12.1  Article 9 is a key provision of the IBA Rules. It deals with assessment and admissibility of evidence, contains the benchmarks by reference to which evidence may be excluded, and provides certain mechanisms by which the tribunal may address bad-faith conduct by a party to the arbitration.

12.2  The results of an IBA survey show that Article 9 is the second most referenced provision of the IBA Rules (approximately 13 per cent of all references), second only to Article 3.¹

12.3  The equivalent provision in the 1999 IBA Rules² was similar in scope to the present provision. However, material changes have been introduced into Article 9 of the current IBA Rules. Two key amendments are:

1. (i)  A new set of provisions with respect to privilege and legal impediment has been incorporated into what is now Article 9.3; and

2. (ii)  The addition of Article 9.7—this allows tribunals to impose costs sanctions on a party that fails to conduct itself in good faith in the taking of evidence.

12.4  The provisions of Article 9—in particular, Article 9.2 which sets out the grounds upon which documents, statements, oral testimony, or inspection may be excluded from evidence or production—operate in tandem with a number of other provisions of the IBA Rules. Accordingly, Article 9 is expressly referenced elsewhere in the IBA Rules. For example, in Article 3 (Documents), Article 6 (Tribunal-Appointed Experts), Article 7 (Inspection), and Article 8 (Evidentiary Hearing).³ The provisions contained in Article 9 play an important role in the successful operation of the IBA Rules.

12.5  Article 9.1 states the general principle that the tribunal shall determine the admissibility, relevance, materiality, and weight of evidence. The exercise of the tribunal’s discretion in determining these matters is central to its role in arbitration proceedings.

12.6  The terms of Article 9.1 reflect accepted practice in international arbitration and provision in similar terms may be found in a number of institutional rules and national arbitration laws. For this reason, practical application of Article 9.1 operates in a similar manner to practice and procedure adopted in arbitrations not conducted under the IBA Rules, and it has relatively few distinguishing features.

12.7  An important consequence of the principle expressed in Article 9.1 is that (subject to any mandatory provisions of law applicable at the seat of arbitration)⁴ the tribunal is not obliged to follow strict rules of evidence that might apply in a national court, either at the seat of arbitration or one of the home jurisdictions of the parties to the dispute. Nonetheless, a tribunal may, in practice, take account of or be sensitive to the law of the seat of arbitration, the national legal backgrounds (and expectations) of the parties and their advisers, any agreements made between the parties, and any applicable institutional rules or guidelines.

12.8  As mentioned, the principle stated in Article 9.1 can be found in nearly all institutional and other arbitration rules.⁵

12.9  The same principle is also found in many national arbitration laws. For example, the German Code of Civil Procedure states that: ‘The arbitral tribunal is empowered to determine the admissibility of taking evidence, take evidence and assess freely such (p. 411) evidence.’⁶ Similar provision may be found in the Belgian Judicial Code⁷ and the Netherlands Code of Civil Procedure.⁸ The United States Courts have uniformly held that arbitrators possess broad powers to determine arbitral procedures, including the assessment of evidence,⁹ and national courts consistently affirm a tribunal’s inherently broad discretion over evidentiary issues.¹⁰ Section 34 of the English Arbitration Act contains a statement of the same principle.¹¹

12.10  Thus, there is wide recognition of a tribunal’s discretion to admit evidence, to determine its relevance and probative value, as well as to reject evidence that it regards as being of little or no assistance.¹² To that extent, the wide powers granted to a tribunal under the IBA Rules are broadly consistent with the position likely to exist under any applicable arbitration rules, and as a matter of accepted practice in international arbitration.

12.11  However, a tribunal’s discretion around evidentiary matters is not entirely without constraints, as it must take care to observe due process and respect the right of each party to have a fair opportunity to present its case as required by the IBA Rules,¹³ and in applicable institutional rules, or mandatory national laws or procedural norms at the seat of arbitration.¹⁴ In particular, during the course of the proceedings each party should be given an opportunity to respond to and comment on the relevance, materiality, admissibility, or probative value of the evidence that has been presented.¹⁵

12.12  What distinguishes the IBA Rules from the majority of other arbitration rules is that they contain clear benchmarks to determine what evidence has value in the proceedings, and the categories of evidence that may be excluded from consideration by the tribunal.¹⁶

(p. 412) 12.13  The next sections address matters covered by Article 9.1—determination of the relevance and materiality of evidence, the admissibility of evidence, and the weight to be attached to individual pieces of evidence.

12.14  Article 9.1 refers expressly to the power of the tribunal to determine relevance and materiality of evidence. As mentioned, these benchmarks have a special significance within the IBA Rules.

12.15  The concepts of relevance and materiality are expressed in the IBA Rules by reference to two yardsticks—‘relevant to the case’ and ‘material to its outcome’. These benchmarks permeate the whole of the infrastructure of the IBA Rules and are the standards by which the introduction, use, and value of evidence is managed.

12.16  For example, as noted elsewhere, a request to produce under Article 3.3 must include a statement explaining why the documents requested are relevant to the case and material to its outcome.¹⁷ Under Article 3.5, a party may object to a request to produce on the basis that the documents requested lack ‘sufficient relevance to the case or materiality to its outcome’.¹⁸ Under Article 3.7, the tribunal may make an order for production only if it determines that ‘the issues that the requesting party wishes to prove are relevant to the case and material to its outcome’. At the evidentiary hearing, pursuant to its powers under Article 8.2, the tribunal may exclude evidence it considers to be ‘irrelevant’ or ‘immaterial’ or if it lacks ‘sufficient relevance to the case or materiality to its outcome’. Under Article 8.5, the tribunal may ask any person to give evidence on any issue that the tribunal considers to be ‘relevant to the case or material to its outcome’.

12.17  Thus, the tribunal has the power to both exclude evidence that is not sufficiently relevant and material and to actively seek evidence that is. The combined effect of Article 9.1 and the other provisions mentioned is that the tribunal is the final arbiter of whether or not evidence presented to it for use in the arbitration is relevant and material. If it is the view of the tribunal that evidence is relevant and material, then that evidence has a place in the proceedings.

12.18  The meaning of relevance and materiality as used in the IBA Rules, and Chapter 6 paras 6.76–6.146 discuss related factors that may influence a determination of relevance and materiality by the tribunal. In practice, the way in which these two tests are applied will depend on the context in which the particular piece of evidence is being considered.

12.19  Article 9.1 makes clear that the tribunal is to determine questions of admissibility of evidence.

12.20  Article 9.2 sets out express limitations on admissible evidence. However, it is for the tribunal to decide if a piece of evidence falls outside or inside those parameters.

