Production of evidence is a concept that is a cornerstone of the arbitration procedure. IBA Rules On the Taking of the Evidence is the guide that commonly used in both commercial and investment arbitration procedures. Also Prague Rules on the Efficient Conduct of Proceedings a more recent and comprehensive guide for arbitration practice. In this blog, we evaluate these two set of rules in terms of submission of the evidence.
A. Background and Scope of Application
First version of rules issued in 1999. In 2008, a review process was initiated and as the consequence of the Committee work, revised version of IBA Rules of Evidence is adopted by resolution of IBA Council on 29 May 2010. Article 1 of the rules defines the scope of application of the Rules. In accordance with this provision, Parties may agree or tribunal may determine to apply IBA Rules. The Rules shall govern the taking of the evidence except to the extent that specific provisions of the Rules are found in conflict with any mandatory provisions of law determined to be applicable to the case. Insofar as the IBA Rules are silent on any matter concerning taking of the evidence and parties have not agreed otherwise, Arbitral Tribunal shall conduct the matter as it deems appropriate in accordance with general principles of IBA Rules.
Working Group of Prague Rules conducted a survey in 30 Civil Law Countries about respective countries’ procedural traditions in international arbitration. On the basis of this research draft rules were prepared and released in January 2018. Feedback received from arbitration practitioners allowed further improvement of draft rules to be available for signing on 14 December 2018 in Prague. Article 1 of Prague Rules provide that “In all stages of application of the Rules, Arbitral Tribunal shall ensure fair and equitable treatment of the parties and provide them with a reasonable opportunity to present their cases” . Prague Rules’ provisions are more comprehensive on the scope of application of the Rules. It covers more than taking of the evidence compared to IBA Rules solely dedicated to taking of the evidence in arbitration proceeding. Prague Rules also provides a broad area of authorization to the arbitral tribunal which is described as “Proactive Role of the Arbitral Tribunal” in Article 2, that is similar to the Judge’s role in civil law jurisdiction systems
B. Comparison of Rules in Terms of “Evidence”
a) Structural Difference between the Rules on Fact Finding
IBA Rules have more detailed provisions concerning each evidence one by one. Arbitral Tribunal authority for each type of evidence determined separately. Each and every type of document and related procedure of their submission is separately regulated in articles respectively;
Article 3 on documents submitted by parties,
Article 5 on reports of party appointed experts,
Article 6 on tribunal appointed experts,
Article 7 on inspection by the arbitral tribunal,
In Prague Rules, Arbitral Tribunal’s authority for collecting different type of evidences provided in Article 3, in general.
b) Document Production
The main difference between the perspective of Rules lies with document production. The roots of this difference comes from procedural traditions of different legal systems. IBA Rules opens room for the concept of document production, which is an element that comes from common law jurisdictions. Document production in IBA Rules, is an extenuated version of “discovery” in US legal system (disclosure in UK legal system). In accordance with the purpose of IBA Rules “to reflect procedures in use in many different legal systems and particularly useful when parties come from different legal cultures” procedure of document production is regulated by Article 3 of IBA Rules.
Article 3.3: A Request to Produce shall contain
(i) a description of each requested Document sufficient to identify it,
(ii) a statement as to how the Documents requested are relevant to the case and material to its outcome;
(iii) a statement that the Documents requested are not in the possession, custody or control of the requesting Party and,
(iv) a statement of the reasons why the requesting Party assumes the Documents requested are in the possession, custody or control of another Party.
On the other hand, Prague Rules explicitly does not prefer document production concept which is contained in IBA Rules. Article 4.2 of Prague Rules;
Generally, the arbitral tribunal and the parties are encouraged to avoid any form of document production, including e-discovery.
If a party is relying on the evidence that under custody of the other party, this request shall be submitted in accordance with Article 4.3 and 4.5 of Prague Rules;
Article 4.3: However, if a party believes that it would need to request certain documents from the other party, it should indicate this to the arbitral tribunal at the case management conference and explain the reasons why the document production may be needed in this particular case. If the arbitral tribunal is satisfied that the document production may be needed, it should decide on a procedure for document production and make an appropriate provision for it in the procedural timetable.
