On 17 December 2020, the International Bar Association (“IBA”) adopted a revised third edition of its Rules on the Taking of Evidence in International Arbitration (the “2020 IBA Rules”), which supersede the 2010 version currently in force (the “2010 IBA Rules”). Unless otherwise agreed, the 2020 IBA Rules will apply to all arbitrations in which the parties agree to apply the IBA Rules after 17 December 2020, be it as part of their arbitration agreement or at the stage of determining the rules of procedure in a pending or future arbitration. The revisions, which are analyzed below, are minor and incremental in nature.
The Aim of the IBA Rules on the Taking of Evidence in International Arbitration
First published in 1999, the IBA Rules on the Taking of Evidence in International Arbitration are a soft law instrument comprising only nine Articles. The IBA Rules combine both civil and common law practices for the taking of evidence and they are frequently adopted in commercial, as well as investment, international arbitrations. Their aim is to provide an efficient evidence-gathering process by supplementing laws, as well as institutional and ad hoc rules applicable in international arbitration, which are normally not specific enough to capture the breadth of issues that may arise during the evidence-gathering process (see Preamble, para. 1 of 2020 and 2010 IBA Rules).
Key Changes of the 2020 IBA Rules on the Taking of Evidence in International Arbitration
The main goal of the 2020 IBA Rules was to streamline the Rules and provide greater clarity. In a nutshell, the key changes include (a) adding cybersecurity and data protection to the list of evidentiary issues that are proposed to be discussed between the arbitral tribunal and the parties during their consultation on evidentiary issues (Article 2), (b) providing, in explicit terms, for the possibility to hold virtual hearings (Article 8) and including a definition for the term “Remote Hearing” (Definitions Section), as well as (c) inserting a provision that expressly empowers the arbitral tribunal to potentially exclude illegally-obtained evidence (Article 9).
Helpful Accompanying Materials
A helpful redline comparison of the 2020 and 2010 IBA Rules, as published on the IBA website, is available here. You may also find here a comprehensive updated Commentary on the 2020 IBA Rules (the “Commentary”) issued by the 2020 IBA Review Task Force.
Key Changes of the 2020 IBA Rules in Further Detail
Scope of Application (Article 1)
In Article 1(2) of the 2020 IBA Rules, it is now specified that the parties may apply the IBA Rules “in whole or in part”.
This is a minor addition, as this was already clarified in paragraph 2 of the Preamble of the 2010 IBA Rules (which remained unchanged in the 2020 IBA Rules), providing that “Parties and Arbitral Tribunals may adopt the IBA Rules of Evidence, in whole or in part, to govern arbitration proceedings, or they may vary them or use them as guidelines in developing their own procedures.”
Cybersecurity and Data Protection (Article 2)
The 2020 IBA Rules added cybersecurity and data protection amongst the list of evidentiary issues proposed to be discussed between the arbitral tribunal and the parties during their initial consultation on evidentiary issues (Article 2(2)(e) of the 2020 IBA Rules):
Article 2 – Consultation on Evidentiary Issues
2. The consultation on evidentiary issues may address the scope, timing and manner of the taking of evidence, including, to the extent applicable:
(a) the preparation and submission of Witness Statements and Expert Reports;
(b) the taking of oral testimony at any Evidentiary Hearing;
(c) the requirements, procedure and format applicable to the production of Documents;
(d) the level of confidentiality protection to be afforded to evidence in the arbitration;
(e) the treatment of any issues of cybersecurity and data protection;
(f) the promotion of efficiency, economy and conservation of resources in connection with the taking of evidence.
International arbitration, due to the frequent involvement of multiple parties and sensitive data, may be susceptible to cyberattacks. This did happen, for instance, in 2015, when the website of the Permanent Court of Arbitration was hacked during an arbitration between China and the Philippines over a politically-sensitive maritime border dispute. You may refer to our discussion on the issue of cybersecurity in international arbitration here.
In the post-GDPR area, and given the varied data protection regimes arising across the globe, data protection is also particularly relevant for most economic actors involved in international arbitration.
The Commentary also stipulates that among the resources that parties and tribunals may find useful in considering these issues are the ICCA-IBA Roadmap to Data Protection in International Arbitration and the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration.
Documents (Article 3)
The 2020 IBA Rules further streamlines the document production process as follows.
A new sentence has been added at the end of Article 3(5) which provides that, if so directed by the tribunal, parties may respond to document production objections (“If so directed by the Arbitral Tribunal, and within the time so ordered, the requesting party may respond to the objection.”), as is often the case in practice:
Article 3 – Documents
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. The reasons for such objection shall be any of those set forth in Article 9.2 or 9.3, or a failure to satisfy any of the requirements of Article 3.3. If so directed by the Arbitral Tribunal, and within the time so ordered, the requesting party may respond to the objection.
Article 3(7) now clarifies (by disposing of the phrase “in consultation with the Parties”) that there is no need for the arbitral tribunal to consult with the parties when considering a “Request to Produce”, which again reflects what usually happens in practice:
Article 3 – Documents
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 consultation with the Parties and in timely fashion, consider the Request to Produce, the objection and any response thereto.
