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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Introduction
An attractive characteristic of international arbitration lies in its built-in flexibility; each case is unique and experienced arbitrators will tailor the procedural rules to fit the specifics of the dispute at hand, having regards to the cultural environment from which the parties originate and to the legal training of their counsel. The purpose of this chapter is to examine how the freedom enjoyed by the parties and the arbitrators in organizing the conduct of evidentiary hearings can best achieve efficiency, bearing in mind the possible application of specific arbitration rules (by agreement of the parties or as required at the place of arbitration) as well as that of mandatory procedural rules (on account of public order).
1. Autonomy of the arbitral process
The autonomy of the procedural process is a pillar of international arbitration. This is enshrined in the New York Convention (Art. V(1)(d): indeed, if "the arbitral procedure was not in accordance with the agreement of the parties", the award will not be recognized; the UNCITRAL Model Law is also to the same effect as well as national legislations and institutional arbitration rules1. The principle of autonomy is particularly palpable in relation to the gathering of evidence. While arbitral rules may vary in the degree of direction they give to parties and arbitrators, they all leave them, on the overall, with much latitude for devising the precise rules that will govern the hearing phase. This does not mean that this aspect of arbitration is of little interest; quite on the contrary, it underscores the importance of customizing the rules for the taking of evidence. [Page29:]
In former times, parties and arbitrators more readily accepted the premise, mostly due to confusion on their part, that the procedural law prevailing at the place of arbitration ought to be applied; fortunately, the practice has swayed in the opposite direction. There is general acceptance today that the lex arbitri has gained its independence from the lex fori: arbitrators no longer have to demonstrate that they are respectful of rules of universal application such as due process, the right to be heard and the equality of treatment between the parties. Arbitrators are likewise mindful of the specific procedural provisions of the lex fori that must be considered to avoid lending arguments to a disgruntled party for contesting the award2.
If parties to an international arbitration are not likely to be bound by the often intricate procedural features of local judicial systems (although in certain jurisdictions: Luxembourg, Uruguay, for example, local rules ought to be expressly excluded), they must nevertheless in all cases prove their allegations3; as a matter of fact, it can be observed that arbitrators increasingly tend to justify their decisions when rejecting the claim of a party, on mere factual points as well as on broader issues, by concluding that he has failed in the discharge of the onus of proof.
2. Oral evidence in international arbitration
The facts can be proven either by written or oral evidence. The merits of each method are discussed in the preceding chapter4; live testimony, besides complementing documentary evidence, brings about an indispensable contribution to arbitrators in the pursuit of the truth, be they guided by the civilist tradition of inward or deep-seated belief ("intime conviction") or by the common law approach of the balance of evidence.
While the judiciary must comply with rigid national standards in receiving oral evidence, parties and arbitrators are free to develop the rules that are most suitable for each particular case. Parties have an undeniable right to be able to present their case by relying on oral evidence; few will contest that such a prerogative also extends to the possibility of resorting to testimony by witnesses other than the representatives of the parties themselves. Article 20 of the ICC Rules offers an illustration: [Page30:]
"Article 20
Establishing the Facts of the Case
..... 2 After studying the written submissions of the parties and all documents relied upon, the arbitral tribunal shall hear the parties together in person if any of them so request or, failing such a request, it may of its own motion decide to hear them.
..... 3 The arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned.
.....
6
The arbitral tribunal may decide the case solely on the documents submitted by the parties unless any of the parties requests a hearing".
The arbitral tribunal must of course remain in full control of the hearings; it must indeed guarantee that the fundamental rights of the parties are safeguarded and that the case proceeds as efficiently and expeditiously as possible towards its conclusion5. Although the parties may reach a specific agreement between them and require the arbitral tribunal to conduct the proceedings in a certain manner (of course, the tribunal is not bound to comply with every one of their desiderata), arbitrators will in practice, preferably after having consulted the parties, issue such procedural orders or directions as they find appropriate to govern the hearings. In this connection, the IBA Rules on the Taking of Evidence in International Commercial Arbitration ("IBA Rules") and the UNCITRAL Notes on Organizing Arbitral Proceedings ("UNCITRAL Notes") 6 represent two remarkably useful tools in assisting them.
This chapter will examine, in a chronological order, the various stages and some aspects in relation to the offering of oral evidence in international arbitration.
Evidentiary hearings
1. Who can testify
As a general rule, any person will be admitted to testify without the arbitrators making any differentiation among the various qualities or capacities in which[Page31:] a person may appear: representative of a party, employee or former employee of a party, consultant or expert remunerated by a party or appointed by the Tribunal, spouses and other related persons, "sachants" (an outside person who is independently familiar with facts or circumstances relevant to the issues being arbitrated) and "amicus curiae": "In fact, these distinctions are of little significance, as the witnesses themselves generally do not testify under oath and the arbitrators always have the power to assess the weight to be given to their testimony" 7. For its part, Article 20-7 of the LCIA Rules indistinctly calls anyone who testifies a "witness" 8.
The facts of the case can be established by all appropriate means, each contributing to fashion the conviction of the arbitrators. They will come naturally to rely on their experience to assess the probative strength of each testimony in the light of the person's relationship with a party, be it direct or indirect, or his interest, financial or sensibility wise, in the case. The statements by a witness will also be balanced against those of other witnesses and even the attitude (aggressivity, signs of sweating, hesitation, looks etc…) of the witnesses will be taken into account in the assessing process.
Internal procedural rules may recognize the status of witness to certain persons only, for instance those who can be sworn or who do not represent a party. It would be most astonishing that such domestic rules could be erected into compelling ones on international arbitrators so that their non-observance would constitute a ground for annulment; however, arbitrators should be attentive to the legal requirements at the place of arbitration since it is the jurisdiction where annulment proceedings can be initiated.
