Introduction
The International Bar Association (IBA) is a prominent association of legal practitioners with a mandate that includes the "promotion of the administration of justice under a rule of law that recognizes the independence of the judiciary". Embedded in this mandate, in keeping with its affiliation with members of the world-wide legal community, is the promotion and facilitation of fair and effective dispute resolution for both international and domestic disputes.
In service of that goal, and in view of the increasing popularity of international commercial arbitration as a means of dispute resolution, in 1999 the IBA adopted the Rules on the Taking of Evidence in International Commercial Arbitration ("IBA Rules" or "Rules") – "a revised and updated version of its previous – now obsolete – 1983 rules", addressing and regulating the taking of evidence in the course of international arbitrations. More than a mere collection of best practices as to evidentiary issues in the taking of evidence in international arbitration, the IBA Rules can have the force of law or mandatory authority . National arbitration laws may incorporate the Rules, institutional arbitration rules may prescribe their application, or the express agreement of the parties may provide for its use. In such instances, the Rules will be directly binding upon the parties and the arbitral tribunal. However, the Rules may also be used as an instrument of persuasion to minimize uncertainty and identify best practices in preparing for and conducting an efficient and effective arbitral proceeding. The cardinal rule of efficient conduct of the arbitration proceeding – and avoidance of related parallel litigation – is compliance with the terms of the arbitration agreement, including any express agreement between the parties to apply the IBA Rules. Hence, where there is no such agreement to adopt the Rules, their use may nonetheless be permitted. The IBA Rules are usually used as an evidentiary guidepost before, during and after the rendering of the final award, and have been drafted as a framework to provide a uniform set of fair and just standards for use by parties in reaching an award. Articles 3 to 9 of the Rules address the general guidelines applicable to the overall conduct of the taking of evidence, which occur after the compilation of the written statements of witnesses or experts.
Key Characteristics of the IBA Rules
The IBA Rules were originally drafted in 1999 as a result of consultation with arbitration practitioners from many countries and in response to increased pressure for greater efficiency in international arbitration. They were revised in 2000, 2002 and 2010, the latest revision following the establishment in 2008 of the IBA Arbitration Committee Taskforce on "The Taking of Evidence in International Commercial Arbitration". The most recent revision has mainly concerned evidentiary issues including the timing and form of witness statements as well as the production of documents.
The IBA Rules combine elements from civil and common law jurisdictions giving tribunals guidance with respect to the taking of evidence in an adaptable framework. They can be applied in both ad hoc and institutional arbitration (although institutional rules may have precedence).
The IBA Rules do not apply to all types of evidence as may become necessary in an international arbitration, but have been drafted with reference to the specific evidentiary issues which commonly arise during proceedings, and take into account both the "substance" of the evidence given and the "form" and content of the documents to be put before the tribunal. In particular, the IBA Rules provide guidance on the evidence of fact witnesses, expert reports and requests for documents, among others.
Witness statements are a common feature of international arbitration. The IBA Rules offer guidance on the requirements for witness statements including in relation to their form and content. In particular, Article 4.2 requires witness statements to contain:
In accordance with Article 4.3 of the IBA Rules, parties can challenge the admissibility of witness statements which have not been filed as required. They also permit tribunals to rule on the admissibility of a witness statement at any time during proceedings. In addition, parties can request that witnesses appear at the hearing for cross examination.
The IBA Rules regulate requests for document production and include an omnibus definition of "Document", capture the form and content of a request, and outline the parameters of the required search. Requests may seek documents relating to a "particular issue" or "relating to the case and material to its outcome". Under Article 3 parties must review their records and make reasonable searches with the aim of producing all requested documents relevant to the issues in dispute (there is no requirement to produce documents which are considered legally or otherwise protected). This includes the obligation to search for electronic data which is "reasonably available". The IBA Rules also regulate requests for the production of documents from third parties.
Expert reports are often more controversial than witness statements. Expert witnesses differ from factual witnesses in that they provide the tribunal with information which is usually not within the knowledge of a lay person. As with factual witnesses, the IBA Rules establish the required form for expert reports and require these to be signed and dated by the expert. The IBA Rules suggest that the tribunal ask for expert reports "as early as possible" and, with the permission of the tribunal, experts may, for example, give evidence by videoconference.
