1 Provenance and Development of the IBA Rules on Evidence
Roman Khodykin, Carol Mulcahy, Nicholas Fletcher
Roman Khodykin, Carol MulcahyEdited By: Nicholas Fletcher
- Witnesses — Arbitral rules — Arbitration
1.1 The IBA Rules on the Taking of Evidence in International Arbitration (the ‘IBA Rules’) are internationally recognized and widely used in the practice of international arbitration. Although the first edition of the IBA Rules adopted in 1983 is materially different in a number of respects from the most recent edition adopted in 2010, the fundamental objective underlying each version of the rules remains the same: to provide some common ground for the production of evidence in the significant number of international arbitrations that take place globally every year, and to provide a bridge between the different legal traditions and domestic practices with which individual arbitration practitioners are familiar.
1.2 The IBA Rules derive from the work product of IBA Committee D (Procedures for Settling Disputes).1 When the first edition of the rules was produced in 1983, Committee D comprised approximately 380 lawyers from many different countries around the world. In an article on the drafting of the 1983 Rules,2 David Shenton, then Chair of that committee, explains that Committee D seemed a useful forum for discussion of the problems that can arise when lawyers and arbitrators from countries with different procedural rules come to present and address claims in international arbitration.
1.3 The task with which a subcommittee of Committee D was then charged was clear, but challenging. Shenton explains that the intention was not to draft a uniform set of rules to govern arbitration proceedings. There were existing institutional and ad hoc rules (p. 2) that provided such frameworks. Instead, the rules to be drafted were to be confined to procedures for production of evidence, a subject that was—to a great extent—avoided by the more general arbitration rules. Shenton’s view was that those other rules did not ‘face up to the difficult decisions of detail that have to be made or agreed between those advising the parties or, failing them, the arbitrators, in circumstances where the parties, their counsel, and the tribunal may come from a mixture of common law and civil law jurisdictions.
1.4 Thus, it was decided that the work of the subcommittee should be directed to ‘the mechanics of presenting or receiving evidence’. Shenton goes on to describe how, in undertaking its work, the subcommittee:
[T]ried to go through the sort of negotiations that would be carried out in practice if lawyers and arbitrators from common law and civil law systems actually had to sit down and agree upon a procedure for an actual arbitration between parties of a civil law and of a common law country.
1.5 One of the most significant problems the subcommittee had to deal with was the differences that exist between the common law adversarial approach to the laying out of a case for judicial consideration, and the civil law’s inquisitorial system. The subcommittee had available to it the reports of a symposium held by the Institute of Arbitrators3 in February 1974 on presenting evidence in proceedings and arbitrations in civil law and common law countries.4 At that symposium, eminent practitioners5 (principally from Western and Eastern Europe and the United States) explained, in turn, the approach to presentation of evidence generally adopted in international commercial arbitration conducted in their home jurisdictions, and the expectations around that subject that practitioners derive from their domestic legal regime. Speakers explained the process adopted in some detail, by reference to a hypothetical case. . Common themes, as well as significant differences, were identified. A key difference was the manner of presenting evidence through witnesses, and the relative value of evidence obtained under ‘destructive’ cross-examination compared with that contained in documents.
1.6 Shenton’s description of the problems the subcommittee faced in trying to draft the 1983 Rules reflects the differences expressed at the symposium, and provides background context as to why it was desirable to find a workable middle ground for users of international arbitration:
In the adversarial system, the burden lies with the parties, or more accurately their legal advisers, to allege their case, to deploy and lay out the evidence they propose (p. 3) to put before the arbitrators in order to prove their allegations and to test and, as far as possible, to discredit the evidence called in support of the allegations of the other side by the process which common law lawyers call cross-examination. The tribunal’s role is to examine the evidence and arguments deployed on behalf of the parties, to rule on its admissibility or otherwise, to decide on the weight to be attached to it, to act as a kind of referee ensuring that the rules of the game are fairly observed, and, finally, to decide the merits on the basis of the evidence and arguments presented by the two sides.
