Introduction

A question that occasionally arises in arbitrations and which may have farreaching practical effects for the conduct of arbitration is the following: Under what circumstances and to what extent may parties and arbitral tribunals resort to state courts for assistance in the course of arbitral proceedings?

Article 5 of the UNCITRAL Model Law on International Commercial Arbitration (hereinafter Model Law), reflecting the parties' (presumed) intention to restrict the powers of state courts to intervene in arbitration to the widest extent possible, provides that no court shall intervene except where so provided in the Model Law.

In certain circumstances, however, compulsory measures ordered by State courts may be the only means of overcoming inherent limitations on the powers of arbitral tribunals to compel parties and/or third persons.

Many-if not most-national arbitration laws therefore have provisions based on or similar to Article 27 of the Model Law, which provides that an arbitral tribunal or, with the tribunal's consent, a party to an arbitration may request assistance from State courts in taking evidence.

Article 27 simply speaks of the taking of evidence. In view of the diversity of national procedural provisions relating to the taking of evidence, an enumeration of specific measures that State courts would be entitled to order under Article 27 was purposely omitted.1[Page143:]

While the wording of Article 27 seems innocuous, recent decisions in the United Kingdom and the USA restrict the ability of arbitral tribunals and parties to apply to State courts for assistance, especially with regard to the type of measure that may be requested and the person against whom it may be directed. It is therefore opportune to take a fresh look at the relationship between courts and arbitral tribunals in the process of taking evidence.

Our aim is to provide an overview of current practice regarding court assistance in respect of the taking of evidence in arbitration and to show how such assistance may serve to enhance the efficacy of arbitral proceedings.

1. Jurisdiction of the courts

Since arbitration agreements often provide for a place of arbitration unconnected with the parties or the dispute, the evidence which a party or an arbitral tribunal seeks to secure or take with the court's assistance will not always be located within the territorial jurisdiction of the courts at the place of arbitration. An initial obstacle preventing more widespread recourse to court assistance is the question of which courts are competent to provide the assistance contemplated in Article 27 of the Model Law (and national provisions based on or similar to Article 27).

Article 27 does not specifically regulate the question of competence, so, unless otherwise provided, according to Article 1(2) of the Model Law a court may only render assistance to the arbitral tribunal or the parties pursuant to Article 27 if the place of arbitration is within its territory. Article 27 does, however, provide that when granting the requested measure, such as ordering a witness to appear, the court shall act within its competence and according to its rules on taking evidence.

Thus, for a court to be able to grant the measure requested, not only must the place of arbitration be within its territorial jurisdiction, but it must also be entitled to do so under its procedural laws.

Provisions on the territorial jurisdiction of courts-or, for that matter, of arbitral tribunals-in respect of witnesses are few and far between. It is usually the court competent to hear the dispute that has the power to order witnesses to appear or documents to be produced. In arbitration, however, such statutory provisions on competence are not applicable. Absent a general duty incumbent[Page144:] on third persons to appear as witnesses before arbitral tribunals, on grounds of reasonableness, a witness cannot be compelled to appear in any location other than the place where he or she is resident.2 In practice, therefore, it is widely accepted that the court in whose territorial jurisdiction the witness is resident, or in which the documents to be produced or the objects to be submitted for inspection are located, is competent to hear the application and to grant the requested assistance. This approach prevails in many countries.

In Switzerland,3 the President of the Geneva Court of First Instance (Tribunaldepremière instance), to whom the respondent in an ICC arbitration with its seat in Geneva had, with the approval of the arbitral tribunal and the other party, applied for an order compelling a witness resident in Geneva to testify in the arbitral proceedings, granted this application.4 In this case, the Court ordered the witness to appear for examination before the arbitral tribunal, which held a concurrent hearing.

In Canada, the Superior Court of Justice5 held that pursuant to Article 27 of the Model Law an arbitral tribunal could not apply to a court in a country other than that of the place of arbitration for assistance in examining a witness. Since in this case the witnesses were not resident in the country of the place of arbitration, the arbitral tribunal's failure to request the courts at the witnesses' place of residence (Cuba) for assistance in examining the witnesses did not constitute a ground for setting aside the award rendered by the arbitral tribunal.