Whereas Article 20(3) of the ICC Rules does not mandate the hearing of "witnesses" or "any other person", Article 20(2) of the same Rules provides a right for a "party" to be heard if he so requests. Although the ICC Rules distinguish between the representative of a party and a witness, they do not purport to lay down any kind of standard which the arbitrators would be required to apply in assessing the probative value of their evidence. Hearings of parties' representatives and of any other person whose testimony is relevant, are normal occurrences in international arbitral proceedings, no matter under what rules they are conducted9. An arbitrator, however, refused to consider as a witness statement the written declaration filed by the legal representative of a party since the latter could not be considered as a witness; the German nationality of the arbitrator could explain why he reached such a decision10.[Page32:]
Article 4(2) of the IBA Rules reflects the current practice in this regard: "Any person may present evidence as a witness, including a Party or a Party's officer, employee or other representative." For their part, albeit after some debate, the UNCITRAL Notes infer no restriction as to the persons who can be heard; the Notes merely draw the arbitrators' attention to the particularities that may be encountered in national legislations, especially as to the manner in which the testimony of certain persons can be received11.
While any person can be called upon to testify, some concerns have been raised about the possible incidence of professional or ethical norms that may govern legal advisors of international organizations in connection with their appearance before arbitral tribunals in particular if called upon (e.g. as party-appointed expert) to interpret the provisions of an investment treaty pursuant to which an arbitration was commenced. On the assumption that the international civil servant comes forward after being allowed by its organization to depose or is prepared to accept the risk of reprove by the organization, it would seem that a tribunal should not refuse to hear him; the tribunal's uncurtailed authority to draw inferences in assessing the value of the evidence will offset arguable indelicacies that the non-observance of the duty of impartiality and neutrality inherent to the international civil service may entail. Arbitrators should not be expected to be the guardians of institutional interests. Similar questions could arise in respect to a person who acted as arbitrator or counsel in a case involving one or both parties or related issues. Of course, in line with Article 9.2(b) of the IBA Rules, arbitrators should remain circumspect and be attentive to political reality in such situations to avoid a backlash against the universal acceptance that international arbitration has gained over the years.
In January 2001, in the Methanex Corporation vs United States of America, an Arbitration under Chapter 11 of the North American Free Trade Agreement and the UNCITRAL Rules, the tribunal considered entertaining written submissions from interested third-parties. This tribunal then issued guidelines on 30 December 2003 for such submissions and two amicus curiae briefs were produced. The direction from the tribunal refers to written submissions from "any non-disputing party that is a person of a Party, or that has a significant presence in the territory of a Party"; such an initiative could also prove of benefit in certain international arbitration proceedings when issues of wider interest are raised, subject of course to the protection flowing notably from the private foundation of the arbitral process, to which parties are entitled. [Page33:]
Article 20(3) of the ICC Rules contemplates that arbitrators may decide to hear "any other person"; such "other person" could include a "friend of the court" who, by definition, does not need to be compelled to appear, which power arbitrators lack anyhow. In the Methanex case, the tribunal based its jurisdiction to accept amicus curiae briefs on its general power to manage the arbitral proceedings12.
Of course, if it is a party that requests the hearing of a certain person as amicus curiae, the tribunal will be careful of the semantics; it could be a disguised application for the appointment of an expert.
Whereas judges are invested with the power to order any person within their jurisdiction to appear before them, arbitrators, without the assistance of the judiciary (when available), cannot coerce witnesses to testify before them. On the other hand, arbitrators can receive, in principle, the deposition of any person as compared to the judiciary which remains bound to act within the limits set by its own municipal laws. For instance, a Quebec court cannot hear, under pain of the nullity of the deposition, a person that has not solemnly affirmed to tell the truth13. In certain legislations, spousal or family relationships and interest can constitute grounds for objection to the appearance of a person; such objection may only go, under some other legislations, to the credibility of the witness as it would be the case in arbitration.
In a nutshell, the lack of imperium of the arbitrators can be said to be compensated by the more extensive freedom they enjoy as to which persons they can hear.
2. Selection and calling of witnesses
Based on the premise that each party has to prove its case, it rests upon him to identify and present the witnesses upon whose evidence he intends to rely. This aspect is inherent to the burden of proof rule. It implies that each party is responsible for insuring the presence of his witnesses at the hearing; different situations will arise.
Unless they are officers or employees of a corporate party, financial compensation will have to be arranged to cover the costs of coming to the hearing. Some witnesses, in particular consultants, will insist on being paid for their time, including preparation, whereas others, such as former employees, may have to obtain the authorization of their current employer. In some instances, a[Page34:] party may wish to call persons unrelated to the case as such but who can testify, for instance, as to the difficulties encountered in the country where the project being arbitrated took place or as to parallel sales in a given market.
A difficult issue often arises in practice in relation to the timing of the disclosure of the name, status and address of witnesses. There are two schools of thought: arbitrators who direct parties to state in their briefs which persons will be called upon to testify in support of allegations intended to be proven by oral evidence while others only require the parties to reveal the identity of their witnesses some time prior to the hearing. Bearing in mind that a party may not always be in a position to know definitively which person will be best suited to testify on a given aspect, especially when all the briefs have not yet been produced, or which person will be available when the hearing comes, let alone a party's fear that the adverse party may either contact his witnesses with a view to influencing them or gain a better understanding of his strategy, it may be sufficient for a party to indicate in his briefs which allegations will be proven by oral evidence and disclose the names of the witnesses later.
Normally, the Terms of Reference or a procedural order will require the parties to provide the name, the exact address and the subject matter of the testimony of each intended witness by a certain time before the hearing, unless full witness statements have been agreed upon14. The UNCITRAL Arbitration Rules (Art. 25(2)) as well as the EDF Conciliation and Arbitration Rules (Art. 26(2)) stipulate a minimum delay of fifteen days before the hearing for disclosing the names of witnesses15. The same minimum notice period is provided for in the new January 1, 2004 Swiss Rules of International Arbitration at Article 25(2). It would be reasonable that such disclosure takes place as soon as possible after the last brief has been filed (e.g. two weeks) and to allow for the maximum period of time possible before the hearing. Claimant should first file his list and then respondent with sufficient time allowed for claimant, whenever possible, to permit modifying his list or adding new names, should it be warranted, as rebuttal witnesses.
