2020 Revision of the IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules)
The IBA Rules on the Taking of Evidence in International Arbitration (“IBA Rules”) are widely used to regulate evidentiary issues in international arbitration proceedings.
On 17 February 2021, the International Bar Association (“IBA”) released its revised Rules on the Taking of Evidence in International Arbitration to further clarify certain aspects and to react to the rapidly increasing reliance on technology in international arbitration practice. The revised Rules were meant to replace the previous 2010 edition.
The IBA Rules on the Taking of Evidence
Determining the procedures in an arbitration is a key issue that the parties, their counsel and the tribunal must face. While the chosen institutional and ad hoc procedural rules generally provide the framework for the arbitration proceedings and usually regulate issues like the constitution of the arbitral tribunal, the appointment of arbitrators and their challenges as well as the costs, this is not the case with respect to the taking of evidence. Questions like how the evidence should be gathered and presented in an arbitration remain to be answered by the parties and/or the tribunal since there is no uniform practice regarding these issues.
The IBA tried to cover the regulatory gap by introducing the IBA Rules in 1999. The main idea was to minimize the differences and find a balance between “common law” and “civil law”, particularly relating to evidentiary matters. To achieve this, the IBA Rules attempted to codify the international practice that already existed and had elements from both the civil law and the common law jurisdictions. The initiative proved to be successful. Since their introduction in 1999, the IBA Rules have become increasingly important and are commonly adopted as default guidelines in both international commercial and investment arbitration proceedings.
The success of the IBA Rules led to the introduction of other sets of rules that also aim to regulate the taking of evidence in international arbitration. In this context, worth mentioning are the Rules on the Efficient Conduct of Proceedings in International Arbitration (Prague Rules) of 2019. The Prague Rules were promoted as an alternative to the IBA Rules suitable to accommodate the needs of civil law jurisdictions with all its peculiarities.
Having been revised for the first time on 29 May 2010, the 2020 Revision introduced the third edition of the Rules. The 2020 IBA Rules are a product of the need to provide further clarification and to acknowledge new practices that were, in the meantime, established in arbitration such as the extensive use of technology and its accompanying challenges. Unless agreed otherwise, in all arbitrations after 17 December 2020 in which the parties agree to apply the IBA Rules, the 2020 edition will now be applicable.
The newly released edition contains mostly minor changes. This is already evidenced by the official redlined comparison published by the IBA. Although rather modest, some of these changes are potentially significant. The key updates in the IBA Rules can be summarised as follows:
- Consultation on issues of cybersecurity and data protection (article 2): Pursuant to article 2 of the Rules, the Arbitral Tribunal shall consult the Parties at the earliest appropriate time in the proceedings and invite them to consult each other with a view to agreeing on an efficient, economical and fair process for the taking of evidence. The consultation on evidentiary issues may address the scope, timing and manner of the taking of evidence, including now, inter alia, the treatment of any issues of cybersecurity and data protection to the extent applicable. (Article 2.2(e)). The addition means to point out how important it is to address information security and data protection issues. In particular, the reference to data protection should be considered in conjunction with the European Union’s General Data Protection Regulation (“GDPR”).
- Documents (article 3): Some of the most significant changes contained in the 2020 revisions relate to the taking of evidence by way of Documents regulated in article 3 of the Rules. The changes are, however, rather of a clarifying nature:
- Within the time ordered by the Arbitral Tribunal, each Party shall submit to the Tribunal and to the other Parties all Documents available to it on which it relies, including public Documents and those in the public domain, except for any Documents that have already been submitted by another Party. Within the time ordered by the Arbitral Tribunal, any Party may submit to the Arbitral Tribunal and to the other Parties a Request to Produce. Pursuant to article 3 para 5, if the Party to whom the Request to Produce is addressed has an objection to some or all of the Documents requested, it shall state the objection in writing to the Arbitral Tribunal and the other Parties within the time ordered by the Arbitral Tribunal. If so directed by the Arbitral Tribunal, and within the time so ordered, the requesting party may respond to the objection. The 2020 IBA Rules, therefore, clarify that the party who has requested the production of documents has the right to respond to an objection of the opposing party provided that the Arbitral Tribunal allows it. With this, the IBA Rules codify an already commonly established practice of arbitral tribunals allowing parties to respond to the opposing party’s objections to document production requests.
- In accordance with article 3 para 7, either Party may, within the time ordered by the Arbitral Tribunal, request the Arbitral Tribunal to rule on the objection. The Arbitral Tribunal shall then, in timely fashion, consider the Request to Produce, the objection and any response thereto. In contrast to the 2010 edition, the IBA Rules no longer require the Tribunal to consult with the Parties when deciding on the Request to Produce. This change also reflects the common practice, as Tribunals often rule on such requests without holding an oral hearing.