Other jurisdictions, e.g. Germany6 and Sweden, 7 have sought to overcome this limitation by extending the jurisdiction of courts to grant assistance to cases where the place of arbitration is abroad. [Page145:]

German law provides that the local court (Amtsgericht) in whose district the judicial act is to be carried out is competent to render assistance. 8 This does not, however, answer the question of the territorial competence of the courts in respect of witnesses. The Hamburg Amtsgericht considered itself competent to grant the assistance sought by an arbitral tribunal in a recent DIS case with its seat in Copenhagen by ordering the witness to appear before the court for examination.

9 Although in this particular case the arbitration was terminated before the witness was examined, the practice of German courts so far supports the view that the courts at the place of residence of a witness are competent to grant assistance in connection with the examination of that witness.

We would submit that, by analogy, the courts in whose territory the person who is to produce documents resides are competent to hear requests for assistance with the production of those documents.

2.Scope of assistance in the taking of evidence: obtaining evidence from third persons

An arbitration agreement empowers the arbitral tribunal to issue orders in respect of evidence only if they are directed at the parties. The tribunal's power to obtain evidence held by persons who are not party to the arbitration is therefore limited. Unless specifically provided by law, the arbitral tribunal cannot order such persons to attend arbitral hearings or provide information.

a) Legislative provisions

Article 27 of the Model Law, in its final wording, does not expressly refer to the taking of evidence held by persons outside the proceedings. However, earlier drafts10of the text show that provision was initially made for the arbitral tribunal or a party to be able to request the State court to compel a third person to provide evidence. The subsequent deletion of the reference to third persons suggests that there was no consensus among the drafters as to whether a third person could be compelled to provide evidence (either as a witness or by producing documents) in arbitral proceedings. [Page146:]

In practice, however, Article 27 has served as a basis for obtaining evidence from third persons too. In the Vibroflotation case, an application was made to the court to enforce a subpoenaduces tecum at the request of the claimant.11 The court held that, although it was in principle admissible to issue a subpoena directed at a third person, in the case at hand the subpoena could not be enforced because it did not relate to the presentation of evidence but was primarily a measure to obtain documents for the purpose of pleading a case and, as such, was not admissible under the applicable procedural law. The application was in fact for an interim measure of protection, but the court rendered its decision on the basis of Article 27 of the Model Law.

In DelphiPetroleumInc.,12 a request for pretrial questioning of a witness (third person) was held to be in principle admissible under the Canadian Federal Court Rule 466.3, which was considered to be applicable to determining the scope of the Federal Court's power to grant assistance to the arbitral tribunal. The request was in fact denied on the merits since the Federal Court held that the evidence which the witness was to provide was irrelevant and concerned information that could have been obtained by other means. 13

§ 1050 of the German Code of Civil Procedure (ZPO), like the Model Law, does not contain a specific reference to evidence held by a person not a party to the arbitral proceedings.114 However, since under German civil procedure a party is precluded from testifying as witness,15 the decision of the Hamburg Amtsgericht indicates that in respect of witnesses the competence of arbitral tribunals to obtain evidence from nonparties is as undisputed in Germany as in the other jurisdictions reviewed.

The position in Germany is less clear when it comes to the production of documents held by a person not party to the arbitral proceedings. Although recent amendments to the Code of Civil Procedure have made it possible for[Page147:] parties in court proceedings to obtain documents held by third persons, these provisions (§ 142 ZPO) lie outside Book 10 devoted to arbitration and therefore do not in principle apply to arbitral proceedings unless so agreed by the parties. It is therefore highly debatable whether, under § 142 ZPO, an arbitral tribunal with its seat in Germany would be empowered to order a person not party to the proceedings to produce documents requested by a party. It may be useful briefly to show that, even if such power were presumed to exist, it would be severely limited.

German procedural law does not allow USstyle pretrial discovery between the parties or with respect to documents held by third persons. Under the old wording of § 142 ZPO, a party that had relied on a document could, in limited circumstances, be ordered by a court to produce that document. The new wording of § 142 ZPO provides that such an order may be made if a party refers to a document, and such document is in the possession of any party or of a third person. However, the party requesting production must in addition show a conclusive cause of action in respect of the document(s) to be produced. 16Thus, the document and its contents must be referred to specifically. 17

In view of these requirements, it is not clear how a court would render an order pursuant to § 142 ZPO in connection with a request under § 1050 ZPO for assistance in arbitral proceedings, since the court will not have access to the full procedural file and therefore not be in a position to establish whether there is sufficient cause of action to warrant an order for production. If the request is made by the arbitral tribunal, we would submit that the arbitral tribunal's order specifying the documents to be produced and the factual issue to be proven by such document(s) (Beweisbeschluss) may provide sufficient grounds for the court to issue an order for the production of the documents in question. If the request is made by one of the parties, the court would have to examine whether the request and the tribunal's approval of the request relate to specific documents, in order to prevent an (inadmissible) 'fishing expedition' or dilatory tactics.