12.21  Admissibility is a topic on which most national courts will have a body of practice and rules. These will lay down what evidence is inadmissible in that particular forum and may vary between jurisdictions. For example, in England, the ‘parole evidence rule’ bars the introduction of pre-contract communications as an aid to contractual interpretation, whereas in many civil law countries pre-contractual documents are taken into account in determining the terms of a contractual relationship.¹⁹

12.22  In international arbitration, where tribunals will nearly always have an express power to determine issues of admissibility, the rules of national courts will not generally apply. In consequence, where an issue of admissibility arises, tribunals will have a much wider discretion as to whether to admit or exclude the evidence in question and, in practice, the tendency of many arbitrators will be to permit the introduction of evidence, rather than to exclude it. This position has been confirmed by one experienced arbitrator in the following terms:

[T]echnical rules of evidence are usually not observed in arbitration, and the tribunal will err substantially on the side of permitting presentation of the facts that a party desires. Consistent with this, international arbitrators have repeatedly declared that they are not bound by national evidentiary rules or formalities [ . . . ] On questions of admissibility, arbitrators ordinarily err in the direction of permitting introduction of irrelevant or duplicative materials [even though permitted under Article 9.2 of the IBA Rules] to exclude evidence on a number of grounds . . .²⁰

12.23  Under Article 9.1 of the IBA Rules, the question of what evidence may be admitted into the proceedings is left entirely to the discretion of the tribunal. However, the tribunal (p. 414) is assisted by other provisions of the IBA Rules—in particular, by the theme prevalent throughout the rules that the evidence that merits admission is that which is relevant to the case and material to its outcome, subject to the exceptions to that principle stated in Article 9.2. Those exceptions are relatively limited and this reflects the view that a tribunal, like a judge (but unlike a jury),²¹ is considered sufficiently skilled to evaluate evidence without the need to be ‘protected’ from questionable evidence that might otherwise distort its findings.²²

12.24  This liberal approach to admissibility of evidence is facilitated to a significant extent by the ability of a tribunal operating under the IBA Rules to evaluate the evidence presented to it. Article 9.1 makes express provision for the power of a tribunal to determine the ‘weight’ of evidence.²³ Adopting a pragmatic approach, rather than having to decide if the evidence should be admitted or excluded, the tribunal may deal with any shortcomings in the character of evidence that is admitted by means of the weight that the tribunal attributes to it. This approach is illustrated by a statement made by one ICC tribunal in its final award:

The Arbitral Tribunal also points out that, pursuant to § 22 of Procedural Order No. 2 and Article 9 § 1 of the IBA Rules (2010) which the Tribunal may take into consideration, it is within its discretion to assess the weight to be given to each piece of evidence submitted in the present case. For this reason, the Tribunal has not deemed it appropriate to discard any specific testimony or document on the basis of one Party’s criticisms thereof.²⁴

12.25  Another reason justifying a liberal approach to admissibility of evidence in international arbitration is that tribunals may wish to avoid any suggestion that due process has not been followed—in particular, that a party has been prevented from presenting its case by the exclusion of evidence on which it wishes to rely.²⁵

12.26  Tribunals will generally deal with issues of admissibility as and when they arise. The wide discretion afforded to them under Article 9.1 is a valuable resource in tailoring decisions to the individual circumstances of the case and dealing pragmatically with issues of admissibility that might otherwise distract resources from more important aspects of the case.

12.27  There does not appear to be any accepted prevailing practice with respect to admission into evidence of illegally obtained documents, or documents that have been leaked (p. 415) into the public domain by a third party. Much may depend on the facts of an individual case and the attitude of the tribunal. In one ICSID case, the respondent raised an objection to the introduction into evidence by the claimant of an audio recording of a conversation in which a bribe was allegedly sought by the respondent from the claimant. The tribunal rejected the claimant’s application to introduce the evidence (in part) on the grounds that (a) given the ease with which technology permitted manipulation of audio recordings, proven authenticity was an essential condition for the admissibility of this type of evidence (the claimant being unable to discharge that burden in the face of objection from the respondent); and (b) because the recording had been made without the knowledge of the respondent’s representative (and was therefore illegal under the applicable national law) to admit the evidence would be contrary to the principles of good faith and fair dealing required in international arbitration.²⁶ In contrast, in another reported case, the tribunal chose to admit an unlawfully obtained video recording.²⁷

12.28  There are many ways of looking at such situations. Once documents are in the public domain—for example, where they have been ‘hacked’ by a third party—there may be strong arguments for saying that they should be permitted on to the record if one party wishes to introduce them. On the other hand, issues of fairness may arise in relation to unlawfully obtained documents, particularly if one of the other parties to the arbitration is responsible for the ‘theft’. As one author explains, there may be nothing in principle to prevent such evidence being introduced on to the record, but the tribunal may decline to admit it on the basis that it would be unfair to the party from whom the documents have been stolen:

[N]othing prevents a tribunal from admitting into evidence documents that may have been stolen or otherwise unlawfully obtained. However, tribunals will most likely refuse to admit such documents on the grounds of procedural fairness and equality of parties. As regards documents obtained from a public source such as Wikileaks, tribunals are guarded in their approach with respect to documents covered by attorney–client privilege, but as regards any other documents available in the public domain, a tribunal may be willing to admit such documents since ignoring them would lead to an unreasonable conclusion, which could make the award subject to challenge.²⁸

(p. 416) 12.29  Another commentator has proposed that the question of who benefits from the wrongdoing is a factor to be taken into account in relation to their admissibility, but that documents subject to certain types of privilege, such as attorney–client privilege, should always be inadmissible.²⁹ A further relevant factor may be whether the documents fall within a category of documents that had previously been requested by an opponent party, but which, in breach of an order for production, had not been produced.

12.30  International arbitration tribunals have sometimes admitted into evidence documents leaked online. For example, in a recent case involving the Kazakhstan government,³⁰ the claimant applied to admit into evidence leaked emails published on a WikiLeaks-type website. The tribunal acknowledged the need to protect against computer and cybercrime and the potential unfairness of allowing confidential evidence obtained through hacking to be admitted against the legitimate expectations of the parties. However, it also recognized that there was a need for the tribunal to have access to information that is in the public domain, accessible to all, and allegedly relevant and material to the dispute—there was an interest in upholding a party’s right to prove its case. Importantly, however, although the tribunal admitted the leaked material into evidence, it excluded from admission documents that were privileged.³¹

12.31  Article 9.1 of the IBA Rules provides that the tribunal is to determine the weight of the evidence presented to it. In other words, the tribunal is to decide what reliance it places upon each individual piece of evidence.

12.32  Determination of the weight of evidence is an evaluative exercise, separate to that of deciding whether evidence is admissible. A piece of evidence may be admissible but given little or no weight by the tribunal when it comes to evaluating the body of evidence that has been presented.

