4.1  Article 1 addresses the interaction between the IBA Rules and the various other rules that may apply in an individual arbitration.

4.2  Many arbitrations will be conducted pursuant to a set of institutional rules. In addition, parties may elect to adopt the IBA Rules. There may also be related party agreements and applicable national laws/international treaty obligations that operate on the arbitration proceedings.

4.3  Necessary interaction between the IBA Rules and these other categories of provision creates the potential for inconsistency or conflict, as well as exposing gaps in the procedural framework. Article 1 of the IBA Rules lays down a number of basic principles by reference to which inconsistencies, conflicts, gaps, and uncertainties in the arbitration infrastructure affecting the taking of evidence are to be resolved.

4.4  Article 1 does not deal with a conflict between application of the IBA Rules and the professional conduct/ethical rules applicable to counsel in a particular arbitration.¹ Nor could it. This is a matter for individual counsel to address in the particular circumstances of the case. The ongoing development of internationally recognized norms of practice in international arbitration may in any event assist in reducing the potential for such conflicts to arise.

4.5  There is little commentary on the operation of Article 1, but this should not detract from the important role its provisions play in effective application of the IBA Rules.

4.6  Firstly, Article 1 sets out a number of principles that are to be applied in addressing a conflict between the IBA Rules and (a) any applicable mandatory provisions of law or (b) the institutional, ad hoc or other rules that have been chosen to apply to the arbitration (defined in the IBA Rules as the ‘General Rules’).

4.7  Secondly, it lays down the principles to be applied in the event of a dispute regarding interpretation of the IBA Rules, or where the parties are unable to agree what to do when those rules are silent on a particular matter concerning the taking of evidence.

4.8  Lastly, Article 1 stipulates which version of the IBA Rules is to apply to a particular arbitration.

(p. 51) 4.9  Subject to one addition and a number of refinements, the terms of Article 1 of the IBA Rules follow very closely the wording of its predecessor provision in the 1999 IBA Rules.²

4.10  Article 1.1 is concerned with potential conflict between the IBA Rules and applicable mandatory provisions of law.

4.11  The use of the word ‘shall’ in Article 1.1 means that, where the IBA Rules apply, the provisions of those rules will govern all matters relating to the taking of evidence in the arbitration.

4.12  Before considering the effect of Article 1.1, it is therefore necessary to decide if the IBA Rules apply. The opening words of Article 1.1 provide that the IBA Rules shall apply when ‘the parties have agreed’ or ‘the Arbitral Tribunal has determined’ to apply them.

4.13  An important distinction exists between formal adoption of the IBA Rules as binding rules operating on the arbitration, and an agreement to use them as guidelines only. The mandatory application of the IBA Rules contemplated by the opening words of Article 1.1 will apply in the former situation, but not in the latter.

4.14  Available data indicates that use of the IBA Rules as guidelines is much more common than formal adoption of the rules. A 2016 IBA Report suggests that nearly half (48 per cent) of the arbitrations considered in the survey referenced the IBA Rules on Evidence. However, in around 80 per cent of those arbitrations, the tribunal consulted the rules as (p. 52) guidelines only.³ In the 20 per cent of arbitrations where there was agreement that the IBA Rules were to be binding, that agreement was reached after commencement of the arbitration in over 90 per cent of cases.⁴

4.15  In the majority of cases where the IBA Rules have been formally adopted into the arbitration proceedings, this will have been done by express agreement of the parties. The agreement may be contained in the parties’ arbitration clause or may have been made during post-dispute negotiations on procedural directions and timetable.

4.16  The IBA Rules also contemplate application of the rules at the election of the tribunal,⁵ and, where a clear direction has been given that the IBA Rules are to apply, the opening statement in Article 1.1 will take effect. In practice, this will generally be done with express or tacit agreement from the parties. In the authors’ experience, even if it wishes to do so, a tribunal is often reluctant to take a unilateral decision to apply the IBA Rules in the face of opposition from the parties. In addition, despite the express statement at Preamble 2 that the IBA Rules are not intended to limit the flexibility inherent in the arbitration process, arbitrators may feel more comfortable exercising such flexibility without obligatory application of the IBA Rules.⁶

4.17  Where there is disagreement—for example, where one party is keen to apply the rules and the other party is not, each seeing a particular disadvantage or advantage relative to their position in the particular dispute—the tribunal may decide or prefer to apply the IBA Rules as non-binding guidelines.⁷ In this case, the opening lines of Article 1.1 do not apply.

4.18  The second sentence of Preamble 2 of the IBA Rules makes clear that the rules are intended to be used flexibly and may be adapted to suit the particular needs of an individual arbitration. Consistent with the principle of party autonomy, it is the adapted version of the IBA Rules that will apply to the arbitration.

(p. 53) 4.19  Although not expressly stated in Preamble 2, it seems sensible that, where parties wish to adapt the IBA Rules, this should be done consensually at the time of adopting the IBA Rules or at commencement of the arbitration, if later. It would be unfair (as well as difficult) for one party to seek to adapt the IBA Rules in the face of disagreement from the other party after an agreement to apply the IBA Rules as they stand has already been made.

4.20  If an irreconcilable disagreement about proposed adaptations emerges during negotiations on whether to apply the IBA Rules, then the parties will have to choose whether to adopt the IBA Rules unadapted, abandon use of those rules altogether, or agree that they may be used as guidelines only.

4.21  Article 1.1 contains a proviso to the general position that, where adopted, the provisions of the IBA Rules shall apply to the taking of evidence. The proviso concerns the relationship between the IBA Rules and mandatory provisions of law. Article 1.1 says that the IBA Rules shall govern

except to the extent that any specific provision of [the IBA Rules] may be found to be in conflict with any mandatory provision of law . . . (emphasis added).

4.22  A mandatory provision of law is one that must be observed and cannot be departed from as a matter of contract. The effect of Article 1.1 is that a mandatory law provision will take precedence over a specific provision of the IBA Rules with which it is in conflict. In this way the conflict is resolved and the integrity of the IBA Rules is preserved without offending the relevant system of law containing the mandatory provision.

