'Discovery', in the US sense, is a dirty word in international arbitration. Indeed, the very first of the guiding principles adopted by the IBA Working Group in formulating rules for the production of documents in the 1999 IBA Rules on the Taking of Evidence in International Commercial Arbitration ('IBA Rules') was:

There shall be no US-style pre-trial discovery. Excluded from the beginning are also so-called 'fishing expeditions'. Pre-trial discovery and fishing expeditions by one party against another are out of place in international arbitration.2

Suffice it to say that US document production procedures have rarely been viewed as a model for wholesale adoption in international arbitration. Neither, however, can the benefits of US-style document discovery, in terms of truth-finding in particular, be entirely disregarded. The question addressed in this paper is whether and how those document production and discovery procedures, as used by North American courts and arbitrators, can be adapted to achieve greater efficiency in document production in international arbitration without unduly sacrificing the benefits they confer.

The first part of the paper explores the extent to which US document procedures are even appropriate for consideration for adaptation in the international arbitration context. The second part of the paper suggests document production procedures for international arbitration that reap the benefits while avoiding the pitfalls of US-style document discovery.

I. The US approach to document production

To determine whether and to what extent US document procedures are appropriate for consideration in the international arbitration context, it is useful to examine: (i) the fundamental objectives that document production is designed to serve in the United States and in international arbitration, (ii) the guiding procedural principles adopted to achieve those objectives, (iii) the actual procedures used to achieve those objectives consistent with those principles in the United States, and (iv) the primary problems with US document discovery that has made it such anathema to the international arbitration community. [Page94:]

(i) Objectives of document procedures

The principal purposes that document production is designed to serve in the United States are: (a) to present documentary evidence in a party's possession that supports that party's position in the dispute (the 'case presentation' objective); (b) to afford each party adequate notice of the documentary evidence that the other party intends to rely on in order to avoid surprise at trial or hearing (the 'surprise avoidance' objective); and (c) to provide parties with access to relevant documents not in their possession (the 'truth finding' objective). These objectives appear broadly consistent with the objectives of document production in international arbitration. While the focus of document production in international arbitration is perhaps on the case presentation and surprise avoidance objectives,3 the truth-finding function of disclosure of adverse evidence in the other party's possession is also increasingly recognized as an important objective of document production in international arbitration.4

(ii) Guiding procedural principles

Rule 1 of the Federal Rules of Civil Procedure-which applies to all procedures, including document production, in US district courts-dictates that all procedures are to be conducted in a 'just, speedy, and inexpensive' manner. Justice is frequently equated with accuracy of result and efficiency with the time and expense of achieving that result. Again, these guiding principles of fairness and efficiency are broadly consistent with those of international arbitration.5

(iii) US document procedures

Rule 26 of the Federal Rules of Civil Procedure authorizes parties, without judicial intervention, to 'obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party' of the lawsuit, so long as it is reasonably calculated to lead to the discovery of admissible evidence. Typically, document discovery occurs after the parties have exchanged their initial skeletal notice pleadings, which outline the parties' claims and defenses without providing substantial accompanying evidence or argument, but before any substantial briefing or trial occurs. The document request, objection and production process is carried out largely by the parties themselves without judicial involvement or intervention; the judge only gets involved if and when necessary to resolve a dispute about document requests that the parties have been unable to resolve amongst themselves. Document production is generally completed before trial-or, as the case may be, before a motion for summary judgment is made to avoid the need for trial-and each party presents those documents on which it seeks to rely (whether obtained from its own custody or from the adverse party in the discovery process) at trial to the judge and/or jury. The document production process in US domestic arbitrations often follows a similar pattern.6 Proponents of the broad US document discovery regime maintain that it is necessary to ensure equal access to information and accuracy of results.

