No one knows better than Robert Briner himself that the opposing parties in an international arbitration and their lawyers often have very different expectations as to the way in which the arbitration should be conducted. Those expectations are usually a reflection of the procedures and rules applicable in the domestic court proceedings to which they are accustomed. One of the principal 'culture clashes' is between the common law and the civil law systems. But even within each of these systems, practices and procedures can vary. Nevertheless, international arbitration procedure is becoming increasingly harmonised and will often follow similar lines, whether the parties and their lawyers are from the same or different legal systems, and irrespective of the place of arbitration and the nationality of the arbitrators.

One important aspect of fact finding and dispute resolution where an accepted arbitral practice or rule has yet to develop concerns evidentiary privileges, and, in particular, the extent of any privilege that attaches to attorney-client communications. The principle of attorney-client confidentiality is often considered fundamental to the proper working of a sophisticated legal system, yet there are very real differences between legal systems as to its scope and application. Non-voluntary disclosure is increasingly commonplace in international arbitration, but it is striking that there is no consensus on how arbitral tribunals should determine claims to legal privilege, especially where the rules that apply in the opposing parties' respective legal systems are not the same. This might be described as a 'conflict of privileges'.

The IBA Rules on the Taking of Evidence in International Commercial Arbitration, adopted in 1999 and which reflect a consensus in the IBA Working Group-comprising leading arbitration practitioners from around the world- on what amounts to appropriate practice in international arbitration, provide in Article 9.2 that: [Page743:]

The Arbitral Tribunal shall, at the request of a Party or on its own motion, exclude from evidence or production any document, statement, oral testimony or inspection for any of the following reasons: . . .

(b) legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable.

The IBA Rules do not indicate how a tribunal might determine which legal or ethical rules are applicable.

In this paper we address the issue of conflict of privileges and propose an international arbitration solution.11 First, however, we shall review the application of evidentiary privileges in a number of jurisdictions and the European Union, and consider various existing transnational approaches.

1. Evidentiary privileges

By evidentiary privileges, we mean those rules that allow a party to withhold a document or other evidence from the other side in contested proceedings, or from anyone investigating or determining a complaint or dispute (e.g. police, regulatory authority, court or arbitral tribunal). Evidentiary privileges have a long history in most legal systems. The word 'privilege' derives from the Latin privata lex, meaning a prerogative given to a person or a class of persons. 2

This paper focuses on attorney-client communications, communications or documents created for purposes of preparing for litigation (or arbitration), and notes made by the lawyer relating to his retainer.

Common law jurisdictions regard certain communications and documents relating to a lawyer as being privileged. Civil law jurisdictions tend to focus on the principle of confidentiality. In this paper, we use the term 'legal privilege' to refer to the entitlement of a lawyer or party to litigation/arbitration to withhold a document or other evidence because of the special position of the lawyer. [Page744:]

Other types of communication might also be privileged in certain circumstances -e.g. communications with a doctor, confessional communications with a minister of religion, communications between husband and wife or other family members, and statements of self-incrimination. Some jurisdictions recognise wider professional privileges, such as those attaching to communications with, and documents held by bankers, accountants and journalists. Some jurisdictions recognise a doctrine of privacy. These are all outside the scope of this paper, although the solution proposed for resolving conflicts of legal privileges may be equally applicable to them.

Similarly, we do not deal with issues relating to commercial confidentiality and State secrecy, which often arise in international arbitration.

In many legal systems, communications made in a genuine attempt to settle a dispute are privileged and may not be disclosed to any court or tribunal until a final settlement is reached (referred to in England as 'without prejudice' communications). These types of communication are likewise beyond the ambit of this paper. 3

2. National rules concerning legal privilege

We give below an overview of the scope and application of legal privileges and their application in civil proceedings4 in certain selected national legal systems5 and under European Union law, in order better to understand how a conflict of privileges might arise.6[Page745:]

In essence, in common law jurisdictions, civil proceedings generally involve non-voluntary disclosure, but legal advice, documents prepared in the context of litigation (or arbitration), and attorney work product are privileged and need not be disclosed. Legal privilege is a manifestation of the principle of confidentiality. There is an increasing trend towards recognising the privileged status of legal advice as a fundamental right. In general terms, the same privileges may be claimed with respect to communication with and documents of in-house lawyers. In civil law jurisdictions, as in common law jurisdictions, communications with and the documents of external lawyers are confidential. Communications with and the documents of in-house lawyers do not always enjoy the same confidential status. But there is generally no non-voluntary disclosure in civil proceedings and therefore questions of privilege do not arise.

2.1 England

In present-day English court proceedings, unless otherwise agreed or ordered by the court, the Civil Procedure Rules require that a party disclose not only the documents on which it relies but also documents which adversely affect its own case. 7 The Civil Procedure Rules recognise, however, the right of a party to refuse to disclose a document on the ground of some special interest recognised by law. 8 Likewise, a witness may refuse to answer a question at trial on the same grounds.

English law recognises two types of evidentiary privileges relating to lawyers: 9

(a)

'legal advice privilege'-communications made between a legal advisor and his client are protected from disclosure if such communications are made for the purpose of obtaining or giving legal advice;

(b)

'litigation privilege'-communications between a legal advisor and his client and third parties are also privileged, once litigation is contemplated, [Page746:] or has been commenced, and where the communication has been created in relation to that litigation for the purpose of obtaining or giving advice or collecting evidence.

A 'legal advisor' for the purposes of privilege includes barristers and solicitors, and also includes in-house lawyers. It may also cover foreign lawyers. 10

The privilege belongs to the client (and its successor in title), and may be waived by (and only by) the client. Breach of the obligation to retain privilege would entitle the client to sue the lawyer for negligence and it may also be a disciplinary offence.

The policy underpinning English legal privilege was summarised in 1996 by Lord Taylor CJ in the House of Lords, as follows: 11

The principle which runs through all these cases . . . is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests.

These policy reasons were endorsed by the House of Lords in the Three Rivers case in 2004. 12

In Three Rivers, the House of Lords also confirmed that legal privilege is absolute. 13 Once a document attracts privilege, 14 that privilege cannot be overridden by some higher public interest: it can only be waived by the client or overridden by statute. 15[Page747:]

Privileges have traditionally been regarded as part of the rules of evidence, and therefore procedural in character. 16 However, more recently, the English courts have held that legal privileges are a fundamental substantive right. 17In the Three Rivers case, Lord Scott said that, in his opinion, the debate whether legal privilege is a procedural right or a substantive right, was 'sterile'. He concluded that it is both. 18

Privilege may generally be claimed in regulatory enquiries. 19 For example, the Competition Act 1998 (section 30) makes statutory provision for privilege to be recognised.

The English Arbitration Act 1996 does not address expressly the application of legal privileges in arbitration. Section 34 provides that, unless otherwise agreed by the parties, it shall be for the tribunal to decide all procedural and evidential matters. These matters include: whether any, and if so which, documents or classes of documents should be disclosed by the parties; and whether to apply strict rules of evidence (or any other rules) as to the admissibility of any material. There is an indication, however, that privileges should be respected. Section 43 gives power to the court, in support of an arbitration, to order a witness to give oral testimony or to produce documents, but also adds that a person shall not be compelled to produce any document 'which he could not be compelled to produce in legal proceedings', thus preserving a right to assert legal privilege. 20

In a domestic arbitration in England, one would undoubtedly expect English rules concerning evidentiary privileges to apply. 21 In an international arbitration with its seat in England and including non-voluntary disclosure, it appears often to be the practice, particularly where an English party and/or English lawyers are involved, to allow all the parties to claim legal privileges available in English law. 22[Page748:]

2.2 United States

As is well known, civil litigation in the United States often includes written interrogatories, depositions and document discovery. As in England, a party is required to disclose information and documents that are unhelpful to its case. 23

Protection from discovery based on legal privileges is well established in both federal24 and State courts. 25

Under US law as applied by federal and State courts, the most common forms of protection from discovery are the attorney-client privilege and the work product doctrine. The attorney-client privilege applies to communications between an attorney and his or her client made for the purpose of obtaining legal advice. The communication must be confidential and it remains privileged when made between representatives of the client or the attorney. Whether a particular communication is privileged depends on a highly fact-specific analysis.