4.23  It is not expressly stated in the IBA Rules, but the natural consequence of Article 1.1 is that the mandatory law provision will, where appropriate, be given effect to in the arbitration proceedings.

4.24  The inclusion of the phrase ‘to the extent’ in Article 1.1 indicates that the relevant provision of the IBA Rules should be displaced only to the extent necessary to remove conflict with the relevant mandatory provision of law. The reference to a ‘specific provision’ of the IBA Rules supports this interpretation.

4.25  The taking of evidence is a critical component in the arbitration process and the IBA Rules have wide reach in relation to that aspect of the proceedings. Thus, the scope (p. 54) of subject matter within the IBA Rules to which a conflict may attach is, in principle, relatively wide.

4.26  However, while there are also many potential sources of mandatory law operating in an international arbitration, those mandatory provisions will very often apply to substantive issues between the parties.⁸ The sources of mandatory provisions of law that touch on ‘procedural’ aspects (eg, the process of taking evidence and, in turn, on many of the matters covered by the IBA Rules) will be more limited. Nonetheless, they may arise from time to time.

4.27  Save in relation to investment arbitrations under the ICSID regime governed directly by international law,⁹ the law of the seat of arbitration is the most likely source of a mandatory law provision affecting procedural aspects of an international arbitration with which the IBA Rules are concerned. Indeed, it has been suggested that the reference to mandatory applicable law in Article 1.1 of the IBA Rules is best understood as a reference to the law of the seat.¹⁰ Some support for that view is found in the Commentary to the IBA Rules, which states in the introduction to Article 1 that international arbitrations are ‘subject to . . . mandatory law relating to arbitration procedure at the seat of the arbitration’, although the Commentary does go on to refer to ‘any mandatory legal provisions’.¹¹

4.28  Unlike institutional rules which, for the most part, have many common themes reflecting accepted practice in international arbitration, the arbitration law within a particular national jurisdiction may vary significantly from that in other jurisdictions. As a result, it was impossible for those drafting the IBA Rules to anticipate or take into account all of the specific provisions of local law that might conflict with the procedures (p. 55) laid down in the IBA Rules. Article 1.1 of the IBA Rules provides the manner of resolution of any conflict that may arise: namely, that the mandatory provision of law will prevail. This express provision reflects the most likely outcome on application of general principles. Redfern and Hunter confirm that ‘ . . . once a place of arbitration has been chosen, it brings with it its own law. If that law contains provisions that are mandatory as far as arbitrations are concerned, those provisions must be obeyed’.¹² On one view, Article 1.1 of the IBA Rules simply acknowledges that position.

4.29  However, the mandatory provisions of law engaged by Article 1.1 are not limited to mandatory provisions of the seat of arbitration. As mentioned, Article 1.1 refers to ‘any mandatory provisions of law determined to be applicable to the case’.¹³ Although the Commentary to the IBA Rules suggests that this provision is directed at the law of the seat of arbitration, there is no limitation to that effect in the rules and, as a matter of principle, it is difficult to see why there should be.

4.30  The law of the seat or ‘legal home’ of an international arbitration can play an important role in the arbitration proceedings, sometimes most significantly by not facilitating unnecessary intervention in the conduct of the arbitration.

4.31  When parties select a seat for their arbitration they often make a conscious choice of seat based not only on considerations of geographical or other factors of practical convenience, but also by reference to the framework of arbitration law existing in that jurisdiction. The arbitration law of the seat will, in nearly all cases, constitute the law governing the arbitration proceedings (the lex arbitri).¹⁴ The law of the seat is likely to include express mandatory and supervisory powers—most importantly, the power to set aside an award and thereby affect the successful party’s ability to enforce that award elsewhere under the New York Convention as well as at the seat.¹⁵ It may also involve application of less tangible but equally important ‘mandatory norms’ concerning the conduct of arbitration.

4.32  As mentioned, the potential for conflict between the detailed provisions of the IBA Rules and mandatory provisions of law at the seat of arbitration covering the same subject matter is likely to be relatively limited. In the majority of arbitrations, the seat chosen by the parties, or that arrived at under the default provisions of most popular (p. 56) institutional rules, is likely to result in one of a number of seats of arbitration generally regarded as ‘arbitration friendly’ or, at the very least, a seat that both parties can ‘live with’ as part of the overall commercial negotiation.¹⁶

4.33  In addition to having the necessary infrastructure (for example, a pool of experienced arbitrators, purpose-built arbitration hearing facilities, easy international access and entry requirements, transcription services, etc) and being a party to the New York Convention,¹⁷ the key characteristic of these jurisdictions is that their arbitration laws will support, rather than interfere with, the arbitration process.

4.34  Countries seeking to support and encourage international arbitration within their territory will generally enact legislation providing an appropriate framework. The UNITRAL Model Law on International Commercial Arbitration has been adopted or has formed the basis for arbitration laws in a significant number of jurisdictions.¹⁸ Other jurisdictions maintain a discrete statute (eg the English Arbitration Act)¹⁹ or include the arbitration law as part of their Civil Code (see the Belgian Judicial Code,²⁰ the German Code of Civil Procedure,²¹ and the Swiss Private International Law Statute).²²

4.35  Consistent with a ‘light touch’ approach to the conduct of arbitrations adopted in many such jurisdictions, the arbitration law at a seat of arbitration is unlikely to deal in any (p. 57) detail (if at all) with the particular procedures to be adopted in an individual arbitration in relation to the taking of evidence.²³ This will be left to the agreement of the parties and/or the discretion of the tribunal (a position that is entirely consistent with the terms and manner of application of the IBA Rules). At least one jurisdiction has gone as far as to enact express statutory provision to the effect that rules of arbitration agreed to be adopted by the parties shall apply and be given effect unless inconsistent with a mandatory provision of that jurisdiction’s arbitration law.²⁴ This position reduces significantly the risk of direct conflict between matters of detail in the IBA Rules and the law of the seat.