There should be a general understanding that once the arbitral tribunal has confirmed who will appear at the hearing, the party must ensure that the announced witnesses will in fact be present. Indeed, the opposite party will most likely have planned certain aspects of the presentation of his evidence according to which witnesses have been called by the other side. The tribunal itself may be looking forward to hearing a particular witness or question him. [Page35:]
It is unfair for a party to cancel at the last minute, often at the start of the hearing, the presence of an announced witness; if a party no longer wishes to produce a witness named on his list, it should nonetheless arrange for his presence at the hearing so that the other side has an opportunity to question him should he desire16. Otherwise, the tribunal may draw inferences against the party who did not make the witness available unless valid reasons can be given. As soon as difficulties arise in this connection, the tribunal must accommodate the situation after having solicited the views of the parties and ensuring fairness and equality of treatment between the parties. Except in very exceptional circumstances and in any event with the other party's acquiescence, no eleventh hour witness should be tolerated; this is tantamount to a violation of due process.
No matter which approach is adopted (disclosure of names of witnesses in the briefs or at some point of time before the planned evidentiary hearing), arbitrators must be vigilant in confirming the list of those persons who will introduce evidence at the hearing; the issuance of a final list by the tribunal may prove a difficult, if not time-consuming exercise. In a normal arbitration, each party will be represented by one representative and will call two or three fact witnesses and perhaps one expert-witness; no particular issue will arise in such a case but the context may dictate otherwise.
The tribunal may wish to hear a person whose testimony has not yet been offered (IBA Rules, Article 4.11; ICC Rules, Article 20(3)); this may require early action and it could raise questions in the parties' mind. Another situation is when a party needs the assistance of the tribunal in securing the presence of a witness who will not appear spontaneously such as an employee of a certifying or consulting firm that conducted an investigation in relation to the project being submitted to arbitration. An official invitation letter from the arbitral tribunal may suffice. The party who sought his testimony would normally advance his costs but it may not be the case if the witness is seen as neutral and independent from the parties' respective position. Under US federal law and most State laws, arbitrators may issue themselves subpoenas compelling any person within the jurisdiction to attend before them as witness17; such a practice is unknown in most civilist jurisdictions.
In some cases, rogatory commissions can be organized, normally with the assistance of the courts at the place of arbitration and those at the place of residence of the witness18. A "commission" is issued by the local court to a[Page36:] foreign court that will summon an individual within his jurisdiction to depose. For obvious reasons of timing and efficiency, the party seeking a commission will liaise with the tribunal which may even decide to apply himself to the local courts to initiate the process. Once the witness, usually a third-party, knows that he can be coerced by his own courts to give evidence, he is likely to accept to testify before a local court reporter and local counsel (if counsel involved in the case do not do it themselves). The arbitrator will issue guidelines for such examination abroad and sometimes the testimony will be given in the form of answers to an agreed list of questions.
There is a case (unreported) of an ICC tribunal (sitting in Geneva) which agreed to hear, in the presence of the parties and their counsel, the evidence of a witness (an ex-employee of a party) at his place of residence (France); considering the expenses involved, an issue of cost may have to be settled in such situations. For the sake of completeness, arbitrators can consider the appropriateness of resorting to other methods to receive evidence. Although there is no unanimous view as to whether the evidence may be taken by one arbitrator instead of by the entire tribunal19, it can indeed prove useful in a limited number of cases and provided the basic guarantees of the parties (access to the evidence and right to question the witness) are preserved, to put in the record evidence that might otherwise be difficult if not impossible to gather by reason of time, costs, non-availability of arbitrators, fastidious collection of evidence especially if of a corroborating nature only etc…
With the considerable improvement of the quality of video-conferencing20, arbitrators should no longer hesitate to resort, at least to propose it to the parties, to such a means of collecting oral evidence from witnesses who would otherwise hardly be, if at all, available to testify. If on-line arbitration as an overall process still has to be accepted as an efficient and confidential way of conducting arbitration, high quality video-conferencing can practically be as effective as an examination and cross-examination conducted live.
There is general agreement that an arbitral tribunal is not obliged to hear all the evidence offered especially when it becomes repetitive and irrelevant. It becomes however more perilous to refuse to hear one or more witnesses altogether. Parties, especially from common law jurisdictions, will envisage relatively prolonged hearings on account of the number of witnesses they intend to call. Discussions often take place between the parties and the arbitrators to fix the proper length of the oral evidence phase. Each party[Page37:] must have a reasonable opportunity to present his case; this is entrenched in the parties' fundamental right of due process. Nonetheless, the arbitrators, who remain in charge of the hearings, may consider that certain testimonies will be superfluous, impractical to obtain without disrupting the timetable of the proceedings, disruptive of the equality between the parties, etc…; the arbitrators can therefore in certain circumstances refuse to hear witnesses without denying a party's right to due process21. In order to illustrate the point, take the case of a party that insists, as essential to his defence, that the former wife and business partner of the owner of the corporate party, now living in the opposite hemisphere, be called to testify in a dispute now involving the new wife and business partner: the arbitrator's discernment will not be betrayed by this disguised attempt to put undue stress on the adversary. Tense discussions sometimes take place within the panel in this respect especially where it is composed of arbitrators from different legal traditions. Can the arbitrators limit the number of representatives of a party as they may do with witnesses, in trying to achieve a certain equality between the parties?
Other vital aspects of oral evidence are dealt with elsewhere: preparation of witnesses [Chapter 3, page 55] and witness statements [Chapter 4, page 65]; both steps, which precede the formal evidentiary hearing, are meant to streamline the collection of oral evidence. Recourse to pre-hearing discovery may also avail as a useful tool especially when counsel are both from a legal tradition that admits such a procedure, but not necessarily so22. Counsel would normally submit to the tribunal the arrangements and schedule they will have worked out between themselves; the tribunal, after reviewing, modifying and completing the proposal, will issue a procedural order to allow for such discovery. The entire transcript of the discovery and all the exhibits produced at that time will become part of the record of the arbitration unless the tribunal decide that testimony needs to be reintroduced at the hearing. In any event, this procedure should allow the parties at the hearing to limit their presentation to the essential points, leaving the arbitrator free to base his reasoning on, or complete it with the pre-hearing oral evidence filed. The appearance of non-key witnesses may be dispensed with, the transcript of their sworn testimony being sufficient since both parties participated in the discovery. Difficulties in the taking of the depositions during discovery will be settled by the arbitral tribunal as they arise. [Page38:]
3. Organizing the evidentiary hearing
The jurisdictional function of the arbitrator is necessarily complemented by his managerial role. The arbitration is as good as the arbitrator is, but the failure to control the proceedings can be disastrous for the arbitral process. A lawyer pleading before his own court will instinctively follow the procedural rules that he has been taught and which all the other members of the same bar also embrace. The local judges evolve within the same system and will ensure compliance with the procedural rules that the legislator or other competent authority in their jurisdiction have enacted. There is no such set of standard rules for counsel to follow when appearing before international arbitration panels; no matter how well-versed counsel may be in the applicable substantive rules of law, he will often not be adequately armed to find his way through vague or lacking procedural rules before an arbitral tribunal.