The order may be refused if the party in possession of the documents has the right to refuse production of documents or if producing the documents would be overly burdensome for the third person and therefore unreasonable. 18[Page148:]

b) Institutional rules

Assuming that court procedures are available to arbitral tribunals in need of assistance in obtaining evidence from third persons, it is of course a necessary prerequisite that the underlying arbitration agreement permits the arbitral tribunal to request such assistance. 19

While Article 3(8) of the IBA Rules on the Taking of Evidence in International Commercial Arbitration recognizes the need to obtain evidence held by persons who are not parties to the proceedings, these rules apply only if the parties have given their consent. Where this is not the case, the arbitration rules which the parties may have chosen will determine the scope of the arbitral tribunal's power to obtain evidence from third parties.

In respect of witnesses, there is consensus that arbitral tribunals may decide to hear witnesses, including third party witnesses (Article 20(3), ICC Rules of Arbitration; Article 20, LCIAArbitration Rules; Article 25(2), Swiss Rules of International Arbitration; section 27.1, DIS Arbitration Rules).

When it comes to the production of documents, however, differences emerge. A number of arbitration rules (e.g. ICC, Article 20(5); LCIA, Article 22(1)(e); Swiss Rules, Article 24(3)) provide that the arbitral tribunal may call on the parties to produce documents, from which it may be inferred that arbitral tribunals are not competent to order third persons to produce documents. The DIS Arbitration Rules, on the other hand, do not contain a comparable restriction. However, the relevant DIS provision (§ 27.1) 20 relates to the arbitral tribunal's duty to establish the facts of the case, and thus to the evidentiary stage of the proceedings, so an order of the production of documents for the purpose of a 'fishing expedition' is clearly not envisaged by it.

Should a court issue an order for the production of documents pursuant to § 1050 ZPO, the documents must be presented to the court. It is submitted that, by analogy with the right of arbitral tribunals to attend witness examinations, they also have the right to inspect such documents. The general principle according to which parties have the right to be present when evidence is taken21 requires that they also be given an opportunity to inspect documents. 22 In practice, that will be done by giving the arbitral tribunal and parties access to the records. [Page149:]

It should be noted, however, that in certain jurisdictions court assistance can take the form of an order for a witness to appear23before or present documents to the arbitral tribunal.

3. Disclosure of documents

Although no specific reference is made in Article 27 of the Model Law to the production of documents, the Analytical Commentary on the draft text suggests that the phrase 'taking of evidence' covers the production of documents as well as evidence obtained from examining witnesses. 24

A question which arises in this context is whether the parties or the arbitral tribunal could obtain assistance to enforce a request for the production of unspecified or very generally described documents in the course of an arbitration. The question cannot be discussed without reference to two recent cases, one in the United Kingdom and the other in the USA.

a)BNP Paribas & Ors v. Deloitte & Touche L.L.P.25

BNP Paribas initiated an arbitration under the ICC Rules of Arbitration against Avis in connection with its acquisition of companies belonging to the Avis Group. The place of arbitration was London, and the applicable procedural law was the English Arbitration Act of 1996. The acquisition agreement was subject to the laws of the State of New York.

BNP's claims were based on alleged false and fraudulent misrepresentations by Avis about the value of the companies in question, which induced BNP to pay an inflated purchase price. Avis contended, amongst other things, that its accounts were audited by Deloitte & Touche (D&T) and signed off without qualification and, in support of its defence, filed a witness statement by D&T's relevant audit partner.

On the basis of this witness statement, BNP applied to the court for an order summoning the witness for a hearing and requiring certain documents to be produced. The application was made with the approval of the arbitral tribunal. [Page150:]

The High Court held that the application was in fact an application for disclosure of documents rather than a subpoena duces tecum. The documents that BNP asked to be produced were regarded as classes of documents rather than specific individual documents.