4.36  A different position may exist in relation to those jurisdictions that have unique or unusual features contained within their laws—whether matters of principle or detail. There may be occasions where a specific mandatory provision of the law of the seat will conflict with a provision contained in the IBA Rules. One such example relates to the law of the United Arab Emirates (UAE). Under UAE law, in arbitrations conducted ‘on shore’²⁵ in the UAE (whether involving domestic or international parties), fact and expert witnesses must give testimony under oath. When making the oath these witnesses must also use the specific language stipulated in the UAE Evidence Law.²⁶ Article 8.4 of the IBA Rules is less prescriptive on this point and does not require the giving of evidence on oath.²⁷

4.37  Any conflict between the two provisions is resolved by the terms of Article 1.1 of the IBA Rules. In an arbitration having its seat ‘onshore’ in the UAE in which the parties have adopted the IBA Rules, the provision contained in Article 8.4 would not apply (p. 58) and, in practice, the mandatory requirements of UAE law requiring witness and experts to give evidence under oath in a manner complying with the relevant provisions of UAE law would prevail. The practical operation of Article 1.1 of the IBA Rules may therefore be significant. In the example given, a failure of the witnesses to give testimony under oath in the manner prescribed could result in the award being set aside by the local courts.

4.38  The ‘mandatory provision of law’ giving rise to a conflict with the IBA Rules may not be limited to discrete provisions of national law directed at specific matters. In our view a conflict may also arise in connection with more general mandatory norms at the seat of arbitration concerned with the operation and conduct of arbitration proceedings. Therefore, it may be necessary to examine what mandatory norms may apply.

4.39  The arbitration laws of most favoured seats of arbitration will lay down what should be the overall objective of an international arbitration conducted within that jurisdiction. Those laws may also set out the guiding principles to be applied in such arbitrations. For example, the Hong Kong Arbitration Ordinance CAP 609 provides at Section 46 that:

4.40  Having identified procedural norms contained in national arbitration laws we must then ask whether or not such norms are mandatory.

4.41  Mandatory norms have been described as those that the relevant legislature wishes to apply, regardless of the will of the parties or any discretion otherwise given to the tribunal. Participants in international arbitration will, for the most part, recognize that some mandatory norms may operate to constrain party autonomy and arbitral discretion.²⁹

(p. 59) 4.42  In some instances, the relevant system of law will make clear whether a procedural norm is mandatory. For example, the English Arbitration Act states which provisions of that legislation are mandatory. Those mandatory provisions include Section 33, which requires the tribunal to ‘act fairly and impartially between the parties’, and to give ‘each party a reasonable opportunity of putting its case and dealing with that of its opponent’ and to ‘adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense . . . ’. Section 33(2) provides that those duties apply to all of the tribunal’s decisions on matters of procedure and evidence, and in the exercise of all powers conferred on it.³⁰

4.43  However, some commentators suggest that even when not expressly stated to be mandatory, the terms or nature of certain national provisions may indicate that they are to be treated as such, ie they must be applied by a tribunal regardless of the (express or implied) contrary intention of the parties. One cited example is Article 18 of the UNCITRAL Model Law, which requires that parties are to be ‘treated with equality and each party shall be given a full opportunity of presenting his case’. Article 19 of the Model Law goes on to provide that the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings, but that article contains the caveat ‘Subject to the provisions of this Law’, thereby making party autonomy subject to the principles contained in Article 18. The second part of Article 19 contains a similar proviso in relation to the power of the tribunal to determine the procedure in the event that the parties cannot agree on the steps to be taken.³¹

4.44  Similar analysis and evidence of legislators’ intentions can be found elsewhere. For example, Article 1699 of the BJC contains the following provision relating to arbitrations which have their seat in Belgium:

Notwithstanding any agreement to the contrary, the parties shall be treated with equality and each party shall be given a full opportunity of presenting his case, pleas in law and arguments in conformity with the [right to be heard]. The arbitral tribunal shall ensure that this requirement as well as the principle of fairness of the debates is respected.³²

4.45  Although Article 1699 is not included in the list of mandatory provisions referred to in Article 1676 of the BJC, it is treated as being mandatory in nature by the inclusion of the (p. 60) phrase ‘notwithstanding any agreement to the contrary’. As a result, neither the parties nor the arbitrators may deviate from this provision.³³

4.46  It may be that the potential for conflict with mandatory norms is more apparent than real. The procedural norms contained in the international arbitration laws of many chosen seats of arbitration will be broadly consistent both with the detailed provisions of the IBA Rules, and with the objectives and general principles set out in the Preamble to the IBA Rules that govern other steps in connection with the taking of evidence not covered by the express provisions³⁴—namely, (in general terms) to provide an efficient, economical, and fair process,³⁵ a reasonable opportunity for each party to put its case, and an expectation of good faith conduct by the parties.³⁶

4.47  However, there may exist differences of emphasis and degree. Will such differences engage Article 1.1? For example, in an international arbitration with a seat in Singapore, the provisions of the UNCITRAL Model Law will apply, including the principle at Article 18 that each party shall be given a ‘full’ opportunity of presenting its case.³⁷ Preamble 1 to the IBA Rules states the intention of the IBA Rules as being the provision of an ‘efficient, economical and fair’ process. Under that umbrella, Article 8.2 of the IBA Rules provides that the tribunal may exclude the appearance of a witness at the evidentiary hearing if it considers such appearance to be ‘irrelevant, immaterial, unreasonably burdensome, duplicative or otherwise covered by a ground of objection set forth in Article 9.2’. If the tribunal were to exercise its discretion to exclude evidence under Article 8.2 of the IBA Rules, would this be in conflict with the mandatory provisions of Article 18 of the Model Law because it will restrict the right of a party to present one of its witnesses, even though the process as a whole will have been a fair one?