(iv) Problems with US approach

Critics, however, maintain that the US document discovery regime, in practice, is time-consuming, wasteful, expensive, intrusive and often misused as a club rather than as a truth-finding technique. The broad scope of permissible discovery coupled with the relative absence of judicial involvement in the process account, in large part, for these abuses of the document discovery process. Moreover, when the judge [Page95:] is asked to intervene in the process-typically, by means of a motion to compel the production of documents that have been requested by one party but refused by the other-the judge will have little prior knowledge of the case since only skeletal initial pleadings have been submitted by the parties. The judge, therefore, is not optimally positioned to rule on the relevance or necessity of the documents requested or, more generally, to control the document discovery process. It is largely for these reasons that the IBA Working Group concluded that US-style document discovery is 'out of place in international arbitration'.7 While arbitration in the United States is touted as a speedier and less expensive alternative to litigation, many of these problems are, in fact, exacerbated in US domestic arbitrations where arbitrators frequently permit excess document discovery for fear of a due process challenge to the ultimate award if such discovery is later deemed by a reviewing court to be necessary for the just resolution of the dispute.

II. Towards greater efficiency in international arbitration

Document production procedures used in international arbitration often combine elements of civil law and common law procedures. The Foreword to the IBA Rules specifically states that the Rules are intended to 'reflect procedures in use in many different legal systems'. In this author's view, the balancing of civil law and common law elements achieved in the IBA Rules is generally good, but imperfect and incomplete in certain respects. The IBA Rules provide neither the broad right to full US-style discovery nor the prohibition of any compelled production not affirmatively granted by substantive law in civil law jurisdictions. Rather, the IBA Rules realize the case presentation and surprise avoidance functions of document production by requiring production of all documents on which the parties intend to rely. They also realize the truth finding function of document production to the extent the requested documents sought to be compelled from the adverse party appear likely to bear materially on the disposition of the case. The IBA Rules, however, do not address certain important timing aspects of document production, and require greater involvement by the arbitral tribunal in the process than is necessary to achieve its ends.

The following suggests document production procedures designed to serve the fundamental objectives of document production consistent with the basic procedural principles of fairness and efficiency. Those procedures include procedures governing (i) the disclosure of documents in a party's possession that it intends to rely on to support its case, (ii) the compelled production of relevant documents from an adverse party, (iii) the production of documents by non-parties to the arbitration, (iv) the eventuality of document requests on the arbitral tribunal's own initiative, (v) the evidentiary and privilege rules to be applied to document production, and (vi) means to enforce document production obligations.

(i) Documents in a party's possession

As noted above, in US litigation a party may be required to produce all documents in its possession even arguably relevant to the dispute, but is generally not required, prior to trial or hearing, to identify which of those documents it intends [Page96:] to rely on in order to present its case. The surprise avoidance function of document production is served to the extent that the requesting party is provided with all documents that the producing party may conceivably rely on to present its case, but that objective is served imperfectly insofar as the receiving party does not know which of the volume of documents the producing party actually intends to rely on. In international arbitration, by contrast, parties generally are not (and should not be) required to provide broad or automatic disclosure of all relevant documents in their possession,8 but are required instead to disclose which documents in their possession they intend to rely on to prove their case.

In that regard, Article 3(1) of the IBA Rules states: 'Within the time ordered by the Arbitral Tribunal, each Party shall submit to the Arbitral Tribunal and to the other Parties all documents available to it on which it relies, including public documents and those in the public domain, except for any documents that have already been submitted by another Party.' The IBA Rule does not specify when or how the documents to be relied on are to be submitted. It is generally good practice to require that the parties submit the documents on which they intend to rely as exhibits to their written pleadings. The advantages of this approach are twofold: (i) the written pleadings provide the context necessary for the arbitral tribunal and other parties to appreciate the relevance of the documents submitted, and (ii) it tends to curb the growing tendency of parties to try to 'flood' the tribunal and other parties with voluminous documents that it does not actually intend to rely on to present its case. If the arbitral procedures contemplate reply and sur-reply written pleadings, further reply and sur-reply documents to be relied on may be submitted with those pleadings.9 Such reply and sur-reply submissions should be limited to documents relevant and necessary to address issues raised in the initial round of written submissions, and should not be used to 'sandbag' the tribunal and parties with documents that could and should have been submitted in the initial round of document submissions.