The work product doctrine applies to any materials produced in anticipation of litigation by or for the party or its representative. A highly fact-specific analysis is also applied to determine whether material is protected by the work product doctrine. 26

Communications with in-house lawyers generally enjoy the same protections as those with external lawyers.

Because of differences in State and federal rules, courts in the United States, more than elsewhere, have had to grapple with the question of conflict of privileges. A US federal court may have to decide whether to apply federal law[Page749:]

or State law regarding protection from discovery based on some form of privilege ('vertical choice of law'). Further, if the court decides State law must be applied, it must then decide which State law ('horizontal choice of law').

Concerning vertical choice of law, Rule 501 of the Federal Rules of Evidence provides some guidance:

in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State, or political subdivision thereof shall be determined in accordance with State law. 27

In addition, the federal courts have decided that in diversity cases, issues of attorney-client privilege are substantive and thus controlled by the forum State's law, while issues regarding the work product doctrine are procedural and thus controlled by federal law. 28

Concerning horizontal choice of law, various choice-of-law rules have been applied to resolve that question. These include, to name but a few: the significant relationship test, a public policy approach, an interest analysis, and a better law approach. 29

The Restatement (Second) of Conflict of Laws provides one approach: 30

§ 139. Privileged Communications

(1) Evidence that is not privileged under the local law of the state which has the most significant relationship with the communication will be admitted, even though it would be privileged under the local law of the forum, unless the admission of such evidence would be contrary to the strong public policy of the forum.

(2) Evidence that is privileged under the local law of the state which has the most significant relationship with the communication but which is not privileged under the local law of the forum will be admitted unless there is some special reason why the forum policy favouring admission should not be given effect. [Page750:]

The Restatement approach-allowing admission if either the forum or the State that has the most significant relationship allows it-reflects a policy strongly favouring disclosure. However, US courts are not bound to apply the Restatement and one author has noted that section 139 has not been widely adopted. 31

As with domestic privileges, the US courts do not have a consistent practice in respect of foreign privileges. 32 Diametrically opposed approaches have been taken, from applying the foreign privileges to rejecting the application of foreign privileges altogether. The latter is premised on the argument that the plaintiff should be held to the procedural law of its chosen forum.

There is no mention of privileges in the Federal Arbitration Act. But courts have recognised that protections provided by the attorney-client privilege and the work product doctrine are applied in arbitral proceedings. 33

2.3 Germany

German law of civil procedure is based on the notion that no litigant is required to provide the weapons for his opponent's case. 34Accordingly, a concept of non-voluntary document disclosure, as found in civil proceedings in England and the United States, is unknown in Germany (save for a very limited exception recently introduced, which, in the interest of furthering the complete presentation of a party's case, allows the judge to order the production of documents to which reference has been made in the parties' written submissions35). A doctrine [Page751:]

of privilege akin to the common law concept, which may be claimed by a party to civil proceedings, has not developed in Germany. 36 It has not been necessary, because a party does not need protection from disclosure.

Communications between a lawyer and his client are, nevertheless, protected by way of a professional obligation of secrecy. However, there is no concept of privilege attached to documents or work product.

Under German law, a lawyer is strictly required to preserve professional secrets, which includes everything that has come to his knowledge in the course of conducting his profession. 37As a result, a lawyer may refuse to give evidence or to disclose documents even if requested by the court. 38

The lawyer's client, on the other hand, if called as a witness, has no such duty and no such right to refuse to give testimony. Accordingly, he may be asked to give evidence about legal advice that he has received. However, this rarely occurs in practice, because a party-whether an individual or an officer representing a company-cannot be called as a witness in his own case, but can only be heard as a party (Parteivernehmung) under highly restrictive circumstances (in particular, only if no other evidence is available and the application to hear the party does not constitute an inadmissible means of investigating the facts) and can as such refuse to testify without having to give any additional reasons.

The client is the 'master of the secret' in the sense that he has the power to decide whether a confidential communication exchanged between him and his legal advisor for the purpose of obtaining legal advice may be disclosed or not. A breach of confidentiality by the lawyer, without authorisation from the client, is a criminal offence and can be punished with fines or imprisonment of up to 39 one year.

These confidentiality obligations and rights apply to independent lawyers admitted to the Bar. To what extent they also govern the behaviour of in-house counsel is somewhat uncertain. An in-house counsel in Germany can be admitted[Page752:]

to the Bar provided he can show that his permanent employment relationship with his company does not affect his independence. In some lower court decisions and in legal writings it has been said that an in-house counsel who is admitted to the Bar (Syndikusanwalt) has the same rights and obligations as an independent lawyer provided his function consists in giving legal advice. 40 In a recent decision, however, the Federal Supreme Court has flatly denied that a Syndikusanwalt, when counselling his employer, can conceivably act as legal advisor in a capacity comparable to that of an external lawyer. 41 It has, therefore, become doubtful again whether in-house counsel admitted to the Bar, when acting in their capacity as internal legal advisors, come under the same confidentiality rule (both rights and obligations) as applies to independent lawyers (although, of course, they owe a duty of confidentiality as employees to their employer).

In proceedings of a regulatory or criminal nature, lawyers likewise have a right to refuse to give evidence. This right is also acknowledged for a Syndikusanwalt. 42 Legal protection against search and seizure in regulatory and criminal investigations is more limited, and is considered to apply only to communications relating to the defence of the lawyer's client in such investigations. 43

The provisions on arbitration in the German Code of Civil Procedure44 say nothing about the production of documents or legal privileges. Some legal writers ascribe to arbitrators more inquisitorial powers than the courts for establishing the facts. 45What at any rate is generally recognised is that German arbitration law does not preclude tribunals from engaging in fact finding in the common law style, provided the parties do not agree otherwise. In both domestic and international commercial arbitration, however, a German lawyer, unless permitted to do so by the client, is under an obligation not to produce confidential documents in his possession. [Page753:]

2.4 France

In French civil litigation, there is no obligation voluntarily to produce documents unhelpful to one's case, but Article 11 of the New Code of Civil Procedure provides that a judge may order a party to the litigation (and also third parties) to produce evidence, under penalty of payment of a daily fine until production is made, unless that party can show some lawful impediment. There is case law to suggest that the existence of a secret professionnel might be a valid basis on which such an order could be resisted. 46

In France, as in Germany, a lawyer (avocat) is under a strict duty of confidentiality concerning all matters relating to his client. 47 Any unjustified disclosure may subject the lawyer to criminal penalties and/or disciplinary proceedings. In contrast to his German counterpart, however, the French lawyer is the maître du secret. Subject to certain very limited exceptions provided for by law, he is prohibited from disclosing information received from a client. This is an obligation from which the lawyer may not be released, not even with the consent of the client. A French lawyer may therefore refuse to give evidence.

Under French law, unless the advice contributes to the commission of an offence, the client can also refuse to give evidence concerning legal advice received from his lawyer, insofar as the advice is strictly confidential.

The rules (and sanctions) imposed by French law apply with regard to documents sent or received by members of a French Bar and by external counsel from other European Union jurisdictions providing services in France. 48

French in-house lawyers cannot be full members of a French Bar, and therefore communications with them have no special status. 49 Likewise, foreign lawyers who are in employment in France are not covered by the laws of professional secrecy. [Page754:]

Documents in the possession of an avocat are generally protected against search and seizure in criminal and regulatory investigations, but this protection does not extend to documents that provide evidence in support of a suspicion that the avocat committed some offence. 50

Article 1460 of the New Code of Civil Procedure provides that an arbitral tribunal may order a party (but not third parties) to produce evidence, but there is no mention of the defence of legal privilege. However, in practice, a French lawyer would be bound by the duty of confidentiality described above.

2.5 European Union

The application of legal privileges is affected, within Europe, by the 1950 European Convention on Human Rights. Article 6 prescribes the right to a fair trial and Article 8 the right to respect for private life. Both articles are regarded as protecting confidential communications between lawyers and clients. 51 Proportionality is also of fundamental importance, and commentators consider that privilege is not to be regarded as an absolute rule. 52 The question in each case is: what is required for there to be a fair trial given the entire circumstances?

