10.1  The Commentary to the IBA Rules describes Article 7 as a:

simple provision, making possible inspections of relevant site, property, machinery or any other goods, samples, systems, processes or documents that may help the decision-making process, wherever they may be located.¹

10.2  Article 7 enables the tribunal to direct that the tribunal, a tribunal-appointed expert, or a party-appointed expert, should make an inspection of a relevant site or thing. The inspection should be one that ‘may help the decision-making process’. This objective is underpinned by the fact that the tribunal’s power to order an inspection is made subject to the provisions of Article 9.2.

(p. 362) 10.3  The Commentary on the IBA Rules notes that inspections most frequently occur in construction arbitrations in which the tribunal may wish to visit the construction site under dispute.² However, the making of an inspection may have value in a number of different situations. For members of the tribunal, as well as for counsel, a physical inspection of the piece of equipment, manufacturing process, layout of a half-built holiday complex, or scene of an incident can offer clarity to submissions and evidence that appear impenetrable on paper. For an expert witness, an inspection may be critical. In some circumstances, the object or site under dispute may be subject to further change or removal and an early inspection may be the only opportunity the experts have to gather evidence and inform themselves about its physical condition at the relevant time. Relevant physical evidence or data may have to be selected or identified so that steps can be taken to preserve it for future reference in the proceedings. Inspection of proprietary material related to the matter in dispute may provide additional insight.

10.4  In addition, the evidential value of the information obtained may be compromised if the inspection does not take place under supervision and in documented conditions in accordance with guidelines laid down by the tribunal or agreed between the parties.

10.5  The point is often made that, in modern practice, the need for an inspection by the tribunal can often be answered by use of visual aids such as models, photographs, drawings, and film, eg chartering a helicopter to make a video showing the terrain in which a road was to be constructed.³ However, such solutions may not be an adequate substitute for inspection in all cases. In addition, such solutions are less likely to answer the needs of experts instructed to collect and present evidence.

10.6  The broad spectrum of circumstances in which an inspection may be appropriate is acknowledged in the revisions made to the predecessor provision of Article 7. The title was changed from ‘On-site inspection’ to ‘Inspection’ as an inspection will not always be connected with a geographical location.

10.7  Under Article 7, an order for inspection may be made in relation to:

[A]ny site, property, machinery or any other goods, samples, systems, processes or Documents.

(p. 363) The description extends the definition appearing in the 1999 IBA Rules by the inclusion of ‘samples’ and ‘systems’.⁴ This expanded description is broad enough to encompass most places and items that a tribunal may determine to be appropriate for inspection in the course of a dispute.

10.8  Some terms mentioned in Article 7 require no explanation—‘site’, ‘property’, ‘machinery’, or ‘other goods’ generally have meanings that are understood and unlikely to give rise to much serious dispute. ‘Samples’ may have different meanings, depending upon the context—for example, it could mean inspection of particular retained samples held by one of the parties, or a representative sample the tribunal wishes to see of something collected under agreed conditions. The descriptions ‘systems’ and ‘processes’ are also capable of wide interpretation, being terms that could apply equally to IT systems, manufacturing processes, accounting/audit procedures, etc. ‘Documents’ is a defined term in the IBA Rules, meaning: ‘a writing of any kind, whether recorded on paper, electronic means, audio or visual recordings or any other mechanical or electronic means of storing or recording information’. The right to request/order the inspection of a ‘Document’ extends to documents of which a copy has been produced under Article 9 of the IBA Rules.

10.9  On-site inspections are most likely to be proposed in disputes relating to the operation of an industrial plant or in construction, engineering, and mining disputes, or possibly in complex financial matters where an inspection of additional documents or processes is deemed necessary.⁵ In theory, the possibilities are endless and may range from inspection of a commodity not meeting contractual specification to the inspection of computer hardware to determine whether soft copy documents said to have been deleted or lost can be retrieved.

10.10  There is no deadline specified in the IBA Rules by which an application or direction for inspection is to be made or given. As a result, and absent any party agreement or applicable provision to the contrary, it is open to a party or to the tribunal to propose an inspection at any stage. In practice, an inspection is likely to take place in advance of any evidentiary hearing, but, in principle, the suggested need for an inspection may arise out of events as late as the parties’ closing written submissions.