Linking the documents submitted to the written pleadings may also help serve a further surprise avoidance function. As noted above, IBA Article 3(1) does not require that a party submit any documents on which it intends to rely if those documents have already been submitted by another party. Thus, a party who has submitted a document will not know whether the other party also intends also to rely on that document unless such reliance is disclosed in a written pleading.

(ii) Documents in the possession of the opposing party

Unlike in US civil procedure, where a party may request, and the opposing party may be compelled to produce, any potentially relevant document from the opposing party's files, in international arbitration a party seeking to obtain documents from its adversary is ordinarily limited to requesting and receiving specifically identified documents, or narrow and specific categories of documents, that are reasonably believed to exist and that are relevant and material to the issues in dispute. International arbitration procedure thereby combines the general authority to compel production of adverse documents found in US civil procedure with the requirements of civil law procedure that the documents to be produced be identified with particularity and bear materially on the issues to be resolved. This is the approach adopted by the IBA Rules in Article 3(2)-(9). Significantly, documents whose production may be compelled include purely internal memoranda and documents of the requested party, which would be beyond the scope of compelled production under some civil law procedural systems.[Page97:]

The IBA Rules leave the timing of the document request process to the arbitral tribunal. The most efficient practice is ordinarily to provide for document requests subsequent to the submission of the initial written pleadings. Thus, if the claimant and respondent make simultaneous initial written submissions, each side may subsequently request the other to produce documents in its possession relevant to the issues raised in the requested party's written submissions but not introduced as evidence along with those written submissions. If the written pleadings are sequential, the respondent will ordinarily be required to submit its request for documents once the claimant has submitted its written pleadings, and may include any produced documents as exhibits to the respondent's answering written pleadings. The claimant, in turn, will submit its request for documents after having received the respondent's answering written submissions.10 The practical advantage of this approach is that it focusses the parties' respective document requests on the specific issues raised by the other party in its written pleadings. If, on the other hand, the document request process occurs prior to the parties' submissions of their respective written pleadings, each side is in the position of having to predict what issues and arguments the other side will make in support of its case, which tends unnecessarily to broaden the scope of the document requests. Moreover, the parties are less likely needlessly to waste time in the document production process if the time for making and responding to document requests runs concurrently with the parties' time to submit answering or reply written pleadings. Finally, a significant advantage of having document requests after the parties' respective written pleadings is that, with the benefit of those written pleadings, the arbitral tribunal will be sufficiently educated about the issues in dispute to make informed rulings on the parties' respective requests for documents.

As to the form of the document requests and mechanics of the document request process, simpler is generally better. The document requests should be addressed to the party from whom documents are requested, and copied to the arbitral tribunal. The reason for having the document requests copied to the arbitral tribunal is to create a disincentive for the requesting party to make unreasonable document requests: if the requesting party knows that the arbitral tribunal will see its document requests, it will be less likely to make unreasonable requests.11

The document request itself need not abide by any strict formalities, but should simply identify the specific documents or narrowly identified categories of documents that are sought. Ordinarily, the relevance of the documents requested will be obvious to a party from whom those documents are sought, but it may be useful to have each document request refer to the specific issue raised in the requested party's written pleadings to which those documents allegedly relate. In that connection, the requirements of Article 3(3) of the IBA Rules that the document requests include 'a description of how the documents requested are relevant and material to the outcome of the case', state that the documents requested are not in the requesting party's possession, and explain why the requesting party assumes the documents are in the requested party's possession may be excessively burdensome and unnecessary in the ordinary case.

Within the time agreed by the parties and/or ordered by the tribunal, the requested party shall either produce the requested documents to the requesting party or object in writing to the document request (or to the objectionable part of the document request). The cover letter producing the requested documents and making any objections should be copied to the tribunal, but a copy of the produced documents need not also be provided to the tribunal at this time.12 The [Page98:] documents produced need not also be submitted to the arbitral tribunal because it will not yet have been established that either party intends to rely on any of the produced documents to support its case in the arbitration. Thus, no useful function is served by having the tribunal receive or review any of the produced documents at this time (other than, perhaps, notifying the tribunal of the general volume of documents produced). As for the objections, they should be addressed to the party requesting the documents, and need only be copied to the tribunal as a disincentive for the objecting party to make unreasonable objections. The parties should be required first to confer amongst themselves in an effort to resolve any outstanding disputes about the requested documents prior to requesting the intervention of the tribunal to resolve such disputes.