The European Court of Justice has considered the question of the scope and application of attorney-client privilege in the context of antitrust proceedings conducted by the European Commission. 53 The Court was asked to consider whether AM&S Europe Ltd, an English company, was entitled to refuse to produce to the Commission certain documents created by in-house counsel and other non-European Union lawyers, on grounds of attorney-client privilege. The Court held that communications between a company and independent lawyers in any European Union Member State made for the purposes and in the interests of the client's 'rights of defence' were privileged and could be withheld from production. In the context of investigative proceedings by the European Commission, the Court recognised this principle as a right that can be claimed not only by the lawyers but by the parties themselves, and regarded it as extending to advice given prior to notice of any investigation. [Page755:]

The Court did not, however, extend the same privileges to communications with in-house counsel or with non-European Union lawyers, despite the fact that such communications would most probably have been privileged in proceedings in England, where the company was situated. The reason given by the Court was that this issue was not uniformly regulated in the various Member States, and that even though there were jurisdictions within the European Union where in-house counsel could become members of the Bar-e.g. England, Germany under certain circumstances (see above)-in order to create a common standard across the European Union, no in-house counsel should be entitled to claim legal privileges at the level of European law. This part of the decision has been criticised by many legal writers and organisations representing in-house lawyers. 54

It was hoped by many that the decision might be overturned in Akzo Nobel Ltd and Akcros Chemicals Ltd v. Commission. 55 An interim measure decision rendered by the President of the Court of First Instance indicated a positive attitude to extending legal privileges to in-house counsel at the European level. The President noted that there had been developments in Community law and in the legal orders of the Member States since the AM&S judgment. However, the European Court of Justice overturned this interim decision, stating only that there was no urgency in resolving the question of whether certain documents were privileged or not and that it could therefore wait until the decision on the main substance of the case. At the time of writing, the Court's final decision is still awaited.

3. The issue reiterated

From the above brief summary of some national laws, it can be seen that there are marked differences between the common law and civil law positions, and even amongst common law and civil law jurisdictions themselves. [Page756:]

The question that we are seeking to address in this paper is what should an arbitral tribunal do when, for example:

(a)

an English party asks the managing director of the opposing party about the advice he received from his German lawyers concerning the matter in dispute; or

(b)

a US party is asked to disclose all communications with its in-house lawyers based in France concerning the matter in dispute.

What privilege rules should an arbitral tribunal apply? Should it have complete discretion? 56 Or should it, for example, apply the privilege rules of the lex arbitri (or the lex fori, if there are no legal privilege rules in the lex arbitri), or those of the legal system governing the

dispute or the legal system at the place where the document is located or was created, or those of the domicile of the party claiming privilege or the professional domicile of the relevant lawyer? And would it be unfair if parties from different jurisdictions had the benefit of different privileges? We will return to these questions below, but first we will consider whether guidance already exists for arbitral tribunals on these questions.

4. Rules of arbitration procedure

There is little institutional guidance to arbitral tribunals concerning evidentiary privileges. Most rules of arbitration procedure recognise that arbitral tribunals may determine procedural issues, but they do not indicate whether or not a tribunal must respect evidentiary privileges. The ICC Rules of Arbitration, for example, read as follows in Article 15:

The proceedings before the Arbitral Tribunal shall be governed by these Rules and, where these Rules are silent, by any rules which the parties or, failing them, the Arbitral Tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration. [Page757:]

The ICC Rules do not refer to non-voluntary document production, but such disclosure is now common in ICC arbitrations. Article 20(7) states that the arbitral tribunal may take measures for protecting trade secrets and confidential information, but the reference to confidential information is not generally understood as being intended to address issues of attorney-client confidentiality and legal privileges. Similarly, the UNCITRAL Arbitration Rules allow the tribunal to order document production, 57 but do not refer to evidentiary privileges.

There are three sets of rules which, by way of exception, do refer to legal privileges:

(1) The AAA International Arbitration Rules, published in 2001 and most recently amended in 2003, provide in Article 16.1 that the tribunal may conduct the arbitration: 'in whatever manner it considers appropriate, provided that the parties are treated with equality', and in Article 19.3 that it may order document production. They go on to state in Article 20.6:

The tribunal shall determine the admissibility, relevance, materiality and weight of the evidence offered by any party. The tribunal shall take into account applicable principles of legal privilege, such as those involving the confidentiality of communications between a lawyer and client.

(2) The International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration, published in June 2005, are slightly more explicit. Rule 12.2 states, inter alia:

The Tribunal is not required to apply the rules of evidence used in judicial proceedings, provided, however, that the Tribunal shall apply the lawyer-client privilege and the work product immunity. The Tribunal shall determine the applicability of any privilege or immunity and the admissibility, relevance, materiality and weight of the evidence offered.

The Commentary to these Rules indicates that an arbitral tribunal is required to apply the attorney-client privilege and the work product immunity when it determines that they are applicable, which suggests that they may not be able to be claimed (or, at least, not to their full extent) by a party to whom such privileges would not normally apply. However, Article 12.2 of the IICPR Rules for International Disputes omits the words in italics and the references to lawyer-client and work product privileges. [Page758:]

(3) Article 38 of the Zurich Rules of Arbitration provide that 'a witness may . . . refuse testimony which would infringe official or professional secrecy protected by criminal law, unless the witness has been freed of its secrecy obligations'.

5. IBA Rules on Taking of Evidence

As already noted, the IBA Rules on the Taking of Evidence in International Commercial Arbitration expressly provide that an arbitral tribunal may exclude any document from evidence or production on grounds of legal impediment or privilege (Article 9.2(b)), but they do not go on to state which law(s) should apply, or how a tribunal should go about making that determination.

In its Commentary to the Rules, the IBA Working Party writes: 58

Article 9.2(b) provides protection for documents and other evidence that may be covered by certain privileges, under the appropriate applicable law, such as attorney-client privilege or professional secrecy. The Working Party felt that it was important that such privileges be recognised in international arbitration.

In his separate commentary, Hilmar Raeschke-Kessler, who was a member of the IBA Working

Group, states that Article 9.2(b) is 'especially important for Anglo-American in-house counsel', 59whose legal reports to management are typically privileged. He contrasts this with the position of in-house counsel in Germany.

The IBA Rules also provide, in Article 9.2(g), that the tribunal may exclude a document from production or evidence due to 'considerations of fairness or equality of the Parties that the Arbitral Tribunal determines to be compelling'.

The Working Party's Commentary notes that this is a 'catch-all' provision, intended to assure fairness and equality to all sides in the case. Very apposite to this paper, they give as their only example: 60[Page759:]

Raeschke-Kessler notes in his commentary that paragraphs (b) and (g) of Article 2 are closely related, with paragraph (g) being mainly concerned with the objection that the parties may have not been treated fairly and equally during the discovery procedure. He again contrasts the position of the US in-house counsel, whose internal notes on the drafting of a contract would be privileged, and those of a German in-house counsel, whose notes would not be protected. He suggests that this could result in considerable imbalance between the parties' respective rights and that 'equality of arms' might be at risk. He concludes: 'One party will only be able to ask for the production of internal documents of the other party as far as itself is required to produce documents of the same type . . .' 61

Thus, the IBA Working Group considers that legal privileges should be recognised in international arbitration, but that some equitable readjustment might be necessary to ensure 'equality of arms'.

6. A transnational proposal

The Principles of Transnational Civil Procedure, 62 adopted in April/May 2004 by the American Law Institute and UNIDROIT, are an attempt to develop an internationally harmonised approach to procedure. The Principles provide in Article 16.2 that the court may order 'disclosure of relevant, nonprivileged, and reasonably identified evidence' in the possession or control of another party or, in some circumstances, a non-party. Article 18 is headed 'Evidentiary Privileges and Immunities' and it is more explicit concerning exceptions to disclosure. It states: [Page760:]

18.1 Effect should be given to privileges, immunities, and similar protections of a party or nonparty concerning disclosure of evidence or other information.

18.2 The court should consider whether these protections may justify a party's failure to disclose evidence or other information when deciding whether to draw adverse inferences or to impose other indirect sanctions.