(p. 364) 10.11  Under Article 7, an order for inspection may arise in one of two ways. The tribunal may decide itself that an inspection is appropriate, or one of the parties to the arbitration may request it.

10.12  The tribunal is empowered to make an order for an inspection to be carried out by:

1. (a)  the tribunal;

2. (b)  a tribunal-appointed expert;⁶ or

3. (c)  a party-appointed expert.

10.13  Subject to any agreement by the parties to the contrary, the right of a tribunal to carry out or order an inspection is likely to exist in any event under the tribunal’s general case-management authority. All of the major institutional rules confer a wide discretion on the tribunal in relation to the conduct of the proceedings and it is very likely that this would include the power to order an inspection if the tribunal considers it necessary in its proper conduct of the proceedings.⁷

10.14  When considering whether to exercise its power to order an inspection, the tribunal must bear in mind any provisions relating to inspection laid down in any applicable arbitration rules (eg Article 22.1(iv) of the LCIA Rules⁸ and SIAC Rule 27(d)).⁹ In addition, where the tribunal has already made provision for a possible inspection in a first procedural order, the terms of that order will need to be considered.

10.15  Save for compliance with the safeguards put in place by Article 9.2,¹⁰ and subject to party agreement to the contrary, it is for the tribunal alone to decide whether an inspection should take place. The tribunal may make a direction for inspection ‘as it deems appropriate’. This makes sense. Whether an inspection will add value to the proceedings will depend very heavily upon the particular facts of the case.

10.16  When a tribunal is considering an inspection under Article 7, it should bear in mind the cost and disruption to the parties of an inspection relative to the potential benefit to be gained.¹¹

(p. 365) 10.17  If the site or object to be inspected lies within the control of one of the parties and that party fails to comply with the order for inspection of what may constitute ‘relevant evidence’, the tribunal is permitted to draw adverse inferences against the non-cooperating party in accordance with the provisions of Article 9.6 of the IBA Rules.¹² In the context of Article 7, ‘relevant evidence’ may include, for example, a piece of allegedly defective equipment the subject of the claim, or a database of customers in a dispute under a distributorship agreement.

10.18  The power of the tribunal to carry out or order an inspection is made expressly subject to the provisions of Article 9.2 of the IBA Rules. These provisions state the grounds upon which the tribunal may exclude an inspection from evidence or production.¹³ Such exclusion may manifest itself as a refusal to inspect or permit an expert to inspect, or by a decision to exclude evidence of an inspection—for example, by not admitting on to the record documentary or audio-visual material generated during an inspection, and not permitting oral testimony in relation to it. The tribunal may exclude such matters either on its own motion or as a result of an objection raised by one of the parties.

10.19  Although this is not stated expressly at Article 7, the decision as to whether grounds exist for excluding a proposed inspection, or evidence of an inspection that has taken place, rests solely with the tribunal.¹⁴ Where the tribunal concludes that one of the grounds set out in Article 9.2(a)–(g) applies, it can exclude an inspection. In the context of Article 7, this will, in broad terms, include circumstances where:

• •  the information to be gleaned from the proposed inspection is not sufficiently relevant or material to outcome [9.2 (a)], eg a requested inspection of part of a construction site where the experts for the parties have already agreed that the item of work proposed to be inspected is not on the critical path of the delay claim being advanced by the claimant;

• •  that some legal impediment or privilege applies to the carrying out of an inspection [9.2 (b)], eg one party wishes to ‘inspect’ an audio recording held by another party, the content of which attracts legal privilege;

• •  that the carrying out of the inspection would be burdensome or disproportionate [9.2 (c) and (g)], eg where one of the party-appointed experts wishes to inspect a component part in a process engineering plant, but where the inspection would (p. 366) cause material disruption to the respondent’s business and the value of the particular claim to which the component is relevant is a very small part of the claimant’s money claim;

• •  that the subject matter of the proposed inspection has been lost or destroyed [9.2 (d)], eg one of the parties wishes to inspect records relating to operation of a logistics business, but those records are demonstrated to have been destroyed during a fire at the relevant party’s office premises;

• •  that there are compelling grounds of commercial or technical confidentiality, or special political or institutional sensitivity, that make an inspection inappropriate [9.2 (e) and (f)], eg where one party wishes to inspect unredacted files held by another party that contain politically sensitive communications between that party and its national government;

• •  or that considerations of procedural economy, proportionality, fairness, or equality of the parties militate against an inspection and the tribunal finds those considerations to be compelling [9.2 (g)], eg a party wishes the tribunal to inspect a top-secret military facility but, within the available procedural timeline, security clearance can only be obtained for the tribunal and one party’s expert.

