* This text is a revised version of the author’s 2001 Goff lecture delivered in Hong Kong on 5 December 2001 under the auspices of the City University of Hong Kong; and the editors acknowledge with thanks its permission to publish this article. The author is indebted to Mr Neil Hart for assistance in researching materials for this lecture. Any comments are welcome, which may be sent by email to vvveeder@compuserve.com. (The law and practice is here stated as at 1 December 2001.)

INTRODUCTION

It is a great honour to be asked to deliver this Goff lecture, not only because it is a privilege to follow in the footsteps of so many distinguished lecturers but also because this lecture bears the name of one of the most respected English jurists of my professional lifetime. There are many stories of Robert Goff: he was one of the greatest advocates I ever heard; he was a creative scholar; he was the most courteous judge; he is now a distinguished arbitrator; but above all else, he was and remains the epitome of fairness and human decency. To listen to his advocate’s argument even in the most contentious case provoked no sense of ill-will, just despair at the power of his legal logic; and to lose a case before him as judge left only a strong sense of his intellectual honesty. To Lord Goff, the title of this lecture might seem so self-evident as to preclude any serious debate. Sadly, however, the debate is provoked by growing difficulties which cause the practice of transnational arbitration to fall short of his ideals.

For the parties to an international commercial arbitration, justice should be the paramount objective; and procedural fairness by their legal representatives is subsumed in that single objective. But the practice of international arbitration is not so simple, certainly not for the parties’ professional lawyers coming from different jurisdictions to a still different place of arbitration. Lawyers are not musicians or ballet dancers: a lawyer’s training, skills and ethics are still essentially rooted in a national legal system; and it is far from clear how and to what extent national professional rules apply abroad to the transnational lawyer in the international arbitration process.

THE EUROPEAN UNION

For example, for a European Union lawyer practising abroad in a host Member State, Article 6 of the Directive 98/5/EC of 16 February 1998¹, which came into effect on 14 March 2000, prescribes rules of professional conduct in addition to the rules of that lawyer’s home Member State: that lawyer is subject "to the same rules of professional conduct as lawyers practising under the relevant professional title of the host Member State in respect of all the activities he pursues in that territory". There is no further guidance in the Directive as to what professional rules of conduct apply to an English lawyer from London practising as an advocate in a Paris arbitration, except that the rules of the French avocat before a French court cannot simply be transposed to this English lawyer in an international arbitration².

Of course, an English lawyer working in the European Union’s other Member States must also comply with the Code of Conduct for Lawyers in the European Union adopted in 1998 by the Conseil des Barreaux de l’Union Européenne (CCBE)³. The Code applies generally to the cross-border activities of any English lawyer working in the European Union and European Economic Area, including the great European arbitration centres of Paris, Geneva, Stockholm, Vienna, The Hague and Zurich. And the CCBE Code applies, at least in part, expressly to international arbitration⁴.

Article 4.5, the 1998 Code provides that "the rules governing a lawyer’s relations with the courts apply also to his relations with arbitrators". These particular rules are set out in Part 4 of the Code under Articles 4.1 to 4.4. Article 4.1 requires a lawyer who appears or takes part in a case before a Member States’ court "to comply with the rules of conduct applied before that court". This rule is largely meaningless in the field of international arbitration because there are no "rules of conduct" applied generally to lawyers before an international arbitration tribunal. The major institutional rules of arbitration, including the ICC and LCIA Rules, are silent as to the conduct of a party’s legal representative.

Articles 4.2 to 4.4 of the Code are more relevant to arbitration. Article 4.2 provides generally for the fair conduct of proceedings, excluding ex parte communications with the arbitrator and requiring settlement discussions not to be communicated to the arbitrator. Article 4.3 requires the lawyer to maintain due respect and courtesy towards the arbitrator; and Article 4.4 requires that "a lawyer shall never knowingly give false or misleading information to the court". These are valuable moral commandments; and this part of the Code is commendable for international practice. But that is the practical problem: it is such a small part that the Code provides no useful guidance on the most basic problems facing transnational practitioners of international commercial arbitration.

