01 November 2017

Document production under the common law and civil law: reconciling the differences through the IBA Rules

This article was written by Paul Starr, Suraj Sajnani and Hermia Chik.

At King & Wood Mallesons, we are constantly seeking to implement new technologies and strategies to alleviate the burdens of document production or ‘discovery’. A key challenge in the context of an international arbitration, which involves parties’ counsel and arbitrators from different jurisdictions, is that there are often different approaches and preconceptions about the right to and scope of evidence production.

This article focuses on the main differences in approach to document production under the common and civil law systems and how these can be managed by carefully employing the International Bar Association Rules on the Taking of Evidence in International Arbitration adopted by the International Bar Association in 2010 (IBA Rules).

The IBA Rules were created to harmonise the civil and common law systems of evidence. They are applicable whenever the parties to an arbitration have agreed or the Arbitral Tribunal has determined to apply the rules. Given that the IBA Rules are generally seen as an accepted standard by the international arbitration community[1] the tribunal or parties often adopt the rules or at least use them as a guideline where parties do not agree to strict application of these rules. Accordingly, this article provides ideas for best practice when employing the rules.

The differences between the civil and common law approaches

The approaches to document production in civil and common law systems are starkly different. In civil law jurisdictions, the pleading party is usually required to only submit evidence it wishes to rely on. A party requesting discovery will often be expected to specify single documents it is requesting in detail sufficient enough to comply with its procedural law. Civil law courts are often reluctant to compel evidence production.

In contrast, common law “discovery” or “disclosure” is usually much more extensive. It is standard practice for parties to request evidence from each other, broad discovery is often mandatory and document requests can be quite wide. Usually, parties are compelled to disclose all documents as long as they are relevant to the case.

The IBA Rules: a middle ground between the two systems

Despite the notable differences between the common law and civil law approaches to document production, there is a general consensus among practitioners from both sides that some level of document production is appropriate in an international arbitration.[2]  The IBA Rules set a middle ground between the two traditions by introducing a limited scope of “document production”, a process commonly understood to be different from US‑style “discovery” and UK‑style “disclosure”.

Under Article 3.3 of the IBA Rules, a party may submit to the opposing party and the arbitral tribunal a request for a ‘narrow and specific category’ of document(s). The requesting party must specify how the documents requested are a) relevant to its case and b) material to the outcome of the case. These requirements are aimed at preventing parties from embarking on ‘fishing expeditions’ as often occur in the US.

The IBA Rules further limit the scope of permissible document requests by allowing the party opposing a document request to make an objection. An objection can be made under Article 9.2 of the IBA Rules on the basis the documents requested:

  • lack relevance;
  • are commercially confidential or privileged; or
  • that their production would cause an unreasonable burden on the part of the producing party.

If the tribunal accepts an objection on one of these grounds, a party will not be required to produce the requested documents.

If we take the example of a case between a Chinese party and an American party, the IBA Rules should be welcomed by both. On the one hand, the Chinese party coming from a system with little mandatory document production will find the IBA Rules effective in restricting broad document requests by the American party.

On the other hand, the American party coming from a jurisdiction with broad discovery procedures would find that it is able to receive more documents than it would have received in Chinese domestic court proceedings.

Uncertainty of rulings by the arbitral tribunal

While the IBA Rules provide a useful guideline for parties making document requests, the rules are less helpful when a party objects to document production. This is because it is usually left to the arbitral tribunal to decide whether a document request is sufficiently ‘narrow and specific’. The uncertainty of the approach that arbitrators take when ruling on document requests gives rise to the problem that the IBA Rules sought to prevent in the first place: different interpretations by arbitrators from different jurisdictions as to what documents need to be produced.

This problem is reflected in Procedural Order No. 1 on Production of Documents of Tidewater Inc. and others v. Bolivarian Republic of Venezuela[3], where the parties agreed to the use of the IBA Rules as a guide in their arbitration.

In that case, the Respondent alleged that the Claimant abused a bilateral investment treaty between Venezuela and Barbados, and sought documents relating to the incorporation of Tidewater Investment S.R.L. to support its claim, namely a “copy of any minutes, memoranda, presentations or any document that contains or refers to the reasons for the formation and insertion of Tidewater Investment, S.R.L. in the corporate structure of Tidewater”. The Claimant objected to producing the documents on the basis that the request was ‘overbroad or contained terms that are not defined or that are vague, ambiguous or unintelligible’.

In that case, the tribunal consisted of two arbitrators from a civil law background and one presiding arbitrator from a common law background. They considered that the Respondent had particularised its request sufficiently narrowly to comply with the IBA Requirements as it focused on the particular issue of Tidewater S.R.L.’s incorporation.

When interpreting the IBA Rules, the tribunal stated that ‘some lack of specificity [of a document request] is clearly contemplated’ by the Rules’. The Claimant was thus ordered to provide the documents to the Respondent.

Could the decision have been different with three arbitrators from a common law background, or three arbitrators from a civil law background? The authors think so.

Tips when adopting the IBA Rules

To limit the potential uncertainty mentioned above, parties may consider:

  • defining the scope of document production under the IBA Rules in addition to nominating the IBA Rules in their arbitration agreement, thus fending off disputes as to scope and expensive interlocutory applications. This is particularly important in sectors where tens of thousands of documents are created, for example, construction and major projects disputes;
  • seeking to agree with the opposing party on the scope of document production to prevent the tribunal from setting a scope that is undesirable for both sides;
  • requesting the arbitral tribunal to include the definition of the IBA Rules in its first Procedural Order so that parties can rely on the Rules when making document requests; and
  • selecting arbitrators wisely: Parties should carefully select arbitrators, bearing in mind their legal background and the document requests likely to be made.

[1]    Richard Kreindler, “The 2010 Revision to the IBA Rules on the Taking of Evidence in International Commercial Arbitration: A Study in Both Consistency and Progress”. international Arbitration Law Review Vol, 13. Issue 5, 2010 p. 157: Nathan D. O’Malley, “Conducting Document Discovery In International Commercial Arbitration ‑ A Practical Overview”, California International Law Journal Vol. 15. Issue 1. 2007, p. 7; Jeff Waincymer, Procedure and Evidence in International Arbitration, Kluwer Law International, 2012 p. 756.

[2]    Commentary on the revised text of the 2010 IBA rules on the Taking of Evidence in International Arbitration, 1999 IBA Working Party & 2010 IBA Rules of Evidence Review Subcommittee.

[3]    ICSID Case No. ARB/10/5.

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