The grounds for exclusion under Article 9.2 are dealt with in more detail in Chapter 12.

10.20  Site inspections normally require considerable preparation. Born succinctly summarizes the typical routines and concerns:

The logistics and procedures for a site inspection can be complex. Visits must be scheduled, following consultations and planning with the parties, with appropriate security, explanation and other assistance. All parties have the right to attend such inspections and the parties will typically be concerned to ensure that arrangements for any inspection not enable their counter-parties to present their case or ‘spin’ the presentation through employees responsible for accompanying the tribunal. Video recordings, photographs and other records of the inspection of a site, goods, or other property can sometimes be made, although the arrangements for this can again be cumbersome.¹⁵

10.21  The IBA Rules do not provide any detail about the arrangements for an inspection under Article 7. These will have to be determined on a case-by-case basis. However, the power given to a tribunal under Article 7 to determine the timing and arrangement of the inspection is very sensibly made subject to the requirement that the tribunal shall do so ‘in consultation with the parties’. This is an important requirement and should not be regarded simply as a box to tick. As a matter of practice, an inspection is much (p. 367) more likely to run smoothly if there is agreement between the parties—with intervention where necessary from the tribunal—as to the appropriate arrangements for the inspection. In addition, a process of consultation gives each party an opportunity to voice its concerns and make proposals to address aspects of the inspection that might not otherwise have occurred to the tribunal.

10.22  Fair treatment of all parties is an important consideration. When a tribunal orders an inspection, it must ensure that the procedures and arrangements laid down for that inspection ensure due process and are fair to all parties. As mentioned, this principle is reflected in the grounds of exclusion set out at Article 9.2(g). As a result, a number of safeguards may need to be put in place in order to ensure that one party does not gain an unfair advantage over any other party as a result of or in connection with the inspection.

10.23  The practical arrangements for an inspection may be relatively simple and flexible, or very detailed and prescriptive. What the tribunal determines to be appropriate will depend very much on the facts of the case, the attitudes of the parties, and the purpose of the inspection.

10.24  When appropriate arrangements have been determined, it is good practice for the tribunal to issue a procedural order or protocol setting out the inspection arrangements in order to remove any doubt about what has been agreed or ordered.¹⁶ As a minimum, this should include the following:

• •  The date/s of the inspection;

• •  What is to be inspected;

• •  The nature and purpose of the inspection;

• •  Who is permitted to attend;

• •  The rights and role of each of the individuals attending the inspection and the content of any accompanying explanatory commentary; and

• •  Whether any record of the inspection is to be produced and what use is to be made of any information collected.

10.25  As noted, there is no deadline by which an inspection must be undertaken. In consequence, an inspection may be proposed or take place at any stage of the proceedings. Where it is known early in the proceedings that an inspection is likely to be required—whether because the tribunal has signalled that it wants to make an inspection or the parties themselves are in agreement that one should take place or where one party has laid down a marker that its expert will require access to a site or object material to the (p. 368) dispute—it may be possible to build in to the procedural timetable some provision for an inspection. Where access to evidence is required urgently or where the need for an inspection arises on short notice or close to the evidentiary hearing, arrangements for the inspection may have to be made very quickly.

10.26  Agreement on the precise date and timing for an inspection may raise a number of factors for consideration. In many cases, the inspection will be of a site or facility controlled by one of the parties. When determining the date and time for an inspection the tribunal will need to be sensitive to the need not to disrupt more than is necessary any development or business being carried on there. There may also be debate around the best timing for an inspection in order to maximize the value of any evidence to be collected. For example, one of the parties may argue that an inspection should take place as soon as possible in order to avoid evidence being lost or destroyed, or there may be discussions around whether an inspection should take place in certain weather conditions or when a certain business process or activity is in full operation. Each party will wish to consider very carefully what will suit its case best before making proposals or submissions about date and timing. The tribunal will need to balance these submissions and make the final decision if disagreement between the parties cannot be resolved.