Article 4.5: A party may request the arbitral tribunal to order another party to produce a specific document which;
(i)is relevant and material to the outcome of the case;
(ii) is not in the public domain; and
(iii) is in the possession of another party or within its power or control.
c) Number of Witnesses and Examination
Under Prague Rules. Arbitral Tribunal has authority to decide which witnesses will be heard throughout the proceedings. Number of witnesses will be heard during the hearings are limited by arbitrators. The aim of this provision is to preserve efficient use of time and effort in proceedings. However, restrictions on the number of witnesses may breach the parties right to present their case with reasonable opportunity.
Article 5.2: The arbitral tribunal, after having heard the parties, will decide which witnesses are to be called for examination during the hearings.
Article 5.3: The arbitral tribunal may decide that a certain witness should not be called for examination during the hearing, either before or after a witness statement has been submitted, in particular if it considers the testimony of such a witness to be irrelevant, immaterial, unreasonably burdensome, duplicative or for any other reasons not necessary for the resolution of the dispute.
Article 5.4: If the arbitral tribunal decides that the witness should not be called for examination during the hearing prior to any witness statement being submitted, this does not, by itself, preclude a party from submitting a witness statement for that witness.
Article 5.7: However, if a party insists on calling a witness whose witness statement has been submitted by the other party, as a general rule, the arbitral tribunal should call the witness to testify at the hearing, unless there are good reasons not to do so.
Under IBA Rules, control on the conduct of evidentiary hearings is given to Arbitral Tribunal. There is not such restriction on the number of the witnesses will be heard in the hearings. Tribunal may take necessary measures to conduct the hearings in an effective and timely manner when it considers that question, answer or appearance is irrelevant or immaterial to the outcome. IBA provision brings out a more balance provision between interests of parties and effective management of arbitration proceedings.
Article 8.2: The Arbitral Tribunal shall at all times have complete control over the Evidentiary Hearing. The Arbitral Tribunal may limit or exclude any question to, answer by or appearance of a witness, if it considers such question, answer or appearance to be irrelevant, immaterial, unreasonably burdensome, duplicative or otherwise covered by a reason for objection set forth in Article 9.2. Questions to a witness during direct and re-direct testimony may not be unreasonably leading.
d) Concepts Brought by Prague Rules
As a difference from IBA Rules, In Article 7.2, arbitrators are authorized to consider legal provisions which are not pleaded by parties, including public policy rules. Such discretion given to arbitral tribunal may be found in conflict with “party autonomy” principle in international arbitration.
Arbitral tribunal may also rely on legal authorities where legal provisions pleaded relate to respective authorities under Article 9 of Prague Rules. These provisions of Prague Rules resembles judges’ prerogatives in Civil Law Jurisdictions and may contradict with characteristic principles of international arbitration.
Article 7: ’Iura Novit Curia’ Principle:
7.1- A party bears the burden of proof with respect to the legal position on which it relies.
7.2 – However, the arbitral tribunal may apply legal provisions not pleaded by the parties if it finds it necessary, including, but not limited to, public policy rules. In such cases, the arbitral tribunal shall seek the parties’ views on the legal provisions it intends to apply. The arbitral tribunal may also rely on legal authorities even if not submitted by the parties if they relate to legal provisions pleaded by the parties and provided that the parties have been given an opportunity to express their views in relation to such legal authorities.
While both rules provide provisions to fulfill procedural gaps in arbitration proceedings; they also approach to certain matters in different perspectives. IBA Rules dealing only with taking of the evidence, would be more efficient for parties relying on the documents that are under custody of each other by virtue of “document production” concept. On the other hand, agreement on Prague Rules which is regulating proceedings with a wider aspect, would be more efficient for parties that ask for a faster and more efficient conduct of arbitration.
1. IBA Rules on Taking of Evidence, International Bar Association
2. Prague Rules on the Efficient Conduct of Proceedings
Mehmet Tuğberk DEKAK