4.48  This particular conflict may be capable of resolution. A similar dichotomy arises when comparing the UNCITRAL Model Law requirement of a ‘full opportunity’ of presenting a case with the provision in the 2012 ICC Arbitration Rules (renewed in Article 22(4) of the 2017 ICC Rules)³⁸ that parties have a ‘reasonable opportunity’ to present (p. 61) their case. Although on a literal reading a ‘full’ opportunity might go further than a ‘reasonable’ opportunity, it could fairly be said that each is concerned with fairness and due process. On this basis, it has been argued that legislators who use the terms ‘reasonable’ or ‘adequate’ are not seeking to limit the due process obligation. They are merely trying to prevent its abuse—for example, by a party seeking to argue that a ‘full’ opportunity to present its case means that it should be the sole arbiter of how many witnesses it may present.³⁹

4.49  Despite such decisions, it is possible that, to suit their own ends, parties may draw attention to apparent conflicts between procedural norms laid down in the applicable arbitration law and provisions or principles of the IBA Rules.⁴⁰ In the absence of guidance or case law on the meaning of a particular provision, a tribunal faced with an alleged conflict between the IBA Rules and a ‘mandatory norm’ embedded in the laws of the seat may have to interpret the domestic provision as best it can and no doubt taking into account arguments of the nature articulated here.

4.50  Applicable mandatory provisions may derive from sources other than the law of the seat. For example, in theory, parties may agree to subject their arbitration to another procedural law of their choice.⁴¹ Experienced practitioners will rightly question why parties would wish to complicate the conduct of an arbitration in this way,⁴² but where another procedural law has been chosen it is equally possible for that law to be in conflict with a provision of the IBA Rules. We have not found a practical example of such a situation, but an interesting issue around how to proceed might arise where a mandatory provision of the law of the seat and a mandatory provision of the chosen procedural law are in conflict with each other, whether or not they are also in conflict with a provision of the IBA Rules.

(p. 62) 4.51  It is also possible that the substantive law applicable to the dispute (in most cases the governing law of a contract) may contain mandatory rules that touch on the taking of evidence. For example, questions concerning the introduction of extrinsic evidence as an aid to interpretation of a contract are sometimes regarded as being governed by its applicable law.⁴³ In some national law systems this may result in documents being inadmissible, eg the exclusionary rule in English law restricts the use of evidence of pre-contract negotiations.⁴⁴ A party to the arbitration may argue that this is in conflict with the tribunal’s power under Article 9.1 to determine issues of admissibility.⁴⁵ Similar issues may arise in relation to burden of proof.⁴⁶

4.52  Further possibilities are likely to exist on a case-by-case basis. For example, it has been suggested that, in Europe at least, tribunals may be obliged under EU law to address issues of European competition law even where they have not been raised by the parties themselves.⁴⁷ Investigation of the issue will still require due process to be observed and the tribunal may need to hear evidence on the matter. The tribunal may exercise its right under Article 4.10 to request testimony but if this is met by permitted objection from one of the parties under Article 9.2 (a) (a lack of sufficient relevance to the case or materiality to its outcome) there may be a stalemate. There is no definition of ‘case’ in the IBA Rules, but on a narrow interpretation it could mean only the issues between the parties on the claims/counterclaims (ie not including the additional matter sought to be investigated by the tribunal). The reference in Article 1.1 to the mandatory law provision being ‘applicable to the case’ does not, on a literal reading, appear to defeat such an interpretation of Article 9.2. Despite this, we think it unlikely that a tribunal would, on this basis, abandon its request for testimony. In our view, in the circumstances described, the EU requirement should be (p. 63) treated as over-riding the possible restriction created by Article 4.10 and Article 9.2. Similar considerations may arise in relation to such matters as economic or political sanctions.

4.53  It is sometimes suggested that the mandatory provisions of national law of the jurisdictions in which an award is likely to be enforced should also be reviewed for potential conflicts with the intended applicable arbitration rules. Given the possibility that such provisions may have a material impact on the ability to enforce the award, this may be prudent. However, there does not appear to be any theoretical justification for doing so in the context of Article 1.1, unless ‘applicable to the case’⁴⁸ has a wider meaning than ‘applicable to the arbitration’.⁴⁹

4.54  Under Article 1.1 determination of whether the mandatory provision of law potentially creating the conflict is actually applicable to the case (and therefore attracts the application of Article 1.1) is a matter for determination ‘by the Parties or by the Arbitral Tribunal’.

4.55  Having regard to the principle of party autonomy, there is a strong case for saying that, if the parties agree that a provision of mandatory law inconsistent with a particular provision of the IBA Rules is applicable to the case, that view should prevail, even in the face of disagreement from the tribunal. However, it is worthwhile considering the issue from the opposite perspective, ie a situation in which it is the parties, rather than the tribunal, that believe the mandatory provision of law does not apply to the case. The tribunal has an obligation to produce an enforceable award and, if the tribunal believes that ignoring the mandatory provision might place the award in jeopardy, it might be said that the tribunal’s view on the application of the mandatory provision should prevail.

4.56  The nature of the submissions (if any) that the tribunal may seek from the parties on this issue will vary according to the particular circumstances of the case. It has been suggested that, where a party asserts that a mandatory law external to the law of the seat applies, it will need to satisfy the tribunal ‘why the law is mandatory, why it applies to the arbitration and why it is not otherwise dealt with or overruled by the lex arbitri or procedural rule selected’.⁵⁰ We agree with that approach.

4.57  Article 1.2 contains a clear statement as to which version of the IBA Rules should apply to an arbitration in which the parties have agreed to apply those rules.

4.58  Article 1.2 refers to the parties’ agreement to ‘apply’ the IBA Rules. This suggests an agreement to formally adopt the IBA Rules as binding on the parties. However, in our view, the rule set out in Article 1.2 should, as a matter of principle, apply in the same way to an agreement to use the IBA Rules as guidance only. It would nonetheless be prudent for the tribunal to confirm in its first procedural order whether the IBA Rules have been formally adopted or whether they are to be used as guidance only, and the version applicable to the arbitration.