The IBA Rules address issues regarding the number of experts and consider the manner in which expert evidence should be presented. Where a tribunal wishes to address the issue of appointment and participation of experts, it shall do so at an early stage in the proceedings and "preferably not later than the first procedural order or agreement by the parties". Furthermore, in instances where conflicting expert reports are provided by the parties, the tribunal may request that the experts attend the hearing together or meet to find and produce evidence of points on which they agree.
Benefits of Employing the IBA Rules
In the context of international arbitration, the advantages of employing the IBA Rules in International Arbitration need to be highlighted.
The IBA Rules have become well-recognized in global arbitration and have garnered significant respect and recognition. They enjoy popularity among counsel and experts due to their flexibility in allowing the arbitral tribunal to tailor the rules to the peculiarities of a specific arbitration. As has been stated elsewhere: "In the vast majority of arbitrations, the parties and arbitrators are prepared to use the Rules. In effect, the IBA Rules have become the quasi-universal procedural guide for modern international arbitrations." They offer an advantage in situations that a drafting party anticipates a potential future dispute that may be resolved by way of arbitration. The drafting party can include in the arbitration clause a reference to the IBA Rules and provide for the appointment of an expert in line with the IBA Request to Produce Additional Document and Exclusion of Document Regulations (the "Document Production Rules") or the IBA Rules on the Taking of Evidence in International Arbitration (the "IBA Rules"). The restrictions placed on the appointment of experts and the admissibility of documents and witness statements which the IBA Document Production Rules and the IBA Rules prescribe can help to save time and money in relation to an arbitration where there is an anticipated dispute. The parties can request the arbitral tribunal to apply the IBA Rules and the IBA Document Production Rules in the absence of an express reference in an arbitration clause. The IBA Rules can also be beneficial in reducing the excesses that can sometimes come about when a party with all the legal teeth it possesses may otherwise feel compelled to go for everything it can bite or bark for in the document production or discovery process. Even with the permission of the tribunal to narrow down its requests, some litigants adapt their earlier submissions to broaden them, rather than restrict them. The IBA Rules can thus be a very useful instrument for crafting a reasonable and balanced vetting of the requests and the expert appointments. The IBA Rules also confer the tribunal with the responsibility to actually grant leave to adduce or to vet a request. This checks the conduct of a party not obviously interested in abusing the discovery process. An additional potential benefit in employing the IBA Rules is that there could be a development of judicial consistency in dealing with the factual issues where the rules have been previously applied in other matters the subject of potential judicial review. As Professor Paul Friedland observes: "…the more uniformly arbitrators follow the IBA Rules, an international convention of sorts, the more likely may be a successful confirmation of the award …." (emphasis added) Though, on the flip side, arbitrators must take into account that the IBA Rules are ‘soft law’ and do not amount to an established convention.
Limitations and Critiques
Despite their widespread usage, the IBA Rules are not without their critics. Part of the concern is that the Rules may be incompatible with or not be enforceable under domestic law. This is a particular issue in effecting WCG and production orders in jurisdictions that do not permit such evidence gathering without the consent of the witness or party. Some commentators have also suggested that there is significant variation between tribunals in their approach to interpretation of the IBA Rules, leading to varying outcomes. This leads to uncertainty for parties who may seek to challenge rulings on production and WCG awards on the basis of non-compliance with the IBA Rules. Indeed different approaches to the Rules by different tribunals on each issue may be a source of concern for parties. Other issues rumble on regarding witness testimony and tribunal decision making in some jurisdictions. This includes a dispute over whether a witness who has been ordered by a tribunal to give evidence must give production of documents unless ordered otherwise. This is critical where witnesses have been ordered by tribunals to produce documents in support of witness statements but such documents are not handed over in many jurisdictions without an order. The effectiveness and enforceability of tribunal witness orders is a concern for users of the Rules. Some commentators argue that this issue should be reviewed and clarified by the IBA.
Comparison with Other Evidence Rules
When comparing the IBA Rules with other international standards for the taking of evidence and fact-finding in international arbitration, one important point of difference is that the IBA Rules apply a presumption in favor of confidentiality before they address the role of public policy behind the evidentiary requests. Article 9(1)(c), indeed, specifies that a document request that calls for production of documents is justified when "the public interest in obtaining the evidence outweighs the interest of maintaining confidentiality or the request is made in order to establish any prejudice". By contrast, the Prague Rules do not provide any presumption in favor of confidentiality, nor do they provide for any particular test based on public policy.