Contrary to defenders before municipal courts, counsel in international arbitration must be guided and directed throughout the arbitral process. Counsel are rarely from the same jurisdiction; they practice their art very differently. It must be realized that the most taxing hurdle for lawyers in international arbitration is to leave outside the hearing room their own procedure coloured spectacles; if they do not, they will likely become critical of the proceedings and miss opportunities in the representation of their client. On the other hand, arbitrators must fully apprehend that they are expected to "enact" the rules that will govern the proceedings; like counsel appearing before them, they must leave behind their own national procedure. Arbitrators must devise appropriate rules to fill in the quasi-procedural void in international arbitration. The UNCITRAL Notes are useful tools to assist them in adopting procedural rules that will respect the sensitivity and legal culture of each party. This is particularly true when it comes to the organization of the evidentiary hearings. The IBA Rules are to be saluted for inspiring some harmonization for the taking of evidence in international arbitration; yet, it can be observed generally that the most experienced arbitrators will issue detailed directions to insure that counsel on both sides will have, as early as possible, the same understanding of the "rules of the game" 23.
The arbitrator is well advised to consider some of the main features of the hearings at the initial stage of the proceedings, notably during the organizational phase of the arbitration when the arbitrators, counsel and the representatives[Page39:] of the parties can meet together. The exchange of views will enable the tribunal to fix a provisional timetable as envisaged in the new Article 18(4) of the ICC Rules. Once the need for an evidentiary hearing has been established, dates can be set aside usually with some reserved days as it is usually impossible to fix, at that time, the precise schedule of the hearing; this gives sufficient head time to ensure the availability of all those who will participate in the hearings or to reschedule the hearings with the least disruptions (e.g. as to the venue). The parties can be directed to indicate in the briefs which allegations will be proven by oral evidence and, when possible, the identity of the witnesses; the manner and the order for taking oral evidence can be decided upon as well as the need for a verbatim record and interpretation. Parties can also agree on the introduction of written statements. More and more procedural orders indicate that the IBA Rules will be kept in mind by the tribunal during the proceedings or that they are adopted, in whole or in part, to govern them.
At the close of the exchange of briefs, i.e. hopefully with an adequate lead time of a good two months before the hearing, the tribunal, in consultation with the parties, will prepare one or more procedural order(s) specifically dealing with the organization of the presentation of testimony. Besides the venue of the hearings which can be conducted at any appropriate location (e.g. Art. 14(2) of the ICC Rules), several matters will be covered.
As far ahead as possible before the hearing dates, parties are requested to confirm the identity of the persons, with full particulars including a CV and an identity picture, who will be produced to give evidence. The subject matter of their testimony will be indicated in sufficient detail and with reference to the parts of the briefs to which their testimony will relate; an indication of the expected duration of their testimony should be provided. Time permitting, the claimant party will send in his list first, then the respondent followed by an opportunity for claimant to submit a list of rebuttal witnesses. With this information in hand, the tribunal will put together, for the parties' further comments, if matters are not entirely settled, the procedural order setting forth the order and the duration of the presentation by each witness allowing for possible opening and possibly closing statements by counsel as well as for questioning time by the other party and sometimes accommodating the constraints of particular witnesses (travel schedule, limited availability…).[Page40:]
If witness statements have been filed, they will normally serve as direct testimony, the other party then proceeding forthwith with his own questioning. Professor Claude Reymond was one of the first to voice that American styled "examination" and "cross-examination" have no place in international commercial arbitration. This was recognized by the members of the Working Party in charge of drafting the IBA Rules: they stayed away from these notions and favoured the terms "direct testimony" and "question" the witnesses.
At the time of putting together the list of persons that will be heard, there may be a need for exchanges of views with the parties concerning the duration, the relevance and the possible redundancy of the testimony, in the light of the overall reserved time for the evidentiary hearing. As Jan Paulsson24 puts it: "… it may be possible to posit… the following 'good housekeeping rules' …. As for witnesses called by a party, … the arbitrator should have full authority to limit their appearance on the grounds of irrelevance or redundance … including the right to limit or deny the right of a party to examine, cross-examine or re-examine a witness if he determines it to be unlikely to serve any further relevant purpose".
This is always a delicate exercise to balance between the efficiency of the proceedings, time and costs wise, and the principle of due process a violation of which could frustrate the award25. Should the parties' wishes not be fully taken into account at that time, it remains possible for the tribunal, once conversant with the evidence already before it, to resume the hearing at a later date if needs be.
The built-in flexibility of the arbitral process allows arbitrators to adapt and complete any guidelines for the presentation of the evidence. This flexibility will be used at the start or, as required, in the course of the hearings. For instance, witness conferencing can be envisaged26 or the confronto method of tandem witness examination resorted to. This latter method provides for two witnesses to be heard simultaneously; they are then invited to explain the reasons for possible differences27. Depending on their legal training, the arbitrators may wish to ask questions first leaving less time to counsel; however, some counsel who have already prepared their presentation, may not be content with this approach.
In most international arbitration proceedings, the deposition of witnesses will be recorded verbatim; nowadays, civil law tribunals will be inclined to[Page41:] have stenographic records of the hearing just as much as common law ones28. Likewise, translation/interpretation will be required in many instances. At the organizational stage, it is wise to visit all the questions that this raises. The arrangements as a general rule are made by the arbitrator or the chairman. Care must be taken of certain specifics. The advances on the arbitration costs may or may not have taken the related expenses into account; some adjustments may be needed or a special deposit paid.