12.33  In theory, in an arbitration conducted under the IBA Rules, a large part of the evidence admitted to the record should be given some weight when the tribunal comes to carry out its evaluation. In addition to fact and documentary evidence that the parties volunteer in support of matters relied on in written submissions, and expert evidence directed at specific issues germane to the dispute, any other evidence obtained by document production under those rules should be demonstrated to be relevant and material (p. 417) to the outcome of the case.³² However, experienced practitioners of international arbitration will know that this is not always the case. Much documentary evidence that finds its way into the record is never looked at again, either by the parties or by the tribunal; either the parties are not sufficiently discriminating in what they choose to introduce, or the requirements of relevance and materiality are not strictly applied by participants in the arbitration. Even in the face of arguments around the admissibility of a peripheral piece of evidence, the tribunal may take a relaxed approach and permit its introduction. However, whatever the attitude of a tribunal to issues of admissibility, a tribunal is likely to be much more discriminating when it comes to weighing the evidence.

12.34  The question of what weight should be given to a particular piece of evidence is an obscure and imprecise exercise, whether carried out in a court room or by a tribunal. In general terms, a tribunal will consider the evidence it has and decide, on an essentially subjective basis, what it believes are the correct facts or conclusions. The weight of the evidence is the persuasive effect of the evidence on the arbitrator’s mind. There are no detailed rules—nor should there be—about how that exercise is to be carried out. That said, there are a number of common factors taken into account when a tribunal is considering how far it should rely on the evidence submitted.

12.35  An important factor for the tribunal will be the reliability of the evidence, ie if it constitutes genuine and reliable proof of what it is offered to prove. Case-specific factors are likely to determine the view the tribunal ultimately takes on this question, but a number of general considerations are also likely to be taken into account.

12.36  For example, in relation to witness evidence:

• •  was the witness tendered for/did the witness decline to attend for cross- examination;

• •  is the tribunal being asked to rely only on a witness statement prepared with the assistance of counsel;

• •  how credible is the witness under cross-examination;

• •  is the witness evidence contradicted by another credible witness;

• •  whether the witness had a direct or only an indirect role in the events to which the evidence relates;

• •  the period of time that has elapsed since the events described by the witness took place;

• •  whether the witness is a former employee of the ‘other’ party and may hold a grudge that may taint the evidence given against that party;

• (p. 418) •  whether the witness is an employee who is supporting without questioning the argument of his or her employer;

• •  whether a witness is independent of the parties at the time the witness offers evidence; or

• •  whether the answer given by a witness was in reality suggested by counsel asking the question.

In relation to expert evidence, a tribunal may temper the reliance it places on written evidence in a number of different circumstances. For example, the assumed facts on which the expert evidence is based may not be proven or shown to be justified on the fact evidence, or during cross-examination of the expert it may become apparent that his or her real expertise relates to a different, albeit related, body of knowledge. When opposing experts have very different opinions, the tribunal may lean in favour of the evidence given by the expert who performs better under cross-examination or in questioning during ‘hot-tubbing’³³ of the experts.

12.37  In relation to documents, the tribunal may consider:

• •  When and in what circumstances the document was prepared;

• •  Whether the document is signed and whether any handwriting or signature present is consistent with that available elsewhere;

• •  Whether there are documents later in time that contradict its content;

• •  Whether there is a compelling body of evidence that contradicts what the document appears to say;

• •  Whether the author of the document was sufficiently well informed about the relevant events to justify reliance being placed on the document;

• •  Whether the purpose for which the document was created may have affected the manner in which it was drafted, including omissions and emphasis; and

• •  Whether the document or correspondence was written in the period leading up to a formal dispute when the parties were merely trying to position themselves for an impending arbitration with a self-serving document trail.

As mentioned, another factor is the authenticity of a document relied on. Logically, it is difficult to see how a document that is not authentic can have any useful part to play in the proceedings.³⁴ If there are issues around the authenticity of a document or other evidence, it is likely that these will have been raised when the evidence is first introduced. (p. 419) It will be a matter for the tribunal to decide whether or not to admit the document, and the decision made will depend very much on the individual circumstances.³⁵ However, even if the evidence is admitted, the tribunal may nonetheless attribute less (or no) weight to it as a result of the allegations of forgery or lack of authenticity.

12.38  Parties to international arbitration are typically permitted to present indirect evidence (for example, hearsay evidence from a witness who has heard second-hand what has been said on a relevant matter)³⁶ but the tribunal may consider as more reliable (and place greater weight on) direct evidence. For example, a tribunal may place more reliance on the content of a relevant document than it will on oral testimony about what the document says. However, if a party can demonstrate that there are reasons for non-production of direct evidence, this may have a mitigating effect on the tribunal’s assessment (ie it may place more weight on the indirect evidence than might otherwise be the case), eg where a party can provide credible evidence about the prior destruction of a document.³⁷

12.39  Rules and practice on the admissibility of evidence—whether framed by the legal tradition of the tribunal and/or counsel, or by reference to guidelines on exclusion of evidence as set out in the IBA Rules or other applicable rules—are sufficiently tangible that the parties will be able to actively engage with them.

12.40  The position in relation to the weighing of evidence by a tribunal is very different. As mentioned, the weighing of evidence is a nebulous and essentially subjective task. Where the majority of the evidence favours one of the parties it is probable that different tribunals would arrive at the same outcome. In less clear-cut cases, different tribunals might arrive at different conclusions on the same evidence. This is because there is no obviously right or wrong answer in relation to such assessment—the individual tribunal must be persuaded on the evidence that the facts support the case being advanced.³⁸

12.41  The consequence of these different considerations is that it will be far easier to advance an argument that a tribunal has improperly excluded evidence than it will be to argue that the tribunal has not properly evaluated the evidence once admitted. For example, if a tribunal makes a decision to exclude evidence on grounds other than those set out in Article 9.2 of the IBA Rules, a party whose evidence has been excluded may argue (p. 420) that this was unfair by reference to the terms of that provision. It is far more difficult to analyse and attack the subjective approach a tribunal has taken to assessment of the evidence.

12.42  The distinction that exists is reflected in the approach taken by national courts when dealing with challenges to awards brought on the basis that a tribunal has not weighed the evidence correctly. For example, the English Court has made clear that, while a failure to give proper consideration to a piece of key evidence could be grounds for challenging an award, such circumstances should not include a situation where the tribunal had evaluated the evidence but simply reached a conclusion that the challenging party does not like. In Arduina Holdings BV v Celtic Resources Holding plc, the Court said that:

The assertion in the claim form that the decision was contrary to the weight of the evidence does not begin to meet the requirements of section 68 [of the English Arbitration Act 1996].