10.27  Whether the order for inspection has been precipitated by a party application or a tribunal request, once a decision to inspect has been made it is sensible to seek a consensus about what the inspection is intended to achieve. This will inform the nature and scope of the arrangements being discussed. In addition, even the simplest inspection involves time and cost and, in many cases, it will not be possible to repeat the inspection. To the extent possible, arrangements made should ensure that those participating are able to obtain what they need with minimum disruption. For example, in an IT dispute, inspection arrangements may include a clear definition of what is being searched for and on what systems; a means of inspection that interrupts the systems as little as possible (such as imaging, ie copying, of computers or servers, which can then be reviewed in isolation from the live systems); and a process by which the data retrieved is to be filtered (usually by the parties’ respective experts under an agreed set of guidelines) before being released.

10.28  Article 7 provides for inspection by the tribunal or by an expert. Depending on the purpose of the inspection some or all of these parties may attend. For example, if the purpose of the inspection is the collection of samples by party-appointed experts, the tribunal may take the view that there is no need for members of the tribunal to (p. 369) attend. If the purpose of the inspection is for the tribunal to be shown a particular piece of manufacturing plant relevant to the dispute, then the tribunal and experts in the relevant discipline may all attend.

10.29  Regardless of for whose benefit the inspection is taking place (ie tribunal or expert/s), Article 7 contains an express statement that the parties and their representatives have the right to attend any inspection. This is important, as transparency around what is said and done during an inspection is fundamental to ensuring fairness to both sides. If the purpose of the inspection is to collect evidence, transparency is particularly important. If a party does not know what the tribunal or another party’s expert was shown, or what explanation of a process or problem may have been proffered to the tribunal, it may be disadvantaged. The presence of both parties will ensure ‘fair play’ and make more likely the observance of any protocol that may have been agreed for the inspection.

10.30  The terms of Article 7 would appear to preclude a situation in which only one of the parties is barred from attending the inspection. The need for caution in relation to such matters is highlighted in the UNCITRAL Notes on Organizing Arbitral Proceedings:

If an on-site inspection of property or goods will take place, the arbitral tribunal may consider matters such as timing, meeting places, other arrangements to provide the opportunity for all parties to be present, and the need to avoid communications between arbitrators and a party about points at issue without the presence of the other party or parties.¹⁷

10.31  It has been pointed out that to make an inspection in the presence of one party alone may have potentially damaging consequences for the successful party when it comes to enforce the award.¹⁸

10.32  As a general rule, the tribunal should therefore order that any inspection by the tribunal, or by a party-appointed or tribunal-appointed expert, should be carried out in the presence of the parties and/or their representatives.¹⁹ Parties have the right to waive that right, but this would be unusual unless both parties agree to do so. Accordingly, given the clear wording of Article 7 on this point, such exclusion could only be justified by reference to other principles contained in the IBA Rules—for example, in order to protect confidential information pursuant to Article 9.4. All other options would have to be considered in consultation with the parties before the decision to exclude party representatives is made.

10.33  In exceptional circumstances a tribunal may consider that it is appropriate to exclude party representation at the inspection. In all cases, the tribunal will have to observe the requirements of due process and fair and equal treatment, and limit any potential disadvantage as much as possible. For example, it may be possible to make a video and/or (p. 370) audio recording of the inspection, which then may be provided to the non-attending parties.

10.34  Situations do arise where the party controlling the site does not allow access to it by the representatives of other parties. For example, where the site forms part of a classified area because of its military significance and has different access regimes for citizens and non-citizens, the controlling party may rely on local legislation preventing it from providing access. Where one party’s expert is not permitted to attend, the tribunal may have to consider appointing an independent expert to inspect and report in preference to permitting the other party’s expert to attend without his/her counterpart being present.