[ . . . ]
It is an integral requirement of this system that the parties disclose to each other in advance the documentation comprising the written part of the evidence. It is also fundamental that each party disclose to the other side all the relevant written material, whether such material is supportive of that party’s case or not. This is the procedure known as discovery, and under the common law system it is regarded as of paramount importance. It is a cornerstone of the system that the basic evidence is called in the form of verbal testimony of witnesses, including the testimony of the parties to the dispute. It is equally fundamental that such evidence be tested by cross-examination. As Mr Robert Goff QC, stated in his presentation at the Symposium, ‘[i]t is a strong conviction of English practising lawyers that, on a contested question of fact, the most satisfactory way to get to the bottom of the matter is, if possible, to see and hear the actual witnesses and to test their evidence by cross-examination in the light of all relevant matters, including contemporary documents . . . ’
In civil law systems, whether arbitrators are expected to apply the rules of evidence and procedure of their national courts, or whether they are themselves left to determine the procedure for examining and taking evidence, the approach is inquisitorial. Lawyers having presented written arguments, allegations and documents in advance, it is for the judge or arbitrator adjudicating on the matter to determine how the testimony will be received, how evidentiary matters that remain unclear will be investigated, and where or whether verbal testimony is required. It is the tribunal that questions the witness of its own motion or, at best, at the instance of the lawyers of one or other of the parties. As Professor Roger Perrot put it; ‘[t]he technique of “direct examination” and of “cross-examination” of the parties, witnesses or experts is totally unknown in our legal systems in Continental Europe. The arbitrator is the person in charge of the investigation. It is he who conducts the hearing of witnesses, who puts questions to them and who challenges them if necessary in order to obtain further details . . . ’
It is said that the civil law system does not have ‘discovery’ as understood in common law systems. However, in exercising its functions, any tribunal, be it a court or arbitrators, has the power to require the parties to produce documents which are considered to be conclusive for the resolving of the dispute . . . a refusal by a party to accede to the invitation of the arbitrator would be met by the well-known formula that the arbitrator may ‘draw all legal consequences’, ie accept submissions of fact by the opposing party which, it is suggested, could have been proved by the documents (p. 4) that the other party refuses to produce upon the arbitrator’s order. There is undoubtedly a strong feeling among civil lawyers that documentary evidence is more reliable than oral testimony.6
1.7 The first edition of the IBA Rules was adopted on 28 May 1983.7 The full title given to those rules (Supplementary Rules Governing the Presentation and Reception of Evidence in International Commercial Arbitration) reflects the subcommittee’s decision that the new rules should provide practical procedures for the reception of evidence that would supplement the procedural framework provided by existing institutional and ad hoc arbitration rules.8 Importantly, the introduction to the 1983 Rules suggested that, even if not specifically adopted by agreement between the parties, the rules could still serve as a guide to arbitrators ‘when the parties in contention come from law areas9 having rules of procedures derived from different systems’.
1.8 The subcommittee responsible for producing the 1983 Rules remained as a standing committee to consider revisions to those rules. Despite the wide geographical membership of IBA Committee D, members of the subcommittee were principally lawyers from England, France, Germany, and the United States. The composition of the Working Party responsible for production of a revised set of rules in 1999 had a very similar composition.10 Importantly, by the time that work on the current 2010 Rules was undertaken, the composition of the drafting subcommittee had a much wider global representation, including representatives from the United States, Canada, Colombia, Argentina, New Zealand, the United Kingdom, France, Spain, Germany, Switzerland, Greece, the UAE, China, Korea, and Japan.11
1.9 The IBA Rules have been a significant success and are generally regarded as representing best practice in international arbitration. In particular, where the participants (p. 5) to an arbitration are from different jurisdictions, the IBA Rules provide a workable regime sensitive to the differences in perception and practice around presentation of evidence. However, this success has not happened overnight. Use and acceptance of the IBA Rules has evolved over time in tandem with the various iterations of those rules.
1.11 In addition to Article 1 (Scope of Application) and Article 2 (Definitions), the 1983 IBA Rules contained (in summary) five articles that together covered written submissions, production of documents, witnesses, and tribunal powers. Article 3 (Introductory Submissions) is interesting because it does not appear in any of the later iterations of the rules; it is also very short. It simply provides that any Introductory Submission (defined broadly to include any form of pleading or submissions) should contain ‘the means by which the facts relevant to the dispute are intended to be provided by that party, including, for each of such facts, the names of witnesses and references to documents’.12 For parties from common law jurisdictions this would have been a novel requirement.