It should ordinarily be for the party who requests documents that have been refused by the other party to raise the issue with the tribunal in order to obtain an instruction or order compelling production of the requested documents. The requesting party's application to the tribunal, copied to the requested party, should identify the specific documents or category of documents sought and explain why those documents are relevant and necessary to the determination of the case. The requested party may oppose compelled production of those documents on the grounds of lack of relevance or materiality, legal privilege, unreasonable burden, loss or destruction of the document, commercial or technical confidentiality, special political or institutional sensitivity, or other general considerations of fairness and equality of the parties.13 The tribunal will ordinarily issue its decision on the request to compel documents by means of a procedural order after having given both parties an opportunity to state their positions, either in writing or at a procedural hearing. Because a procedural order is not an interim or partial award, it should not, in most jurisdictions, be subject to judicial review by a national court.14

(iii) Documents in the possession of non-parties

An arbitral tribunal generally does not have authority to compel a third party that is not a party to the arbitration to produce documents requested by one of the parties, since the tribunal derives its authority exclusively from the consent of the parties appearing before it. Some national laws, including the Federal Arbitration Act in the United States, give arbitrators authority to subpoena documents (and other evidence) from a non-party within the jurisdiction in which the tribunal sits.15 When the non-party is located in a jurisdiction other than the place of arbitration, however, recourse must be made to the courts of that jurisdiction. Whether those courts will render assistance depends on the local law.16 If, as in the United States, national law authorizes the parties themselves (as opposed to arbitrators) to subpoena or otherwise seek documents from non-parties for use in the arbitration, it nevertheless remains best practice to require that a party seeking production of documents from a non-party obtain the tribunal's prior approval before doing so. This will ensure the arbitral tribunal's primary authority over the conduct of the proceedings generally, and over the document production process specifically.

(iv) Documents requested by the tribunal

The parties will ordinarily take the lead in initiating document requests. Since it is ultimately up to the tribunal to decide the merits of the dispute, however, the tribunal retains authority to request and/or order, on its own initiative, a party to produce documents that have not been requested by either party or submitted as [Page99:] evidence in the proceedings.17 This should ordinarily be a rare occurrence, and the parties should be given an opportunity to raise objections and otherwise be heard with respect to the tribunal's requests.

(v) Document production evidentiary rules

While national evidentiary rules governing the admissibility, relevance and materiality of documentary evidence ordinarily will not apply, and institutional and ad hoc arbitration rules rarely prescribe evidentiary rules in any detail, certain best practices should ordinarily be followed:

Copies. It is sufficient that copies of documents, rather than the originals, be produced, unless the receiving party raises a specific objection to the authenticity, or conformity of the copy to the original, in which case the tribunal may order that the original be produced for inspection.18

Confidentiality. Unless the applicable arbitration rules provide satisfactory confidentiality provisions, the parties and arbitrators should take the necessary steps, by way of a stipulation or order, to preserve the confidentiality of the documents produced and limit their use to the arbitration.19

Admissibility and relevance. The arbitral tribunal itself determines the admissibility, relevance, materiality and weight of any documents produced by the parties. In that connection, the tribunal may exclude from production or evidence any document that it deems to lack sufficient relevance, be protected by privilege, be unreasonably burdensome to produce, or be protected by special confidentiality. Where necessary to avoid tainting the tribunal with potentially prejudicial information, the tribunal may appoint a neutral expert to review documents whose production or admissibility is challenged in order to determine whether the documents should be produced and/or admitted into evidence notwithstanding a challenge on relevance, privilege or confidentiality grounds. That neutral expert would ordinarily not forward the document in question to the requesting party or the arbitral tribunal until he or she has determined that the document should be producible and admissible.

