Discovery of documents is a particular feature of civil litigation in common law and is frequently used in international arbitration if arbitrators come from a common law background. Since this procedural instrument is unknown in civil law, it has become a major bone of contention in international arbitration, encumbering and influencing the process of choosing arbitrators. In 1999, in the hopes of settling the controversy, the International Bar Association issued new Rules on the Taking of Evidence in International Commercial Arbitration (hereinafter, IBA Rules), which, like the earlier rules of 1983, sought to achieve a 'harmonization of the procedures commonly used in international arbitration'. 1 Publication of these rules has led to an extensive discussion in German legal literature, 2 throwing a new light on the question: Is discovery of documents appropriate in international arbitration? [Page491:]

I. The essence of discovery of documents

Discovery of documents is a procedural instrument that allows a party to demand that its adversary disclose all documents in its possession that are relevant to the legal dispute. Only 'privileged' papers, such as a party's correspondence with its lawyers, are exempt from this duty of disclosure. All other confidential items, such as internal correspondence and minutes of board meetings, are not privileged.

Rules on the scope of discovery of documents differ between common law jurisdictions. Article 26 of the US Federal Rules of Civil Procedure goes furthest and covers not only documents that directly support a claim, or defence against a claim, but also those documents that are only indirectly relevant to the claim or defence. The English procedure for discovery of documents was somewhat softened by the Civil Procedural Rules introduced by the Woolfe reform in 1999. Under 'standard disclosure', only directly relevant documents need be shown. In certain circumstances, however, the court can order 'specific disclosure', which requires indirectly relevant items to be submitted too. 3

II. The need for discovery of documents in common law civil litigation

In the common law system, discovery of documents is regarded as an indispensable procedural instrument in civil litigation. This is due to the way in which proceedings are perceived in common law, which differs substantially in this respect from civil law. 4

The key feature of Anglo-American civil proceedings is that their origin lies in trial by jury. As a jury could not be repeatedly summoned, it was necessary to settle the dispute through a single oral hearing, allowing the matter to be dealt with in one go. Juries have since disappeared from English civil litigation proceedings, and, for reasons of cost, are now only seldom used for commercial matters in the USA. However, the single oral hearing has retained its significance to this day and can last a considerable length of time.

The concentration on a single oral hearing determines the way in which the parties' representatives prepare proceedings in common law civil litigation. A detailed statement of claim is neither customary nor even necessary, because[Page492:]

the entire matter in dispute and the evidence do not have to be submitted until the oral hearing starts. The statement of claim is therefore brief, and serves only to provide the defendant with sufficient information about the claim and the merits on which it is based for it to prepare its defence. The term 'notice pleading' is thus used to designate this minimal statement of claim. 5

Each party, together with its legal representative, must prepare well for the oral hearing, as no application for an adjournment may be made, should the other party spring a surprise in its arguments. Each party must therefore be aware of the other party's position from the very outset. This is the purpose of discovery of documents: it owes its existence to the desire to avoid unpleasant surprises at trial.

In the civil law system the same need is not felt because the facts of the case in civil litigation are clarified step-by-step through an exchange of detailed written statements between the parties under the supervision of the court (statement of claim, statement of defence and usually a number of further statements, called réplique and duplique). Any new argument a party is allowed to introduce is handled through a statement in reply and further verbal proceedings. Discovery of documents is here not only unnecessary but also inadmissible, since it would constitute a 'fishing expedition' contravening the principle of burden of proof. 6

III. Reasons for discovery of documents in arbitration

Arbitration is not part of civil litigation procedure in the State courts. It must therefore be asked why the procedural instrument of discovery of documents, which originates from civil litigation in common law, has a place in international arbitration. The reason is that until recently the laws on arbitration procedure contained only minimal provisions on the conduct of the proceedings. In the absence of any agreement between the parties, a blanket clause in the law left the conduct of the proceedings almost entirely to the discretion of the arbitrators. In the UNCITRAL Model Law on International Commercial Arbitration (hereinafter, UNCITRAL Model Law), the blanket clause is found in Article 19(2).