1.12 Article 4 of the 1983 IBA Rules (Production of Documents) was important because it represented a first attempt at compromise between common law and civil law approaches to disclosure of documents. Under Article 4, following the conclusion of pre-hearing written submissions, each party was required to produce to the other party a list of the documents upon which it wished to rely. In addition, as a concession to the common law approach of ‘complete’ disclosure or discovery of relevant documents (including adverse documents), Article 4(4) provided that a party could make a request for a document not listed by its opponent but that was ‘relevant to the dispute’. However, for common law lawyers, the provision came with an impediment in the form of a requirement that the requested document must (a) have passed to/from the opponent party from/to a third party and (b) be capable of identification with reasonable particularity. Thus (as Shenton notes) documents generated entirely within a corporate body would not fall within the disclosure mechanism provided for in the rule.
1.13 Article 5 (Witnesses) also represented a compromise between legal traditions. Under this article, witness evidence was to be produced in the form of written statements to be delivered to the tribunal only. The tribunal would then circulate the witness evidence to the parties simultaneously.13 The right to request the attendance of a witness (p. 6) for cross-examination (regarded as an essential tool in common law court process) was permitted, but more tightly controlled than would be the case today.14 Witnesses attending for examination were to be questioned first by the tribunal before being handed over to counsel for examination in chief and cross-examination.
1.14 Article 7 (Arbitrator’s Powers) set out express powers of the arbitrator in relation to management and assessment of evidence. These included the power to call witnesses to give evidence orally, or to rule that evidence from a witness should be ignored if the witness failed to appear. The tribunal was also empowered to appoint experts to assist the tribunal or to present evidence, and to rely on the tribunal’s own expert knowledge.15 In addition, in what appears to be a ‘sweep up’ provision, Article 7 provided for the tribunal to have power to ‘exercise all powers it deems necessary to make the arbitration effective and its conduct efficient as regards the taking of evidence’.
1.15 In 1997, a Working Party was established to update and review the 1983 IBA Rules. A revised set of rules was published in 1999.16 The commentary on those new rules noted that in the sixteen years that had elapsed since the 1983 IBA Rules:
[T]he nature of international arbitration has changed significantly. New procedures have developed; different norms as to appropriate procedures have taken root; and the scope of international arbitration has grown considerably, as many regions of the world formerly inhospitable to international arbitration have now embraced it.17
1.17 The important phrase ‘relevant and material to outcome’ appeared for the first time in expanded provision for document production. The revised provisions removed the restriction in the 1983 IBA Rules that limited requests for documents to documents passing between the opponent party and a third party. A party was permitted to address a request to the tribunal for an order requiring production of any document believed to be held by the other party, subject to a requirement that the request identify (p. 7) the document with precision and include an explanation as to how the document was ‘relevant and material to the outcome of the case’.18 Thus, access to a party’s internal documents—something that most common law lawyers regarded as a necessary right—was to be permitted but with the safeguard of a stringent test of ‘materiality to outcome’, designed to keep the expanded access under tight control and within boundaries that recognized the concerns of civil lawyers about encroachment of common law discovery practices.
1.18 A second protective measure also introduced by the 1999 IBA Rules was the right of a party to raise an objection to a document production request on one of a number of grounds expressly provided for in the rules as setting the boundaries for evidence to be used in the arbitration.19 These grounds for excluding evidence and denying requests for production—relevance and materiality, privilege, unreasonable burden, loss or destruction, commercial or technical confidentiality, political or institutional sensitivity, and considerations of fairness or equality—were the foundation for the current provisions in Article 9.2 of the 2010 IBA Rules. A more detailed analysis of these mechanisms—what the Working Party described as a ‘well-balanced compromise between the broader view generally taken in common law countries and the more narrow view generally held in civil law countries’—appears later in this text in respect of the current formulation contained in the 2010 IBA Rules.
1.19 The revisions introduced by the 1999 IBA Rules also included the addition of a Preamble, which set out a number of general principles considered important in ‘illustrating both what the Rules hope to accomplish and what they do not intend to do’.20 Some of the principles were a restatement of matters mentioned in the Introduction to the 1983 IBA Rules, but additions included an express statement that:
The taking of evidence shall be conducted on the principle that each Party shall be entitled to know, reasonably in advance of any Evidentiary Hearing, the evidence on which the other parties rely.