Privileges. Many arbitration rules indicate that the tribunal should take into account legal privileges, but few if any state which legal rules shall govern the existence, scope and applicability of such legal privileges.20 The issue may be particularly acute in international arbitration where, for instance, a US party may claim attorney-client privilege with respect to its communications with its in-house counsel while its foreign civil law adversary can claim no similar privilege under applicable foreign laws with respect to communications with its in-house counsel. Under those circumstances, it may be fair and practical to apply the most protective of the potentially applicable legal privileges to both parties in order to ensure fair and equal treatment of the parties.

(vi) Enforcement issues

As noted above, if the tribunal determines that a party should produce certain documents, it may request or order the party to produce those documents. If a party nevertheless refuses to produce the documents, the tribunal may indicate to the refusing party that its refusal to produce the documents may warrant an inference that those documents would be adverse to the interests of that party. Under certain arbitration rules, the tribunal is also expressly authorized to take a party's refusal to produce the ordered documents into account in allocating the [Page100:] costs of the arbitration in its final award.21 Where the documents are in the possession of a non-party, recourse to the courts with jurisdiction over that non-party will be required to impose and enforce any production obligations.

Conclusion

Semantics aside, document 'discovery', in its limited international arbitration sense, is here to stay. The hallmarks of document production in international arbitration are (i) the case presentation and surprise avoidance practice of producing up-front all documents on which each party intends to present its case, and (ii) the truth finding practice of allowing limited and focused 'discovery' of relevant and material documents in an adverse party's possession. It is through those practices that international arbitration can achieve both greater efficiency and greater justice than currently achieved in North American civil procedure and domestic arbitration practice.

1
While the author has been asked to address the 'North American' viewpoint on document procedures in international arbitration, this paper reflects primarily the US viewpoint of the author.

2
H. Raeschke-Kessler, 'The Production of Documents in International Arbitration - a Commentary on Art. 3 of the New IBA-Rules of Evidence' in Law of International Business and Dispute Settlement in the 21st Century: Liber Amicorum Karl-Heinz Böckstiegel (Cologne: Heymanns, 2001) 641 at 644.

3
For example, the IBA Rules state that 'the taking of evidence shall be conducted on the principle that each Party shall be entitled to know, reasonably in advance of any Evidentiary Hearing, the evidence on which the other Parties rely' (Preamble, para. 4), without mentioning the truth-finding function of the production of adverse evidence. The fact, however, that Article 3(2)-(8) of the IBA Rules provides for the production of evidence from an adverse party demonstrates that the discovery of adverse evidence is a recognized function of document production in international arbitration.

4
The lesser emphasis placed on the compelled production of adverse evidence in international arbitration reflects the civil law influence. Speaking very generally, under civil law procedures parties are generally required to disclose the evidence on which they intend to rely (and ordinarily do so in their pleadings), but must produce requested adverse evidence only in narrowly-defined circumstances-e.g. only if their adversary has a substantive right to production, the party seeking production has identified the documents to be produced with particularity and demonstrated their importance to the case, and no privileges apply. Several theories may explain the difference between the common law and civil law approaches to compelling adverse evidence: (i) civil law simply strikes a different balance in the competing values of accuracy of decisions and protection of personal and business privacy; (ii) the difference between the civil law 'dispute resolution' concept of civil procedure and the common law 'social ordering' concept of civil procedure; (iii) the civil law notion that by assisting a party in obtaining adverse evidence from another party, the court violates its duty of neutrality as between the parties; (iv) the code form of substantive civil law places less emphasis on factual detail that discovery might unearth than does the case law form of substantive law in the United States; and (v) civil law relies on different procedures (e.g. pleadings, court-appointed experts) to perform the functions that US discovery performs.

5
See generally J. Paulsson, 'Overview of Methods of Presenting Evidence in Different Legal Systems' in Planning Efficient Arbitration Proceedings, ICCA XIIth International Arbitration Congress, Vienna, 3-6 November 1994, ICCA Congress Series No. 7 (Kluwer Law International, 1996) 112 at 115-17 (identifying fairness and controlling costs as overriding principles in presenting evidence).