18.3 The court should recognize these protections when exercising authority to impose direct sanctions on a party or nonparty to compel disclosure of evidence or other information.

The Working Group's Commentary states, inter alia:

P-18A All legal systems recognize various privileges and immunities against being compelled to give evidence, such as protection from self-incrimination, confidentiality of professional communication, rights of privacy, and privileges of a spouse or family member. Privileges protect important interests, but they can impair establishment of the facts. The conceptual and technical bases of these protections differ from one system to another, as do the legal consequences of giving them recognition. In applying such rules choice-of-law problems may be presented.

P-18B The weight accorded to various privileges differs from one legal system to another and the significance of the claim of privilege may vary according to the context in specific litigation. These factors are relevant when the court considers drawing adverse inferences from the party's failure to produce evidence.

Thus, the Principles allow a court to respect applicable evidentiary privileges and immunities, which may vary from jurisdiction to jurisdiction. The Commentary goes on to note that Principles 18.2 and 18.3 reflect a distinction between indirect sanctions and direct compulsory sanctions, and recommends that a court should not normally impose direct compulsory sanctions on a party or non-party that refuses to disclose information protected by a privilege.

In a Preliminary Draft (March 2000), the authors recommended that there should be a list of various types of evidence that could not be admitted (unless waived by the party able to take advantage of the privilege), which would include legal profession privilege and communications between counsel in settlement negotiations. They further recommended against admitting evidence of information covered by 'other privileges recognized by the law of the place with the most significant relationship to the parties to the communication, unless the court determines that the need for the evidence to establish truth is of greater significance than the need to maintain confidentiality of the information'. 63[Page761:]

Where so ordered, such evidence could be produced in a closed session of the court, but in the presence of the parties and their lawyers. As the above quotation from the Principles shows, this two-track approach (i.e. differentiating between recognised universal transnational privileges and other domestic privileges) was not adopted.

7. Conventions on taking evidence

The 1970 Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters provides a regime whereby a judicial authority of a Contracting State may, in accordance with the law of that State, request the competent authority of another Contracting State, by means of a Letter of Request, to obtain evidence. Article 11 provides:

In the execution of a Letter of Request the person concerned may refuse to give evidence in so far as he has a privilege or duty to refuse to give the evidence -

(a) under the law of the State of execution; or

(b) under the law of the State of origin, and the privilege or duty has been specified in the Letter, or, at the instance of the requested authority, has been otherwise confirmed to that authority by the requesting authority.

A Contracting State may declare that, in addition, it will respect privileges and duties existing under the law of States other than the State of origin and the State of execution, to the extent specified in that declaration.

Thus, the Hague Convention recognises the right to claim privileges. Its rules concerning privilege are the opposite of those prescribed in the US Restatement quoted above, in that they allow the person giving evidence to take advantage of the best available privileges. 64

EC Regulation 1206/2001 is similar. It enhances judicial cooperation in the European Union by providing that courts of one Member State may request the assistance of the judicial authorities of another Member State and, in particular, request that evidence be taken in the other Member State. Article 14 provides that a request cannot be actioned if the person concerned claims the right to refuse to give evidence under either: (i) the law of the requesting court; or

(ii) the law of the requested court. Thus, the EC Regulation also adopts a most favourable privilege approach. [Page762:]

8. Policy considerations for a possible arbitration solution

The above overview of the law on evidentiary privileges shows that international arbitral tribunals cannot expect much guidance-or at least much consistent guidance-from international sources, and that tribunals must create their own rules for determining which legal privileges should apply in any given case. Given that arbitral tribunals generally have wide discretionary powers in determining rules of evidence, there are a number of approaches that a tribunal might take to the issue of conflict of privileges. We address below some of the most pertinent policy and legal factors affecting that determination.

8.1 Doing justice

The first and overriding policy consideration must be the objective of doing justice between the parties. Justice is more likely to be achieved if all the relevant evidence is disclosed and available to the arbitral tribunal. On that basis, attorney-client communications should, where relevant, be disclosed. On the other hand, it is generally considered in civil law jurisdictions that justice can be achieved without the need to have full disclosure of the kind regarded as routine in common law jurisdictions. In any event, in neither civil law nor common law jurisdictions is the disclosure of attorney-client communications regarded as a prerequisite to doing justice.

8.2 Respect for the confidentiality of attorney-client communications

There can be no doubt that the 'modern' rationale behind attorney-client privilege is that: (i) the client will communicate with its lawyer more truthfully and openly; (ii) the lawyer can advise the client better if it communicates fully; and (iii) better legal representation is of greater value than full disclosure.

For these reasons, attorney-client communications are given a special status in common law and civil law jurisdictions alike. The confidentiality of communications with external counsel is recognised in both legal systems, and by the Strasbourg authorities.

8.3 Are attorney-client privileges procedural or substantive?

A further important consideration for arbitral tribunals when determining what legal privileges to apply is whether the privilege in question is regarded as substantive or procedural. Are the rules involved procedural in nature, which would bring them within the scope of the arbitrators' discretionary powers as 'masters of their own procedure', or are they substantive, requiring that the arbitral tribunal engage in a choice-of-law analysis in order to decide their applicability? [Page763:]

While rules of evidence are generally considered to be procedural in character, 65 there appears to be no international consensus on whether legal privileges are a procedural or a substantive matter. Legal writings and court decisions in the jurisdictions considered above reveal a wide divergence of views. In France, where a lawyer's duty of confidentiality-and corresponding right to refuse to testify-are regulated by deontological rules and/or the Code of Civil Procedure, legal privilege is usually considered to be a procedural matter. The same is true for Germany, although some legal writers, taking up the discussion that has occurred in the United States on the relatedness of procedural norms to substance, appear to lean towards a recognition of substantive elements in the law of privilege. 66 There appears to be no discernible consensus in the ordinary courts on the character of legal privileges.

We would agree that, applying a functional analysis, legal privileges are both procedural and substantive in character. On the one hand, it cannot be denied that the possible impact of any right to legal privilege in civil proceedings is procedural in nature, insofar as it limits the procedural possibilities for establishing the truth. Moreover, in procedural systems which may require that the parties produce documents and information possibly damaging their case, legal privileges function as a countervailing factor, limiting the effects of discovery requests. Although perhaps not the purpose of legal privilege, this procedural aspect has certainly become an accepted side-effect, instrumental to achieving the desired degree of protection as regards the confidentiality of attorney-client communications. On the other hand, it appears to us, at least on the basis of our review of the jurisdictions considered in this paper, that the underlying purpose of legal privilege-the protection of the confidential communication between the client and his attorney-is at the same time undeniably a substantive matter. Widely formulated legal privileges that can be claimed not only by the attorney but by the client itself must rightly be seen as rules of law 'which characteristically and reasonably affect people's conduct at the stage of primary private activity', 67 i.e. as rules of law that affect parties' behaviour outside of any procedural setting. [Page764:]

This acknowledgement that legal privileges have a substantive character leads to the conclusion that international arbitrators do not have completely unfettered discretion in determining whether or not to recognise them. As is usual and appropriate when determining which substantive laws are applicable in any given case, arbitral tribunals should undertake a choice-of-law analysis. We consider various approaches in part 9 below.

8.4 Parties' expectations

International arbitration should seek to meet the parties' expectations. For the purposes of our present discussion, this has three facets.

The first expectation is that communications which are privileged when made will remain privileged. This assumes that privileges recognised by a domestic court will likewise be recognised by foreign courts and international tribunals. Such an expectation is important because it affects the nature of the communication and relates to the underlying rationale for legal privilege (i.e. full and open communication between a client and his attorney).

Thus, when a client seeks advice from external counsel based in England or the United States, that client will most probably provide information to the lawyer assuming such communication to be privileged. Likewise, the lawyer will most probably write his advice assuming it to be privileged. Similar assumptions are also likely to be made in respect of communications with in-house counsel based in England or the United States. (Although, as this paper has shown, it might be a mistake to assume that such privileges will be recognised internationally, the assumption is often made in practice.) A communication between a client and a German or French external lawyer will also most probably be assumed to be confidential, and any advice will be written accordingly. On the other hand, a communication with a French (and possibly German) in-house lawyer will most probably be assumed not to be confidential, but it will equally be assumed that the advice will not be subject to involuntary disclosure.

