Disclosure rules

Parties may prefer to adopt or refer to rules prepared specifically for disclosure, such as those set out by the IBA Rules and the CIArb Protocol for E-Disclosure in International Arbitration. Such rules are regularly used in international disputes and provide a helpful and familiar procedure for parties from different jurisdictions who may be used to different forms of disclosure. Parties will, however, often direct the tribunal to use the rules as a guide, rather than making them compulsory.

To a great extent, the IBA Rules have become an international standard and warrant detailed consideration. In essence, they set out a framework that:

1. requires the tribunal to consult with the parties at the earliest appropriate time and invite them to agree to an “efficient, economical and fair process” for the taking of evidence in the proceeding, including disclosure
2. requires the parties to disclose all documents upon which they rely
3. allows the parties to request disclosure of certain documents via a Request to Produce and provides a procedure to resolve any objection to the Request to Produce.
4. allows the tribunal and parties to seek documents held by non-parties to the proceeding.

In respect of disclosure, the IBA Rules are predicated upon the principle that, in general, a request should relate to documents which are material and relevant, should be specific and not be overly burdensome. It must be emphasised that the IBA Rules framework is subject to what is agreed by the parties and ruled by the tribunal, but it is usual to refer to and be guided by the IBA Rules. Although this is a soft law instrument, as will be seen from the above summary, the IBA Rules are of real importance and give key practical guidance.

At article 3 (Documents), the IBA Rules provide that documents on which a party relies must be submitted to the arbitral tribunal and to the other parties. But in respect of what would be the discovery or disclosure process, article 3 goes on to provide (at art 3(2)) that “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”. That request to produce shall contain, by virtue of article 3(3):

(i) a description of each requested Document sufficient to identify it, or

(ii) a description in sufficient detail (including subject matter) of a narrow and specific requested category of Documents that are reasonably believed to exist; in the case of Documents maintained in electronic form, the requesting Party may, or the Arbitral Tribunal may order that it shall be required to, identify specific files, search terms, individuals or other means of searching for such Documents in an efficient and economical manner; a statement as to how the Documents requested are relevant to the case and material to its outcome; and

(i) a statement that the Documents requested are not in the possession, custody or control of the requesting Party or a statement of the reasons why it would be unreasonably burdensome for the requesting Party to produce such Documents, and

(ii) a statement of the reasons why the requesting Party assumes the Documents requested are in the possession, custody or control of another Party.

It will be seen that this is a procedure that attempts to prevent a very wide, litigation-like and traditional common law approach to disclosure, where a party has to sift through all the material in its possession and then schedule for inspection or production the documents of relevance to the case that it has.

The art 3(3) procedure instead works on the basis of a request to produce, where the party requesting a document describes it, and states how it is relevant to the case and material to the outcomes of the case. The manner in which this process normally takes place in practice is by use of the so-called Redfern Schedule. The purpose of the Redfern Schedule, according to the author of that schedule himself (see Redfern & Hunter on International Arbitration (6th edition, at para 6.101) is “to crystallise issues in dispute, so that the arbitral tribunal knows the position that the parties have reached following the exchanges between them. This makes it possible for the arbitral tribunal to make an informed decision as to whether or not a particular document of class of documents, should be produce, without having to be involved in the details of the exchanges between the party’s lawyers and, usually, without the need for a meeting.”

It will be seen that the process in art 3(3) and the use of the Redfern Schedule pre-suppose that, once a request is issued by one party to another, the representatives from each side will enter into discussion, either orally or by correspondence. That process will provide an opportunity for a better understanding of the respective positions as to the document or documents in question whether a particular document is in existence or in the party’s possession and for compromise or agreement. Although it is to be hoped that such matters are capable of resolution without the need for a meeting, there will be occasions where a meeting or hearing will be required.

As to Redfern Schedule itself, as a schedule of document production, it takes the form of a chart with four columns:

Column (1): documents requested

Column (2): reasons for request

Column (3): objections to production, and

Column (4): left blank for the decision of the tribunal on each request.