A party may insist on transcript delivery the same day; if the other does not want to pay the added cost, is it proper for the tribunal to allow the requesting party to do so at its own expense at the risk of violating the equality between the parties? The transcript made only by one party will not avail as proof29. The parties may agree to have live note recording; it is suggested that they should make the arrangements themselves especially if the arbitrators are not familiar with this system. With respect to transcripts, it is wise to provide for a certain time limit for the parties to indicate corrections; of course, corrections must relate to what the witness actually said and not to what he intended to say. As one author noted30, the lack of recording is not per se a cause of nullity of the proceedings but that "this may be the case whenever absence of record prevents a decisive point being established with certainty". In 1999, the Paris Court of Appeal decided that the absence of a full transcript of the oral evidence given in an arbitration did not, in itself, violate due process31.
Interpretation may be consecutive or simultaneous; again there will be a difference in costs. If all the witnesses can express themselves in the language of the arbitration, but some are not confident in their level of sufficiency, who should advance the costs for the individual assistance required? Will these form part of the costs of arbitration independently of who advanced the expenses? What will be the interaction of the private interpretation with the recording being made in the language of the arbitration? Would a party be right in objecting (e.g. for having to call in an additional counsel) if the tribunal were to allow arguments on points of law in the language of the substantive law notwithstanding the official language of the arbitration?
Unless the parties agree otherwise, hearings shall be held in camera; Article 25(4) of the Swiss Rules of International Arbitration goes on to state that the[Page42:] arbitrator may require the retirement of any witness during the testimony of other witnesses. Of course, representatives of the parties have a right to be present throughout the hearing even if they are to be called to testify (e.g. Art. 20(3) ICC Rules).
Experts, whether party-appointed or named by the tribunal, will, as a rule, stay in the room throughout the hearings and their testimony will generally come last. Their observations and conclusions can thus relate more closely to the actual events and circumstances of the case and they will be in position to highlight and clarify certain aspects of their report for the benefit of the tribunal.
In order to avoid antagonizing one of the parties, if not the two of them, the tribunal should not wait until the actual hearings commence to canvass the parties' desiderata; this topic should be covered at the time the organizational procedural order is issued. Since separate questioning is likely to increase the time for the hearing32, the tribunal will remain mindful of the planned schedule. There seems to be no set rule in this connection33 although the practice is still influenced, albeit to a lesser degree as the arbitral process gains in independence, by the judiciary systems of the arbitrators and counsel. The parties may agree that witnesses be present at all times by deference to those who may have to wait in hotel rooms until their turn comes34. The tribunal may also deal in the procedural order with the possibility or interdiction for witnesses who have not yet testified to review transcripts when they are ready at the end of each day; likewise, when a testimony is suspended (e.g. lunch break,…), the witness should be instructed not to discuss his evidence or performance with anyone.
In large project arbitrations, the tendency seems to be that witnesses will testify in the presence of each others; they generally have worked together for a number of months or years and normally have learned to appreciate, if not to know one another. The discipline that ought to prevail at the hearings is not threatened in such cases. However, if feelings have been exasperated during the parties' working relationship, especially when founded on a more personal association ("intuitus personae"), it may become demanding to achieve a smooth control over hearings possibly plagued with outbursts and unsolicited interventions. [Page43:]
In deciding whether to exclude witnesses or not, the arbitrator will be guided by his quest for the truth in establishing the facts. In the light of the context of the dispute as described in the briefs, the arbitrator has to opt for the approach that will be the more amenable for the witness to speak out freely and to the point: a person testifying in the presence of someone whom he came to loathe will tend to present an exaggerated version of certain facts while former work colleagues, especially if from the same trade, will be more inclined to depose in an objective manner as they stand to be immediately corrected. In case of exclusion, a witness who has testified may want to remain in the room; this will be allowed as a rule but provided he is not called again to give evidence to avoid giving him an undue advantage.
4. Giving evidence at evidentiary hearings
Little assistance is found in arbitration rules as to the manner in which oral evidence is to be produced in front of arbitral tribunals. This intended void illustrates at best the built-in flexibility of the international arbitral process. The arbitrator's role is crucial at that stage of the proceedings to ensure maximum efficiency of the fact-finding phase. Again, arbitrators can find much comfort in the IBA Rules. In the quasi-absence of express safeguards, arbitrators must constantly keep in mind the fundamental principles of "due process" and of the "equal treatment of the parties". The weight of the evidence can only be fairly assessed if these principles are not violated.
Authors have been prolific in comparing the advantages and disadvantages of the civil law regime and of the common law system for receiving oral evidence in international arbitration35. Indeed, there is no better fertile soil than international arbitration to test the merits of the two approaches. However, experienced arbitrators have not shown much concern over such analysis in the past few years since they gradually came to apply the best of the two systems, melting them with relative ease in practice. The IBA Rules, which were developed by practitioners originating form various legal traditions, are a modern example of harmonization in the field of adducing evidence in international commercial arbitration; parties, counsel and arbitrators alike, wherever they are from, can follow these Rules without hurting their inner sense of justice. True multicultural arbitrators must be preferred to those whose only claim to fame is the mastering of the civilist and common law traditions. [Page44:]
Much has been written on the taking of evidence and it is not intended here to summarize the literature on the subject. With respect to administering the oaths before an individual testifies, reference is made to the developments in Chapter 6, page 87. Rather, this section will address some singular issues that can arise in the course of the evidentiary hearings no matter how well planned they have been.
Witness assisted by counsel
Parties are generally assisted by advisers; can a witness, during his testimony, be advised by a lawyer? An engineer that has designed a plant over which an arbitration is proceeding between the owner and the contractor, may condition his appearance on being accompanied by his lawyer since a separate action is being threatened against him by the contractor: is his lawyer welcome at the hearing? Maybe not but provided the testimony is not interfered with or influenced, the witness will have some assurances that he will be able to formulate his responses in a manner that will not disserve him later on. Despite the duty of confidentiality associated with arbitration, the transcript (or extracts) of evidence given before an arbitral panel may very well get filed in a court case; once produced, there is not much that can be done to reverse the situation. If the tribunal summoned the witness who is assisted by counsel, should the costs of the witness' lawyer be part of the costs of arbitration?