It was this discretion which therefore constituted the legal grounds for using procedural instruments stemming from State civil procedure in arbitration. As to how arbitrators exercised their discretion, the following could be thought[Page493:]

to apply: 7 if the parties come from the same legal tradition, it will be deemed a matter of course that the arbitrators are appointed from this legal sphere and that they apply the principles of their 'home' law-be it common law or civil law-in the arbitration proceedings; if the parties come from both legal traditions, it will be assumed that the tripartite tribunal will comprise arbitrators from both backgrounds and that they will apply aspects of procedure drawn from both traditions, so as not to disappoint either of the parties.

However, such reasoning proves to be misguided, for arbitration laws have since acquired independent regulations relating to the conduct of arbitral proceedings, which basically rule out recourse to instruments of civil procedure, whether from common law or civil law.

IV. Independence of arbitration laws

The UNCITRAL Model Law has created a set of new rules relating to the conduct of arbitral proceedings, which restrict the discretion of the arbitrators (Articles 18-27). These rules were incorporated into the new German arbitration law that came into force on 1 January 1998 (Zivilprozessordnung, §§ 1042-1050), and led the German legislator to comment: 8 'Wenngleich die Vorschriften das schiedsrichterliche Ermessen gegenüber dem geltenden Recht einschränken, wird hierdurch letztlich auch dem Schiedsgericht seine Aufgabe erleichtert.'

The rules on the conduct of proceedings contained in the UNCITRAL Model Law have been filled out with the legal customs of the parties that are almost inevitable on account of the nature of arbitration proceedings. Together, they have developed into a generally recognized procedural standard in international arbitration.

This procedural standard now includes the following principles:

1) Statements on the matter in dispute

Since international arbitration involves legal relations that extend across national boundaries, it is conducted in the form of written proceedings, at least up to the stage of taking evidence. The facts of the case are determined through an exchange of detailed statements between the parties, beginning with the statements of claim[Page494:]

and defence prescribed by arbitration law (UNCITRAL Model Law, Article 23). This is generally followed by further statements (réplique and duplique) because no party can afford to leave the adversary's arguments unanswered. 9 That such further statements are almost inevitable has been confirmed with reference to ICC arbitration: 'The ICC Rules do not specifically provide for subsequent exchanges of written submissions, but they do not exclude them either and, indeed, the exchange of one or more sets of pleadings following the establishment of the Terms of Reference has become standard practice in ICC arbitrations.' 10

Each statement is accompanied by those documents that the party feels are necessary for its presentation of the facts, and the party indicates the evidence to which it intends to refer. Although the second sentence of Article 23(1) of the UNCITRAL Model Law states that this is not obligatory, it has nonetheless become common practice because the facts can only be convincingly portrayed with the support of such documents. 11 It is an approach also found in arbitration rules. For example, Article 18(3) of the 2004 Swiss Rules of International Arbitration expressly states: 'As a rule, the Claimant shall annex to its Statement of Claim all documents it deems relevant.' A parallel provision may be found in Article 19(2) for the Statement of Defence.

The arbitral tribunal generally sets deadlines for the submission of statements, 12 with the result that the facts of the case are largely clarified before any oral hearings start. This international arbitration practice has since become a matter of course for parties from an Anglo-American legal background too, 13 for reasons of practical necessity.

2) Significance of oral hearings

Given that by the time oral hearings arrive, the arbitral tribunal is familiar with the facts of the case as presented in the statements and accompanying documents, the main purpose of the initial hearings is simply to deepen knowledge of the merits and discuss what facts and evidence might still be missing. If witnesses or experts have to be heard, a further set of oral hearings is often held. 14 Article 24(1) [Page495:]

of the UNCITRAL Model Law reads: 'to hold oral hearings for the presentation of evidence or for oral argument'. After the taking of evidence, the parties invariably wish to comment on the results in further statements, followed by more oral hearings, until such time as it can be agreed that this stage of the proceedings can be closed.

International arbitration thus generally includes a series of verbal discussions, as indicated by the plural 'oral hearings' in Article 24(1) of the UNCITRAL Model Law. 15 Unpleasant surprises for a party in the course of establishing the facts of the case can thus be more or less ruled out.