The commentary on the 1999 IBA Rules describes this statement as ‘the overriding principle’ of the 1999 IBA Rules. In addition, the Preamble introduced a statement encouraging early identification by the tribunal of the issues it regarded as being relevant and material to the outcome of the case, including issues suitable for preliminary determination.21 The commentary attributed this guidance to a desire for an effective and cost-efficient process.22
1.20 Clear and detailed provisions relating to the use of expert evidence that accommodated both the common law practice of party-appointed experts (Article 5) and the civilian (p. 8) approach of tribunal-appointed experts (Article 6) were introduced with related provisions intended to preserve the integrity and fairness of the process, and to provide a degree of comfort for those practitioners unfamiliar with one or other of these ways of managing expert evidence. For example, a party-appointed expert had to disclose in the expert report any pre-existing relationship with the instructing party. In relation to tribunal-appointed experts, the tribunal was required to consult with the parties before making the appointment, the parties were entitled to respond to the expert’s report by way of submissions, and the expert was required to attend the evidentiary hearing for examination by the parties.
1.21 In 2008, the IBA Arbitration Committee established the IBA Rules of Evidence Review Subcommittee and tasked it to review and, as needed, to update the 1999 IBA Rules. The subcommittee held many meetings, and discussed the rules at open fora of the IBA in Buenos Aires in October 2008, in Dubai in February 2009, and in Madrid in October 2009. The subcommittee also conducted an online survey of Arbitration Committee members and others in 2008. In early 2010, the Arbitration Committee circulated a draft for public comment. The contemplated revisions were discussed at numerous arbitration conferences, and the comments received were considered during the review process. Revised IBA Rules were adopted by the IBA Council on 29 May 2010. It is this (latest) version of the IBA Rules that will be examined in this text.
1.22 Some five years later, in June 2015, the Arbitration Committee organized a subcommittee to conduct a worldwide survey on the use of IBA arbitration practice guidelines and rules, including the IBA Rules.23 The committee received 845 responses from around the world, including from every region. The committee also solicited and received fifty-five country reports containing analysis of the survey responses received from that individual country, and the use of the IBA Rules as reflected in its arbitral jurisprudence and doctrine.24 Based on that information, the committee found that:25
• Nearly half (48 per cent) of the arbitrations known to the survey respondents referenced the IBA Rules on Evidence.
• Save for Latin America and Africa,26 reference is made to the IBA Rules in more than 50 per cent of arbitrations in all regions.
• The IBA Rules are treated as binding in 20 per cent of arbitrations known to the respondents. However, they are followed in 93.43 per cent of the remaining 80 per (p. 9) cent of cases where they are consulted as guidelines only, ie only in 6.57 per cent of cases in which they are used as guidelines are they are not followed.
• The survey results did not indicate any significant difference in relation to the frequency with which the IBA Rules on Evidence are referenced in common and civil law jurisdictions.27
• There appears to be general consensus that the use of the IBA Rules will grow.28
1.23 Although there was also found to be a minority view that the IBA Rules are ‘too American’,29 these findings indicate the important role that the IBA Rules have come to play in the practice of international arbitration, and speak to the growing acceptance and application of those rules over the four decades since they were introduced.
1.24 Significantly, other responses to the survey suggest that the IBA Rules should be regarded as an evolving project with possible scope for additional refinement as engagement with the rules increases. The committee noted that the jurisdictions where the rules are most used seem to support most strongly the position that they do not need to be reviewed or revised. In contrast, jurisdictions where the rules are not ordinarily used had a much higher number of respondents in favour of amendment. The committee concluded that jurisdictions such as Africa (where the IBA rules are not commonly used) may want those rules changed in order to reflect a regional compromise, rather than the practices of those currently using them.30 Further evolution of the IBA Rules may be one route forward. However, if awareness and application of the current rules increases in those jurisdictions, it may be that users will become more comfortable with application of the existing provisions, or that the flexibility inherent in the rules themselves will be fully utilized to accommodate different ways of doing things.
4 Symposium held in London on 14–16 February 1974 on the theme ‘Analysis of Differences in the Way of Presenting Evidence in Arbitrations under Civil and Common Law Systems’ published in Arbitration (The Journal of the Chartered Institute of Arbitrators) April 1974 (Special Issue).