4.59  The original 1983 IBA Rules have been revised on two occasions to produce the 1999 IBA Rules and the current IBA Rules. Given the success of the IBA Rules it appears likely that they will continue to be used extensively in international arbitration and therefore that they will be subject to review at an appropriate point in the future.

4.60  Under Article 1.2, in the absence of a contrary indication from the parties, the version of the IBA Rules current on the date of the parties’ agreement to apply the rules, not the version current at the time of commencement of the arbitration (if different), will apply. This is in contrast to the position under many institutional rules where, unless the parties agree otherwise, the version of the rules in force at the date of commencement of the arbitration will apply.⁵¹ Thus, the practical position under the IBA Rules is that, in relation to all agreements to apply the IBA Rules made after 29 May 2010 (the effective date of the 2010 Rules), the current IBA Rules will apply.

4.61  Where the Parties agree to apply the IBA Rules after the dispute has arisen, the version of the rules that they have in mind is likely to be the (then) current version in any event.

4.62  If the parties’ agreement to apply the IBA Rules is contained in an arbitration clause in a commercial contract it is possible that there may be a significant time lapse (p. 65) between the date of the agreement and the date on which a dispute actually arises. If, at the time of negotiating that agreement, the parties wish to ensure that the version of the IBA Rules that will apply to any later dispute is that in force at the date the arbitration commences, they would be wise to make express provision for this in their arbitration agreement. This approach is recommended in the Commentary to the IBA Rules.⁵² However, if this not done, when the dispute is referred to arbitration there is nothing to prevent the parties from agreeing to apply the current version of the IBA Rules.

4.63  The following is one possible formulation of such an express agreement (dealing both with formal adoption of the IBA Rules and their use as guidance only):

In addition to the [institutional or ad hoc rules chosen by the parties] the parties agree that the arbitration shall be conducted [in accordance with] [taking guidance from] the IBA Rules on the Taking of Evidence in International Arbitration as current on the date of commencement of the arbitration].⁵³

4.64  Article 1.3 deals with the issue of conflict between the IBA Rules and the General Rules. The General Rules are defined by the IBA Rules as the institutional, ad hoc, or other rules that apply to the conduct of the arbitration.⁵⁴

4.65  The IBA Rules do not provide a complete framework for the conduct of an arbitration. As Preamble 1 makes clear, the IBA Rules are intended to introduce practical procedures around the reception of evidence that flesh out and supplement the infrastructure provided by the applicable General Rules.

(p. 66) 4.66  In a perfect world the General Rules and the IBA Rules would always work in harmony together to provide a unified framework for the conduct of the arbitration. However, while those responsible for drafting the IBA Rules made every effort to ensure that those rules were drafted to conform with the principal institutional and ad hoc rules used by parties, the Commentary to the IBA Rules,⁵⁵ and the terms of Article 1.3, acknowledge that conflicts may nonetheless arise.

4.67  Party autonomy is central to any international arbitration and this is acknowledged by the closing words of Article 1.3, ‘unless the parties agree to the contrary’. If the parties to the arbitration are able to agree how a conflict between the IBA Rules and the General Rules is to be dealt with, that choice will be effective. The position agreed by the parties will generally apply, regardless of what view the tribunal may take or has expressed to the parties in relation to the conflict. In practice, any agreement reached between the parties is likely to be a pragmatic position specific to the particular circumstances of the conflict.

4.68  If the parties cannot agree how a conflict between the IBA Rules and the General Rules is to be resolved, Article 1.3 is triggered and provides guidance as to how the tribunal is to deal with the conflict.

4.69  The 1983 IBA Rules simply provided that, absent party agreement, in the event of a conflict between the General Rules and the IBA Rules, the IBA Rules should prevail. That provision was revised on introduction of the 1999 IBA Rules and the revised provision remains effective under the current IBA Rules. The relevant wording of the current Article 1.3 provides that

the Arbitral Tribunal shall apply the IBA Rules of Evidence in the manner that it determines best in order to accomplish the purposes of both the General Rules and the IBA Rules of Evidence.⁵⁶

4.70  The commentary to the 1999 IBA Rules does not provide an explanation for this change, but it is to be assumed that the more nuanced approach provided for in the current version of the rules—designed, as far as possible, to give effect to both sets of rules—was considered a more attractive option. In the commentary to the 1999 Rules, and restated in the commentary accompanying the current IBA Rules, the drafters of this revision (p. 67) state that ‘the arbitral tribunal shall try to harmonise the two sets of rules to the greatest extent possible’.⁵⁷ This more sophisticated approach to the issue than that contained in the 1983 IBA Rules grants the tribunal greater flexibility in its application of the particular IBA rule affected by the conflict.

4.71  Although it is not entirely clear from the wording of Article 1.3 that the discretion granted to the tribunal extends to ignoring the particular provision of the IBA Rules altogether where it is appropriate to do so, this would appear to be in keeping with the overall intent behind Article 1.3.

4.72  Although many arbitrators will favour an intuitive approach over a forensic one, in principle, Article 1.3 provides for a two-stage process.

4.73  In order to decide how best to achieve the purposes of both sets of rules as required by Article 1.3, the tribunal must first consider the purpose/s of each and the degree of consistency or inconsistency in purpose that may exist.

4.74  In relation to the IBA Rules themselves, a tribunal should have regard to the general purpose behind those rules as set out in Preamble 1 and 2, and the general principles upon which the taking of evidence is to be conducted set out in Preamble 3. These matters are dealt with in more detail in Chapter 2. While a theoretical distinction might be drawn between the objectives of the IBA Rules set out in Preamble 1 and 2 and the underlying general principles stated in Preamble 3, such a distinction would be an entirely artificial one. Each of the provisions in the Preamble is an expression of what the IBA Rules are intended to achieve.