At best, of course, the Code applies only to regional practice for European Union lawyers in Western Europe. On a worldwide basis, what are the professional rules or guide for a lawyer seeking to discharge a duty to achieve procedural fairness in an international arbitration? The issue was raised ten years ago by a distinguished commentator, Jan Paulsson⁵; but his call went unheeded⁶. Yet the problem is real; the solution ought not to be insuperable; and the matter needs addressing by an international body because the problem applies generally to all of us, everywhere, practising as lawyers in the field of international arbitration. It applies especially in Hong Kong as a leading centre for international commercial arbitration, attracting legal practitioners from all over the world. To the question: what are the professional rules applicable to an Indian lawyer in a Hong Kong arbitration between a Bahraini claimant and a Japanese defendant represented by New York lawyers, the answer is no more obvious than it would be in London, Paris, Geneva and Stockholm. There is no clear answer; but perhaps, as we shall see, there should and could be.

PROCEDURAL UNFAIRNESS

In 1937, the ICC Congress met in Berlin, where its opening session was attended by the German Chancellor Hitler and his colleagues Goering and Goebbels. Even then, the ICC’s new president, the American Thomas J Watson of IBM, felt able to proclaim the keynote of the conference: "world peace through world trade"⁷. Thomas Watson was right – but not as right as he would be 50 years later. The great cause today is the same but still greater: without world trade, there can be no world peace; international arbitration is the oil which lubricates the machinery of world trade; and the mechanics, the international arbitration practitioners, now deserve better practical guidance as to how to apply that oil. International commercial arbitration cannot wait another 50 years.

Let us start with the root of the problem: what is procedural unfairness? Many decades ago, when I was at school in Bristol, in the west of England, our school rugby team played a match against a local school badly endowed with playing fields. In fact, its rugby field lay on a steep hill; and given other demands for its use (which must have included abseiling), we had time for only one half of the match, all of which we played uphill – and lost, badly. In my ears, for a long time, the phrase "playing on a level playing field" resonated as the basic moral rule of fairness in any adversarial game. What was procedurally unfair, however, was not the pitch itself but the unfairness of playing uphill without the subsequent advantage of playing downhill. Given the range of geographic diversity, fairness is a general concept which must accommodate both flat and hilly ground.

The procedural difficulties in arbitration come from human rather than geographic diversity; and human diversity is surprisingly diverse. For example, there is a large house, beautifully built by one of our arbitration colleagues with a large circular drive leading to the main entrance, adjoining a magnificent tennis court. As many of you will know, the turning circle of a Rolls Royce is disappointingly large; and so it proved that the circular drive had to be enlarged – by taking out a large chunk of the tennis court. Tennis matches are still played at that house; the far half of the tennis court retained its full size although the near half is now severely truncated. The playing field is level, even if it is not equal; it is technically difficult serving and receiving a serve in a few feet of court; but it is not unfair if contestants take turns serving from the truncated half of the tennis court, which they apparently do. Where the tennis players are Rolls Royce owners, a turning circle is perhaps more important than a full tennis court; tennis can still be played fairly; and tennis teas can still be taken without tears. But what if not all players are Rolls Royce owners? Or if the field is not only uphill or unequal; but the other half is a cricket pitch, or a baseball diamond or a swimming pool – and there is no equivalent change at half time? Then there can be tears; and where the game is arbitration, it can raise acute questions of legal, professional and cultural diversity which are now potentially of immense importance in the practice of international arbitration by parties and particularly by their lawyers. Such diversity can unbalance the arbitral process.

This is different from the situation where both parties equally lack recourse to documentary production or factual testimony tested by cross-examination or the use of their own party-appointed expert witnesses. There is here a level and fair playing field; and of course awards have been enforced in a State court even if the arbitration’s procedure was very different from the procedures employed in that court. We are also not dealing with deliberate dishonesty or criminal fraud here; and the international arbitral process can deal with acts of illegality⁸, which thankfully seem to be rare. And we are not addressing non-criminal misconduct which is generally regarded as morally questionable; for example, the deliberate nomination of different specialist arbitrators in multiple disputes to deprive the other parties of specialist legal advice; or the deliberate conflicting out of specialist counsel by a party to the same end; or one party’s beauty-parading of arbitral candidates which looks more at partiality than beauty; or the wilful aggravation of the parties’ dispute in order to put unfair pressure on the adverse party.

We are concerned here with ambiguous acts short of deliberate dishonesty which cross the line of procedural fairness because no-one really knows quite where that line is now drawn at the international level. The issue can arise on challenges to awards under national legislation before State courts, including the UNCITRAL Model Law; and the enforcement of arbitration awards under the 1958 New York Convention. Then, however, it will often be too late to put right what was at the time, perhaps inadvertently, wrong.

