Like many other rules and guides in international arbitration, the IBA Rules on the Taking of Evidence in International Arbitration (the “Rules”) have also been recently updated. Since their first adoption in 1999, the Rules have gained wide acceptance as a reflection of best practice in international arbitration, and parties increasingly agree to apply the Rules as default evidentiary guidelines in international commercial and treaty-based arbitrations. In 2019, the IBA Guidelines and Rules Subcommittee established a Task Force that studied a need for revisions to the Rules. After delivering proposed changes in spring 2020, the Task Force considered comments and feedback from over 160 arbitral institutions worldwide in proposing changes to the Rules, which the IBA Council considered and approved in December 2020 (the “2020 Rules”). The 2020 Rules, along with commentary, were formally released on February 15, 2021. This marks the second-ever update to the Rules and the first update since 2010. The 2020 Rules replace previous versions and automatically apply to all arbitrations in which the parties agree to apply the Rules after December 17, 2020.
The revisions in the 2020 Rules can be broadly identified by the following categories: (i) virtual hearings, cybersecurity and data protection; (ii) document production; (iii) confidentiality; (iv) illegally obtained evidence; and (v) witnesses and experts. These changes reflect current best practices and bring the rules up to date with the changes seen recently in institutional arbitral rules.
Virtual Hearings, Cybersecurity & Data Protection
One of the most significant, and perhaps most predictable changes to the 2020 Rules in light of recent events, is the inclusion of an express provision providing for Remote Hearings. Under Article 8 of the 2020 Rules the tribunal may, after consultation with the parties, order that the Evidentiary Hearing be conducted as a Remote Hearing. As set out in the commentary, Article 8.2 of the 2020 Rules “encourages arbitral tribunals to be pro-active and consider time, cost and environmental concerns” in deciding whether to order that a hearing proceed remotely. The new definition of “Remote Hearings” provides the possibility for the hearing to proceed in whole, or in part, by way of videoconferencing or other communication technology. The IBA commentary notes that this update reflects the “tools implemented and the practices adopted by parties and arbitral tribunals” in response to the Global Coronavirus Pandemic.
In addition to expressing the tribunal’s authority to order that an Evidentiary Hearing proceed remotely, Article 8.2 of the 2020 Rules requires tribunals to consult with parties with a view to establishing a Remote Hearing protocol to conduct the hearing “efficiently, fairly, and, to the extent possible, without unintended interruptions.” The protocol may address:
- the technology to be used;
- advance testing of the technology or training in the use of technology;
- the starting and ending times considering, in particular, the time zones in which participants will be located;
- how documents may be placed before a witness of the arbitral tribunal; and
- measures to ensure that witnesses giving oral testimony are not improperly influenced or distracted.
Where the parties cannot agree to a Remote Hearing protocol, Article 8.2 empowers tribunals to fix the protocol after consultation with the parties.
In line with the addition of provisions concerning Remote Hearings, the Rules now expressly provide that tribunals may consult the parties on evidentiary issues including, at Article 2.2(e), “the treatment of any issues of cybersecurity and data protection.” This amendment intends to “highlight the advisability of considering data protection issues” at an early stage, and the IBA recommends that parties and tribunals consider the ICCA-IBA Roadmap to Data Protection in International Arbitration and the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration in addressing these issues.
Revisions to Article 3 of the Rules include clarifications intended to promote efficiency. Particularly, Article 3 now expressly provides that a party may respond to its counterparty’s objection to a request to produce “if so directed by the Arbitral Tribunal.”. Unlike the 2010 Rules, the 2020 Rules make it clear that a party does not have an automatic right to respond to an objection to a Request to Produce—this opportunity is subject to the tribunal’s discretion. The 2020 version of Article 3 also clarifies that tribunals may decide on objections to Requests to Produce without consulting the parties. In other words, the tribunal may decide whether to grant a Request to Produce without holding an oral hearing.