3) Principle of burden of proof

The principle of burden of proof means that each party must assert and prove the facts in its favour, i.e. the plaintiff the facts substantiating its claim and the defendant the pleas it makes to counter such claim. The principle of burden of proof applies in arbitration too. This is clear from the 1976 UNCITRAL Arbitration Rules, Article 24(1) of which states: 'Each party shall have the burden of proving the facts relied on to support his claim or defence.'A similar provision can be found in Article 19(1) of the AAA International Arbitration Rules and Article 24(1) of the Swiss Rules of International Arbitration. The UNCITRAL Model Law makes no mention of burden of proof, but UNCITRAL left no doubt that it is 'a generally recognized principle'. 16

Burden of proof is fundamental to arbitration, as arbitrators are regarded as having no ex officio authority to investigate. No application for ascertaining facts in a fishing expedition may therefore be allowed. 17 The IBA showed wariness here: Article 3.3 of its 1999 Rules on the Taking of Evidence in International Commercial Arbitration was intended to limit the risk of a fishing expedition. 18

4) Role of the arbitral tribunal

In international arbitration, the arbitrators cannot limit themselves to a passive role as in the adversary system. It is they who are responsible for determining the course of the proceedings, as stated in the blanket clause in Article 19 of the UNCITRAL Model Law. It is they too who control the exchange of written[Page496:]

statements, as is clear from Article 23(1) of the Model Law. Since the arbitrators are made fully aware of the facts and the evidence at an early stage through the exchange of written statements, they would indeed seem entitled 'to determine the admissibility, relevance, materiality and weight of any evidence' (UNCITRAL Model Law, Article 19(2)). This does not however mean that they must take the evidence themselves, as is customary in civil law. Since they have no power to compel witnesses to appear and make statements, and it is the parties who must themselves bring their witnesses to the hearing, it is appropriate to leave the questioning to the parties. This procedure is becoming increasingly common in international arbitration. 19

5) Conclusion

There is agreement in arbitration circles on these principles of international proceedings. The talk is of a trend towards a uniform procedural model for international arbitration. 20 The major features of this procedural model have been briefly described as follows: 'The written stage is essentially based on continental procedure, whereas the oral stage has been influenced to a greater extent by Anglo-American techniques.' 21

V. Answering the question

1) Order for discovery of documents by the arbitrators

In international proceedings, an order for discovery of documents, issued at the discretion of the arbitrators, is possible only if there is a need for it. In common law civil litigation the need for discovery of documents stems from the oral nature of the proceedings and the justifiable wish by both parties to avoid any unpleasant surprises in the arguments of the other party at the oral hearing. But that precisely does not apply in international arbitration, where the proceedings are largely in writing and that the facts of the case are clarified by the parties and by the arbitral tribunal before and after the first oral hearing without any risk of a surprise that could not be countered. Given what has become a generally recognized standard, discovery could be said to be[Page497:] superfluous and to have no place in arbitration.

To maintain that a restricted form of discovery of documents is required in international arbitration for the purpose of ensuring that parties from different legal circles are equally well armed is no valid argument when there is no actual need for discovery. Experience also shows that in many arbitration cases involving a party from a common law background no desire for discovery of documents was ever expressed. It has been said, with reference to a report by Professor Gabrielle Kaufmann-Kohler at the Petersberger Arbitration Conference in 2003, 22 that the estimated percentage of international arbitration cases involving discovery of documents is at least 50 per cent. This figure may well be too high, but indicates that in half of all cases there was no call for discovery of documents. Dr Robert Briner, reporting on the Iran-United States Claims Tribunal, 23 has stated that in all proceedings handled by the Tribunal evidence was found using customary methods (including prima facie), without any need for discovery of documents.

It is consequently no coincidence that, in the arbitration rules of ICC and the German Institution of Arbitration (DIS), there is no provision for discovery of documents in the absence of a specific prior agreement between the parties. 24 Significantly, Article 24(2) of the 1976 UNCITRAL Arbitration Rules contains the following provision, which has been understood to rule out an order for discovery of documents: 25

The arbitral tribunal may, if it considers it appropriate, require a party to deliver to the tribunal and to the other party, within such a period of time as the arbitral tribunal shall decide, a summary of the documents and other evidence which that party intends to present in support of the facts in issue set out in his statement of claim or statement of defence.