Witnesses are handed the exhibits in relation to which they are testifying. However, a witness can pull out his diary or excerpts from it or walk to the witness stand with notes that he had prepared to help him depose. Most of the time, even counsel of the party producing the witness will have been unaware that this would happen; of course, opposite counsel will immediately ask that the documents in question be turned in the record. In exercising his control, the arbitrator will enquire as to the nature of the notes or document and decide upon their production. In most instances, they will be personal notes of the witness and production will not be ordered. Conversely, if the document is directly relevant to the matter in dispute, it should be filed in the record and be subjected to examination by the other side. If the arbitrator is not able to rule on the basis of the explanations provided by the witness as to the nature and import of the document, then he should inspect it and, as warranted, afford the opposing party the opportunity to inspect it as well36.[Page45:]
Should the fact that the document was obtained or copied from the confidential files of one of the parties or even from those of a third-party affect the ruling? Can the witness, having procured the document fraudulently on the eve of his dismissal or lay-off, nonetheless comment on the document in his testimony? Should his testimony be struck off the record if the fraudulent document on which it is based is revealed afterwards? Arbitrators are not restricted in this area by national laws in the way that the judiciary is; furthermore local laws differ and some, as in France, admit a greater latitude than in common law jurisdictions37; even in England, each case needs to be considered on its merits and the requirements of procedural fairness are not cast in stone when it comes to the desirability of producing raided documents before an unrelated authority38. Finally, admissibility of evidence in international arbitration is not as strict as before domestic courts, there being no national interest to protect39. In his assessment of the probative value of the evidence, the arbitrator will take into account all the circumstances. He will not allow evidence if there are compelling ethical rules, as he may determine, that dictate such a decision (e.g. Art. 9.2(b) of the IBA Rules).
In preparing the schedule for the hearing, the arbitrator will normally allot equal time to both sides; this reflects the rule that the parties must be treated with equal fairness. But should this always be the case? If the parties announce disproportionate lists of witnesses, then an equal division of time would not be fair. However, if the arbitrator detects that one party is prevented from calling a "normal" number of persons on account of the high expenses involved or of his inability to reach or convince potential witnesses to come (e.g. a lasting dispute and former employees), then he may talk the other side into not bringing all the intended witnesses to reinstate some kind of balance. There can also be circumstances where one party legitimately needs more time40. The time for the consecutive interpretation of the witnesses of a party should be deducted in computing the duration of the testimony on each side.
Of course, most procedural rules before courts and bar regulations forbid counsel assisting a party in a case, to give evidence in the same matter; in common law procedure, the judge will cut short explanations given by counsel if there are akin to testimony. In international arbitration, there is no such[Page46:] rule. Arbitrators can freely ask a counsel to summarize or relate facts for the record instead of going through a laborious question-answer process to get to the same result; counsel may present some of the factual background that he has been made aware of in preparing the case and assembling the exhibits; of course, this is done in front of the witness so that the opposite party can question the witness directly. This pragmatic approach is particularly timesaving when the witness is not conversant with the language of the arbitration, has difficulty in clearly and concisely describing the facts or does not understand the point on which he is asked to testify. There is no difference here, it seems, with witness statements that have been carefully prepared by counsel; in the same way that the witness will simply sign his statement (presumably after having read it), the witness listening to counsel answering a question can just nod his acceptance of the verbal statement just made. The witness can immediately be questioned by the other side the same way opposite counsel can cross-examine the signatory of a statement availing as direct examination.
Credibility is paramount in assessing the weight of evidence. This ingredient is not only distilled through what the witness say but also through his whole conduct. Unconsciously, arbitrators may subject, without anyone knowing, the individual testifying before them to some kind of profiling; it is often said that gesture may lead to some inference that a witness is lying or withholding part of the story. Unfortunately, the perception that the arbitrator may have forged for himself during a witness' presentation will vanish over time; the demeanour of witnesses does not transpire in transcripts. It is always helpful for the members of a panel to review together the attitude of the various witnesses in the presentation of their evidence; however, memories vanish with the passage of time. A solution may be found by having a member of the tribunal (preferably the secretary of the tribunal or an assistant who could come for that purpose and why not a professional) taking some pictures of the witnesses and, perhaps, of the setting generally; more daring arbitrators may even make short videos of some brief sequences of the testimony. Such measure can be introduced with finesse so as not to hurt any feelings. For instance, the matter could be evoked during the first organizational meeting and be made part of the ensuing order. When the hearing arrives, the matter will have been noted and no difficulty should arise. [Page47:]
Parties will sometimes bring into the hearing room some kind of demonstrative evidence to assist the arbitrators in gaining a better understanding, for instance a scale model of a power plant; a tridimensional view will definitely be of assistance. Likewise, a witness will back up his oral evidence by going to the "white board" (it can immediately produce a photocopy of the drawings or other sketches which a traditional "black board" cannot do). Technical explanations will thus be easier for the panel to follow. However, the usefulness of the exercise will have totally disappeared at the time of reading the transcript: the witness draws a line with his pointer from that point to this point. In complex technical or construction matters, such demonstrations by witnesses and in particular experts are not a rare occurrence. Here again, oral testimony given with the help of a drawing board or the placing of a model in the hearing room would retain its benefit if they could be viewed by the arbitrators during their deliberation, that is if a video has been made of the relevant parts of the testimony. One word of caution: if video is to be made of some of the presentations, and not only of the witnesses during a few seconds, hiring a technician is recommended so as not to overburden the panel. [Page48:]
1 The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted on June 10, 1958 by the General Assembly of the United Nations; UNCITRAL Model Law on International Commercial Arbitration adopted on June 21, 1985 by the United Commission on International Trade Law: Art. 19(1): "… [s]ubject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings". Some examples of national legislations: Netherlands Code of Civil Procedure, Art. 1036, French New Code of Civil Procedure, Art. 1494, Algerian Decree Law of April 23, 1993 and of institutional rules: ICC Rules of Arbitration in force from 1 January 1998, Art. 15(1); AAA International Arbitration Rules (7 April 1997 edition), Art. 16(1) & (2); LCIA Arbitration Rules in force from January 1, 1998, Art. 14(1).
