Материал: Amy C Kläsener
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The Taking of Evidence
Thirdly, when it comes to the tribunal’s discretion to reject requests, the refusal ground of an unreasonable burden to produce plays an important role.51 In particular, this burden may vary depending on the different software currently available to the requested party (and if the question arises as to whether a party should be obliged to acquire the software). In this respect, a tribunal should not only assess the burden on the requested party but should also consider its cost-shifting powers (e.g., making e-document production conditional on paying all or parts of the respective costs of the requested party).52
Fourthly, another question is whether electronic documents should be provided in electronic format or produced in paper form.Article 3.12 of the IBA Rules indicates that electronic documents are to be submitted or produced in the form most convenient or economical to the provider and which is reasonably usable by the recipients, unless otherwise agreed, or the tribunal otherwise directs.53 Yet, it is crucial that the documents are accessible to the other parties and the tribunal without undue delay and costs.
Finally, there is the question as to the consequences of inadvertently produced documents (in particular, documents that might be subject to privilege or otherwise protected from production); inadvertent production might occur in e-document production, when adequate human review was not possible within the prescribed time frame. In such cases, parties may conclude claw-back agreements preventing either party from making use of inadvertently produced documents, unless a counterparty can show that the document was properly produced.54
Grounds for refusing requests for document production
Article 9.1 of the IBA Rules vests tribunals with broad discretion as to the admissibility (and relevance, materiality and weight) of evidence. As the issue of admissibility may vary from one jurisdiction to another,55 the IBA Rules try to strike a balance in this respect. Pursuant to Article 9.2 the tribunal ‘shall, at the request of a Party or on its own motion, exclude from evidence or production any Document, statement, oral testimony or inspection’ based on56 (1) lack of sufficient relevance or materiality, (2) legal impediment or privilege, (3) unreasonable burden to produce, (4) loss or destruction of the document,
(5) commercial or technical confidentiality, (6) political or institutional sensitivity or (7) considerations of procedural economy, proportionality, fairness or equality of the parties.57 In disputes related to M&A transactions, a requested party will likely invoke issues of privilege (as parties are usually advised by counsel, be it outside or in-house counsel, during the negotiation of a transaction) and confidentiality (as relevant information is now with the buyer or seller of the target company, which is often a competitor of the contractual
51Article 9.3(c) IBA Rules. See Marghitola, Document Production in International Arbitration (2015), p. 98 et seq.
52Waincymer, Procedure and Evidence in International Arbitration (2012), p. 850.
53Waincymer, Procedure and Evidence in International Arbitration (2012), p. 847.
54Born, International Commercial Arbitration (2nd ed., 2014), p. 2374.
55Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 4.
56This list should not be considered as exhaustive, see Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 18.
57For a detailed analysis of those grounds see Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mns 18 et seq.;Waincymer, Procedure and Evidence in International Arbitration (2012), Chapter 11.7; Marghitola, Document Production in International Arbitration (2015), Chapter 5.
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The Taking of Evidence
partner).58 While the issue of privilege could – because of many unresolved or highly debated questions – be discussed in length (and would likely fill its own book), this chapter will only mention some important questions in this respect and direct the reader to relevant literature for further information.
The complexity of privilege in the context of arbitration stems from the fact that the nature and concept of privilege varies from jurisdiction to jurisdiction and in civil and common law (in particular as there are differences in the qualification of privilege as a substantive or procedural matter in common and civil law). Further, there are no established, uniform conflict-of-law rules for the determination of the applicable law to privilege in international arbitration.59 Also the IBA Rules do not provide a solution on this issue; although Article 9.3 does contain a checklist for the tribunal when considering issues of privilege.60
From a conceptual point of view, it is submitted that the main difference is that the common law attorney–client privilege usually covers any communications (excluding facts) between client and attorney (or – in most jurisdictions – in-house counsel61) which have the main purpose of providing legal services and may be invoked by clients and attorneys; the civil law concept of professional secrecy usually covers everything the attorney knows about the client’s affairs and may be invoked by attorneys (or – in a limited number of jurisdictions – in-house counsel).62 The situation is further complicated by the European Court of Justice’s case law.63
In the absence of established conflict-of-law rules regarding privilege,64 legal doctrine provides for several connecting factors (e.g., the applicable procedural or substantive law, the law where the party or lawyer claiming protection resides) for the determination of the law applicable to the issue of privilege.65 However, as those connecting factors may not fully satisfy the premise that tribunals should do justice to the legitimate expectations of the parties when rendering decisions on choice of law, tribunals frequently resort to the ‘closest connection’ or ‘centre of gravity’ test, which often leads to the application of the law of the place where the entire attorney–client relationship has its predominant effects.66
58As to possible confidentially reasons see Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 43; Ehle,‘Arbitration as a Dispute Resolution Mechanism in Mergers and Acquisitions’, in Campbell (ed.), The Comparative LawYearbook of International Business (2005), p. 306.
59Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 19 with further references.
601999 IBA Working Party & 2010 IBA Rules of Evidence Subcommittee,‘Commentary on the revised text of the 2010 IBA Rules on the Taking of Evidence in International Arbitration’ (2010), p. 25.
61Waincymer, Procedure and Evidence in International Arbitration (2012), p. 812.
62Waincymer, Procedure and Evidence in International Arbitration (2012), p. 812; Zuberbühler/Hofmann/Oetiker/ Rohner, IBA Rules of Evidence (2012),Article 9 mn 23 and 24.
63Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 25 with references to
AM&S Europe Ltd v. Commission, C-155/79 and Akzo Nobel Chemicals v. Commission, C-550/07;Waincymer, Procedure and Evidence in International Arbitration (2012), p. 812.
64Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 28;Waincymer,
Procedure and Evidence in International Arbitration (2012), p. 802 et seq.
65Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 28.
66Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 29 with further references; Born, International Commercial Arbitration (2nd ed., 2014), p. 2385 with further references.
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Another doctrine endorsed by some authors67 and arguably by the IBA Rules68 is the ‘most favourable privilege’ rule, which authorises a tribunal to apply the law of the party that accords the broadest protection to any given privilege issue (and by that, aims to ensure fair and equal treatment of the parties).
The IBA Rules in Article 9.3 only contain non-binding guidance with respect to the determination of applicable privileges,69 in which a tribunal may basically take into account
(1) any need to protect confidentiality in connection with providing or obtaining legal advice, (2) any need to protect confidentiality in connection with settlement negotiations,
(3) the expectations of the parties and their advisors at the time the legal impediment or privilege is said to have arisen, (4) any possible waiver of any applicable legal impediment or privilege and (5) the need to maintain fairness and equality between the parties, particularly if they are subject to different legal or ethical rules. In particular the fifth consideration appears to be of particular importance in cross-border situations (so that parties from common and civil law countries are treated equally) and can be managed by employing the ‘most favourable privilege’ rule.70
Adverse inference
When parties do not comply with tribunals’ document production orders, (in the context of M&A arbitrations, one might think of documents that show that certain information (such as notes in negotiation protocols) has or has not been disclosed to the counterparty) the question arises which consequences such behaviour might have, in particular as tribunals lack the power to compel production71 and judicial assistance is often cumbersome and time-consuming.72 A technique also supported by Article 9.5 and 9.6 of the IBA Rules is to draw an ‘adverse inference’ from the silence of a party, or failure to comply with an order of the tribunal for the production of documentary evidence.73 Therefore, to apply this principle, there must have been a document production order and the requested party must have failed to provide a ‘satisfactory explanation’ for not having produced the documents in question.74
67Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 30 with further references; Marghitola, Document Production in International Arbitration (2015), p. 78 et seq.
681999 IBA Working Party & 2010 IBA Rules of Evidence Subcommittee,‘Commentary on the revised text of the 2010 IBA Rules on the Taking of Evidence in International Arbitration’ (2010), p. 25.
691999 IBA Working Party & 2010 IBA Rules of Evidence Subcommittee,‘Commentary on the revised text of the 2010 IBA Rules on the Taking of Evidence in International Arbitration’ (2010), p. 25; Marghitola,
Document Production in International Arbitration (2015), p. 76.
70Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 34.
71Lew/Mistelis/Kröll, Comparative International Commercial Arbitration (2003), mn 22-58.
72Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 54.
73Blackaby/Partasides et al., Redfern and Hunter on International Arbitration (6th ed., 2015), mn 6.113; for further consequences of a failure to comply with a tribunal’s order see Born, International Commercial Arbitration (2nd ed., 2014), p. 2388 et seq. and Marghitola, Document Production in International Arbitration (2015), Chapter 9.
74Blackaby/Partasides et al., Redfern and Hunter on International Arbitration (6th ed., 2015), mn 6.114.
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Further to the principles enshrined in Article 9.5 and 9.6 of the IBA Rules, according to some authors,75 further requirements must be met for a drawing adverse inference: (1) the party seeking adverse inference must produce all available evidence corroborating the inference sought; (2) the requested evidence must be accessible to the requested party; (3) the inference sought must be reasonable, consistent with facts in the record and logically related to the likely nature of the evidence withheld; (4) the party seeking the adverse inference must produce prima facie evidence; and (5) the requested party must know, or have reason to know, of its obligation to produce evidence rebutting the adverse inference sought. Notably, other authors raise concerns that these criteria would limit the application of adverse inference too much.76
Fact witnesses
Another, often one of the most important, sources of evidence is the testimony of fact witnesses. In international arbitration, it has become standard practice that a party which intends to present a witness first submits a written witness statement, which is then followed by the examination of the witness at the subsequent oral hearing.