4.75  In summary, for the purposes of Article 1.3, the key provisions are:

• Preamble 1: to provide an efficient, economical, and fair process for the taking of evidence that will meet, so far as reasonably possible, the expectations of parties from different legal traditions;

• Preamble 2: to supplement other applicable arbitration rules but not to impede the flexibility of the arbitration process to meet the needs of the case; and

• Preamble 3: the taking of evidence is to be conducted on the principles that:

  • •  each party shall act in good faith; and

  • •  each party shall be entitled to know reasonably in advance of any evidentiary hearing or fact/merits determination, the evidence on which the other party relies.

4.76  The tribunal must then also consider the ‘purpose’ of the General Rules with which the IBA Rules are in conflict. This will involve looking beyond the precise wording of the individual provision giving rise to the conflict, to the broader purpose behind the rules as derived from related provisions and any statement of underlying purpose included within those rules.

4.77  Although frequently couched in terms of tribunal responsibility, many institutional and other arbitration rules contain express provisions indicating the overall objectives and procedural norms expected by application of the rules—the equivalent of the procedural norms contained in domestic arbitration laws mentioned earlier. For the most part, these are likely to be expressed in very similar terms to those that appear in the Preamble to the IBA Rules. They will frequently refer to such matters as providing a fair and efficient process, granting a reasonable opportunity for each side to present its case, avoiding unnecessary expense, and securing an enforceable award.⁵⁸

4.78  Some institutional rules may go further and make express reference to additional considerations. For example, Article 6 of the Arbitration Rules of The Vilnius Court of Commercial Arbitration (Principles of the Arbitration Proceedings) states that:

The Arbitral Tribunal, the Chair of the VCCA and the Secretariat shall examine and resolve the issues attributed to their competence in accordance with the principles of the parties’ autonomy, procedural equality of arms, disposition, the adversarial principle, the principles of confidentiality, economy, cooperation and expedition of the arbitration proceedings.⁵⁹

4.79  Other sets of rules, although containing similar aspirations, may contain some modification to the more usual provisions because they are designed for a specific purpose, eg expedition or low cost. A number of arbitral institutions offer expedited or fast-track procedures.⁶⁰ Generally speaking, expedited procedures shorten time limits for rendering a final award. For example, several rules provide for an award to be rendered within six months of either the case management conference⁶¹ or from the constitution of the tribunal.⁶² Other measures include provisions on whether the tribunal may decide the case on a documents-only basis or whether a hearing will be held.⁶³ Examples of low-cost arbitration rules include the Chartered Institute of Arbitrators’ Cost Controlled Arbitration Rules and the ARIAS Fast Track Arbitration Rules.

4.80  Having determined what each set of rules is intended to accomplish, the tribunal must then apply the IBA Rules to the matter in issue in the ‘manner that it determines best’ in order to accomplish the purposes of both sets of rules.⁶⁴

4.81  In practice, the broad objectives of the IBA Rules and the relevant General Rules are likely to be closely aligned. The approach ultimately taken will depend very much on the view of the particular tribunal whether, on the facts of the case, it is best to apply the provisions of the IBA Rules giving rise to the conflict, to adopt the position under the relevant General Rule, or to adopt some other course permitted within the IBA Rules. However, where the General Rules have a special objective (such as expedition) the tribunal may wish to tailor the approach taken to meet that objective, provided such tailoring does not compromise observance of the underlying principles upon which the IBA Rules operate.

4.82  The authors have been unable to find any reported examples of how Article 1.3 has been applied in circumstances of conflict. The following scenarios illustrate the sorts of issue that could arise.

4.83  An arbitration is being conducted under the SIAC Arbitration Rules 2016 and the IBA Rules. Both sets of rules provide that a party may request the attendance at the evidentiary hearing of any witness whose witness statement is relied upon by its opponent.⁶⁵

4.84  There is a potential conflict between those two sets of rules in the event that the witness fails to attend the hearing in accordance with such request.

4.85  SIAC Rule 25.4 states that where a witness fails to attend ‘the Tribunal may place such weight on the written testimony as it thinks fit, disregard such written testimony, or exclude such written testimony altogether’.

4.86  In contrast IBA Article 4.7 provides that ‘[absent] a valid reason [for such non-attendance] . . . the Arbitral Tribunal shall disregard any Witness Statement related to that Evidentiary Hearing by that witness, unless in exceptional circumstances the Arbitral Tribunal decides otherwise’.⁶⁶

4.87  If in the arbitration a witness were to fail to attend the evidentiary hearing for cross-examination the tribunal will have to decide whether to simply exclude the witness statement of that witness altogether (as contemplated by the IBA Rules) or deal with the (p. 70) evidence as a matter of weight—to decide in due course what weight (if any) it will place upon the evidence contained in the witness statement (the SIAC position).

4.88  There is no obvious dichotomy in the objectives of the two sets of rules. They appear on their face to be broadly the same. At the most basic level the IBA Rules require an ‘efficient, economical and fair process for the taking of evidence’. The SIAC Rules require the tribunal to conduct the arbitration to ensure ‘the fair, expeditious, economical and final resolution of the dispute’.⁶⁷ The approach of the two provisions dealing with witness evidence (Article 4 of the IBA Rules and SIAC Rule 25) appears to have a similar purpose, namely, transparency as to the witness testimony to be relied upon and the opportunity to test that evidence.

4.89  In practice, a tribunal faced with this situation might be reluctant to adopt the IBA position. That position has attracted some criticism for being too rigid⁶⁸ and the exit route provided by Article 1.3 might be used to adopt a more flexible approach. On the other hand, the SIAC formulation permits a total disregard of the witness statement as another option open to the tribunal and this response might therefore be seen as at least sharing common ground with the IBA position.