The 2020 Review Task Force also clarified at the outset of Article 3(12) that the provisions of Article 3(12) apply “unless the Parties agree otherwise or, in the absence of such agreement, the Arbitral Tribunal decides otherwise”. The Commentary explains that such “reservation appeared in the 2010 IBA Rules of Evidence only in Article 3.12(b) and in part in Article 3.12(c), but the Task Force concluded that it properly applies to all four [now five] subsections of Article 3.12.”
Further, Article 3(12)(d) of the 2010 IBA Rules, provided that “translations of Documents shall be submitted together with the originals and marked as translations with the original language identified.” The 2020 IBA Rules now helpfully make the following distinction: under the revised Article 3(12)(d) of the 2020 IBA Rules, documents that are “produced in response to a Request to Produce need not be translated”. Yet, 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” (new Article 3(12)(e) of the 2020 IBA Rules):
Article 3 – Documents
12. With respect to the form of submission or production of Documents, unless the Parties agree otherwise or, in the absence of such agreement, the Arbitral Tribunal decides otherwise:
(a) copies of Documents shall conform to the originals and, at the request of the Arbitral Tribunal, any original shall be presented for inspection;
(b) Documents that a Party maintains in electronic form shall be submitted or produced in the form most convenient or economical to it that is reasonably usable by the recipients;
(c) a Party is not obligated to produce multiple copies of Documents which are essentially identical;
(d) Documents to be produced in response to a Request to Produce need not be translated; and
(e) 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.
Witnesses of Fact (Article 4)
Article 4(6) of the 2020 IBA Rules has now been modified to clarify that second-round witness statements may address “new factual developments that could not have been addressed in a previous Witness Statement”, whether or not referred to in another party’s earlier submissions:
Article 4 – Witnesses of Fact
6. If Witness Statements 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, including statements from persons not previously named as witnesses, 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.
Party-Appointed Experts (Article 5)
Similarly, Article 5(3) of the 2020 IBA Rules, now clarifies that second-round expert reports may capture “new developments that could not have been addressed in a previous Expert Report”:
Article 5 – Party-Appointed Experts
3. If 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 Expert Reports, including reports or statements from persons not previously 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 developments that could not have been addressed in a previous Expert Report.
Tribunal-Appointed Experts (Article 6)
Article 6(3) the 2010 IBA Rules read as follows:
Article 6 – Tribunal-Appointed Experts
3. Subject to the provisions of Article 9.2, the Tribunal-Appointed Expert may request a Party to provide any information or to provide access to any Documents, goods, samples, property, machinery, systems, processes or site for inspection, to the extent relevant to the case and material to its outcome. 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 modified Article 6(3) of the 2020 IBA Rules, the second sentence (“The authority of a Tribunal-Appointed Expert to request such information or access shall be the same as the authority of the Arbitral Tribunal.”) has been deleted.
Pursuant to the Commentary, there was no “need to delineate the scope of the tribunal-appointed expert’s power to request access beyond the provisions of the first sentence of Article 6.3”, which stipulates that the expert may request information “to the extent relevant to the case and material to its outcome.” The Commentary further clarifies that this sentence “could be misinterpreted to suggest that the tribunal-appointed expert would have the power to resolve any disputes over information or access, including, for example, claims that information was privileged, which would be inconsistent with the sentence in Article 6.3 that provides for the arbitral tribunal to resolve such disputes.”
Remote Hearings (Article 8 & Definitions)
The newly-inserted paragraph 2 of Article 8 (Evidentiary Hearing) of the 2020 IBA Rules, introduces the possibility of holding virtual hearings, which became the new normal during the COVID-19 pandemic:
Article 8 – Remote Hearing
2. At the request of a Party or on its own motion, the Arbitral Tribunal may, after consultation with the Parties, order that the Evidentiary Hearing 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.
Accordingly, the definition of a “Remote Hearing” is also added to the “Definitions” Section that precedes the Articles, which reads as follows:
“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.
Admissibility and Assessment of Evidence (Article 9)
A newly-inserted provision in Article 9(3) of the 2020 IBA Rules stipulates that the tribunal “may, at the request of a Party or on its own motion, exclude evidence obtained illegally.” The Commentary provides the example of a recording of a conversation without the permission of those involved in a country where such act would be illegal. Such a recording under new Article 9(3) may explicitly be deemed inadmissible by the tribunal.
The Commentary also explains that the drafters of the 2020 IBA Rules “contemplated capturing the specific circumstances in which such evidence should be excluded but concluded that there was no clear consensus on the issue.” Indeed, national legislations on the admissibility of illegally-obtained evidence vary and so do arbitral tribunals’ rulings on the issue, which, as explained in the Commentary, have taken into account different criteria, such as “whether the party offering the evidence was involved in the illegality, considerations of proportionality and whether the evidence is material and outcome-determinative, whether the evidence has entered the public domain through public ‘leaks’, and the clarity and severity of the illegality.”
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Overall, while not ground-breaking, the 2020 IBA Rules introduce welcome additions that are mainly geared towards providing greater clarity, whilst acknowledging recent prevailing practices and developments, such as the shift from physical to remote hearings, caused by the COVID-19 pandemic, as well as the need to take into account cybersecurity and data protection issues that may arise in an international arbitration.