It would defeat the expectation of the parties communicating with a US lawyer if those communications were not to remain privileged. It might not defeat the expectations of parties communicating with a French in-house lawyer if they were told that the communication was not privileged, but it might nevertheless surprise them-if they had not thought about the possibility of non-voluntary disclosure-if the in-house lawyer's advice had to be produced in legal proceedings. [Page765:]

The second expectation of parties involved in international arbitration is that the arbitral tribunal's decisions are made on the basis of the applicable law. This, of course, begs the question in many international arbitrations: what is the applicable law? To the greatest extent possible, the law and the rules applied by tribunals should be reasonably certain and predictable. Certainty and predictability should also extend to the procedures for taking evidence and the application of privileges relating to the legal profession. This weighs heavily in favour of internationally accepted choice-of-law criteria. As pointed out above, privilege rules 'affect people's conduct at the stage of primary private activity'-i.e. even before any thoughts on disputing claims in any forum have developed. Parties active in international commerce that choose arbitration as their means of dispute resolution are capable of organising their conduct in accordance with privilege rules only if and to the extent that those rules are reasonably certain and predictable.

The third expectation is that parties that agree to resolve a dispute by arbitration will be treated by the arbitral tribunal in a fair and reasonable manner. This expectation is reflected in rules of due process. But it also reflected in the procedural flexibility available to arbitrators, which allows them to adapt procedures to a particular case.

It might be said that by agreeing to international arbitration, with its lack of formal rules of evidence, a party waives its right to insist on legal privileges and lays itself open to the discretion of the tribunal. We do not find that argument convincing. Rights to legal privilege and confidentiality are fundamental and should not be considered waived without an unequivocal statement of such intent from the party entitled to claim the privilege.

8.5 Equality of arms

'Equality of arms' is one of the fundamental requirements to which an arbitral tribunal must have regard when adopting and implementing any procedural rules.

This principle is widely recognised. For example, Article 18 of the UNCITRAL Model Law on International Commercial Arbitration provides that 'the parties shall be treated equally'. French courts have held on several occasions that the principle of 'equality of the parties' must be observed in international arbitration 'as a general principle of procedure founded in procedural public policy'. 68[Page766:]

The European Court of Human Rights has held that 'equality of arms' is an essential feature of the right to a fair trial. 69

This principle comes into play when an arbitral tribunal is confronted with a claim of legal privilege by one party (e.g. a claim by a US party with regard to communications with its in-house counsel), which, if recognised only with regard to that party, would result in that party being entitled to refuse to produce certain information, while the other party (e.g. a French party) would not be able to assert a similar right to claim privilege.

While 'equality of arms' does not mean that parties must always be granted absolute equality in quantitative terms, the question is whether an evidentiary procedure that allowed different parties to claim different privileges has materially offended the principle of equal treatment.

We share the view of the IBA Working Party. 70 While there is force in the argument that no two parties are equal in every respect (whether it be resources, legal representation or their legal rights and obligations), and it is not for arbitral tribunals to correct natural inequalities, we are of the opinion that the principle of 'equality of arms' is relevant in determining what legal privileges a tribunal should allow. We consider an appropriate adjustment that might be made by a tribunal in part 10 below.

8.6 International enforceability of an award

A further consideration of practical importance for international arbitrators when confronted with a claim of legal privilege is the effect their determination might have on the enforceability of their award.

The New York Convention establishes liberal standards of enforcement. However, a problem could arise if an arbitral tribunal were not to recognise a privilege which, in the country of enforcement, was considered a fundamental substantive right, the disregard of which could be interpreted as a breach of due process or a violation of the public policy (ordre public) of that country.

By raising this issue, we do not wish to imply that legal privileges should be judged to belong to the realm of public policy. But in view of the fundamental importance ascribed to rights of legal privilege in some countries (e.g. comments[Page767:]

of the English courts that attorney-client privilege is a fundamental right protected by the European Convention on Human Rights), this possibility cannot be excluded. Similarly, a failure to respect the principle of 'equality of arms' may constitute a violation of international procedural public policy. 71

9. Choice-of-law analysis: closest connection

As noted in part 8.3 above, legal privileges are, in our opinion, Janus-like, in being both procedural and substantive in character. This means that arbitral tribunals do not have complete discretion in deciding which privileges should apply in any particular case, because they must recognise and give effect to applicable substantive privileges. We are also led to this conclusion by other factors mentioned above, such as the generally recognised value of protected attorney-client communications, and the desirable objective of meeting the parties' expectations that applicable privileges should be recognised. The question then becomes how to determine what privileges should apply.

We advocate a choice-of-law approach. This is the approach taken by the US courts in diversity cases. A rich doctrine and abundant literature has developed on the choice of law in international arbitration. For the purposes of this paper, it suffices to note that, according to the prevalent practice as reflected in almost all leading institutional arbitration rules, arbitrators are granted wide discretion in the method for selecting the appropriate applicable law. They may do so either by reference to national rules, or to general principles of private international law, or by the so-called voie directe, without any reference to specific conflict rules. 72

It appears to us that, in the absence of any other determinative factors such as agreement between the parties, the concept of 'closest connection' is the most appropriate method to be used to determine which rules of legal privilege should apply in a particular case. The closest connection test is now the standard rule in Europe for determining the applicable law, 73 in the absence of an express or implied agreement of the parties, and it corresponds to the 'most significant relationship' test favoured in the United States. 74[Page768:]

A number of possibilities might arise from applying the closest connection rule. In many cases, the various connecting factors will all lead to the same result and will provide an easily identifiable and predictable solution. But reliable answers must also be found in cases where the connecting factors do not coincide.

In cases were the 'closest connection' approach would lead to the application of different privileges for each of the parties or for different categories of documents, we suggest that an adjustment should be made, as further described in part 10 below.

9.1 Lex arbitri

One option would be to conclude that the lex arbitri is most closely connected to procedural aspects of the arbitration and issues of privilege. In our opinion, the problem with this approach is that, first, it does not take account of the substantive aspects of legal privileges and, second, national arbitration laws, as we have seen above, typically do not contain any specific rules on legal privileges.

9.2 Domestic law at the place of arbitration

The tribunal could conclude that the law at the place of arbitration is most closely connected to the arbitration and issues of privilege. Many State courts apply the privileges applicable in the lex fori. This may be on the assumption that privilege rules are procedural in nature, or merely for simplicity's sake. The advantage of this approach is that it results in the application of the same privilege rules to all parties. As noted above, the lex arbitri at the place of arbitration is unlikely to include any rules on privilege. The alternative would be to apply the same rules as are applied in court proceedings. Again, this would not take account of substantive policy aspects of legal privileges. Also, it would come as a surprise to the parties if they were to learn from the arbitrators that, by choosing a place of arbitration for their dispute, they had also chosen the privilege rules applicable in its courts. Parties agree upon a place of arbitration for many reasons, including its neutrality, convenience and/or the mandatory or non-mandatory procedural rules applicable there. Under normal circumstances, it cannot, however, be assumed that their choice of the place of arbitration is in any way influenced by legal privilege rules that may apply to lawyers or parties in the local courts. In view of the substantive nature of legal privilege, the question remains: what link exists between the law of the arbitral situs and the communications between a lawyer and his client, who might both be residents of and acting in other jurisdictions? [Page769:]

9.3 Law governing the dispute

Another approach for an arbitral tribunal to take would be to conclude that the substantive law governing the dispute has the closest connection and apply its privilege rules. A question arises as to the significance of the relationship existing between the law governing the dispute and any rules on privilege. One may, of course, think of a connection between the applicable substantive law and certain aspects of the law on evidence, such as burden of proof. In the case of legal privileges, however, such a link is not evident. On the contrary, there is no reason to believe that contracting parties, when agreeing on a substantive law, gave any thought to the rules of legal privilege under that law or imagined that a future tribunal would find that any such chosen substantive law should also govern their rights to legal privileges. The same lack of a connecting factor between the substantive law and privilege rules exists when the applicable substantive law has to be determined by the tribunal.