Generally, the purpose of a written witness statement is to set out the topics of the testimony to facilitate the preparation of the witness’s examination in the oral hearing.This generally recognised understanding is reflected, inter alia, in Article 4 of the IBA Rules, which also sets out what formal content a written witness statement should have.
In many instances, the written witness statement stands for the examination in chief,77 namely the questioning by counsel of the party that nominated the witness. However, this is not a strict rule, and the advantage of starting with the examination in chief by the party’s ‘own’ counsel could be to accustom the witness to testifying before a tribunal and to avoid the immediate exposure to opposing counsel.
Cross-examination is usually the core part of an oral hearing. It may also become the most contentious part, depending on the style and cultural background of the counsel and arbitrators.While common law counsel consider it to be state-of-the-art to ask closed questions to ‘put the case before the witness’ and to raise doubts on his or her credibility, lawyers with a civil law background might be used to adhere to the guiding principle that witnesses should be asked open questions to serve the purpose of fact-finding. Moreover, arbitrators from a civil law jurisdiction might apply a more inquisitorial approach than their common law counterparts. In any event, Article 8(2) of the IBA Rules stipulates that the tribunal shall at all times have complete control over the evidentiary hearing.
To balance contrary understandings of counsel (e.g., because of different ethical rules) of the method and purpose of written witness statements or cross-examination, tribunals should at a very early stage of the proceedings address issues such as counsel’s role in the drafting of written witness statements based on information or testimony of the respect ive witness, whether meetings with witnesses for preparing them for examinations are
75Zuberbühler/Hofmann/Oetiker/Rohner, IBA Rules of Evidence (2012),Article 9 mn 58 et seq. with further references.
76Born, International Commercial Arbitration (2nd ed., 2014), p. 2393;Waincymer, Procedure and Evidence in International Arbitration (2012), p. 776; Marghitola, Document Production in International Arbitration (2015), p. 177.
77See, e.g.,Article 8(4) IBA Rules.
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The Taking of Evidence
permitted or whether cross-examination is limited by the scope of the written witness statement.This is a matter of fairness and ultimately may be a matter of whether the parties were granted the equal right to present their case.78
In M&A arbitrations, the accessibility to and availability of witnesses may constitute a particular problem that could already be addressed by drafting respective contractual provisions. Managers and other employees of the target company might serve as key witnesses. If personnel have left the company, it might be – as in any other case – difficult for either side to convince them to provide witness testimony, in particular in light of tribunals lacking the imperium to force witnesses to appear, so that parties must rely on the witnesses’ voluntary cooperation. If the key personnel have remained with the company, they will often feel more loyal to the new owners than to the previous ones or even feel under some pressure to appear as witnesses for the new owner, in which case the seller’s access could be safeguarded by including provisions that allow the seller to approach the relevant staff.
The lack of imperium of the tribunal could, in some instances, be compensated by involving state courts where the lex arbitri so allows. Under certain arbitration or civil procedural laws, tribunals or parties to arbitral proceedings may ask the state courts at the place of arbitration to provide judicial assistance.This could, for instance, include the summoning of witnesses before a state court. However, the involvement of state courts during arbitral proceedings is – except where interim measures are concerned – usually rather rare.
Finally, various questions might arise if lawyers (in particular the lawyers that were advising in the transaction) are called to appear as witnesses.While those lawyers might be of particular value for a party as they – apart from being in possession of the relevant documents – usually have knowledge of aspects that might not be written down, such as the intention of the parties when agreeing on certain clauses in an SPA, issues such as privilege or other confidentiality obligations or professional duties might arise.Those issues might even be intensified if the lawyers advising in the transaction act as counsel in the arbitration.
Expert evidence
Expert evidence is of particular importance in M&A related arbitration.Again,common law jurisdictions and civil law jurisdictions have traditionally taken different approaches.While the former regularly rely on party-appointed experts, the latter prefer tribunal-appointed experts.These traditions simply reflect the different conduct of proceedings in the two systems, namely adversarial as opposed to inquisitorial.The pros and cons for either approach are numerous79 and must be assessed case by case.Whether the tribunal appoints ‘its’ expert to assist in deciding the matter or the parties retain and instruct their ‘own’ experts does not so much depend on the legal background of the persons involved, as on pragmatic aspects such as time and costs.
Even if the lex arbitri or the applicable arbitration rules do not explicitly refer to the parties’ right to appoint an expert, this right is based on the overall and fundamental right of each party to present one’s case. Similarly, a tribunal’s power to appoint an expert will be
78For practical guidance with a helpful checklist on conducting an oral hearing, see e.g. Lévy/Reed,‘Managing Fact Evidence in International Arbitration’, in van den Berg (ed.), International Arbitration 2006: Back to Basics?, ICCA Congress SeriesVolume 13 (2007), pp. 633–644.
79See, for instance,Waincymer, Procedure and Evidence in International Arbitration (2012), p. 932 et seq.
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