A further argument against discovery of documents in international arbitration is that the parties expect quick and efficient proceedings. 26 Discovery of documents is however usually an extremely complex, tedious and costly undertaking[Page498:]

and, as such, is at odds with the aims of arbitration. 27 If it is therefore not required, weighing the possible expectations of the parties against the objectives of arbitration in the context of the arbitrators' discretion, the scales would seem to come down against its use.

For these various reasons, the answer to the question of whether discovery of documents can be ordered by arbitrators in international proceedings-and certainly those where the applicable procedural law is based on the UNCITRAL Model Law-must be no.

2) Agreement between the parties

This conclusion does not however mean that the parties are not allowed to agree on discovery of documents if they so wish in a particular instance. The 1999 IBA Rules on the Taking of Evidence in International Commercial Arbitration could in that case be applied when formulating such an agreement.

The IBA Rules provide limited regulations on discovery of documents. According to Article 3.2, each party can submit to the arbitral tribunal a request to produce documents. Article 3.3 requires the desired documents to be concretely identified and to be relevant to the arbitration proceedings. They may be either individual documents or documents of an identified category, such as minutes of all board meetings for a particular period. They thus include internal documents. Article 9 states under what conditions an arbitral tribunal can rule out document production. These include legal privilege and 'unreasonable burden to produce the requested evidence'.

The IBA Rules have been widely acclaimed insofar as they consider the American and English-style discovery to be 'generally inappropriate in international arbitration'28 and, through Article 3.3, aim to prevent 'fishing expeditions'. However, it remains disconcerting that internal and confidential documents

(e.g. minutes of board meetings for a particular period) must necessarily be disclosed if they are covered by the category applied for. 29 Such a duty to produce documents is rejected as totally unacceptable by many companies in the civil law world. It was not deemed essential in the IBA Supplementary Rules Governing the Presentation and Reception of Evidence in International Commercial Arbitration of 1983. Indeed, Article 4.4 of the 1983 Rules contained[Page499:] the following provision:

A party may by Notice to Produce a Document request any other party to provide him with any document relevant to the dispute between the parties and not listed, provided such document is identified with reasonable particularity and provided further that it passed to or from such other party or to a third party who is not a party to the arbitration. If a party refuses to comply with a Notice to Produce a Document he may be ordered to do so by the Arbitrator.

An agreement in line with the 1999 IBA Rules should therefore always include a supplement restricting the disclosure of internal documents, as in Article 4.4 of the 1983 Rules. 30[Page500:]

1
IBA, 'Commentary on the New IBA Rules of Evidence in International Commercial Arbitration', Business Law International (January 2000) 15.

2
See e.g. A.H. Baum, 'Reconciling Anglo-Saxon and Civil Law Procedure: The Path to a Procedural Lex Arbitrationis' in Law of International Business and Dispute Settlement in the 21st Century, Liber Amicorum Karl-Heinz Böckstiegel (Carl Heymanns, 2001) 21; S.H. Elsing, 'Internationale Schiedsgerichte als Mittler zwischen den prozessualen Rechtskulturen' (2002) Journal of International Dispute Resolution (BB-Beilage 7 zu Heft 46/ RIW-Beilage 3 zu Heft 12) 19; V. Triebel & J. Zons, 'Discovery of Documents in Internationalen Schiedsverfahren - Theorie und Praxis' (2002) Journal of International Dispute Resolution (BB-Beilage 7 zu Heft 46/RIW-Beilage3 zu Heft 12) 26; K. Sachs, 'Use of documents and document discovery: "Fishing expeditions" versus transparency and burden of proof', SchiedsVZ 2003, 193; L. Demeyere, 'The Search for the "Truth": Rendering Evidence under Common Law and Civil Law', SchiedsVZ 2003, 247; G. Kaufmann-Kohler/P. Bärtsch, 'Discovery in international arbitration: How much is too much?', SchiedsVZ 2004, 13; L. Shore, 'Three Evidentiary Problems in International Arbitration: Producing the Adverse Document, Listening to the Document that does not Speak for Itself, and Seeing the Witness through her Written Statement', SchiedsVZ 2004, 76; M. Wilke, 'Der Urkundenbeweis in transnationalen deutsch-amerikanischen Prozessen und im Schiedsverfahren' (2004) Journal of International Dispute Resolution 88. See also K. Lionnet & A. Lionnet, Handbuch der internationalen und nationalen Schiedsgerichtsbarkeit, 3d ed.(Stuttgart: Boorberg, 2005) at 298ff