9.4 Place where a document is located

One connecting factor that has been suggested is the law of the country where the relevant document is located. Given that documents are often stored 'off-site', and possibly in another country, there might be no link between the place of storage and the transaction in question and/or the location of the client and/ or lawyers and/or the arbitration. And what if multiple copies are stored at different locations? We do not see any merit in this solution.

9.5 Place where a document is created

The place where the document was created may appear, superficially, to have closer links. However, due to advances in modern technology and the fact that lawyers increasingly give advice from laptop or handheld computers while travelling, the place of production may be difficult to determine and/or be wholly unrelated to any aspect of the transaction or advice.

9.6 Domicile of the party claiming privilege

A more predictable connecting factor is the law applicable at the domicile of the party claiming the privilege. This is likely in most cases to give rise to certainty: a person or company usually has only one domicile. It also has the advantage of giving all communications with that organisation the same status. However, in some cases, a real connecting link may still be missing. And it seems illogical to us that all communications between a US company and its in-house counsel in France should have the same privileged status as communications with its US in-house counsel, when the same communication between French in-house counsel and a French company would not be privileged. [Page770:]

9.7 Professional domicile of the lawyer

We consider that an appropriate connecting factor in many cases will be the law applicable at the lawyer's professional domicile (i.e. where he is admitted to practise). Taking into account that privilege rules in many countries are formulated as rules of professional ethics, it appears reasonable in respect of any given document to apply the same rules of privilege to the lawyer and to the client. Both the objectives of certainty in the determination of the applicable law and the harmony of the result derived are thereby served. If the lawyer is working in a jurisdiction other than his 'home' jurisdiction, the confidentiality and privilege rules at the place he practices may also be relevant.

Internationally active commercial parties do business in multiple jurisdictions and make use of the advice of various lawyers operating under differing privilege rules. It is accepted that sophisticated commercial parties may engage in forum shopping, including the choice of lawyers and attached privileges, in order to obtain the distinction they desire between 'secret' and 'non-secret' advice. We suggest, however, that a client's choice of attorney is likely to be influenced by other predominant factors, such as the applicable law, professional experience and expertise, and knowledge of the client's business, so there is unlikely to be much scope for abuse in having the lawyer's professional domicile determine the applicable privileges.

On the basis of the above considerations, we are confident that arbitrators who apply the closest-connection test will be able to meet the parties' expectations when determining which rules of privilege invoked by a party in international arbitration proceedings are prima facie applicable. It also becomes clear, however, that this choice-of-law approach, if applied to each of the parties separately, would result in many cases in the application of different privilege rules to each of the parties involved and/or even to different documents in the possession of one and the same party being treated differently.

10. Proposed arbitration solution: most favourable privilege

In cases where there is a conflict of privileges and the rules differ as significantly as they do between the common law and civil law systems, it does not appear acceptable to us, for practical as well as legal reasons, simply to rely on a choice-of-law analysis and to apply different rules of privilege to different parties. [Page771:]

As can be seen from our review of the law and practice in various legal systems, and the approaches adopted by different institutions, the rules vary considerably. For example: the English courts view privilege as a fundamental and absolute right, applying to external and in-house lawyers; whereas the European Court of Human Rights views it as a qualified right; and the European Court of Justice makes a distinction between, on the one hand, advice from external lawyers based within the European Union and, on the other hand, advice from in-house lawyers and non-European lawyers. The approach in the US Restatement is to deny a claim to privilege if it is not available in either the forum or the home State. The Hague Convention and EC Regulation 1206/2001, however, allow a recipient of a Letter of Request to refuse to give evidence if he can claim privilege under either the law where the request is made (if privilege is specified in the request or has been otherwise confirmed by the requesting authority) or the law where the request is received.

In arriving at an arbitration solution, we consider that the expectations of the parties must be given adequate weight. A common law party expects that its communications with both its external and in-house lawyers will be privileged. A civil law party expects that its communications with its external lawyer will be kept confidential and, while not characterising its communications with its in-house lawyers in the same way, it nevertheless probably does not expect that such communications will be subject to non-voluntary disclosure (although, equally, it can be argued that a well-informed party should have in mind the likely procedures in an international arbitration).

The more limited doctrine of privilege in the civil law needs to be seen, we suggest, in its context. The civil law has not needed to develop the same doctrine as is found in the common law, because the civil law has not developed a general requirement that a party produce documents it does not want to produce. The modern practice in international arbitration, at least where one common law party is involved, is to allow requests for production by each side and some non-voluntary disclosure. Applying civil law doctrines to document production of a common law kind is to do so wholly out of context.

We also consider that in arriving at an arbitration solution, considerable weight must be given to the 'equality of the parties' principle, which is part of procedural public policy. To have common law style non-voluntary disclosure and allow a common law party to claim common law privileges, but to restrict a civil law party to civil law confidentiality rights, would, we suggest, violate the principle of 'equality of arms'. This point was recognised by the IBA Working Party and[Page772:] addressed in Article 9.2(g) of the IBA Rules on the Taking of Evidence in International Commercial Arbitration, pursuant to which the arbitral tribunal may deny disclosure for compelling considerations of fairness and equality.

For greater predictability, we propose that international arbitrators, after determining which privileges may be applicable based on the closest connection test, adopt an approach that allows any party to the arbitration to claim the same legal privileges as are available to any other party. This will generally mean, when a common law party is involved, that a civil law party can claim common law privileges. This will result in the application of the 'most favourable privilege'.

Such an approach is likely to meet, or at least not defeat, the expectations of any of the parties that communications with their lawyers will remain confidential. There can be no doubt that the principle of equal treatment of the parties will thereby be observed. At the same time, the risk of the award encountering difficulties at the enforcement stage, due to privilege issues being viewed differently in other jurisdictions, will as far as possible be avoided.

Admittedly, in certain instances, it may not be easy for arbitrators to determine which particular aspect of an applicable set of privilege rules represents the 'most favourable privilege' to be applied to both parties. The scope of the privilege, related standards of professional ethics, conditions of (partial or complete) waiver, possible inferences to be drawn from the exercise of the privilege right, and other elements need to be considered. Likewise, the interrelationship between such rules and applicable standards of fact finding, in particular standards of required document production, needs to be examined. The arbitrator's task is not to apply mechanically those rules of privilege found to be applicable that can be considered to provide best protection, but rather to create a coherent amalgam of the rules applicable in each instance so as to provide a functionally workable system of best protection that correlates with the other evidentiary rules adopted.

We accept that this 'most favourable privilege' approach is likely to create a high degree of privilege protection, especially if a common law party is involved. Tribunals are generally sceptical concerning a party's stated reasons as to why it cannot produce what appears to be relevant evidence. And in the case of privileged documents, a tribunal has limited means of testing whether a document is truly privileged or not, unless it reviews the document, which may defeat the point of asserting privilege (or the tribunal appoints a third party[Page773:] assessor). Accordingly, international arbitrators adopting this approach will be limiting the opportunity to establish all the facts, and thereby the truth. However, arbitral tribunals do not generally have the power to force a party to disclose evidence: 75 they may only draw adverse inferences if evidence ordered to be disclosed is not disclosed. Where a claim of legal privilege over a document is accepted, the tribunal should not draw any adverse inference from nondisclosure of that document. In both the common law and civil law systems, the courts do not generally see attorney-client communications and attorney work product, and do not make adverse inferences as to its contents. The adoption of a 'most favourable privilege' approach would not, in our opinion, frustrate the search for the truth, but it is merely an acknowledgment that the parties should be treated equally and that the confidentiality attaching to lawyers' communications and documents should generally be respected.

With the increasing harmonisation of many aspects of arbitral procedure, combining elements from the common law and the civil law, there is much to be said for having an autonomous set of privilege rules in international arbitration. This would be the best means of achieving predictability and equality of arms for parties in the arbitral process. The work of the ALI/UNIDROIT Working Group shows, however, how difficult it is to draft transnational rules. In the meantime, tribunals must seek to grapple with conflict of privileges with cultural sensitivity and common sense. [Page774:]

1
For previous articles on this topic, see e.g. J.H. Rubinstein & B.B. Guerrina, 'The Attorney-Client Privilege and International Arbitration' (2001) 18 J. Int. Arb. 587; R.M. Mosk & T. Ginsburg, 'Evidentiary Privileges in International Arbitration' (2001) 50 ICLQ 345; N. Gallagher, 'Legal Privilege in International Arbitration' [2003] Int. A.L.R. 45.