2 See E. Gaillard, "Arbitrage commercial international", J.-Cl. Droit international, Fascicule 586-8-1 ou Procédure civile, Fascicule 1067, 1994, pp. 2-9.
3 Redfern, Reymond et al. The Standards and Burden of Proof in International Arbitration, Arb. Int., Vol. 10, 1994, No. 3, p. 317; M. Rubino-Sammartano, International Arbitration, Law and Practice, 2nd ed., Kluwer Law International, 2001, pp. 653-656; Swiss Rules of International Arbitration, January 2004, Art. 24-25.
4 Antonias Dimolitsa, [Chapter 1, p. 11, supra].
5 ICC Rules (1998), Art. 21(3), AAA Arbitration Rules (1997), Art. 20(4), LCIA Rules (1998), Art. 19.5, ICSID Rules (1984), Art. 14; Delvolvé Rouche Pointon, French Arbitration Law and Practice, Kluwer Law International, 2003, pp. 117-118.
6 IBA Rules of Evidence on the Taking of Evidence in International Commercial Arbitration, adopted by a resolution of the IBA Council on 1 June 1999, International Bar Association; UNCITRAL Notes on Organizing Arbitral Proceedings, United Nations, Vienna, 1996.
7 E. Gaillard and J. Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration, Kluwer Law International, 1999, p. 699.
8 Article 20-7 of the LCIA Rules: "Any individual intending to testify to the arbitral tribunal on any issue of fact or expertise shall be treated as a witness under these Rules notwithstanding that the individual is a party to the arbitration or was or is an officer, employee or shareholder of any party".
9 See for instance, in the case of the ICC Rules: Y. Derains and E. Schwartz, A Guide to the New ICC Rules of Arbitration, Kluwer Law International, 1998, pp. 254-257.
10 D. Hascher, Collection of Procedural Decisions in ICC Arbitrations 1993-1996, Kluwer Law International and ICC Publishing SA, 1997, pp. 96-102, commenting a decision rendered in case 7319 (at p. 102: "Placé devant le problème de la distinction entre témoin et représentant d'une partie, l'arbitre, plutôt que, comme en l'espèce, décider entre la voie de l'enquête ou celle de l'audition des parties, pourrait de préférence indiquer aux parties (et à leurs conseils) qu'il entendra toute personne susceptible d'apporter un éclaircissement sur l'affaire").
11 "Questions Concerning the Desirability and Text of the UNCITRAL Project to Improve Planning of Arbitral Proceedings", ICCA Congress Series No. 7, op. cit., pp. 173-196. At p. 186, Howard M. Holtzmann summarizes the discussions that led to the adoption of Annotation 15(e) "Hearing representatives of a party": "Consider whether persons interested in the outcome of the case can testify as witnesses (e.g. can an executive employed by a company testify as a witness concerning a transaction in which he participated?). If interested persons cannot be witnesses, consider ground rules for determining what persons, or categories of persons, have sufficient interest so that they will not be admitted as witnesses (e.g., persons who are shareholders? persons who are directors or managers? persons who are retired and receive a pension? Or any employee regardless of status?). If interested persons cannot be witnesses, consider whether and if so how, the tribunal will receive information from them". Compare with the final text of Annotation 15(e): "According to some legal systems, certain persons affiliated with a party may only be heard as representatives of the party but not as witnesses. In such a case, it may be necessary to consider ground rules for determining which persons may not testify as witnesses (e.g. certain executives, employees or agents) and for hearing statements of those persons and for questioning them".
12 For a scholarly analysis of the arbitrators' power to organize the procedure under civil law and common law, see P. Mayer, "Le pouvoir des arbitres de régler la procédure: une analyse comparative des systèmes de civil law et de common law", Revue de l'Arbitrage, 1995, No. 2, pp. 163-184.
13 Article 299 of the Quebec Code of Civil Procedure.
14 M.E. Schneider, ASA Bulletin No. 2, 1993, pp. 302-332, in particular document 1, section 3-6 at p. 315, document 8, section 4-1 at p. 320; see also M. Bühler and C. Dorgan, "Witness Testimony pursuant to the 1999 IBA Rules of Evidence in International Commercial Arbitration - Novel or Tested Standards?", Journal of International Arbitration, Vol. 17, No. 1, 2000, Section IV B.
15 UNCITRAL Arbitration Rules, 1976, promulgated by UN resolution 31/98 and adopted by the Assembly of the United Nations on December 15, 1976; Procedural Rules on Conciliation and Arbitration of Contracts financed by the European Development Fund, Annex V to Decision No. 3/90 of the ACP-EEC Council of Ministers of 29 March 1990.
16 See G. Lörcher, Improving Procedures for Oral and Written Witness Testimony, ICCA Congress Series No. 7, Planning Efficient Arbitration Proceedings, p. 149: "Therefore, unless both parties renounce the hearing of a witness or oral testimony altogether, oral testimony should be heard if it is offered in points which are material to deciding the case".
17 Section 7 of the United States Arbitration Act, 9 USC, and the relevant enabling legislations whereby the Uniform Arbitration Act was incorporated in various states; Sulzer v Somagec et al, Court of Appeal, Paris, November 27, 1987, Rev. arb. 1989, p. 62, cited by M. Rubino-Sammartano, op. cit., p. 685.
18 Generally see Evidence in International Arbitration Proceedings, AIJA Law Library Series, Edition AIJA and Graham & Trotman / Martinus Nijhoff, 1994, especially the national reports dealing with Question 4.2 "Obligation to Appear". See e.g. in this connection the references given by M. Buhler and C. Dorgan in footnote 64 (footnote 14 supra), by Y. Derains and E. Schwartz, in footnote 579 (footnote 9 supra); see also M. Rubino-Sammartano, op.cit., at pp. 693-695; J.-F. Poudret and S. Besson, "Droit comparé de l'arbitrage international", Bruylant, 2002, pp. 597-602; A. Redfern and M. Hunter, Law and Practice of International Commercial Arbitration, Sweet & Maxwell, 3rd Edition, 1999, para. 6-80; Conférence de M. Rouhette, Rev. Arb. 1973, pp. 247-248; G.B. Born, International Commercial Arbitration in the United States, Commentary & Materials, Kluwer, 1994, pp. 855-861.