While such an application would have been admissible under CPR 31.17 in court proceedings, the High Court held that this provision did not apply to arbitral proceedings. Section 43 of the 1996 Arbitration Act did not give courts the power to order disclosure by a third party. The repeal of section 12(6) of the 1950 Arbitration Act, which empowered courts to order, amongst other things, discovery of documents in connection with arbitrations, indicated that the legislator had consciously decided to remove such powers from the courts. Furthermore, the High Court held that Article 27 of the Model Law, from which section 43 derived, only referred to the taking of evidence and not to the disclosure process and thus did not provide authority to extend the competence of the courts to applications for disclosure as such applications were a matter for the arbitral tribunal (sections 33 and 34 of the 1996 Arbitration Act). 26Accordingly, the application was dismissed.

b)Hay Group v. E.B.S. Acquisition Corp. et al., PriceWaterhouse Coopers L.L.P.27

Hay initiated arbitral proceedings against Hoffrichter, a former employee who joined a division of PriceWaterhouseCoopers (sold later on to E.B.S.) after leaving Hay's employment. In order to obtain information in support of its claim that Hoffrichter had breached a non-solicitation clause, Hay served subpoenas on E.B.S. and PriceWaterhouseCoopers for documents to be produced at an arbitration hearing. E.B.S. and PriceWaterhouseCoopers objected to the subpoenas before the arbitral tribunal, but the tribunal disagreed. When E.B.S. and PriceWaterhouseCoopers refused to comply with the subpoenas, the applicant sought to have them enforced by the State courts. [Page151:]

On appeal against the decision of the US District Court for the Eastern District of Pennsylvania, which had ordered enforcement of the subpoenas, the 3rd Circuit of the US Court of Appeals reversed the order on the grounds that section 7 of the Federal Arbitration Act did not allow an arbitral tribunal to order a person not a party to the arbitration to produce documents at the prehearing stage of the arbitration. The arbitrators' power over such persons was exclusively determined by the Federal Arbitration Act. In the absence of an express provision permitting arbitrators to order pretrial discovery against third parties, the court was not competent to enforce subpoenas by the arbitral tribunal to that effect. Such power could not be derived from the arbitration agreement since that was only binding on the parties and therefore could not endow the arbitral tribunal with powers visàvis nonparties.

These cases clearly illustrate that orders for the production of documents as part of 'fishing expeditions', i.e. sweeping requests for unspecified classes of documents to obtain information to corroborate a claim or to undermine an opponent's claim, cannot be enforced by resorting to court assistance within the meaning of Article 27 of the Model Law.

Although both cases concern requests aimed at third parties, it is conceivable that such requests would also fail if they were directed by one party at another party. Since the court's competence to provide assistance is subsidiary to the competence of the arbitral tribunal, such assistance would have to be denied if the arbitral tribunal were itself able to perform the same act to the same extent.

In Germany, there is no provision for the enforcement of an order for production of documents against a party; the court may merely draw adverse inferences from the party's failure to produce the documents. If the party that has been ordered to produce documents does not bear the burden of proof, the court may assume that the facts stated by the party upon whom the burden of proof lies are proven, by analogy with the concept of frustration of proof (§ 427 ZPO). 28 This power goes no further than the arbitral tribunal's power to evaluate the weight of the evidence. It would under such circumstances be abusive to resort to court assistance. [Page152:]

Conclusion

With the everincreasing importance of arbitration as a dispute resolution mechanism in both the domestic and international spheres and the resulting professionalization of arbitral proceedings, the distinction between proceedings in State courts and before arbitral tribunals is becoming increasingly blurred. Attempts have been made in arbitration to use the same instruments for obtaining or taking evidence as may be available in court proceedings.

Such attempts, however, find their limits in the specific nature of arbitration as a form of dispute resolution based on the agreement of the parties. Although Article 27 of the Model Law and similar national provisions allow for court assistance to arbitral proceedings for the purpose of taking evidence, this does not extend the competence of arbitral tribunals beyond that which the applicable arbitration law or arbitration agreement gives them. By providing assistance, courts merely place at the disposal of the participants in arbitral proceedings the means of compulsion based on public authority which they alone may use. [Page153:]

1
H.M. Holtzmann & J.E. Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer Law and Taxation, 1989) at 735.

2
See e.g. J. Münch in Münchner Kommentar zur Zivilprozessordnung, 2d ed. (Munich, 2001) § 1050, no. 1.

3
Article 184(2) of the Swiss Private International Law Act contains a provision similar to Article 27: 'If the assistance of judicial authorities of the State is necessary for the taking of evidence, the arbitral tribunal or, with its consent, a party may request the assistance of the State court at the seat of the arbitral tribunal. . . .'