4.90  A more nuanced approach might be to invite submissions from the parties on which of the three possibilities under the SIAC Rules the tribunal should adopt: (a) disregard the evidence (as in the IBA Rules); (b) exclude the evidence; or (c) place such weight on the evidence as it thinks fit. Under the IBA Rules, it is likely that the tribunal would, in any event, hear submissions on the question of whether ‘valid reasons’ or ‘exceptional circumstances’ existed under IBA Article 4.7 that justified a departure from the default position of disregarding the evidence. Whether the tribunal ultimately adopted a pragmatic approach of admitting the statement (but perhaps attributing little or no weight to it) or disregarding/excluding it altogether, both parties would have had an opportunity to present their arguments on the issue and the need for transparency and party perceptions of ‘fairness’ underlying both sets of rules would have been satisfied in a reasonably efficient way.

4.91  An arbitration is being conducted under the SCC Rules for Expedited Arbitration 2017 (the ‘SCC Expedited Arbitration Rules’) and the IBA Rules. Both sets of rules provide that, at the request of one of the parties to the arbitration, the tribunal may order the production of documents held by the other party.⁶⁹ However, there is a potential conflict between those rules in relation to the required degree of proximity that such documents should have to the issues in the case.

(p. 71) 4.92  Article 3 of the IBA Rules sets out a procedure by which parties to the arbitration may make requests for production of documents, and the conditions for doing so that must be satisfied as part of that process. If those conditions are met then, absent the existence of one or more of a number of grounds for objection set out in Article 9, the tribunal ‘may order the Party to whom such Request is addressed to produce any requested documents in its possession’. One of the conditions for a request for production of documents is that it explains how the requested documents ‘are relevant to the case and material to its outcome’. Conversely, a ground for objection to the request is that there is a ‘lack of sufficient relevance to the case or materiality to its outcome’.

4.93  Article 32(3) of the SCC Expedited Arbitration Rules states that ‘at the request of a party . . . the Arbitrator may order a party to produce any documents . . . that may be relevant to the case and material to its outcome’.

4.94  It is by reference to small differences like this that parties intent on resisting an order for production may seek to build a case. In the event of a request to produce a contested document, what test should the tribunal apply before making an order for production? If challenged on the test it intends to apply, how should a tribunal respond?

4.95  Should the tribunal be satisfied that the requested document ‘is relevant to the case and material to its outcome’ (an arguable position under the IBA Rules debate) or only that it ‘may’ be so relevant and material (the position under the SCC Expedited Arbitration Rules)? Is there a significant difference between the two tests given that, until an individual document is actually produced, it is impossible to know how relevant/material it is?

4.96  This issue might be thought to be a distinction without a difference, but academic writing suggests that it is not. It has been argued that ‘potential and prima facie relevance and materiality are two different standards that should not be confused’, and that the prevailing view of scholars is that prima facie relevance and materiality is the applicable threshold under the IBA Rules.⁷⁰

4.97  There is no fundamental difference in the objectives of the two sets of rules. They are very similar. The IBA Rules seek an ‘efficient, economical and fair process for the taking of evidence’. The SCC Rules require the tribunal to conduct the arbitration in an ‘impartial, efficient and expeditious manner giving each party an equal and reasonable opportunity to present its case’. However, the SCC provision goes on to provide ‘considering at all times the expedited nature of the proceedings’.⁷¹ The approach of the two provisions dealing with document production (SCC Expedited Arbitration Rules Article 32 (3) and IBA Rules Article 3) have the common purpose of providing a mechanism by (p. 72) which parties may obtain limited document production that will assist the tribunal in a determination of the issues in the case.

4.98  A tribunal faced with this issue could approach the question in a number of ways depending on the facts and procedural history of the particular case. The more onerous requirement in the IBA Rules might be seen as enhancing achievement of the objective of speedy resolution underlying the SCC Expedited Arbitration Rules. On the other hand, the SCC rules require that each party has ‘an equal’ as well as ‘a reasonable’ opportunity to present its case. If it is a case where all of the documents are in the hands of one party (eg as sometimes happens in a construction dispute) the tribunal may feel that application of the less onerous standard of test better meets the overall combined purposes of the two sets of rules.

4.99  Article 1.4 addresses disputes on the interpretation of the IBA Rules.

4.100  The IBA Rules are the product of considered analysis and expert drafting. However, differences of interpretation are bound to arise. There may be ambiguities that come to light in the course of proceedings, parties may adopt different positions for tactical reasons in order to suit their case, or new developments in technology or practice may occur to which the proper manner of application of the IBA Rules as drafted may be unclear.

4.101  There are two limbs to the guidance given in Article 1.4. The Arbitral Tribunal is to interpret the IBA Rules (a) ‘according to their purpose’ and (b) ‘in a manner most appropriate for the particular arbitration’.

4.102  A purposive approach to construction of the IBA Rules is to be adopted that takes into account the stated objective of the IBA Rules as set out in Preamble 1 and Preamble 2⁷² (p. 73) (namely, an efficient, economical, and fair process, and flexibility of procedures; see Chapter 2). In the event of a dispute about the interpretation of a particular provision of the IBA Rules, the Arbitral Tribunal will need to consider the meaning of the provision under scrutiny in the context of these underlying objectives.

4.103  However, when considering issues of interpretation, the tribunal should also have regard to the general principles of the IBA Rules set out in Preamble 3.⁷³ An interpretation that gives effect to those principles should be preferred over one that does not.

4.104  A further and legitimate point is that the IBA Rules build a bridge between civil law and common law practices and a ‘one-sided’ interpretation of those rules should be rejected.⁷⁴ We agree with that view. The Preamble to the IBA Rules states expressly that the rules are intended, in particular, for use ‘between Parties from different legal traditions’. Absent particular circumstances justifying such an approach (eg where both the tribunal and all parties to the dispute are from the same legal tradition), an interpretation reflecting a middle ground between the two traditions is generally to be preferred.