19 See comments in M. Rubino-Sammartano, op.cit., at pp. 665-666.
20 E. Schäfer, "Videoconferencing in Arbitration", ICC International Court of Arbitration Bulletin, Spring 2003, Vol. 14/No. 1, pp. 35-45.
21 Y. Derains and E. Schwartz, op. cit., at p. 256: this has been confirmed in both France and England, see the references mentioned. M. Rubino-Sammartano, op. cit., pp. 658-659 is of the opinion that the practice of limiting the number of witnesses must not be approved especially with a view to saving-time; he argues that, save in special situations, the arbitrator is not in a position to assess, before hearing the witnesses, whether one or more of them will be necessary. A. Redfern and M. Hunter, op. cit., at para. 6-103, state: "The trend in international arbitration is toward shorter hearings with greater reliance upon documentary evidence. This is a necessary step in the interests of economy of time and costs…".
22 An arbitral tribunal composed of three arbitrators from a continental tradition choose a method reminiscent of discovery in ICC case No. 7170, 1992, commented in Journal du Droit International, 1993, at pp. 1082-1084.
23 A Procedural Order rendered in ICC case no 7314 on 17 February 1994 gives a good illustration (almost a manual) of detailed directives to the parties in preparation to an evidentiary hearing; reproduced with a commentary in Journal du Droit International (Clunet), 1996, No. 1, at pp. 1045-1049.
24 International Council for Commercial Arbitration Congress Series No. 7, Planning Efficient Arbitration Proceedings, at p. 119.
25 Iron Ore Company of Canada vs Argonaut Shipping, Inc., US District Court, Southern District of New York, 9 September 1985, commented in Yearbook Commercial Arbitration, Vol. XII - 1987, Kluwer, at pp. 173-176. Arbitrators who have decided not to hear certain testimonies or certain witnesses will sometimes go to great lengths in their award, by instinct of self protection, to prevent the losing party from invoking Art. V. 1(b) of the New York Convention (a party "unable to present his case") or another applicable law (English Arbitration Act 1996, sec. 68(2)(d), US Federal Arbitration Act, sec. 10(d)).
26 W. Peter, "Witness 'Conferencing'", Arbitration International, Vol. 18 - No.1 (2002), pp. 47-58.
27 M. Rubino-Sammartano, op. cit., pp. 690-691.
28 G.B. Born, op. cit., p. 93: this was probably not the case ten years ago.
29 Société Ganz Mozdony et autres c/ SNCFT, Paris Court of Appeal, (1st Ch. C), 16 November 1993, Revue de l'arbitrage 1995, No. 3, pp. 477-481.
30 M. Rubino-Sammartano, op. cit., at p. 669.
31 Société Sopip c/ Société El Banco Arabe Espanol et autre, Court of Appeal of Paris (1st Ch. C), 14 December 1999, commented in Revue de l'Arbitrage 2000, No. 3, pp. 471-492, at p. 481.
32 M. Schneider, "Witnesses in International Arbitration", presentation of materials from arbitration practice, ASA Bulletin, No. 2, 1993, 302 at p. 310 and No. 4, 1993, 568 at pp. 575-576.
33 G. B. Born, op. cit., p. 88; Fouchard Gaillard Goldman, op. cit., para. 1287; Y. Derains and E. Schwartz, op. cit., p. 269.
34 A. Redfern and M. Hunter, op. cit., para. 6-105, p. 336.
35 ICC, Taking of Evidence in International Arbitral Proceedings, Paris, 1990; J. Thorens, "L'arbitre international au point de rencontre des traditions du droit civil et de la common law", Etudes de droit international en l'honneur de Pierre Lalive, recueil édité par C. Dominicé, R. Patry et C. Reymond, Helbing & Lichtenhahn. 1993, pp. 693-697; Procedure and the Taking of Evidence in International Commercial Arbitration, The Interaction of Civil Law and Common Law Procedures, P.M. Patocchi & I.L. Meakin, RDAI/IBLJ, No. 7, 1996, pp. 884-895; A.H. Baum, "Reconciling Anglo-Saxon and Civil Law Procedure: The Path to a Procedural Lex Arbitrationis", Law of International Business and Dispute Settlement in the 21st Century: Liber Amicorum Karl-Heinz Böekstiegel, edited by R. Briner, L.Y. Fortier, K.P. Berger & J. Bredow, 2001, p. 21; see also P. Mayer, op. cit., supra, note 12; H. Smith, Roles of the Arbitral Tribunal in Civil Law and Common Law Systems with Respect to Presentation of Evidence, ICCA Congress Series No. 7, op. cit., supra, note 16, pp. 161-172; J. Paulsson, Overview of Methods of Presenting Evidence in Different Legal Systems, Id., pp. 112-122.
36 See in this connection the guidelines proposed by D.W. Rivkin, "Procedural Issues to Consider", Chapter I, in the Practitioner's Handbook on International Arbitration and Mediation, edited by R.V. Rhoodes, D.M. Kolkey, R. Chernick, Juris Publishing, 2003, at para. 6.06.
37 J.-F. Poudret and S. Besson, op. cit., para. 560, p. 512.
38 R. Best, United Kingdom: High Court Finds Unfairness in Disclosure of Pharmaceutical Company's Dawn Raided Documents, commenting on R v Director of the Serious Fraud Office & Secretary of State for Health (2003) EWHC 3002 (Admin), 17 December 2003, available on www.mondaq.com, 23 January 2004.
39 J.-L. Delvolvé, J. Rouche and G.H. Pointon, French Arbitration Law and Practice, Kluwer Law International, 2003, para. 240, p. 129.
40 M. Bühler and C. Dorgan, op. cit., Section 4E.