2
For a summary of the history of legal privileges, see e.g. G. C. Hazard, 'An Historical Perspective on the Attorney-Client Privilege' (1978) 66 Calif. L. Rev. 1061.

3
For a review of this topic, see e.g. J.A. Fry, 'Without Prejudice and Confidential Communications in International Arbitration [When does Procedural Flexibility Erode Public Policy?]' [1998] Int. A.L.R. 209.

4
We are concerned here with legal privileges in the context of civil proceedings. Legal privileges play an important role in criminal, administrative and regulatory proceedings as well.

5
We have chosen England, the United States, Germany and France as leading examples of the varying practices in common law and civil law systems. We would have liked to include Switzerland, because it is Dr Briner's home jurisdiction and because Switzerland is beyond any doubt an important place of international commercial arbitration. We have not included it in this review principally because the authors are not in a position to comment authoritatively on that jurisdiction. For Swiss law and practice, see e.g. the detailed study by B.F. Meyer-Hauser, Anwaltsgeheimnis und Schiedsgericht (Zurich: Schulthess, 2004).

6
See also the recent comparative study, Regulated Legal Professionals and Professional Privilege within the European Union, the European Economic Area and Switzerland, and Certain Other European Jurisdictions, a report by John Fish for the Council of Bars and Law Societies of Europe (CCBE, 2004).

7
Civil Procedure Rules ('C.P.R.') 31.5 and 31.6. This is referred to as 'standard disclosure'. The Court may also order 'specific disclosure' of certain documents or categories of documents (C.P.R. 31.12). Prior to the coming into force of the C.P.R., the scope of a party's disclosure obligation was somewhat wider; see Rules of the Supreme Court 1965 Ord. 24, rr. 1-2, referred to as the Peruvian Guano test after Compagnie Financiere du Pacifique v. Peruvian Guano Co. (1882) 11 Q.B.D. 55 at 63 (C.A.). See P. Matthews & H.M. Malek, Disclosure, 2d ed. (London: Sweet & Maxwell, 2000).

8
See e.g. C.P.R. 31.20 and Glossary.

9
See Civil Procedure ('The White Book') (London: Sweet & Maxwell, 2004), paras. 31.3.5-31.3.30; Phipson on Evidence, 15th ed. (London: Sweet & Maxwell, 2000, and Third Supplement, 2003), c. 20; A. Zuckerman, Civil Procedure (London: LexisNexis, 2003), c. 15; C. Hollander, Documentary Evidence, 8th ed. (London: Sweet & Maxwell, 2003), c. 12 and 13; Halsbury's Laws of England, 4th ed. (London: Reissue, 2001) vol. 37, paras. 570-584; J. Auburn, Legal Professional Privilege (Oxford: Hart, 2000); C. Passmore, Privilege (Birmingham: CLT Professional Publishing, 1998).

10
See The White Book, supra note 9, para. 31.3.16; and e.g. the decision of the Australian Federal Court in Kennedy v. Wallace [2004] FCAFC 337 at paras. 198-215.

11
Reg. v. Derby Magistrates' Court, ex p. B [1996] 1 A.C. 487 (H.L.) at 507.

12
Three Rivers District Council & Ors v. Governor & Company of the Bank of England (No. 10) [2004] 3 W.L.R. 1274 (H.L.). The House of Lords held that legal advice privilege was not limited to telling the client the law, but included advice as to what should prudently and sensibly be done in the relevant legal context.

13
Ibid., para. 25.

14
Privilege only protects legitimate and lawful communications. Thus, for example, communications with a lawyer made in furtherance of a crime or in the commission of a fraud would not be privileged.

15
Clear statutory language is required to override legal privilege; see R. (Morgan Grenfell) v. Special Commissioners of Income Tax [2003] 1 A.C. 563 (H.L.), and Bowman v. Fels, The Times Law Report, 14 March 2005 (C.A.).

16
Parry-Jones v. Law Society [1969] 1 Ch. 1 (C.A.). Legal privilege is generally regarded as primarily a rule of immunity (i.e. an excuse to refuse compulsory disclosure) and not of admissibility.

17
General Mediterranean Holding SA v. Patel [2000] 1 W.L.R. 272 (H.C.); Medcalf v. Mardell [2003] 1 A.C. 120 (H.L.); R. (Morgan Grenfell) v. Special Commissioners of Income Tax [2003] 1 A.C. 563 (H.L.); B. v. Auckland District Law Society [2003] 3 W.L.R. 859 (P.C.). See Phipson, supra note 9, para. 20-01; A. Zuckerman, supra note 9, para. 15.1; C. Hollander, supra note 9, paras. 12-03-12-15.

18
Three Rivers, supra note 12, para. 26.

19
See e.g. C. Hollander, supra note 9, c. 25.

20
See Lord Mustill & S.C. Boyd, Commercial Arbitration: 2001 Companion Volume to the Second Edition (London: Butterworths, 2001) at 322.

21
And the courts will rarely interfere with the tribunal's discretion, Biakh v. Hyundai [1988] 1 Lloyd's Rep 187.

22
See e.g. the discussion of the applicable law and conflict of privileges in arbitration under the Bermuda Form in R. Jacobs, L.S. Masters & P. Stanley, Liability Insurance in International Arbitration (Oxford: Hart, 2004) at 313-16.

23
See Federal Rule of Civil Procedure 26(b)(1) ('Fed.R.Civ.P.'), which provides that 'parties may obtain discovery of any matter, not privileged, that is relative to the claim or defence of any party'.

24
See Fed.R.Civ.P. 26(b)(1) quoted supra note 23, which acknowledges an exception for privileged matters, and Fed.R.Civ.P. 26(b)(5), which provides that a party may withhold information otherwise discoverable on the grounds that it is privileged or subject to protection as trial preparation material; Federal Rule of Evidence 501; J.B. Weinstein & M.A. Berger, Weinstein's Federal Evidence, 2d ed. (New York: Matthew Bender, loose-leaf, updated); S.C. Yeazell, Civil Procedure, 6th ed. (New York: Aspen, 1996); C.A. Wright & A.R. Miller, Federal Practice and Procedure: Civil, 2d ed. (St. Paul: West, 1982, updated annually).

25
See e.g. New York Civil Practice Law and Rules, § 4503; J.B. Weinstein et al., New York Civil Practice: CPLR, 2d ed. (New York: Matthew Bender, loose-leaf, updated).

26
See e.g. authorities cited supra note 24, and E.S. Epstein, The Attorney-Client Privilege and the Work-Product Doctrine, 4th ed. (Chicago: American Bar Association, 2001); J.H. Wigmore & J.T. McNaughton, Evidence in Trials at Common Law (Boston: Little, Brown & Co., 1961, updated); J.W. Strong et al., McCormick's Hornbook on Evidence, 5th ed. (St. Paul: West, 1999).

27
See e.g. Dudley, 'Federalism and the Federal Rule of Evidence 501: Privilege and Vertical Choice of Law' (1994) 82 Geo. L.J. 1781.

28
It has been suggested that the reason for this distinction is that Rule 501 of the Federal Rules of Evidence requires that the privilege law of the forum State be applied, but is silent as to what law applies to issues of work product doctrine. See E.S. Epstein, supra note 26 at 464.

29
See e.g. S. Bradford, 'Conflict of Laws and the Attorney-Client Privilege', (1991) 52 U. Pitt. L. Rev. 909 at 915.

30
American Law Institute (St Paul: ALI, 1971).

31
S. Bradford, supra note 29.

32
See e.g. R.M. Mosk & T. Ginsberg, supra note 1 at 370; C.F. Dugan, 'Foreign Privileges in United States Discovery Proceedings' (1996) 5 J. Int'l L. & Prac. 33; K. Riechenberg, 'The Recognition of Foreign Privileges in United Sates Discovery Proceedings' (1988) 9 Nw. J. Int'l L. & Bus. 80.