4.105  In addition to looking at the underlying purpose of the IBA Rules, the tribunal must consider what interpretation is appropriate for the particular arbitration. In essence, the tribunal must decide which of the possible/competing interpretations will work best to attain the objectives of the IBA Rules in ‘this arbitration’, with ‘these parties’, and in the ‘actual circumstances of this case’. Furthermore, the second limb of Article 1.4, by which an interpretation ‘most appropriate for the particular arbitration’ is to be sought, suggests that there is no ‘correct’ answer on issues of interpretation. In the event of two conflicting interpretations resting (respectively) on the first and second limbs of Article 1.4, the latter is likely to be preferred. This would be consistent with the intended flexibility of the IBA Rules⁷⁵ and the requirement found in many institutional rules to adopt procedures suitable for the particular dispute,⁷⁶ subject always to requirements of due process.

4.106  Article 1.5 addresses a situation where both the IBA Rules and the General Rules⁷⁷ are silent on a matter affecting the taking of evidence, and the parties have been unable to reach an agreement concerning that matter. This provision, in contrast to other parts of Article 1, is not dealing with a situation of conflict between two competing or inconsistent provisions, but rather with an absence of provision.

4.107  Because the IBA Rules are, and are intended to be, relatively detailed in relation to matters affecting the taking of evidence, it should be fairly easy to identify whether a matter arising is or is not addressed in the IBA Rules. If there is disagreement on this point, the issue will have to be decided by the tribunal under its general powers.

4.108  Article 1.5 will apply only where, and to the extent, both the IBA Rules and the General Rules are silent on a particular matter affecting the taking of evidence. The opening words of Article 1.5 (‘insofar as’ rather than ‘if’ or ‘when’) appear to contemplate situations where the IBA Rules (or indeed the applicable General Rules) make some relevant provision, but are not sufficient to deal with the entirety of the matter to be addressed.

4.109  Given the general nature of most institutional and other arbitration rules it will not be surprising to find that the General Rules are silent on a number of matters of detail affecting the taking of evidence.

4.110  In contrast, the IBA Rules aim to lay down practical procedures around the reception of evidence—to provide detail to supplement the General Rules. As a result, the identification of gaps in the available guidance afforded by the IBA Rules is likely to occur (p. 75) in a limited number of cases. However, no set of rules can be drafted to deal with every eventuality; if they could, they would be too inflexible.

4.111  In recognition of the principle of party autonomy, if the parties are able to reach agreement on how they wish to deal with the issue on which the General Rules and the IBA Rules are silent, that agreement will prevail.

4.112  When both the IBA Rules and the General Rules are silent on a matter affecting the taking of evidence, and the parties have been unable to reach agreement on that matter, Article 1.5 provides that the tribunal should deal with the matter as it deems appropriate in accordance with the general principles of the IBA Rules.

4.113  Unlike Article 1.3 and Article 1.4, which both refer to a consideration of the ‘purpose/s’ of the IBA Rules, Article 1.5 refers to the ‘general principles’ of the IBA Rules. The change in terminology from ‘purpose’ to ‘principles’ suggests that, in exercising its discretion to make a decision on an issue on which both the IBA Rules and the General Rules are silent, the tribunal’s focus should be to give effect to the general principles set out in Preamble 3 to the IBA Rules, ie that the parties shall act in good faith in the taking of evidence, and (in particular) each party shall have reasonable advance notice of the evidence upon which its opponent intends to rely.⁷⁸

4.114  Subject to this requirement, in practice the tribunal is also likely to take into account the Preamble 1 objective of an ‘efficient, economical and fair process’.

4.115  Given the idiosyncrasies of individual arbitrations, it is possible that situations may occur for which there may be no express provision in either the IBA Rules or the General Rules. However, by having regard to the factors mentioned in Article 1.5, the tribunal should be able to arrive at a reasonable and workable solution.

4.116  For example, in an arbitration under the LCIA/IBA Rules, one party may turn up at an evidentiary hearing brandishing a number of material new documents and witness evidence obtained from a new witness. Neither set of rules makes express provision for this situation and the tribunal should therefore have regard to the guidance in Article 1.5.

4.117  Provided the tribunal is satisfied that there is no deliberate bad faith on the part of the party producing the evidence from the new witness, the tribunal may be loath to (p. 76) exclude material that will assist in its determination of the dispute. However, the tribunal must conduct the arbitration on the principle that the other party is entitled to know about the new evidence reasonably in advance of the evidentiary hearing. There will be any number of ways in which a tribunal may seek to reconcile the competing interests of the parties in relation to the presentation of the new evidence, depending upon the demands of the hearing timetable. In order to give the other party an opportunity to consider the new material, it might order an adjournment of the hearing until the following day or, if practical, it might reorganize the timetable so that issues to which the new material relates are postponed until later in the hearing schedule. Following an opportunity to consider the materials, the tribunal must hear from the receiving party as to what time and further directions it feels it needs, consider the producing party’s answers to the points made, and then make a decision as to whether or not a longer adjournment of the hearing is necessary. The process will be fact-specific, but a balance will have to be struck between minimizing disruption to the timetable and ensuring that the non-producing party has an adequate opportunity to address the new evidence.

4.118  Another example might be an arbitration under the ICC/IBA Rules, where a party serves an important witness statement in the language of the arbitration (English) together with a notice (as required under Article 4.1(c) of the IBA Rules) that the witness statement was originally prepared in another language (Lithuanian). The witness statement is served with a copy of the original statement in the Lithuanian language. The other party subsequently contends that the English language version of the witness statement is not an accurate translation of the original statement.

4.119  The serving party may argue that the point raised by its opponent is a matter that can be ironed out during cross-examination of the witness, at which an interpreter will be present. However, once again, under Article 1.5 of the IBA Rules the tribunal must have regard to the principle that a party is entitled to know in advance of an evidentiary hearing the nature of the evidence that will be relied on by the other side. In the circumstances described, it is important that the receiving party has a clear understanding of the evidence that is being presented. The tribunal could direct that a translator for each side should confer to agree a definitive English language version of the original statement a reasonable period in advance of the hearing.