4
Order of 9 May 1990, ASA Bulletin 1990, 283.

5
Re Corporacion Transnacional de Inversiones, S.A. de C.V. et al. and STET International, S.p.A. et al., Superior Court of Justice, 22 September 1999, see CLOUT database, case 391, <www.uncitral.org>.

6
§§ 1050 and 1025(2) Code of Civil Procedure (ZPO), which entered into force on 1 January 1998.

7
Sections 26 and 50 of the 1999 Arbitration Act. Section 44 of this Act provides that the arbitral tribunal may designate the District Court which is to grant the assistance.

8
§ 1062 ZPO.

9
For a review of the procedure, see M. Wirth & U. HoffmannNowotny, 'Rechtshilfe deutscher Gerichtezugunsten ausländischer Schiedsgerichte bei der Beweisaufnahme - ein Erfahrungsbericht' SchiedsVZ 2005, 66

10
As reproduced in H.M. Holtzmann & J.E. Neuhaus, supra note 1, pp. 742 and 745. The reference to third persons was dropped from the third draft of July 1983, which provided: 'The court shall execute such request … by ordering a party or third person to give evidence to the arbitral tribunal.'

11
Vibroflotation A.G. v. Express Builders Co. Ltd., High Court of Hong Kong, 1994, 15 August 1994, see CLOUT database, case 77, <www.uncitral.org>.

12
Delphi Petroleum Inc. v. Derin Shipping and Training Ltd., Federal Court of Canada, Trial Division, 3 December 1993, see CLOUT database, case 68, <www.uncitral.org>.

13
Ibid., p. 7.

14
'The arbitral tribunal or a party with the approval of the arbitral tribunal may request from a court assistance in taking evidence or performance of other judicial acts which the arbitral tribunal is not empowered to carry out. Unless it regards the application as inadmissible, the court shall execute the request according to its rules on taking evidence or other judicial acts. The arbitrators are entitled to participate in any judicial taking of evidence and to ask questions.'

15
R. Greger in R. Zöller, Zivilprozessordnung, 23d ed. (Cologne, 2002) § 373, no. 1.

16
Rechtsausschuss BTDrucks. 14/6036, § 121.

17
D. Leipold in E. Schilken, G. Kreft, G.Wagner & D. Eckhardt (eds.), Festschrift für Walter Gerhardt (Cologne, 2004) 570.

18
142(2) ZPO.

19
M. Wirth & U. HoffmannNowotny, supra note 9 at 67.

20
'The arbitral tribunal shall establish the facts underlying the dispute. To this end it has the discretion to give directions and, in particular, to hear witnesses and order the production of documents. . . .'

21
§ 357(1) ZPO: 'The parties are entitled to attend the taking of evidence.'

22
J. Münch supra note 2, § 1050, no. 16.

23
See supra note 4.

24
'e.g. hear the witness, obtain the document or access to property ' (emphasis added), Report of the Secretary General, Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration, UNCITRAL, 18th Session, Vienna, 3-21 June 1985, p. 60.

25
[2003] EWHC 2874 (Comm.).

26
Ibid. '13. . . . There is nothing in the Model Law which suggests that the Court should assist with the process of disclosure. Indeed, disclosure questions have been taken from the court [by repeal of section 12(6)] and given back to the arbitral tribunal. This is recognized by sections 33 and 34 of the 1996 Act including 34(2)(d). That section makes disclosure by the parties a matter for the arbitral tribunal. 14 . . . The decided cases make clear that under that procedure it is not permissible to go "document hunting" with a view to trawling through documents to see what turns up. However, I should make it clear that if there were a properly targeted application relating to specific documents which could be said to be required to be adduced in evidence, then any such specific application would have to be considered on its merits.'

27
(2004) 19:4 Mealey's International Arbitration Report B-1-B-5.

28
J. Zekoll & J. Bolt, 'Die Pflicht zur Vorlage von Urkunden im Zivilprozess - Amerikanische Verhältnisse in Deutschland?' NJW 2002, 3129 at 3130; G. KaufmannKohler & Ph. Bärtsch, 'Discovery in international arbitration: How much is too much?' SchiedsVZ 2004, 13 at 17.