. Nevertheless, IBA Rules enjoy wide usage and recognition by practitioners, as shown by the International Arbitration Survey conducted by Queen Mary University of London. Furthermore, the same study puts forth that the IBA Rules are the most widely known, the most frequently used and the most highly rated among the soft law instruments.
The purpose of this article is to provide readers with a tour d'horizon on the latest developments in evidentiary matters in international arbitration practice, through a brief comparison of the old and the new IBA Rules and also the Prague Rules.
Witnesses of Fact and Party-Appointed Experts
Article 5 of the IBA Rules concerns the taking of evidence from party-appointed experts. The key amendment in the new rules relies on sub-section 3 of the Article, which covers the submission of additional or revised expert reports once the initial expert reports are submitted. A parallel amendment for submission of second-round witness statements is also made under Article 4, which covers witnesses of fact.
The IBA Rules on party-appointed experts and witnesses of fact do not normally permit additional or revised expert report witness statements once they are submitted (Art. 4.6 and Art. 5.3). The 2010 version of the rules allowed only one exception to this rule. The exception applied when the additional or revised documents were related to matters in the other party's witness statements, expert reports or other submissions. Clearly, in this old version of the IBA Rules, a party's ability to submit additional or revised expert reports or witness statements was restricted.
Nevertheless, practice has demonstrated that this rule was employed rather loosely, because in fact parties frequently came across with new developments in subsequent expert reports.
The new version fixed this issue by adding a second exception to both rules (Article 5.3(b) and Article 4.6(b)). The new exception applies when there are new factual developments that could not have been addressed in the previous expert reports or witness statements. Second-round expert reports and witness statements are no longer limited to the contents of earlier statements.
The amendment explained above is not the only change under Article 4. There is also an amendment to testimonies requested by the arbitral tribunal. By virtue of the amendment to Article 4.10, the scope of parties who are entitled to object to an arbitral tribunal's request for a testimonial has been widened, now including any party to the dispute, abandoning the former wording of the provision that vested the right to object exclusively to the addressee of the request.
Article 6 of the IBA Rules regulates the appointment of experts by the arbitral tribunal. Although the revised version of the Article remains mainly the same, there is a noteworthy change to the tribunal-appointed experts' authority to demand information or access to documents from parties, which is addressed in sub-section 3 of the Article.
In the 2010 version of the IBA Rules, the authority of a tribunal-appointed expert was equivalent to the arbitral tribunal's, which was stated as; "The authority of a Tribunal-Appointed Expert to request such information or access shall be deemed to be the same as the authority of the Arbitral Tribunal." This was perceived to be quite ambiguous because of the following sentence of the sub-section which states: "Any disagreement between a Tribunal-Appointed Expert and a Party as to the relevance, materiality or appropriateness of such a request shall be decided by the Arbitral Tribunal, in the manner provided in Articles 3.5 through 3.8."1
However, the new version of the rules has removed that ambiguity by deleting the relevant sentence about the equivalency of authority mentioned above in sub-section 3 of the Article. It is now clear that only the arbitral tribunal has the authority to decide on disagreements between a Party and the tribunal-appointed experts concerning the experts' requests for information or access.
An important point needs to be emphasized here regarding the independence of experts. In 2018, the Queen Mary Law School conducted an International Arbitration Survey in which users demanded provisions dealing with standards of independence and impartiality for experts. With that in mind, it can be argued that by deleting the equivalency of authority of the experts vis-à-vis the arbitral tribunal the IBA intended to respond to this demand, at least partially.
Document Production (Article 3) Related Changes:
The clashes between the diverging principles of full and frank disclosure of common law tradition and the inquisitorial system of civil law tradition are at their noisiest when it comes to the production of documentary evidence in international arbitration. In 1999 the committee attempted to settle the matter by narrowing the scope of production requests to "narrow and specific categories of documents" that would be "relevant and material to the outcome of the case", yet the noise of the clash still echoes.
The 2020 revision brought relatively minor amendments to the document production regime:
The party to whom a request to produce has been addressed could already object by virtue of Article 3.5 of the Rules:
"If the Party to whom the Request to Produce is addressed has an objection to some or all of the documents requested, it shall state the objection in writing to the Arbitral Tribunal and the other Parties within the time ordered by the Arbitral Tribunal."
However, there was no recognized possibility of responding to an objection within the framework of the 2010 version. But, according to the latest revision:
"If so directed by the Arbitral Tribunal, and within the time so ordered, the requesting party may respond to the objection."
Thus, a party's right to respond to objections has been affirmed by the committee. With this amendment, the IBA Rules have aligned with international practice, in particular the custom enshrined under the Redfern Schedule.
Additionally, the revised rules clarify that an arbitral tribunal no longer has to consult with the parties when evaluating document production requests. We believe that the revision has been made in order to avoid unnecessary delays caused by the exchange of comments. It is our understanding that the exchange of comments has been replaced by the objection mechanism provided under Article 3.
Furthermore, in a similar fashion to an arbitral tribunal's requests for testimonials, the right to object to production requests only existed for the party to whom the document production request was addressed. Thanks to the revision, any party may now object to a request on grounds of confidentiality and privilege. This amendment is particularly important for multi-party arbitrations.
The revised 2020 IBA Rules stipulate that the documents that are produced in response to a request need not to be translated by the party producing the documents. However, documents in a language other than the language of the arbitration that are submitted to tribunals shall be accompanied by translations marked as such. It is our understanding that this is another step to encourage disputants to narrow down their document production requests.
What Are the Major Differences Between IBA Rules and the Prague Rules?
It has long been argued that the IBA Rules, which allow broad document production, cause the arbitration process to become costlier and lengthier for the parties. The Prague Rules were formulated as a solution to this issue—which was described as the creeping Americanization of international arbitration by the committee—and as a reaction to the concerns raised, by discharging parties of control over the process and granting it to the arbitral tribunal instead, particularly with respect to documentary evidence. Moreover, the Prague Rules encourage arbitral tribunals to be more proactive, and to accelerate the dispute settlement process in general.
For this reason, the Prague Rules, which are based on civil law's inquisitorial approach, provide for the arbitral tribunal's active role in the taking of evidence. To explain the concepts "inquisitorial approach" and "adversarial approach", it is fair to suggest that the former is a setting where the arbitral tribunals have more control over the matter, whereas the latter allows the parties to take control of the process.
Under the Prague Rules, the ability of a party to request documents from another party is much more limited. The arbitral tribunal and the parties are encouraged to avoid any form of document production, including e-discovery. In place of that, each party is encouraged to submit documentary evidence upon which it intends to rely in support of its case. If a party claims that it will have to request such documents from the other party it should do so at the case management conference; the rules advise the arbitral tribunal to clarify the reasons why document production is required in this specific case.
If an arbitral tribunal is convinced that the production of the documents will be required, it may decide on the procedure for the production of the documents and make an appropriate provision for it in the procedural timetable. Only in extraordinary cases may a party urge the arbitral tribunal to order document production at a later point of the arbitration.
To conclude the comparison, the IBA Rules are combat proven and intend to harmonize the arbitration practice by finding a compromise between civil law and common law trained lawyers, whereas the Prague Rules are relatively new and are more exclusively tailored for civil practitioners that want to avoid "the creeping Americanization of International Arbitration".
1. "Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration" accessed on 21.02.2021, p.23
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.