[ . . . ]

The assertion that the arbitrator failed to take any or proper consider[ation] of the evidence could, in an exceptional case, give rise to a challenge under section 68, based on the general duty of an arbitrator under section 33 if, for example, an arbitrator genuinely overlooked evidence that really mattered, or got the wrong end of the stick in misunderstanding it. But there is all the difference in the world between such cases and an arbitrator evaluating evidence but reaching factual conclusions on it (as will happen in most arbitrations) which one party does not like. That cannot be the basis of a complaint under section 68.³⁹

This perspective should provide comfort to a tribunal when exercising the broad discretion to determine the weight of evidence afforded to it under Article 9.1.

12.43  When evaluating evidence, the tribunal will need to consider related matters, such as the burden and standard of proof, as well as any inferences or presumptions that the tribunal may feel able to make. The IBA Rules do not contain any provisions relating to burden of proof and only limited provision in relation to the drawing of inferences.⁴⁰ The following general principles will nonetheless apply in connection with the evaluation of evidence under Article 9.1.

12.44  It is widely accepted that a party to arbitration has the burden of proving the facts relied on to support its claim/counterclaim, defence, or right of set-off.⁴¹

12.45  A number of institutional rules contain an express statement that each party bears the burden of proving the facts necessary to its claims and defences (see, for example, Article 41.1 of the CIETAC Rules,⁴² Article 29 of the CAM Rules,⁴³ Article 27.1 of the PCA Rules,⁴⁴ and Article 27.1 of the PRIME Finance Arbitration Rules).⁴⁵

12.46  The IBA Rules contain no such provision. However, the position described is consistent with commentary on the issue and accepted practice.⁴⁶

12.47  However, it is worth bearing in mind that there is a divergent approach between and among civil and common law legal systems with respect to classification of the burden of proof.⁴⁷ If a question does arise about how a burden of proof should be allocated, the answer may have an impact on how evidence is to be produced and evaluated.⁴⁸ Associated conflict of laws questions may arise. For example, should a tribunal apply the law of the seat (on the basis that the burden of proof is a procedural matter), the law (p. 422) governing the underlying substantive issue, or some international standard?⁴⁹ A pragmatic solution to such questions is that advocated by Born, who suggests that the strict distribution of the burden of proof applied by national courts does not arise in international arbitration and that the tribunal should adopt a more flexible approach designed to meet the needs of the particular issues in the case:

[T]he tribunal need not apply the burden of proof rules of any specific jurisdiction, but can instead fashion specialized rules in light of the particular substantive issues and procedures at issue in a specific instance.⁵⁰

12.48  We agree that a pragmatic approach to burden of proof is desirable and a strict analysis of where it rests may not always be helpful or wanted. An obvious case is where a claim and counterclaim relate to the same factual issue. One cited example of this is the case of a construction dispute where a builder delivers an account to the owner to receive payment. The owner seeks a declaration that the money is not owed. The builder counterclaims for the money due. From a technical perspective each has a burden of proof in relation to its contention but, from a practical perspective, the tribunal will simply consider all of the evidence and decide which position is to be preferred.⁵¹

12.49  As arbitration proceedings progress, evidence will be presented by different parties at different times. It is therefore very common for the ‘balance’ of evidence to change backwards and forward between the parties. A claimant with the burden of proof may present a prima facie case that satisfies the standard of proof required at that stage, only to find that the respondent subsequently presents a preponderant body of evidence leading to a decision in favour of the respondent.

12.50  In common law legal systems the party with the burden of proof may be required to initially establish a prima facie case (ie one that should succeed in the absence of rebuttal by its opponent), failing which the responding party has the right to seek a determination that there is no case to answer before being called on to present any of its own evidence. The process of ‘no case to answer’ does not have a significant role to play in international arbitration. Tribunals tend to defer decisions on whether the burden of proof has been discharged to the end of the proceedings and respondents tend to present evidence even if they believe that the respondent has no case to answer.⁵² That said, in recent years there appears to have been some limited erosion of that position. (p. 423) For example, Article 39 of the SCC Rules (Summary Procedure) makes some provision for a party to request early determination of an issue of fact, including on grounds that an allegation of fact is ‘manifestly unsustainable’. Similar summary procedures for early dismissal of claims have been introduced under other arbitration rules, but on the basis of the language used, these appear to be limited to an assessment of the legal merits of the claim⁵³ and on the assumption that the supporting facts are as stated. There is some suggestion that an exception to this may arise where the factual allegations underlying the legal arguments are regarded by the tribunal as being (manifestly) incredible, frivolous, vexatious, inaccurate or made in bad faith.⁵⁴ Of course, if the claimant cannot even present a prima facie case, the claim will not succeed in any event.

12.51  The burden of proof deals with the question of which party has responsibility for presenting evidence on a particular issue. It does not indicate the level of proof required.

12.52  In relation to the sufficiency of evidence needed to discharge the burden of proof, it is widely accepted that the standard in international arbitration is the ‘balance of probabilities’ or a ‘more likely than not’ standard.⁵⁵ It is often pointed out that this is the standard formulated in common law systems and that civil law systems speak of ‘the satisfaction of, or the inner conviction of the adjudicator’.⁵⁶ However, when it comes to practical application, there does not appear to be any difference of substance between the two formulations.

12.53  In arriving at conclusions on the facts in issue in the proceedings, arbitral tribunals are permitted to rely on presumptions or inferences regarding evidence.

12.54  An example of a positive inference would be that contemporaneous documentation is more likely to be reliable than documents prepared for the purpose of the (p. 424) arbitration. Absent a statement to the contrary in the first procedural order, an arbitral tribunal may also presume that documents introduced on to the record are authentic unless an allegation is made to the contrary.⁵⁷ Of course, such presumptions may not be appropriate in all cases. For example, there may be few contemporaneous documents and those that exist may be contradictory, or the volume of documents may be so great that, in the absence of positive collaborative assistance from the parties in finding those that are material, primary reliance by the tribunal on those documents may be difficult.⁵⁸

12.55  Examples of adverse inferences include negative inferences drawn from a party’s failure to produce material documents or witnesses in its control, or the failure of a witness to answer certain questions put to them.⁵⁹ Absent a valid excuse, it is natural (if not logical) to assume that the withheld information is adverse to the interests of the party controlling it and the tribunal may wish to form a view on the kind of information or evidence that is being withheld.⁶⁰ A tribunal may also draw inferences from circumstantial evidence.⁶¹ As with other indirect evidence a tribunal may place more or less weight on such evidence depending on what direct evidence is available.