3
V. Triebel & J. Zons, supra note 2 at 27f.

4
See K. Zweigert & H. Kötz, Rechtsvergleichung, 3d ed. (Tübingen: Mohr, 1996) at 265ff.

5
S.H. Elsing, supra note 2 at 20.

6
V. Triebel & J. Zons, supra note 2 at 27; K. Sachs, supra note 2.

7
W.L. Craig, W.W. Park & J. Paulsson, International Chamber of Commerce Arbitration, 3d ed.(Oceana, 2000) at 423.

8
Preliminary remarks to section 5 of the reasons of the German legislator, Bundestags-Drucksache,13/5274 (12 July 1996) at 46. [Translation: Even if the rules limit the arbitrators' discretion in relation to previous law, the tribunal's task is ultimately made easier.]

9
See UNCITRAL Notes on Organizing Arbitral Proceedings (1996), § 39.

10
Y. Derains & E.A. Schwartz, A Guide to the New ICC Rules of Arbitration (The Hague: Kluwer Law International, 1998) at 52.

11
L. Shore, supra note 2 at 78.

12
See UNCITRAL Notes, supra note 9, § 39.

13
S.H. Elsing, supra note 2 at 21

14
See UNCITRAL Notes, supra note 9, § 59ff.

15
S.H. Elsing, supra note 2 at 23.

16
H.W. Holtzmann & J.E. Neuhaus, A Guide To The UNCITRAL Model Law On International Commercial Arbitration (Deventer: Kluwer Law & Taxation, 1989) at 568.

17
K.H. Schwab & G. Walter, Schiedsgerichtsbarkeit, 7th ed. (Munich: Beck, 2005) at 124, note 11.

18
See Commentary, supra note 1 at 20.

19
M. Wirth, 'Ihr Zeuge Herr Rechtsanwalt! Weshalb Civil-Law-Schiedsrichter Common-Law-Verfahren-srecht anwenden', SchiedsVZ 2003, 9.

20
W.L. Craig, W.W. Park & J. Paulsson, supra note 7 at 423.

21
E. Gaillard & J. Savage, eds., Fouchard, Gaillard, Goldman On International Commercial Arbitration (The Hague: Kluwer Law International, 1999) at 690.

22
K. Sachs, supra note 2 at 197, note19.

23
R. Briner, 'The Evaluation of Evidence: Some Observations Based on the Practice of the Iran-United States Claims Tribunal' in The International Practice of Law: Liber Amicorum for Thomas Bär and Robert Karrer (Basel: Helbing & Lichtenhahn, 1997) 41.

24
S.H. Elsing, supra note 2 at 22.

25
K.H. Schwab & G. Walter, supra note 17 at 123, note 8; F.-B.Weigand, 'Discovery in der internationalen Schiedsgerichtsbarkeit', RIW 1992, 361 at 364ff.

26
See Article 20(1) of the 1998 ICC Rules of Arbitration and § 33.1 of the 1998 DIS Rules of Arbitration.

27
V. Triebel & J. Zons, supra note 2 at 28; Y. Derains & E.A. Schwartz, supra note 10 at 261; W.L.Craig, 'Common Law Principles on the Taking of Evidence' in Beweiserhebung in internationalen Schiedsverfahren (DIS Publications, vol. 14, 2000) 21, who refers to personal experience as an arbitrator in proceedings between Saudi Arabian and US parties.

28
Commentary, supra note 1 at 18.

29
See the examples given by K. Sachs, supra note 2 at 197.

30
See L. Shore, supra note 2 at 76: 'It is argued that the most recent edition of the IBA Rules constitutes a misguided combination of various aspects of different traditions.'