- Documents to be produced in response to a Request to Produce need not be translated, while Documents in a language other than the language of the arbitration that are submitted to the Arbitral Tribunal shall be accompanied by translations marked as such (article 3 para 12 lit. d and e). With this a distinction is made: While foreign-language Documents submitted to the Arbitral Tribunal are required to be translated, Documents to be produced to another Party in response to a Request to Produce are not required to be translated. The provision is in accordance with the common practice in arbitration. Only the Documents that form part of the evidentiary record need to be translated. In light of this, it is also common for the parties to reach agreements regarding translations in order to keep the respective costs under control and make sure that they incur only where necessary.
- Witnesses of fact (Article 4) and Party appointed Experts (article 5): If Witness Statements and/or Expert Reports are submitted, any Party may, within the time ordered by the Arbitral Tribunal, submit to the Arbitral Tribunal and to the other Parties revised or additional Witness Statements and/or, respectively, Expert Reports, including statements from persons not previously named as witnesses and/or identified as Party-Appointed Experts, so long as any such revisions or additions respond only to: (a) matters contained in another Party’s Witness Statements, Expert Reports or other submissions that have not been previously presented in the arbitration.; or (b) new factual developments that could not have been addressed in a previous Witness Statement and/or a previous Expert Report, accordingly. With the revised provisions in article 4 para 6 and article 5 para 3, the IBA Rules allow the Parties to submit second round Witness Statements and/or Expert Reports to cover new factual developments that could not have been addressed in a previous Witness Statement or a previous Expert Report. In practice, the relevant provisions were usually interpreted rather broadly which, in some case, was the source of further dispute. The update aims to clarify the cases in which the submission of an additional Witness Statement or Expert Report is justified and thus permissible.
- Tribunal-Appointed Experts (article 6): While the 2020 Revision leaves article 6 of the IBA Rules for the larger part unchanged, one modest but worthy of mention update is to be found in article 6 para 3 and concerns the scope of authority of the Tribunal-Appointed Expert to request information relevant to the case from the Parties. Pursuant to the previous edition of 2010, “the authority of a Tribunal-Appointed Expert to request such information or access shall be the same as the authority of the Arbitral Tribunal“. In the 2020 IBA Rules, the above passage was omitted. The update aims to ensure that the language in article 6 leads to no misunderstanding and make clear that there is no equivalence of authority between the Tribunal-Appointed Expert and the Arbitral Tribunal. The Tribunal has the exclusive authority to resolve disagreements between a Party and the Tribunal-Appointed Expert in relation to the Expert’s requests for information or access.
- Remote Evidentiary Hearings (article 8): The 2020 IBA Rules are now regulating the Remote Hearings as defined in the Preamble: “Remote Hearing“ means a hearing conducted, for the entire hearing or parts thereof, or only with respect to certain participants, using teleconference, videoconference or other communication technology by which persons in more than one location simultaneously participate.
Article 8 para 2 confirms that the Tribunal may, at the request of a Party or on its own motion, after consultation with the Parties, order that the Evidentiary Hearing as defined above be conducted as a Remote Hearing. In that event, the Arbitral Tribunal shall consult with the Parties with a view to establishing a Remote Hearing protocol to conduct the Remote Hearing efficiently, fairly and, to the extent possible, without unintended interruptions. The protocol may address: (a) the technology to be used; (b) advance testing of the technology or training in use of the technology; (c) the starting and ending times considering, in particular, the time zones in which participants will be located; (d) how Documents may be placed before a witness or the Arbitral Tribunal; and (e) measures to ensure that witnesses giving oral testimony are not improperly influenced or distracted.
The update can be seen as a direct consequence of the COVID-19 pandemic that increased the interest of many users of international arbitration (and of the IBA Rules) in the Remote Hearings.
As it is still disputed whether the Parties can be subjected to a Remote Hearing at the Tribunal’s order and against their will, it is advisable, for the time being, that they expressly agree that a Remote Hearing is only possible with their consent.
- Admissibility and Assessment of Evidence (article 9): Pursuant to the newly introduced provision in article 9 para 3, the Arbitral Tribunal may, at the request of a Party or on its own motion, exclude evidence obtained illegally. The 2020 IBA Rules do not specify what constitutes “evidence obtained illegally”. For the respective determination, the applicable law is therefore decisive.
The new IBA Rules do not include ground-breaking changes. Nonetheless, they provide for more clarity and efficiency in the taking of evidence in international arbitration. While some scholars argue that the 2020 IBA Rules represent a missed opportunity to further clarify the provisions relating to the Admissibility and Assessment of Evidence, the codification of established practice in arbitration is, in any case, welcome. Many Arbitral Tribunals and Parties choose to consult the IBA Rules merely as guidelines for the evidence procedure and not to employ them as binding rules. In light thereof, further adjustment of the Rules to accommodate the specific needs of each case remain possible, while the IBA Rules simply reflect and codify the established prevailing practice in international arbitration.