12.56  The IBA Rules make express provision for the drawing of adverse inferences by reason of a party’s failure to produce witness or other evidence. Articles 9.5 and 9.6 provide for the right of the tribunal to infer that the withheld evidence would be adverse to the interests of the party that has failed to produce it. These provisions are addressed at 12.357-12.386. The possible use of adverse inferences in relation to bad-faith conduct by a party to arbitration in breach of Preamble 3 of the IBA Rules is also considered briefly in Chapter 2.⁶²

12.57  Article 9.2 sets boundaries for the evidence (oral or written) that a party may be asked to provide or produce under the IBA Rules, and the evidence that a tribunal may exclude. It is an extremely important provision and the grounds of objection set out in Article 9.2 are adopted by reference into various other provisions of the IBA Rules.⁶³

12.58  The provision states that the tribunal ‘shall’ (either upon request by a party or on its own motion) exclude from evidence or production, a document, statement, oral testimony, or inspection, if that evidence falls within one of the limitations listed in Article 9.2(a)–(g). Thus, if a tribunal is satisfied that one or more of those grounds is established, the evidence should be excluded. However, it is for the tribunal to determine whether an objection under Article 9.2 (a)–(g) has been made out, thereby retaining control of the decision to exclude evidence.⁶⁴ The Commentary on the IBA Rules explains that the limitations contained in Article 9.2 are important because they ‘preserve the lines of distinction between the rights of the parties and the authority of the arbitral tribunal’.

12.59  The grounds for exclusion of evidence set out in Article 9.2 constitute important protections for the parties and, in relation to document production, they provide a necessary counterbalance to the right of a party to request production of documents from its opponent.⁶⁵

12.60  Article 9.2 lists the grounds on which (a) the production of documents or (b) the admission of evidence, can be resisted.

12.61  A disputed request for document production is one of the most common situations in which the provisions of Article 9.2 (a)–(g) will come into play. Under Article 3.5 of the IBA Rules, those provisions contain the grounds upon which a party may raise an objection to production, and under Article 3.7(ii), those which the tribunal must consider when it has to decide whether an order for production should be made.

12.62  While Article 9.2 appears to provide an exhaustive list of limitations, it has been suggested that the provision omits reference to one other ground that is available to a party (p. 426) to raise in connection with a disputed document production request—that the document that has been requested does not exist:

One important substantive objection is not included in the catalogue of Article 9, section 2: the non-existing document; that is, a document which has never existed and leads only a virtual life in the mind of the requesting party. A non-existing document does not come within the scope of Article 9, section 2(d), which is only concerned with the loss or destruction of documents.⁶⁶

12.63  The point is made elsewhere⁶⁷ that, although Article 3.3 does not expressly require a party to state in a request to produce the grounds on which it believes the requested documents to exist, it should be read as containing an implied requirement in those terms. In any event, it would be prudent for the requesting party to mention the grounds for such belief, particularly where this is not obvious from the nature of the documents requested. The absence of an express requirement for a statement in these terms may explain why there is no corresponding right of objection under Article 9.2. Clearly, if documents do not exist, they cannot be produced, although an allegation of their non-existence will not prevent an order for production being made if the tribunal is persuaded that the documents do, in fact, exist.

12.64  Each of the grounds for exclusion of evidence expressed in Article 9.2 is addressed in the sections that follow.

12.65  The power to exclude evidence on the basis of relevance and materiality extends to all types of evidence—whether a document, oral or written fact evidence, or expert evidence—and may be exercised at any stage of the proceedings.

12.66  The tribunal is to exclude evidence that it determines does not have ‘sufficient relevance to the case or materiality to its outcome’.⁶⁸

12.67  The requirement of ‘sufficient’ relevance suggests that there are gradations of relevance and a tipping point (sufficiency) where the test is met. On this basis, it is suggested (p. 427) that the sufficiency requirement at Article 9.2(a) bites only on the relevance limb of the benchmark, presumably on the basis that a piece of evidence either is or is not material to the outcome.⁶⁹ We agree with that view.

12.68  In relation to document production, it should be remembered that the requirement of relevance and materiality at Article 9.2(a) is expressly restated at Article 3.3(b) as a requirement of a request to produce documents.

12.69  A failure to include in the request an explanation of how the documents requested are relevant and material is a standalone basis for rejection or dismissal of the request. These matters are discussed further in Chapter 6 paras 6.76–6.146.

12.70  In general terms, there are two situations where a tribunal’s assessment of a document as not being relevant and material will result in that document being blocked from appearance on the record. The first is where the tribunal declines to order production of a requested document under Article 3.7.⁷⁰ The second is where it excludes a document already on the record.

12.71  The factors described⁷¹ as being relevant to an assessment of relevance and materiality for the purposes of a document production request or order have similar application to the exercise of the tribunal’s more general discretion to exclude documentary evidence under Article 9.2(a) for ‘lack of sufficient relevance to the case or materiality to its outcome’.

12.72  Situations not related to document production requests where a tribunal may, in theory, decide to exercise its power under Article 9.2(a) will be case specific. For example, a party may have introduced a document with its written submissions that the other party contends should be removed from the record for lack of relevance and materiality,⁷² or a party may, late in the day—after written submissions and voluntary production have been completed—indicate that it wishes to introduce a document on to the record against the wishes of the other party.

12.73  Although relatively rare in our experience, also possible is a situation where, of its own initiative, the tribunal decides that a document is not sufficiently relevant and material to justify its retention or inclusion on the record. For example, when an issue between the parties has been conceded by one side, a tribunal may decide pursuant to Article 9.2(a) (p. 428) that no further evidence should be permitted because it will serve no purpose. In Abaclat, a tribunal excluded from the record legal opinions that had been filed in prior arbitration proceedings by expert witnesses providing testimony in the matter before them. The respondent wanted to introduce the opinions in order to embarrass the claimant’s experts by reference to allegedly inconsistent testimony contained in the opinions. In deciding to exclude the opinions, the tribunal considered the assistance that the opinions would provide on the issues in the case. It took the view that ‘these [opinions] would be used in the first place for impeachment purposes’ and ‘not to shed more light on the legal issues at stake’. The tribunal went on to say that that there was sufficient material available upon which the experts’ evidence could be challenged so as to render admission of the opinions ‘excessive’.⁷³

12.74  The factors described⁷⁴ as being relevant to an assessment of relevance and materiality for the purposes of document production will also have application in relation to an assessment by the tribunal of the relevance and materiality of witness evidence.