5 Well-known participating practitioners from the field of international arbitration included Yves Derains, Pierre Lalive, Arthur Marriott, Alan Redfern, Pieter Sanders, Hans van Houtte, Bernado Cremades, Howard Holtzmann and Sergei Lebedev, to name but a few.
6 Shenton (n 2) 120–22.
8 ibid Article 1.1, states expressly that ‘[t]hese are procedural rules governing the presentation of evidence . . . intended to supplement any other rules applicable to the arbitration . . . ’ (emphasis added).
9 The Introduction to the 1983 IBA Rules (n 7) uses the phrase ‘law areas having rules of procedures derived from different systems’. There is no commentary on this particular choice of words in the 1983 Rules, but we believe it may be reasonably inferred from the phraseology used in subsequent iterations of the rules and commentary that it is intended to refer to jurisdictions with different legal traditions (ie in broad terms common law systems or civil law systems) and therefore different procedural rules. The Introduction to the 1999 IBA Rules and to the 2010 Rules uses the phrase ‘parties from different legal traditions’. The Commentary on the revised text of the 2010 Rules refers to the procedural issues that can arise ‘when the parties come from different legal backgrounds and cultures’. It also references the adoption of the 1983 Rules and the fact that they ‘were frequently discussed at arbitration conferences as an example of the harmonization procedures that can occur in international arbitrations’.
10 The Working Party charged with drafting the 1999 IBA Rules was made up of representatives from Italy, Sweden, England, France, Spain, The Netherlands, Switzerland, Germany, Belgium, the United States, and Hong Kong.
12 1983 IBA Rules (n 7), Article 3. Article 6 (Scope of Proceedings) also provides that whenever terms of reference are drawn up they shall contain a list of the witnesses who will be called upon to give evidence at the hearing, and the issues upon which each witness will testify.
13 1983 IBA Rules (n 7), Articles 5.1 and 5.3. Each party had the right to deliver further or supplementary witness evidence.
14 1983 IBA Rules (n 7), Articles 4.5–4.8. Following receipt of witness evidence, each party had the right to deliver a notice requesting the right to give oral evidence, or for any of its witnesses to give oral evidence at the hearing, or to request that the witnesses of the other party give oral evidence. The notice had to stipulate the issues to which that oral evidence related. If the other party objected to the request, the question of whether the witness should attend, and the scope of the evidence to be given orally, was to be determined by the tribunal. The tribunal could also itself require witnesses to attend for examination.
15 The parties were entitled to deliver statements from an expert. See 1983 IBA Rules (n 7), Article 5.2 dealing with witness statements.
18 1999 IBA Rules (n 16), Article 3.3.
19 1999 IBA Rules (n 16), Article 9.2.
20 Commentary on the 1999 IBA Rules (n 17) 3.
21 1999 IBA Rules (n 16), Preamble.
22 Commentary on the 1999 IBA Rules (n 17) 18.
24 The IBA Arbitration Guidelines and Rules Subcommittee, ‘Report on the Reception of the IBA Arbitration Soft Law Products’ (International Bar Association 2016) paras 6–9, 40, 49, and 59 <www.ibanet.org/Document/Default.aspx?DocumentUid=105d29a3-6261-4437-84e2-1c8637844beb>accessed 27 November 2018 (hereafter ‘2016 IBA Report’).
25 2016 IBA Report (n 24) paras 12–18.
27 An example given in the report is that a relatively high number of English arbitrations referenced the IBA Rules (72 per cent), while a lower number of US arbitrations (56 per cent) did so. The frequency of such references in France was said to lie somewhere between the two (62 per cent). 2016 IBA Report (n 24) para 39.
28 In circumstances identified by respondents where the IBA Rules were not referenced, respondents cited lack of awareness of the IBA Rules and/or the availability of local or institutional rules on evidence that made reference to the IBA Rules unnecessary.
29 Interestingly, this view was expressed by respondents from both civil law and common law jurisdictions, being Italy, Brazil, Germany, Finland, Switzerland, Japan, New Zealand, Canada, England, and Ireland. 2016 IBA Report (n 24) para 87. .
30 2016 IBA Report (n 24) paras 79–86.