It should also be noted that a number of procedural questions are likely to arise as between the parties and typically, these will include:

1. should documents be exchanged simultaneously or sequentially
2. is it possible to agree a list of issues so that document requests can be limited to the evidence that is necessary to resolve the issues in dispute
3. should document requests be limited in number and only be permitted up to a particular point in the arbitration (for example, within four weeks after the parties have set their cases out in full)
4. should a Redfern Schedule or any other format be used
5. how should bundles of documents be produced and distributed; in hard copy or electronic form
6. how should electronic material be addressed and what searching tool should be used
7. how should documents be paginated and labelled, and should documents be translated and if so, how should this be done?

Taking into account the traditional difference in approach between common law and civil law practitioners in respect of disclosure and the view among some civil law practitioners that international arbitration has been too common law-centric in that regard, a group of civil law international arbitration practitioners have created the Prague Rules, which are intended to provide a framework for arbitration that is efficient and bares much closer resemblance to civil law, rather than common law, practice.

The Prague Rules are predicated on the basis that the tribunal will have a proactive management role from the time of its appointment. They provide for the legal and factual issues in a dispute to be narrowed at an early stage through a case management conference, along with the tribunal making preliminary orders. Disclosure itself is deliberately restricted, with art 4 (Documentary Evidence) stating that “4.1 Each party shall submit documentary evidence upon which it intends to rely in support of its case as early as possible in its proceedings.4.2 Generally, the arbitral tribunal and the parties are encouraged to avoid any form of document production, including e-discovery.”

Article 4 does, though, allow for a party to request documents from another party at the case conference stage, provided it can support its request with reasons. If the tribunal is satisfied that production is needed, it is open to it to ”decide on the procedure for document production”. Further, art 4.4 provides that a party may only request the tribunal to order document production at a later stage than the case conference in exceptional circumstances and where the requesting party could not have made such a request at that conference.

It should also be noted in respect of the Prague Rules that they provide for an inquisitorial approach to evidence, along with any expert evidence being sought by the tribunal, which will be responsible for appointing the expert. In addition, where the matter proceeds to a hearing, parties and the arbitral tribunal should proceed on a documents only hearing wherever possible.

Unusually and some would say contentiously, the Prague Rules provide that the tribunal, or members of the tribunal, may seek to facilitate a commercial settlement or provide mediation of the dispute, where the parties give their consent.

Whether the Prague Rules will prove to be a success or not remains to be determined. Certainly in seeking to improve efficiency, they have a focus on an issue which is core to many contemporary concerns expressed by those engaged in international arbitration. That having been said, some have suggested that the approach of the Prague Rules will simply create additional costs at an early stage in a dispute and that many parties are unlikely to make use of them in a dispute that revolves around factual issues. At the same time, where the parties are from a civil law tradition and wish to have their arbitral proceeding adhere to a civil law-friendly approach, then the Prague Rules provide a ready framework. Similarly, where a dispute has little factual contention, but turns on interpretations and questions of law, then again the Prague Rules are likely to be of genuine assistance.

In practice, of course, much of the material that will be of interest to commercial parties will now be in electronic form. There are various forms of artificial intelligence that may be used to interrogate such material. Article 3 of the IBA Rules (as set out above) will apply to both physical and electronic documents. However, if electronic material in large volumes is to be dealt with appropriately and fairly in a proceeding, then it will be incumbent on the tribunal to seek to manage proactively and effectively and to exercise its discretion appropriately.

As to material in the hands of a non-party, where a party to the arbitration claims that a document is material and relevant, but the document in question is in the hands of a third party, difficulties may ensure. The arbitral tribunal itself, of course, will not have the power to order production, but depending on national law, the national court will be able to assist the process, typically by requiring a person to attend in answer to a subpoena and to produce the documents in their possession.