Frequently parties involved in international arbitration come from jurisdictions with varying approaches to the production and presentation of evidence. Questions of how to deal with such evidence (in its various forms) would be left to the discretion of the Tribunal who had to juggle parties’ different experiences and expectations to find an acceptable solution.
As a consequence, frameworks such as the International Bar Association Rules on the Taking of Evidence in International Arbitration (the IBA Rules) were established in 1999 to create an internationally-recognised protocol for dealing with disclosure of documents, the production of expert and factual evidence, and the conduct of evidentiary hearings. Since their inception the IBA Rules have been widely accepted by the international arbitration community, and are frequently expressly incorporated into arbitration clauses.
On 17 December 2020, the IBA adopted an updated set of rules (only the second update since their inception) which were published on 17 February 2021.
So what are the changes?
The updates to the IBA Rules include:
- Document production (Article 3) - clarification on document production including how a party can reply to objections by a counterparty to produce documents, whether a tribunal is obliged to consult with parties in considering a request for production of documents, the number of copies of documents a party is obliged to produce and the requirement to provide translations
- Second-round witness statement and expert reports (Articles 4 and 5) – clarification on when a party may serve supplemental factual and expert evidence that could not have been addressed in initial evidence
- Tribunal-appointed experts (Article 6) – clarification that experts appointed by the tribunal to assist it with specific issues will not have the power to resolve any disputes between the parties over information or access to information
- Evidentiary hearings (Article 8) – likely to be of most interest is the confirmation that an arbitral tribunal may now order that the evidentiary hearing be conducted as a “remote hearing”, either at the request of a party or on its own motion. The remote hearing may be fully remote (i.e. all aspects of the hearing are conducted by video), or “hybrid” (where only certain participants or only parts of the hearing are by video). The tribunal should consult with the parties to develop a “remote hearing protocol” designed to deal with matters such as the appropriate technology to be used, how documents are to be placed before the tribunal (i.e. by providing them via an electronic document platform) and steps that can be taken to ensure that witnesses giving oral testimony are not improperly influenced or distracted
Why are the changes important?
Although not major changes, the new rules provide welcome clarification on a number of points of practice.
In particular, the update to the rules concerning remote hearings formalises measures that parties have adopted since the Covid-19 outbreak, and should therefore make the process for agreeing a hybrid or fully remote arbitration hearing more straightforward.
Commercial parties who engage in arbitration as their favoured dispute resolution mechanism, know all too well the cost and disruption that can be caused having to lose key personnel to attend hearings (often on a different continent) to give evidence, or simply to observe proceedings. Normalising the use of technology to allow hearings by video conferencing will mean from a party’s perspective a reduction in the upfront cost of travel and accommodation, and the time that people must spend away from their usual day-to-day work commitments.
Whilst, on the whole, these changes are to be welcomed, reflecting as they do what has become practice, there remain doubters who question the value of video hearings, and whether they truly ensure an “efficient, economical and fair process” (which the IBA Rules is keen to promote). Critics scoff at the cost of engaging third parties to host video conferencing platforms, and the need to provide IT soft- and hardware to witnesses to ensure they are able to give evidence via video. Equally there is concern that, without a witness physically present, there can be limited confidence that he or she is not being aided by having documents or colleagues present “off screen”.
From a tactical standpoint it may not always be in a party’s interest to have arbitration hearings conducted remotely, particularly in circumstances where there are advantages to be gained by having witnesses taken out of their comfort zone and be subjected to face to face cross-examination in the more sterile environment of an arbitration hearing room.
Whatever those concerns, the fact that an IBA Task Force has seen fit to update the rules to allow for a more open process for dealing with remote hearings suggests that they are likely to be a permanent feature of the international arbitration landscape. This comes as little surprise to disputes lawyers who have had no choice but to adapt to the practice. It will be interesting to see how widespread it continues to be once international restrictions on travel have been lifted in a post-Covid world.
Furthermore, the movement within the arbitration community for “greener” arbitrations, has highlighted a growth in support for the arbitration community to reduce its carbon footprint by (for example) limiting international travel and adopting IT solutions wherever possible. Our experience suggests that, despite some challenges, remote hearings are effective with courts and arbitral institutions ready and willing to embrace video technology. There is a considerable amount of cost to be saved, all of which suggests that the nay-sayers will have to move with the times otherwise they risk being left behind.
Catherine Penny