6
See, in the present publication, L.B. Kimmelman & D.C. MacGrath, 'Document Production in the United States', p. 43ff.

7
See supra note 2.

8
Compare M. Hunter, 'Modern Trends in the Presentation of Evidence in International Commercial Arbitration' (1992) 3 The American Review of International Arbitration 204 at 206 (no automatic general discovery in international arbitration) with H. Smit, 'Roles of the Arbitral Tribunal in Civil Law and Common Law Systems with Respect to Presentation of Evidence' in Planning Efficient Arbitration Proceedings, ICCA XIIth International Arbitration Congress, Vienna, 3-6 November 1994, ICCA Congress Series No. 7 (Kluwer Law International, 1996) 161 at 166 ('when circumstances appear to make this appropriate, the parties may be ordered to make disclosure right up front of all relevant documents').

9
See IBA Rules, Article 3(10) (providing for the production of additional documents which the parties believe have become relevant and material as a consequence of issues raised in prior written pleadings or submissions).

10
A potential disadvantage of sequential document requests after sequential written pleadings is that there is less opportunity for the parties to compromise on their respective production obligations than if both sides simultaneously exchange document requests and later simultaneously produce documents. Where written pleadings are sequential, an alternative approach is to provide for document requests by both sides after the respondent has submitted its answering written pleadings. The documents produced by each side could then be incorporated by the other side in its respective reply or sur-reply written submissions. The disadvantage of this approach is that the document request process will ordinarily run concurrently with the claimant's time to submit a reply written pleading and therefore may disproportionately impact the claimant.

11
IBA Rules, Articles 3(2) and (4), read together, provide for the document requests to be 'addressed' to the party from whom documents are requested and 'submitted' to the arbitral tribunal. The IBA theory for directing document requests to the arbitral tribunal is that '[o]nly the arbitral tribunal has the competence to make a decision on the request' (H. Raeschke-Kessler, supra note 2 at 645). The IBA Rules require that any documents produced be produced to the tribunal as well as to the other party. For the reasons explained below, it is generally more efficient to have the parties assume the primary role and burden in the document request process, with the arbitral tribunal serving principally as a visible observer, unless and until the tribunal's intervention is necessary to resolve a roadblock in that process. Thus, the document requests should be exchanged between the parties, and only copied to the tribunal, and any documents produced submitted only to the requesting party and not to the tribunal.

12
IBA Rules, Article 3(4)-(5), by contrast, requires that the documents themselves be produced to the arbitral tribunal and that any objections be made directly to the tribunal.

13
See generally IBA Rules, Article 9(2) (describing grounds for exclusion of documents from evidence)

14
See e.g. UNCITRAL Model Law on International Commercial Arbitration, Article 34.

15
See generally P.D. Friedland & L. Martinez, 'Arbitral Subpoenas Under U.S. Law and Practice' (2003) 14 The American Review of International Arbitration 197. As the foregoing article explains, there is division of authority in the United States as to whether Section 7 of the Federal Arbitration Act authorizes an arbitral tribunal to compel pre-hearing discovery of documentary evidence from a non-party, although the better reasoned authorities allow such pre-hearing discovery of documentary evidence.

16
In the United States, Section 1782 of Title 28 of the United States Code authorizes US district courts to compel discovery in the United States for use in foreign proceedings. Several courts in the United States, however, have held that arbitral tribunals do not fall within the meaning of 'tribunal' in Section 1782, and that Section 1782 is therefore not available to assist in obtaining evidence for use in foreign arbitral proceedings. See generally H. Smit, 'The Supreme Court Rules on the Proper Interpretation of Section 1782: Its Potential Significance for International Arbitration' (2003) 14 The American Review of International Arbitration 295.

17
See IBA Rules, Article 3(9).

18
See IBA Rules, Article 3(11).

19
See IBA Rules, Article 3(12).

20
Article 9(2) of the IBA Rules, for example, states that the tribunal may exclude from evidence or production any document on the grounds of 'legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable', without indicating a choice of law governing such legal privilege.

21
See e.g. International Institute for Conflict Prevention and Resolution, Rules for Non-Administered Arbitration of International Disputes (revised and effective 15 June 2005), Rule 16(3) (authorizing the tribunal to apportion the costs of the arbitration among the parties in light of, inter alia, 'the conduct of the parties during the proceeding')