With respect to translation, the 2020 Rules revise Article 3 to clarify that documents delivered in response to a Request to Produce need not be translated, but that documents submitted to the tribunal must be delivered in the language of the arbitration. Parties agreeing to apply the 2020 Rules in future arbitrations, in particular where there are likely to be significant translation issues, may want to consider whether a translation protocol that addresses translation obligations and costs would be beneficial The 2020 Rules also update Article 3 to provide that parties are not required to produce multiple copies of documents which are essentially identical unless the tribunal decides otherwise.
Finally, Article 3.10 of the 2020 Rules now provides that “any Party” may object to a Request to Produce for the reasons outlined in Article 9.2 (for example, lack of sufficient relevance, political or institutional sensitivity, or privilege) and a new Article 9.3 of the Rules, which states the tribunal “may, at the request of a Party or on its own motion, exclude evidence obtained illegally.” The 2010 Rules were more restrictive, only permitting the party to whom the Request to Produce was addressed to object thereto. This update recognizes that parties to the arbitration other than the party subject to the Request may have reasonable concerns of confidentiality, privilege, or political sensitivity over the requested productions.
Article 9.5 of the 2020 Rules provides an important clarification with respect to the confidentiality of documents produced in response to a Request to Produce. Under the 2010 Rules, tribunals had the discretion to “make necessary arrangements to permit evidence to be presented or considered subject to suitable confidentiality protection.” Article 9.5 now includes “Documents to be produced” within the ambit of evidence subject to the tribunal’s arrangements for confidentiality protection. Parties often produce requested documents that are never “presented or considered.” This update to the 2020 Rules clarifies that documents produced, but not relied on, are subject to the tribunal’s orders concerning confidentiality.
Illegally Obtained Evidence
With respect to new Article 9.3 and a tribunal’s ability to exclude evidence obtained illegally, little consensus exists concerning the admissibility of illegally obtained evidence in international arbitration, with national laws varying on the issue and tribunals weighing different factors in determining whether to exclude this type of evidence. As a result, the 2020 Rules are permissive, providing that tribunals “may”, at a party’s request or on their own motion, exclude illegally obtained evidence. This permissive language differs from Article 9.2, which provides that tribunals “shall” exclude evidence for the reasons contained therein (i.e. lack of relevance or materiality; privilege; confidentiality; procedural economy, proportionality, fairness or equality).
Witness and Experts
The 2020 Rules clarify that parties are entitled to submit additional witness statements and expert reports where new factual developments that could not have been addressed in earlier statements or reports arise. As per the commentary, this revision confirms that second-round witness statements and expert reports may, in some circumstances, address new factual developments, whether responsive to another party’s earlier submissions or not.
Additionally, Article 6 has been revised to provide an important clarification to the tribunal-appointed expert’s authority to request information relating to the case from the parties. The 2010 Rules provided that the tribunal-appointed expert’s power in this regard was equivalent to the tribunal’s. This wording could result in confusion concerning whether the expert or the tribunal was empowered to decide a disagreement between the expert and a party in relation to a request for information. Accordingly, the 2020 Rules remove language referring to the tribunal-appointed expert’s authority, making it clear that the tribunal, not the expert, decides disagreements between the expert and the party concerning requests for information.
While the 2020 Rules do not make broad, sweeping changes to the 2010 Rules, they do demonstrate a pointed effort to bring updates that reflect more recent international practice and clarify interpretation issues. Like many arbitral institutional rule updates, the IBA Rules now reflect the reality of international arbitral practice post 2020: remote or hybrid hearings may be necessary; there’s a desire for efficiency; and cybersecurity and data protection are top of mind. In addition to bringing the Rules up to speed with the novel global environment in which we now practice, the Rules provide important clarifications concerning the tribunal’s authority; expand bases upon which to object to evidence or request its exclusion; and strengthen confidentiality protections. Undoubtedly, these revisions to the Rules bring welcome clarifications and additions that ought to enhance efficiency in arbitral proceedings to which the 2020 Rules apply.
To read about the The New 2021 ICC Rules click here.