Dispute Resolution | Revision of the IBA Rules on the Taking of Evidence in International Arbitration
The IBA rules on the Taking of Evidence in International Arbitration (the “IBA Rules”), first adopted in 1999, have become the most widely accepted set of guidelines for international arbitration proceeding, regardless of the administering institution or the legal background of the parties. Designed as supplementary evidentiary rules that could be applied irrespective of the laws governing the proceedings, the rules provide for flexible procedures and aims to bridge the differences between “common law” and “civil law” practitioners.
On 15 February 2021, the IBA formally released its revised rules on the taking of evidence (see link below), which replace the 2010 edition of the rules. In addition, an updated commentary on the rules has been published (see link below).
The revised IBA Rules will apply to arbitration agreements concluded after 17 December 2020, as well as agreements where the parties have decided to adopt the IBA Rules in force at the time of the commencement of the proceedings.
The revision reflects a relatively modest alteration, rather than a comprehensive overhaul of the rules. The aim is to clarify the rules and reflect established practices, as well as addressing new, technology-driven challenges that the international arbitration community is facing today.
Among the most noteworthy revisions are:
- Article 2.2(e): Cybersecurity and data protection issues
- Article 3: Document Production
- Article 4.6 and 5.3: Witnesses of fact and party-appointed experts
- Article 8.2: Remote evidentiary hearings
- Article 8.5: Direct testimony at hearings
- Article 9.3: Illegally obtained evidence
These topics will be briefly summarized below.
Cybersecurity and data protection issues (Article 2.2 (e))
Article 2 of the IBA Rules provides a framework for considering evidentiary issues in an early consultation between the parties and the tribunal, which shall be held at the earliest appropriate time in the proceedings. Article 2.2 comprises an open-ended list of issues that may be addressed in the consultation, in order to determine an economical and fair process.
With the latest revision, a new article 2.2(e) has been added to this non-exhaustive list, providing that the tribunal may also address “the treatment of any issues of cybersecurity and data protection” during the early consultations.
Given the confidential nature of the information exchanged in arbitrations and the increase in remote hearings as a result of the current pandemic, cybersecurity is a growing concern in international arbitration. The inclusion of article 2.2(e) is a recognition that the participants need to approach this issue with care. The revision is also a reminder that the participants must consider compliance with GDPR or other applicable data protection schemes.
Document Production (Article 3)
According to article 3.2 of the IBA Rules, the parties may submit a request to produce documents to the tribunal, which the party whom a request to produce has been addressed could object pursuant to article 3.5. However, the 2010 edition of the IBA Rules did not expressly permit the requesting party to respond to such an objection.
Accordingly, the revised articles 3.5, 3.6 and 3.7 of the IBA Rules now explicitly provide for the requesting party to respond to the objection, and the tribunal to consider not only the request to produce and the objection, but also the responses thereto. Furthermore, the revised rules clarify that the tribunal no longer has to consult with the parties when evaluating document production request, possibly to avoid unnecessary delays caused by a second round of exchange of comments.
Additionally, according to the revised article 3.10 of the IBA Rules, “any party” may now object to a request on any of the reasons set forth in article 9.2 or 9.3, inter alia, confidentiality and privilege. Previously this possibility was only held by the party to whom a request was addressed. The amendment is particularly important for multi-party arbitrations.
Witnesses of fact and party-appointed experts (Article 4.6 and 5.3)
Article 4 and 5 of the IBA Rules concern the taking of evidence from witnesses of fact and party-appointed experts. The key amendments (sub-section 4.6 and 5.3) address the submission of additional/revised expert reports or witness statements once the initial statements are submitted.
Under the 2010 edition, the submission of additional/revised witness statements or expert reports was permitted only when they responded to matters in the other party’s witness statements, expert reports or other submissions.
Practice has demonstrated that this rule was applied rather loosely. Consequently, the wording of the IBA Rules has been reconciled with actual practice. The revised article 4.6 and 5.3 now make clear that the parties can submit a second round of witness statements and expert reports to cover new factual developments that could not have been addressed previously. Thus, second round submissions are no longer limited to the specific content of the earlier statements.
Remote evidentiary hearings (Article 8.2)
As a result of the current pandemic and restrictions on travelling, parties to an international arbitration have been forced to resort to remote hearings in order to continue proceedings. While many practitioners look forward to the return of ordinary hearings, most accept that, given the cost advantages, remote hearings will continue to be utilized also after the pandemic has passed.
Recognizing these present and long-term expectations, the revised IBA Rules provide a framework for remote hearings. Pursuant to article 8.2, the tribunal now may order that the evidentiary hearing is to be conducted remotely at its own discretion or at the request of a party. According to the commentary on the revised rules, tribunals shall be pro-active and consider time, cost and environmental concerns when assessing this issue.
Direct testimony at hearings (Article 8.5)
Generally, witnesses in international arbitration only appear at the hearing if they are called for cross-examination by the counterparty. Hence, witnesses normally do not give oral testimony at the hearing, given that their initial written statement is submitted as their direct testimony.
Under the 2010 edition of the IBA Rules, there was some uncertainty as to whether the party that presented the witness may call that witness to give direct oral testimony if the counterparty waives its right to cross-examinations.
The revised article 8.5 of the IBA Rules now make it clear that the tribunal, as part of its discretionary authority, may allow a witness to give direct oral testimony at the hearing, despite the fact that the counterparty has waived its right to cross-examination. Additionally, the tribunal may also allow such oral direct testimony to exceed the content of the prior written direct testimony.
Illegally obtained evidence (Article 9.3)
The revised IBA Rules have also implemented a new rule addressing illegally obtained evidence. Pursuant to the new article 9.3, the tribunal now “may” exclude evidence obtained illegally as part of its discretionary power.
The drafters of the revision have purposely refrained from specifying what constitutes illegally obtained evidence, as there is no uniform standard for the determination of whether illegality has occurred. Consequently, the question of whether illegally obtained evidence can be presented in an arbitration will in large part depend on the law deemed applicable to the dispute as well as the discretion of the tribunal itself, taking account of the totality of the circumstances.