12.75  If exclusion of witness evidence is being considered at the time of the evidentiary hearing, a tribunal is much more likely to be fully up to speed on the issues in the case and may find a determination of what is relevant and material (and what is not) much easier than at an earlier stage of the proceedings, when contested document production requests are being ruled on, or the intended scope of witness evidence is being discussed.⁷⁵

12.76  One example cited elsewhere of tribunal intervention at an evidentiary hearing is that of an ICC arbitration conducted in Paris presided over by a sole arbitrator. During the hearing a witness had been called to give evidence concerning a licence to produce pharmaceutical products. In the course of oral testimony, after cross-examination had continued for a reasonable period, the question turned to matters that the arbitrator understood as relating to the witness’ own liability. As the witness was not a party (or an employee of a party), the tribunal ruled that further questioning would be inadmissible.⁷⁶ In practice, many tribunals will permit counsel to have a degree of latitude in relation to questions put to witnesses during cross-examination. However, if there is a tight timetable and it is clear that counsel is wasting time on unimportant points, it may well step in to move matters along.⁷⁷

12.77  Article 9.2(b) and Article 9.3 address the important subject of legal impediment and privilege as a bar to the use of evidence.

12.78  As the Commentary to the IBA Rules makes clear, those responsible for drafting Article 9.2(b) felt it important that certain privileges that may apply under the appropriate applicable law should be recognized in international arbitration.⁷⁸ The Commentary on the IBA Rules refers to three examples of such privileges—attorney–client privilege, professional secrecy, and without prejudice privilege. There is potential for misunderstanding in relation to the use of such terms, as different national jurisdictions may have different labels for the same category of privilege, and the nature and scope of particular privileges may not be the same across jurisdictions. However, there are two broad categories of privilege that are widely used in international arbitration.

12.79  The first category is privilege protecting certain types of communications between a party and its lawyer (and sometimes extending to communications with third parties) (p. 430) relating to legal advice and/or litigation. In England, this category of privilege is broken down into ‘legal advice’ privilege and ‘litigation’ privilege, while in the United States, the equivalent privileges are (in broad terms) ‘attorney–client’ privilege and ‘attorney–work product’ privilege. In a number of civil law jurisdictions, such protections as exist in respect of these matters are often covered by a single privilege known as professional secrecy.

12.80  The second category of widely used privilege is a protection that attaches to communications between disputing parties relating to efforts to settle their dispute—often referred to in England as ‘without prejudice’ privilege. These and other privileges are discussed in more detail at 12.88 – 12.101.

12.81  Evidentiary privileges play a significant role in legal proceedings across the world. However, legal privileges and other legal impediments to production or introduction of evidence generally arise out of a provision of law or practice within a national jurisdiction and, while there may be common themes across jurisdictions, complex issues of conflicts of laws can arise in relation to the application of such privileges in an international forum.

12.82  Article 9.2 provides that the tribunal may exclude from evidence or production evidence to which legal privilege or legal impediment attaches. Article 9.3 describes a number of factors that a tribunal may take into account when considering issues of privilege and/or legal impediment—in substance, the need to protect a document or oral statement made for the purpose of obtaining/providing legal advice; in connection with settlement negotiation; the parties’ expectations when the legal privilege or impediment is said to have arisen; any waiver of the privilege/impediment; and the need to maintain fairness between the parties, particularly where those parties may be subject to different rules.

12.83  It is convenient to consider Article 9.2(b) and Article 9.3 together. In doing so it is important to note that, under those provisions:

1. (a)  The basis of exclusion from production or evidence is the existence of a legal impediment or privilege under the legal or ethical rules that are determined by the tribunal to be applicable;⁷⁹ and

2. (b)  In considering issues of legal impediment/privilege, and to the extent permitted by any mandatory legal or ethical rules that the tribunal determines to be applicable, the tribunal may take into account the factors described in Article 9.3.⁸⁰

12.84  Although the 1999 IBA Rules contained a provision in identical terms to Article 9.2(b), there was no guidance on the application of its terms. When preparing the 2010 IBA Rules, those responsible for drafting the rules felt it appropriate to provide the additional (p. 431) non-binding guidance that is now found at Article 9.3. The approach taken by the IBA Committee when formulating these guidelines has been described in these terms:

In tackling the issue of privileges, the IBA Working Group had to strike a delicate balance. The new rules had to be specific enough to provide international arbitrators with more practical and workable guidance as to how to handle privilege issues in international arbitration than the 1999 edition of the Rules. At the same time, however, the new provision had to be generic enough to avoid the impression of over-emphasising the issue of privilege and any interference with the complex conflict of laws problems related to privileges as well as any conflict with mandatory, public-policy nature of domestic privilege rules. Such a conflict would have been inconsistent with the soft-law nature of the IBA Rules, which constitute a restatement of best practice standards but cannot and do not intend to override applicable domestic law of a mandatory nature.⁸¹

12.85  Despite these objectives, the provisions that appear in the IBA Rules have nonetheless been criticised for being too general and not providing more precision around how potentially applicable privilege rules are to be sorted and applied. One commentator puts it this way:

[A]rt. 9.2(b) refrains from providing a specific conflict rule for the application of privileges in international arbitration. At the same time, the rule is not specific enough to provide international arbitrators with concrete guidance as to the practical handling of privilege issues.⁸²

12.86  However, the view has also been expressed that the discretion afforded to a tribunal by application of the relatively ‘high level’ guidance given in the IBA Rules is a good thing:

There may be competing privilege claims, and the decision as to which privilege rule or rules to apply falls into the general category of procedural matters left to the arbitrators’ discretion.⁸³

12.87  Our view is that the combination of Article 9.2(b) and Article 9.3 provides useful practical guidance for a tribunal asked to rule on issues of legal impediment or privilege. While avoiding expression of a fixed rule that might trespass on mandatory provisions of applicable law (and thereby create more problems than would be solved), the rules provide a decision-making framework that provides assistance to the tribunal as it navigates its way through these complex issues. Express provision on this topic in institutional rules is scarce.⁸⁴ National laws vary considerably in the substance of legal (p. 432) and ethical rules that may apply. The IBA Rules rightly grant the tribunal considerable discretion and, while tending to suggest that the laws of the home jurisdictions of the parties are the appropriate ones to take into account on issues of privilege (and thereby downplaying the potential relevance of other possibilities),⁸⁵ the additional considerations expressed in Article 9.3 allow the tribunal take into account factors relevant to the broader conduct of the arbitration.

12.88  In international arbitration, the term ‘privilege’ is very often used to refer to what in English practice is known as legal advice privilege, litigation privilege, or ‘without prejudice’ privilege. However, Articles 9.2(b) and 9.3 are not confined to these categories of privilege. In addition, those provisions make express reference to a ‘legal impediment’. In consequence, tribunals may have to consider a wide range of privileges and legal obstacles to production asserted by the parties. The next few sections describe some categories of privilege or legal impediment that may arise.