The IBA Rules also remain silent with regard to applicable law . By contrast, the UNCITRAL notes are highly detailed compared to the IBA Rules and they contain instructions on applicable law. The UNCITRAL notes specify that the same general principles apply for taking of evidence under the rules of both UNCITRAL and other rules of international arbitration, such as the ICC rules. However, the UNCITRAL notes are particularly focused on addressing the power of tribunals in determining applicable law for issues not governed by arbitral rules (including analytics on lex arbitri, conflict of law issues, both contractual and non-contractual rules), as well as the fact that trade usages (including lex mercatoria) are applicable regardless of applicable laws unless the parties have excluded them. Such analysis is not present in the IBA Rules and confirms again that the IBA Rules are of a more procedural nature that can be applied by tribunals with varying degrees of discretion and flexibility.
Application of the IBA Rules in Practice
Practitioners can most effectively use the IBA Rules when they consider the Rules as an extension of the arbitration procedure, rather than as a set of principles that are just applied in isolation. The elements of the IBA Rules that relate to taking evidence are intended to be applied in conjunction with those elements relating to document production. For example, at the outset of the evidentiary stage, parties usually will produce their first requests for document production under Article 3 of the IBA Rules on the Taking of Evidence, with each party’s request for production responding to the issues raised in its first Request for Document Production, under Article 3 of the IBA Rules on Fact Witnesses and Expert Witnesses, under Articles 4 and 5 of the IBA Rules on the Taking of Evidence, and under Sworn Statements of witnesses, under Article 6 of the IBA Rules on the Taking of Evidence. The objective of the taking of evidence procedure is to establish the factual framework for the merits hearing, and the IBA Rules require parties to fully disclose and discuss how the evidence may be used to establish the legal issues to be decided by an arbitral tribunal. Experts usually are introduced at the same time as document requests, and a party’s expert report should cover both, as applicable, the facts and the rules of law meant to apply to each fact. A statement of facts of a party under Article 6 of the IBA Rules on the Taking of Evidence is designed to provide the factual basis for reasons that a tribunal should extend an initial hearing on the merits and should be the foundation for a party’s Request for Document Production and its expert’s sworn statement. A non-compliance objection to a request for production under Article 4 of the IBA Rules on Document Production should consider whether the information the other party is seeking for production is or should be known by it and whether the other party has already made available the document or information at issue and why that should suffice. Those objections should also consider whether the proposed production deadline should be the same or different than that proposed by the producing party and if the initial document request timeframe does not provide the requesting party with time enough to conduct any necessary follow-up discovery.
Conclusions and Prospects
The IBA Rules have earned their spot as a well-recognised set of procedural rules for the taking of evidence in international arbitration. They provide guidance in preparing and presenting the evidence required for the decision-making process. While these rules will not be able to resolve all evidentiary disputes and may not be referred to by name, they will serve as an important point of reference for practitioners by establishing standards of procedure. For example, the identification of which document should be produced on application by a party, the consideration of a reasonable request, the relevance, materiality, confidentiality and attorney-client privilege, cost and delay. This provides a useful framework in which to understand and apply the IBA Rules in practice. Areas of potential future development include the role of third parties or non-disputing parties (such as States) and the specific documents, such as forensic evidence, that fall within the scope of the Rules, in particular, the principles governing document production beyond the usual documents that are in the possession or power of a party to a dispute, the principles that govern the production of witness statements and statements of fact, and the retention of experts . The value of the Rules lies in the fact that they are a set of procedural rather than substantive rules with flexible criteria that cover a wide range of circumstances. In recognition of this, revisions are made periodically, although the 2010 Revisions to the Rules are still considered relatively new. The stated aim of the next update is to "keep pace with the case law of international arbitration . . . especially in light of the 2006 New IBA Practical Guide on Drafting Arbitral Clauses." There have been no public discussions on the amendments and the IBA has only considered changes to the IBA Rules for Taking of Evidence following recent Court of Appeal decisions. In Hwang -v- KPMG Management Ltd and Jones -v- Kaneria the English Courts adopted and applied the IBA Rules with little judicial analysis. Despite its lack of authority, the applicability of the IBA Rules was cited at least 180 times in the English Courts in 2011. However, there is a need for the Rules to be reviewed and detailed in terms of how applications for interim measures, such as post-award restraints of trade, can be accommodated by reference to the Rules. In light of the globalisation of India’s economy, multinational businesses and professionals can expect to be affected by innovative and sophisticated commercial arbitration processes in the coming years.