Document production, at least to some extent, is an integral part of most international arbitration proceedings. This is true even if the substantive law governing the dispute follows the civil law tradition. In that case, however, the provisions in the substantive law build upon the premise that there is no document production. Does this lead to a conflict between substantive and procedural law in international arbitration?
It can be very difficult for a claimant to prove its case on the basis of the information and documents the claimant has at hands. Of course, also civil law jurisdictions are aware of this problem. But how do they address it, if not by way of document production? There are various possibilities; some originate in the substantive law, some in the procedural law. The substantive law regularly contains provisions allocating the burden of proof or shifting it to the opposing party under certain conditions. Section 363 of the German Code of Civil Procedure may serve as an example. Also, the law can operate with assumptions of fact. In addition to statutory law, the allocation of the burden of proof may be refined by case law. German courts, for example, have established evidentiary principles to take account of the fact that in specific situations it is very difficult for a party to fully prove its case. The classical example is medical professional liability: If a patient has been able to establish a gross error in treatment, it is assumed that this error has caused the bodily harm.
However, it is not only the substantive law of civil law jurisdictions which addresses the burden of proof and the burden to adduce evidence. In addition, the procedural law contains rules and principles relating to the taking of evidence and its evaluation. The procedural law may also relax the burden of proof. To give an example: According to Section 287 of the German Code of Civil Procedure, the court may estimate the amount of the damage on the basis of the court’s discretion and conviction, based on its evaluation of all circumstances. Further, at least in Germany, the courts have developed a balanced approach for distributing the duty to substantiate disputed facts. This is the so-called secondary burden of substantiation which applies in the following situation: (1) A party charged with the burden to adduce evidence stands outside the relevant course of events and thus does not know the specific facts; and (2) the opposing party is in a much better position to elaborate on the facts because the relevant action took place in its sphere of observation. In such cases, the opposing party does not get away with simply disputing the alleged facts. Rather, as far as reasonable, the opposing party has to substantiate why the alleged facts are not correct. Otherwise, i.e. if the opposing party does not comply with its secondary burden of substantiation, the alleged facts are deemed to be acknowledged.
These procedural rules and principles reflect and complement the substantive law. The interaction between the substantive and the corresponding national procedural law often puts a claimant into the position to make its case even without an entitlement to document production. However, the national procedural evidentiary rules will regularly not be applicable in international arbitration. The parties rarely agree that the rules of civil procedure governing the arbitration will be the national rules of civil procedure of a specific country. As a consequence, the substantive law relating to evidentiary principles is truncated and deprived of its procedural corollary. It may thus happen that a tribunal orders a party to produce documents although the substantive burden of proof rules are based on the premise that there is no duty for the opposing party to produce documents. This can lead to inconsistencies in international arbitral proceedings.
To give a specific example: Section 280 para. 1 of the German Civil Code is the key provision relating to damages for breach of duty. Under that provision, a claimant has to prove the breach of a duty arising from the obligation, the damage and the causal link between the breach and the damage. If this is established, damages will be awarded unless the opposing party is able to prove that he or she is not responsible for the breach of duty. When Section 280 of the German Civil Code was revised in 2002, the legislator justified that allocation of the burden of proof as follows: If a breach of duty is proven, it is established that the disturbance of the contractual relationship originates from the sphere of the opposing party. Therefore, it is reasonable to expect this party to demonstrate the reasons for the breach of duty. In other words, the legislator took into consideration that the claimant often stands outside the respective sphere of observation so that it can be difficult for him – at least without document production – to positively prove the other side’s responsibility. This evidentiary difficulty is thus addressed by a (partial) shift of the burden of proof to the opposing party. If, in an international arbitration, document production is ordered “on top”, the claimant may benefit from an unwarranted double advantage: shift of the burden of proof under substantive German law plus entitlement to document production under international rules on the arbitral procedure. Of course, also the opposite situation may occur: the substantive law is based on the premise that there will be document production, but, for whatever reason, the arbitral proceedings are conducted without document production. In such a situation, it can be very difficult for a claimant to make its case.
The potential tension between substantive law on the burden of proof and document production plays a role in the currently ongoing 23rd Willem C. Vis Arbitration Moot. Also, Rolf Trittmann elaborates on this issue in this year’s German Arbitration Journal. He takes the position that an arbitral tribunal is obliged to take account of the interdependence between substantive and procedural law as part of its inherent powers to establish the facts under the applicable arbitration rules or when granting a party’s requests for document production. As a consequence, according to Trittmann, a tribunal must incorporate the burden of proof rules under the applicable substantive law into its test of the relevance and materiality of a requested document before ordering the production of this document according to Art. 3 (3) (b) of the IBA Rules on the Taking of Evidence. This is one way to address the issue. There will certainly be other options, depending on the specific circumstances of the case. What is important, though, is that arbitrators do not inadvertently put a party at an undue advantage or disadvantage.