12.89  Professional privileges are those that attach to documents, knowledge, or information that comes into existence or that are shared between parties in the context of a professional relationship. An individual may obtain access to such privileged information by reason of belonging to a particular profession and may be bound by legal or ethical rules to keep that information secret from other parties. Professional privileges often exist within industries where one party may wish or need to reveal sensitive or confidential information to a member of that profession and public policy dictates that such communications should be protected. Examples of professional privileges include the following:⁸⁶

• •  Legal advice privilege (widely recognized in many common law jurisdictions and referred to in some as attorney–client privilege or professional secrecy)—designed to protect the confidentiality of communications between a client and a lawyer in connection with the taking and providing of legal advice. This type of privilege is dealt with in more detail at 12.139-12.196.

• •  Litigation Privilege (again, widely recognised across a number of jurisdictions and having broad equivalents (for example, ‘attorney work product’) in others)—protects communications with third parties where the dominant purpose of the communication is to further litigation which is pending, reasonably (p. 433) contemplated or existing. This type of privilege is dealt with in more detail at 12.149-12.151 and 12.169.

• •  Medical privilege—this prevents doctors and medical staff from revealing information about the health of their patient without the patient’s consent.⁸⁷

• •  Accountant-client privilege—some US states treat certain types of communication between an accountant and a client as privileged (either on the basis of an extension to the accountant of litigation and legal advice privilege or as a standalone privilege). In Europe, the position is rather different and accountants cannot normally claim legal advice privilege although, in some instances, they can rely on litigation privilege.

• •  Other privileges not connected to a particular profession also exist. As with professional privileges, many of these have their provenance in considerations of public policy. One of the most important of such privileges is that which attaches to settlement discussions (also known as ‘without prejudice privilege’). This type of privilege is dealt with in more detail at 12.174-12.186. Other examples include business secrets privilege (historically an American concept, the privilege may apply to a secret formula, patent, device, or compilation if it is used in the owner’s business and enables the owner to obtain a competitive business advantage), and other privileges such as those attaching to bank records, political votes, tax returns, etc.⁸⁸

12.90  A further important privilege is that of privilege attaching to government information or matters of national interest. In some cases, this privilege exists as a general principle of law and in others it is embodied in legislation. For example, in Nigeria, Section 243(1) of the Evidence Act 2011 provides that: ‘A Minister, or in respect of matters to which the executive authority of a State extends, the Governor or any person nominated by him, may in any proceedings object to the production or request the exclusion of oral evidence, when, after consideration, he is satisfied that the production of such document or the giving of such oral evidence is against public interest’.⁸⁹ ‘Cabinet privilege’ exists under Section 38 of the Canada Evidence Act 1985.⁹⁰ According to this provision, the production of documents prepared for or used by Ministers of the Crown in executive policy-making deliberations is to be refused.⁹¹ In England ‘public interest immunity’ has replaced ‘Crown Privilege’ and is similar in scope to that found in the Nigerian provision mentioned above. Halsbury’s Laws describe it thus:

(p. 434)

It is a general rule of law founded on public policy and recognised by Parliament that any documentary evidence may be withheld or an answer to any question may be refused on the ground that the disclosure of the document or the answering of the question would be injurious to the public interest. The rule is a rule of substantive law and may be described as a principle of constitutional law; it is not a mere matter of practice or procedure.⁹²

12.91  A similar type of privilege known as ‘executive privilege’ exists in the United States. This allows the President and other state officials to withhold certain communications within the executive department from the courts and from Congress. In addition, some US states courts recognize a privilege protecting the deliberative process of government.⁹³

12.92  In some jurisdictions, certain of these protections may be classified as legal impediments rather than privileges.

12.93  It should be noted that, even if appropriate to raise under Article 9.2(b), some of these privileges may also give rise to a ground for exclusion under one of the other provisions of Article 9.2. For example, rather than relying on a privilege that protects government information, reference might also be had to Article 9.2(f): ‘grounds of special political or institutional sensitivity (including evidence that has been classified as secret by a government . . . )’.

12.94  As with evidentiary privileges, a ‘legal impediment’ may take many forms. As mentioned, what is classified as an evidentiary privilege in some jurisdictions may have a different status in others and perhaps fall more readily under the description ‘legal impediment’. In addition, there may be particular types of ‘legal impediment’ that are peculiar to an individual jurisdiction or region. Such impediments may cover a broad range of subject matter and it is therefore much more difficult to provide an illustrative list. However, what follows are some examples of provisions that have been relied upon/considered as legal impediments.

12.95  National courts have in some cases found that a threat of foreign prosecution is a reasonable excuse for non-production of evidence.⁹⁴ In essence, the argument is that if the relevant party were to comply with an order for discovery of documents, such conduct would breach the laws of another state and render that party liable to sanctions. The laws of the foreign state constitute the legal impediment.

(p. 435) 12.96  However, there have also been cases—in England and in the United States—where national courts have refused to bar disclosure of documents by reason of foreign ‘blocking statutes’ existing in some civil law jurisdictions. The latter jurisdictions—generally with a tradition of very limited document production—have sometimes viewed pre-trial discovery requests made to one of its nationals in proceedings before a foreign court as interference with the sovereignty, customs, and national interests of that jurisdiction. In order to prevent the discovery procedures from being executed in their territories, those jurisdictions have therefore enacted what are known as ‘blocking statutes’, under which a party complying with the discovery order of a foreign court becomes liable to a penalty.⁹⁵

12.97  Another commonly raised legal impediment to production of evidence, particularly in disputes involving banks, is the banking secrecy regime. National legislation may provide that a bank cannot disclose information and documents about bank accounts held by clients of the bank. This may put the bank at a genuine risk of sanctions if it were to breach that legislation. Breach of a banking secrecy regime may, in some jurisdictions, even trigger a criminal prosecution and conviction. For example, under the Criminal Code of the Russian Federation, unauthorized receiving, disclosure, or usage of information covered by commercial, tax, or bank secrecy, made without the permission of its owner, by a person to whom it was entrusted or who has obtained the information in the course of business, constitutes a crime.⁹⁶ The information may, in certain circumstances, be provided to certain third parties (for example, state officials), but the list does not include arbitral tribunals.⁹⁷ As a result, if a bank employee were to disclose to a tribunal any document or information that is subject to bank secrecy without first obtaining the permission of the bank’s client, the employee may face criminal prosecution in Russia. In addition, the client whose rights have been violated by the disclosure can seek damages from the bank.⁹⁸

12.98  A balancing of interests approach has been adopted by American courts when considering an application for production of documents from a bank subject to application of (p. 436) foreign law prohibiting production. In one case concerning enforcement of an Internal Revenue Service summons directed to the First National Bank of Chicago seeking disclosure of certain records in First Chicago’s branch bank in Athens, Greece, the Court found that:

First Chicago has adequately demonstrated that compliance will subject its employees to the risk of substantial criminal penalties under Greek law, and that a balancing of relevant competing interests weighs against compelling disclosure at this time. We therefore reverse the judgment of the district court, but remand for consideration of an order requiring First Chicago to make a good faith effort to secure permission to make the information available.⁹⁹