33
See e.g. G. Born, International Commercial Arbitration, Commentary and Materials, 2d ed. (The Hague: Kluwer Law International, 2001) at 490.

34
P. Schlosser, 'Die lange deutsche Reise in die prozessuale Moderne', JZ 1991, 599; Bundesgerichtshof, NJW 1991, 3151.

35
As part of the 2002 reform of civil procedure, the courts' authority was widened to include the power to order parties or third persons to produce relevant documents to which a party has referred in its written submissions (Code of Civil Procedure, § 142(1)). However, it is unlikely that legal advice would be specifically referred to in submissions. If a requested document is not produced, the court cannot subpoena it, but only draw an unfavourable inference. In any event, according to the prevailing opinion of legal commentators, the judge is expected to respect the concerned party's legitimate interests in protecting confidential information, which includes business secrets and legal advice. See e.g. J. Zekoll & J. Bolt, 'Die Pflicht zur Vorlage von Urkunden im Zivilprozess - Amerikanische Verhältnisse in Deutschland?' NJW 2002, 3129; R. Greger, 'Zweifelsfragen und erste Entscheidungen zur neuen ZPO' NJW 2002, 3050; Gerber & Kießling, 'Die Vorlagepflichten der §§ 142 ff. ZPO nach der Reform 2002' ZZP 2003, 318.

36
In criminal matters, however, a party has this right according to the principle nemo tenetur se ipse accusare.

37
Federal Lawyers Act § 43 a; Criminal Code § 203.

38
Code of Civil Procedure § 383(I)(6), entitles a lawyer to refuse to give evidence about anything that becomes known to him during the exercise of his profession; see e.g. R. Greger in R. Zöller, Zivilprozessordnung, (Köln: O. Schmidt, 2004) at § 385.

39
Criminal Code § 203(I)(3).

40
Roxin, 'Das Zeugnisverweigerungsrecht des Syndikusanwalts', NJW 1992, 1136; H. Alfes, Das Anwaltsgeheimnis des Syndikusanwalts und des fest angestellten Unternehmensjuristen (Heidelberg: Recht und Wirtschaft, 1999) at 126.

41
Bundesgerichtshof, NJW 1999, 1715-16.

42
Hassemer, 'Das Zeugnisverweigerungsrecht des Syndikusanwalts', Wistra 1986, 1.

43
Code of Criminal Procedure, § 97.

44
§§ 1025ff.

45
J.-P. Lachmann, Handbuch für die Schiedsgerichtspraxis, 2d ed. (Köln: O. Schmidt, 2002) at 238. G. Wagner, 'Germany' in F.-B. Weigand, ed., Practitioner's Handbook on International Arbitration (Munich: Beck, 2002) at 762-63.

46
Cass. civ. 1re, 21 July 1987, Bull. Civ. I, n°248; Gaz. Pal. 1988.1.322. For an example involving an avocat, see also Trib. gr. inst. Chalons-sur-Marne, 16 November 1972, Gaz. Pal. 1973.1.162.

47
Article 160 of Decree dated 27 November 1991, Article 66-15 of Law dated 31 December 1971 (modified by Law dated 7 April 1977), Article 226-13 of the Criminal Code, and Articles 2.1 and 2.2 of the Règlement intérieur du Barreau de Paris ('RIBP') regarding secret professionnel (i.e. information and documents communicated within the lawyer-client relationship). See generally e.g. R. Martin, Déontologie de l'avocat (Paris: Litec, 2004); A. Damien & H. Ader, Règles de la profession d'avocat (Paris: Dalloz, 2004).

48
Article 6.1 of Directive 98/5/CE of 16 February 1998 and Directive 77/249/CEE of 22 March 1977. See e.g. Article 20 of the RIBP, which addresses communications between members of the Paris Bar and lawyers from other EC States.

49
It is worth mentioning that a debate on this issue has started in France, but no major change is expected in the near future.

50
See e.g. Cass crim, 8 November 2000, J.C.P. 2001.IV.1455.

51
See e.g. Campbell v. UK (1992) 15 E.H.R.R. 137, Foxley v. UK (2000) 31 E.H.R.R. 637.

52
See e.g. C. Hollander, supra note 9, paras. 7-01-7-14 and 12-13-12-15.

53
AM&S Europe Ltd v. Commission, Case 155/79, dated 18 May 1982, [1982] E.C.R. 01575. It isnotable that the UK government intervened in support of AM&S, and the French government intervened in support of the Commission.

54
See e.g. statement of the CCBE, which intervened in the case, at <ww.ccbe.org>; statement of the European Company Lawyers Association at <www.ecla.org/privilege.htm>; Kolvenbach, 'Die Rechtstellung der Syndikusanwälte in der Europäischen Gemeinschaft', AnwBl 1987, 211; Fischer & Iliopoulos, 'Die Sicherung der Vertraulichkeit der Anwaltskorrespondenz im kartellrechtlichen Nachprüfungsverfahren', NJW 1983, 1031; statement of the Bundesverband der deutschen Industrie (BDI) on the modernisation of European antitrust law, 19 January 2001, at <www.bdi-online.de>.

55
Joined cases T-125/03 R and T-253/03 R, dated 30 October 2003, [2003] E.C.R. II 04771.

56
See e.g. ICC case 7626 of 1995, (1997) XXII Y.B. Comm. Arb. 132 at 135. The Indian claimant sought to exclude certain diaries, relying on the Indian Evidence Act. The tribunal stated: 'This is an international arbitration procedure. The strict rules of evidence, as they apply in England where the Tribunal is sitting, or in India, do not apply. In accordance with the power given to the arbitrators in the Terms of Reference, and under the ICC Rules, the Tribunal has the right to determine whether and what evidence shall be admitted.'

57
Article 24.3.

58
[2000] Business Law International 14 at 33.

59
H. Raeschke-Kessler, 'The Production of Documents in International Arbitration - A Commentaryon Article 3 of the New IBA Rules of Evidence' (2002) 18 Arbitration International 411 at 427.

60
Supra note 58 at 34. Documents that might be considered to be privileged within one national legal system may not be considered to be privileged within another. If this situation were to create an unfairness, the arbitral tribunal may exclude production of the technically non-privileged documents pursuant to this provision.

61
Supra note 59 at 428.

62
Available at <www.unidroit.org/english/principles/civilprocedure/ali-unidroit principles-e.pdf>.

63
Article 24.2.

64
See also the 1975 Inter-American Convention on the Taking of Evidence Abroad, Article 12.

65
For the common law, see e.g. L. Collins et al., eds., Dicey and Morris on the Conflict of Laws, 13thed. (London: Sweet & Maxwell, 2000) at paras. 7-014-7-030.

66
For a detailed discussion, see D. Coester-Waltjen, Internationales Beweisrecht (Ebelsbach: RolfGremer, 1983) at 391ff. See also J. Kropholler, Internationales Privatrecht, 5th ed. (Tübingen: MohrSiebeck, 2004) at 578.

67
H. Hart & H. Wechsler, The Federal Courts and the Federal System (1953) 634, as quoted byJ.B. Weinstein, 'Recognition in the United States of the Privileges of Another Jurisdiction' (1956)56 Colum. L. Rev. 535 at 545, n. 54.

68
See e.g. E. Gaillard & J. Savage, eds., Fouchard, Gaillard, Goldman On International Commercial Arbitration (The Hague: Kluwer Law International, 1999) at para. 791, referring to Fougerrolle v. Procofrance, 25 May 1990 (Paris Court of Appeal), and also para. 1654.

69
See e.g. Dombo Beheer BV v. Netherlands (1994) 18 E.H.R.R. 213.

70
See part 5, above.

71
See part 8.5, above.

72
The voie directe is available to the arbitral tribunal, e.g. pursuant to Article 17(1) of the ICC Rules of Arbitration.

73
1980 Rome Convention on the Law Applicable to Contractual Obligations, Article 4(1).

74
American Law Institute, Restatement of Law, Second, Conflict of Laws (St Paul: ALI, 1971) § 188.

75
The English Arbitration Act 1996, s. 43, allows a party to apply to the court for an order compelling a witness to provide oral evidence or produce documents.