25 February 2021
On 17 December 2020, the International Bar Association (IBA) adopted new rules on the Taking of Evidence in International Arbitration (Rules). The new Rules were published on 17 February 2021 and will apply to all arbitrations in which the parties agree to apply the IBA Rules after 17 December 2020. The new rules and commentary can be found here.
This is the first update to the IBA Rules since 29 May 2010, and only the second update since the IBA Rules were first published in 1999. The updates to the Rules are predominantly intended to reflect the practices that have been adopted by parties and arbitral tribunals since the global COVID-19 pandemic. In particular, the new Rules outline a procedure for arbitral tribunals to order that an evidentiary hearing be conducted as a “Remote Hearing” (which includes hybrid hearings), and requires tribunals to consult with the parties with a view to establishing a “Remote Hearing Protocol” to govern the conduct of the hearing. However, the 2020 Task Force also took the opportunity to “tune up” certain other provisions. The key updates to the Rules are summarised below.
Tribunal consultation on cybersecurity and data protection – Article 2
The new Rules include an express provision that the evidentiary issues on which the tribunal may consult the parties includes “the treatment of any issues of cybersecurity and data protection” (Article 2.2(e)). This was added to highlight the advisability of considering information security and data protection issues (particularly in light of the EU’s General Data Protection Regulation). The commentary also highlights that parties and tribunals may find further guidance on these issues in the ICCA-IBA Roadmap to Data Protection in International Arbitration and the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration.
Document production – Article 3
The new Rules introduce some clarificatory updates regarding document production, namely:
(1) a party who has requested the production of documents may respond to an objection from the relevant counterparty “if so directed by the Arbitral Tribunal, and within the time so ordered”. This therefore clarifies that parties may reply to objections (as is often provided for in procedural orders) but that this right is not automatic (Article 3.5).
(2) clarification that the tribunal does not have to consult with the parties when considering Requests to Produce (Article 3(7)). This update is intended to reflect current practice, as tribunals often rule on objections without holding an oral hearing.
(3) parties are not obligated to produce multiple copies of documents which are essentially identical unless the tribunal decides otherwise (Article 3.12(c)). This should prevent unnecessary costs from being incurred in the review and production of documents, unless the existence of multiple identical documents is relevant to the dispute.
(4) documents that are produced in response to a Request to Produce do not need to be translated, but documents that are submitted to the tribunal do need to be translated into the language of the arbitration (Articles 3.12(d) and (e)). This again appears to reflect prevailing practice, such that translation costs are only incurred where necessary.
Witness statements and expert reports – Articles 4 and 5
The new Rules clarify that parties can submit second round witness statements and expert reports to cover new factual developments that could not have been addressed in a previous witness statement (Article 4.6(b)) or expert report (Article 5.3(b)). These updates ensure that opportunities to give further evidence are still limited to responses to the counterparty’s evidence, but recognise that this opportunity should also extend to circumstances where new evidence has come to light that it was not possible to adduce first-time round.
Tribunal-appointed experts – Article 6
The new Rules have clarified that the a tribunal-appointed expert will not have the power to resolve any disputes between the parties over information or access to information, by deleting some language in Article 6.3 which had the potential to be misinterpreted.
Evidentiary hearings – Article 8
The new Rules confirm that an arbitral tribunal may order that the evidentiary hearing be conducted as a “Remote Hearing”, either at the request of a party or on its own motion (Article 8.2). The newly inserted definition of “Remote Hearings” also includes hybrid hearings, where only certain participants or only parts of the hearing take place using videoconferencing or other communication technology.
The new Rules clarify that the arbitral tribunal should consult with the parties with a view to establishing a Remote Hearing Protocol in order to conduct the Remote Hearing “efficiently, fairly and, to the extent possible, without unintended interruptions” (Article 8.2). The updated commentary on the Rules states that the question as to who bears responsibility for preparing such a protocol was left open in the interests of flexibility. The new Rules also give some examples of issues that may be addressed in the protocol in order to reflect current and recent practice during the pandemic. These include, for example, the technology that will be used, the testing of such technology to ensure the hearing runs smoothly, how documents will be placed before the tribunal (such as a third party document platform provider) and measures to ensure that witnesses giving oral testimony are not improperly influenced or distracted. On this final point, the commentary on the new Rules specifies that such methods include questioning the witness at the outset of the examination about the room in which the testimony is being given, who is present and what documents are available, installation of mirrors behind the witness, use of fish-eye lenses, or the physical presence of a representative of opposing counsel in the same room as the witness.
It is standard practice for parties to agree that a witness statement serves as the direct evidence of a witness and that witnesses need only appear at an evidentiary hearing if requested for cross-examination. As a further clarification, the new Rules confirm that if a party who has introduced a witness statement requests that that witness appears at the evidentiary hearing, the arbitral tribunal may, after hearing the parties, permit that witness to give evidence at the hearing (Article 8.5). This was intended to address some uncertainty as to whether, when a party waives its right to cross-examine a witness, the party that presented the witness may nevertheless call that witness to give testimony.
Assessment of evidence (Article 9)
Finally, the new Rules now specifically contain a provision which gives the tribunal the power, at the request of a party or on its own motion, to exclude evidence that has been illegally obtained (Article 9.3). Although the 2020 Review Task Force contemplated capturing some specific circumstances where evidence should be excluded, there was no clear consensus on this issue given variation in national laws. It is for this reason that the Rules state only that the tribunal “may” exclude such evidence (in contrast to Article 9.2, where the tribunal “shall” exclude evidence in certain circumstances, such as due to legal impediment or privilege).
Comment
The new Rules do not make any wholesale changes, but are instead intended to acknowledge prevailing practice or clarify specific points of interpretation. They are nonetheless a welcome development, particularly in light of the major shift from in-person to remote hearings since the COVID-19 pandemic. The Rules provide encouragement to tribunals to adopt remote hearing protocols and normalise this practice. This should help ensure that parties and tribunals routinely consider how their remote hearings can be organised and facilitated as fairly and efficiently as possible.
For further information, please contact:
Chris Parker, Partner, Herbert Smith Freehills
chris.parker@hsf.com
