Institutional – or ad hoc – rules provide the framework for any arbitration but do not address the issue of how evidence should be gathered and presented.
This is partly to allow parties maximum flexibility – a key advantage of arbitration over litigation as a means of resolving disputes. However, the lacuna can cause problems if parties, particularly from different legal traditions, have conflicting views about how the case should proceed.
“An ‘efficient, economical and fair process for the taking of evidence in international arbitration’”
A new era
The 1999 IBA Rules on the taking of evidence in International Commercial Arbitration are intended to address this gap and have been widely successful in their acceptance and application. However, since they are now over a decade old, the IBA has decided that it is time to reflect on practical experience of their use and consider the areas in which they can be improved or refined. A Working Party of the IBA Arbitration Committee, in consultation with the arbitral community, has therefore produced the revised 2010 IBA Rules.
The foreword and preamble to the 2010 IBA Rules state that they are intended to provide an “efficient, economical and fair process for the taking of evidence in international arbitration”. As with the 1999 IBA Rules, the 2010 IBA Rules provide mechanisms for the presentation of documents, witnesses of fact and expert witnesses, inspections and the conduct of evidentiary hearings. They are designed to be used in conjunction with, and adopted together with, ad hoc or institutional rules governing international arbitrations.
The 2010 IBA Rules introduce a few key changes:
A new Article 2 provides for consultation between parties and the arbitral tribunal regarding “evidentiary issues”. Parties are encouraged to consider, at an early stage in the proceedings, the “scope, timing and manner” of the taking of evidence and the arbitral tribunal is encouraged to identify relevant issues and/or issues for which a preliminary determination may be appropriate.
The new Article 2 also recognises that, as international arbitration grows more complex, and the size of cases increases, it is important for parties to resolve their disputes in the most effective and least costly manner. If a preliminary determination of certain issues may be appropriate, the arbitral tribunal should seek to resolve such matters first, so as to avoid unnecessary work and expense.
Article 3 deals with documents that the parties wish to introduce as evidence into the arbitral proceedings. It is recognised that documents are often the most reliable form of evidence for parties in arbitration. The 2010 IBA Rules give new guidance on the disclosure of electronic documents, which are to be submitted in the form “most convenient or economical…that is reasonably usable by the recipients”, unless the parties agree otherwise. However, the rules stop short of setting out detailed procedures for dealing with electronic disclosure.
“It is recognised that expansive ‘document discovery’ is generally inappropriate in international arbitration”
Both the 1999 and the 2010 IBA Rules also give guidance on whether, and in what conditions, a party should be able to request production of documents from another party, i.e., “document discovery”. It is recognised that expansive “document discovery” is generally inappropriate in international arbitration, and requests for documents to be produced should be carefully tailored to issues that are relevant to the determination of the merits of the case.
Under a new provision in Article 3 of the 2010 IBA Rules a party requesting disclosure of electronic documents may specify, or be ordered by the arbitral tribunal to specify, particular files, search terms or other means of searching for electronic documents in an “efficient and economical manner”. It is hoped that this provision will prevent broad “fishing expeditions”, while at the same time permitting parties to request electronic documents which can be reasonably identified and which can be shown to be relevant and material to the outcome of the arbitration.
Also, under both the 1999 and the 2010 IBA Rules, an arbitral tribunal may exclude evidence for any of the reasons set out in Article 9 (Admissibility and Assessment of Evidence), one of which is legal impediment or privilege. New provisions in Article 9 of the 2010 IBA Rules include a list of criteria which the arbitral tribunal may take into account when considering whether to exclude evidence by reason of legal impediment and privilege. This includes, for example, any need to protect the confidentiality of a document and the need to maintain fairness and equality as between the parties, particularly if they are subject to different legal or ethical rules.
A useful tool
The IBA believes that the revised rules provide an effective mechanism to assist parties in the conduct of international arbitrations. In particular, they present a useful harmonisation of the procedures commonly used in international arbitration, reflecting processes initially developed in both civil law and common law systems. Parties and arbitral tribunals may adopt the 2010 IBA Rules in whole or in part, at the time of drafting the arbitration clause in a contract, or once an arbitration commences. The rules may, alternatively, simply be used as guidelines. This flexibility means that the 2010 IBA Rules present parties with a useful tool which may be adapted to the particular circumstances of each arbitration.
The draft rules are available on the IBA website: www.ibanet.org