10.35  Where one party’s representatives are denied access to a site only at the point of inspection, those conducting the inspection will have to make a choice as to whether to cancel the inspection or to continue with it in the absence of the party being denied access. For the reasons given mentioned, a tribunal is unlikely to want to continue without exploring further with the parties who should continue with the inspection and whether expanded access can be granted at a later date (assuming this is practicable).

10.36  Where a tribunal-appointed expert is refused access, that expert may seek guidance from the tribunal leading to the same considerations. That expert may then prepare a report and record in it what difference to his or her conclusions the site visit could have made.²⁰ The tribunal may draw negative inferences if it believes that the controlling party did not have a valid reason to refuse access to the site.²¹

10.37  Legal counsel are very often present at inspections. There are advantages to this. If the inspection is to be carried out by a tribunal or experts who may wish to ask questions of party representatives, counsel may assist in ensuring ‘fair play’. In the event of an unanticipated issue or problem arising, it may be possible for counsel to agree a solution that can save the inspection from being abandoned. However, there are also possible disadvantages. For example, the presence of counsel may inhibit constructive discussion between experts on each side that may assist in narrowing the issues.

10.38  In all cases, it is prudent to have clear, simple guidelines on where those attending the inspection may go during the inspection, and what they are permitted to do or say. Additionally, it will be sensible to anticipate and/or to record any necessary security or confidentiality measures.

(p. 371) 10.39  The arrangements that are made will necessarily be fact specific. What is observed during an inspection may be easily understood by all attendees with little or no accompanying explanation. In other cases—for example, if the tribunal is visiting a factory to inspect a manufacturing process or a piece of equipment alleged to be defective—it may be desirable for the parties to agree a neutral explanatory commentary to be given during the inspection so that everyone knows what it is they are looking at, and how it fits into the manufacturing process or commercial operation.

10.40  It may also be sensible to discuss who should accompany the tribunal and who should answer any questions that the tribunal may have. The parties may wish to have an express agreement that none of the party representatives will attempt to advocate a position or argument, or that the tribunal will not talk to a party representative unless legal counsel for the other party is present.

10.41  In other cases, and provided legal counsel are present, the tribunal may be keen to ask questions of the experts on each side in order to gain a better understanding of the process, and any technical issues between the parties. It has been suggested that, during the inspection, if a member of the tribunal observes something they regard as material to the dispute, this should be drawn to the attention of the parties in order that both parties may have an opportunity to comment.²²

10.42  If the purpose of the inspection is to gather evidence—perhaps a visit by the expert witness of the party not in possession of the property or object being inspected—other considerations may also come into play. For example, if the expert wishes to take samples, under what conditions can this be done and are the experts for the other parties entitled to supervise or take away part of the same sample? If non-destructive testing, eg the taking of physical measurements, is to be undertaken is it necessary that the parties agree a protocol for how this should be carried out?

10.43  It is also helpful to have agreement or direction on whether those attending the inspection are permitted to make any form of visual or audio recording of the inspection.

10.44  A tribunal may wish to issue directions about whether and how the inspection itself and any evidence or information arising out of it are to be recorded and/or circulated.

10.45  Parties may agree to some form of joint visual or audio recording of the inspection being made. Counsel may sometimes wish to agree a joint note of what was inspected, by whom, and any significant matters arising during the inspection. The tribunal and the parties should think carefully about whether they would like a contemporaneous transcript made of the inspection as well as any questions and answers passing between (p. 372) those who attend. While it can be useful to have a complete record of events, the formality of a transcript may, in some circumstances, inhibit useful dialogue with the experts.²³

10.46  Direction may also be needed on how and to whom any material observations, evidence gathered, or the results of any associated sampling/testing are to be recorded and distributed. There should be a clear understanding of what material is, and is not, to be introduced on to the record as evidence. For example, it may be agreed or directed that the test results of a sample taken during the inspection will be introduced into the record, whereas the informal remarks made by an employee operating machinery during an inspection will not.

10.47  The following is an example of an inspection protocol agreed in relation to a tribunal inspection of a power generation plant, the performance of which was the subject of the dispute. The tribunal wished to gain a better understanding of a number of technical points made about plant components in expert evidence. Provision was also made for the parties’ representatives to take photographs of the plant in operation.