12.99  Production of evidence may also be resisted by reference to data protection or privacy laws. A number of jurisdictions have in place legislation that prevents the holding, use, or disclosure of personal information.¹⁰⁰

12.100  Under the rules of the Swedish Code of Judicial Procedure, purely personal notes are not subject to disclosure unless there are exceptional circumstances justifying this.¹⁰¹ Russia and the Ukraine also have a high level of protection in relation to personal correspondence and communications. For example, under Article 23.2 of the Constitution of the Russian Federation, ‘Everyone has the right to privacy of correspondence, or telephone conversations and of postal, telegraph and other messages. Limitation of this right shall be allowed only on the basis of a court decision’.¹⁰²

12.101  Under Article 138 of the Russian Federation Criminal Code, violation of the secrecy of correspondence, telephone calls, and postal, telegraph, and other communications of individuals is a criminal offence punishable with a fine, compulsory community (p. 437) service, or, if committed by a person who abused his or her occupational status, by imprisonment of up to four years. Based on this provision, it has been argued in some cases that a corporate respondent cannot produce the business emails of its employees without putting him/herself and company officers in danger of criminal prosecution. Certain Russian data protection laws—for example, Article 88 of the Labour Code of the Russian Federation—do permit employers, in certain circumstances, to disclose personal data of employees, provided they first obtain the written consent of the employee.¹⁰³

12.102  Article 9.2(b) makes provision for evidence to be excluded on the basis of a legal impediment or privilege ‘under the legal or ethical rules determined by the Arbitral Tribunal to be applicable’. This invites the question of how a tribunal should go about determining that applicable law in cases where this is disputed.

12.103  Although objections of legal impediment are likely to be directly linked to application of a national system of law, more complex questions may arise in relation to evidentiary privileges. The parties to international arbitration will very often come from different countries, may sometimes instruct counsel based in a different jurisdiction to their own, and the arbitration in which they are involved may be seated in yet another jurisdiction. When a party claims the protection of a privilege, that party, or its legal counsel, will generally have in mind a specific domestic or internationally recognized protection that it believes should apply. However, where parties are in dispute—and, in particular, where one of them is trying to obtain production of evidence and another is resisting this—disputes may arise as to what standard of protection (if any) should apply. For example, if a party from the United States is in dispute with a French party and the seat of the arbitration is in London, which jurisdiction’s laws should determine the question of legal privilege?

(p. 438) 12.104  The most straightforward solution to this issue would be an express agreement between the parties on the law or rules that should apply to questions of privilege. As in other contexts, the principle of party autonomy means that parties are free to agree the law or rules that are to govern questions of privilege and may even themselves define the scope of privilege that is to apply. Party agreements on such matters will generally be binding on the tribunal.¹⁰⁴ In practice, however, such agreements are rare.

12.105  Another pragmatic approach used by some tribunals is to address the issue of privilege at an early case management conference in order to expose any likely complexities or disagreements in relation to issues of privilege, and whether an agreed approach can be found. It may be sensible to include this topic on a list of possible agenda items for discussion under Article 2 of the IBA Rules.

12.106  In the absence of party agreement, the position remains difficult. Institutional rules and national laws seldom make express provision for issues of privilege.¹⁰⁵ Most institutional rules,¹⁰⁶ and many national arbitration¹⁰⁷ laws, simply contain general provisions granting a tribunal wide powers in relation to the conduct of the proceedings, including the admissibility of evidence. Even where privilege is mentioned, it is usually only to make clear that the tribunal has the power to determine the matter.¹⁰⁸

12.107  The IBA Rules start from the same standpoint of granting the tribunal wide powers to determine all issues related to evidence, including the question of admissibility.¹⁰⁹ The IBA Rules go on to state expressly in Article 9.2(b) that a tribunal may exclude evidence for reason of legal impediment or privilege but, as mentioned, also indicate that the tribunal must first establish the applicable rules to determine if that ground of relief is available.¹¹⁰

12.108  It is suggested that, faced with the question of which rules apply to an issue of privilege, there are four approaches a tribunal might take:¹¹¹

1. (a)  The application of general principles of law;

2. (b)  The application of a single national law determined through a choice-of-law approach;

3. (p. 439) (c)  The cumulative application of two or more potentially relevant national laws or rules; or

4. (d)  The creation of an autonomous standard defining the scope of the privilege.

12.109  These different approaches are briefly considered below.

12.110  One possible approach is simply to apply general principles to the question of whether the asserted protection exists. The difficulty with this approach is that it may be difficult to identify a set of such principles in relation to each type of privilege or impediment that may be raised. The position may be easier in relation to some categories of privilege than it is in respect of others. One example of the former category is that of legal advice (attorney–client) privilege.

12.111  However, even if the existence of legal advice privilege can be treated as an internationally accepted norm, it is still the case that the scope and application of such privilege varies considerably between jurisdictions. In addition, while there is no doubt that legal advice privilege is internationally recognized and understood, the same cannot be said for the wide variety of lesser-known privileges that may be available or which operate within national boundaries. Without constant and uniform application, a rule cannot be treated as a general principle of law. Accordingly, as attractive as it sounds, application of ‘general principles’ may be of limited practical assistance in relation to issues of legal impediment/privilege.

12.112  Where there are competing systems of law potentially applicable to resolution of an issue, application of a single system of law determined by conflict-of-laws principles is the traditional approach to take. In some cases, the discretion afforded to a tribunal may be sufficiently wide to enable it to make a direct choice of an appropriate system of law. Both of these routes will result in application of a single system of law. This introduces simplicity, but comes with a certain level of rigidity. Domestic law on privilege is rarely designed to deal with international disputes.

12.113  In relation to identification of a single applicable law, a number of possibilities are generally available to a tribunal.

12.114  Arguments for application of the lex arbitri are based on the premise that the operation of legal privilege as a restriction on the production or admission of evidence is procedural in nature and should be governed by the law of the seat of arbitration in the same way as other procedural matters not expressly addressed in applicable institutional or arbitration rules. However, this approach is criticized for not upholding the legitimate expectations of the parties who may have assumed the applicability of certain privileges that exist in their home jurisdiction. In addition, given that national laws on arbitration do not generally contain any detailed rules dealing with privilege in arbitration, the tribunal may have no choice (p. 440) but to resort to procedural rules applicable in state courts. This may be said to be inconsistent with the expectations of the parties who have opted to have their disputes settled through arbitration and not by reference to national court rules.¹¹² Members of the tribunal may also come from a jurisdiction different to that of the seat and have no appetite or experience of local procedural rules.¹¹³