The common starting point is necessarily the concept of procedural fairness; and whilst no arbitration tribunal can guarantee perfection at all times in deciding substantive law or fact (because judges and arbitrators are not deities), arbitrators can reasonably be asked always to deliver procedural fairness. In England, that objective is now recognized expressly in Lord Woolf ’s massive reforms to civil procedure in the State courts; for arbitration tribunals, independently, it is expressed by section 1(a) of the English Arbitration Act 1996⁹; and for both courts and arbitration tribunals, directly and indirectly, by the English Human Rights Act 1998 applying Article 6 of the European Convention on Human Rights, guaranteeing a fair hearing to every person, legal and moral. But, as we all know, procedural fairness is no easy objective, and there is nothing "natural" about natural justice.

In the Anglo-Saxon adversarial system, fairness is dependent on the standards of conduct deployed by the parties and especially the parties’ legal representatives, towards each other and towards the court or arbitration tribunal. As the US Supreme Court decided long ago in the Gideon case¹⁰, a defendant’s attorney at a criminal trial can be just as much an essential part of a properly constituted court as the judge or jury; and in complex civil litigation and arbitration, the same is almost invariably true. Judges just cannot do it as well or at all without the help of the parties’ lawyers, and an international arbitration of any size would be equally incomplete without the parties’ legal representatives. This symbiotic relationship can be readily illustrated with a recent cautionary tale from England.

THE CAUTIONARY TALE

In Vernon vs Bosley (No. 2) (1998)¹¹, the defendant nanny had killed by negligent driving two of the plaintiff ’s children and the plaintiff sued her for nervous shock. In a reserved judgement delivered long after the trial, the judge awarded damages for post-traumatic stress disorder based on expert evidence from a psychiatrist and psychologist; and the defendant then appealed to the Court of Appeal. The Court of Appeal heard this appeal and gave judgement up-holding liability but reducing the amount of damages. Before the formal order was drawn up, the defendant’s counsel received anonymously through the post copies of a county court judgement in different family proceedings between the plaintiff and his divorced wife relating to the custody of their remaining children and of a judgement of the Court of Appeal (differently constituted) dismissing the plaintiff ’s appeal from that county court judgement.

What was significant was the expert issue in these family proceedings, taking place six months after the trial in the personal injury proceedings. In stark contrast to their evidence at that earlier trial, the same psychiatrist and psychologist had given expert evidence that the mental health of the plaintiff father had dramatically improved and that he was substantially, if not fully, recovered. This was not a case where these experts had given false evidence or expressed opinions which were incorrect; and in this sense neither had "changed his evidence", but rather only their prognosis as time had elapsed between the evidence in the personal injury trial and the later hearing in the family proceedings during which the plaintiff ’s mental health had significantly improved. As Lord Justice Stuart-Smith’s judgement reports:

"It appeared to the defendant’s legal advisers [this must have been somewhat of an understatement] that this evidence was materially different from the picture presented to Sedley J [the trial judge] and this court [the Court of Appeal], and in particular it might affect the judge’s findings as to the plaintiff ’s state of health at the time of the judgement and to the prognosis for the future. This would affect the level of general damages and also elements of future loss." (page 688D).

The plaintiff was morally blameless; he acted on the advice of his legal advisers. He was represented by different solicitors and counsel in the two sets of proceedings; and before the trial judge delivered his reserved judgement in the personal injury proceedings, his legal advisers advised him not to disclose the improved prognosis to the defendant, the trial judge or even later to the Court of Appeal; and when the plaintiff learnt that his former wife might disclose these medical reports obtained in the family proceedings to the defendant’s insurers, his legal advisers sought and obtained from the High Court an injunction restraining her from doing so. Factually it is a complicated case; but what is clear was the absence of any dishonesty on the part of any of the plaintiff ’s legal advisers. They were plainly faced with an acute problem of professional ethics where their duty to the court appeared to conflict radically with the duty to their own client.

At the resumed hearing before the Court of Appeal, the defendant submitted that by one or more of three routes, discovery or disclosure of the later medical reports or the requirements not to mislead the court, the change in prognosis should have been made known by the plaintiff and his legal advisers. As to documentary discovery, by a majority, the Court of Appeal decided that the parties’ duty continued up to judgement, after the conclusion of evidence and the trial; that the notes and medical reports were not privileged; and that these materials should have been disclosed to the defendant before the trial judge delivered his reserved judgement, even though both sides had long before closed their respective cases. As to the duty not to mislead the court, Lord Justice Stuart-Smith concluded:

"I readily accept that the plaintiff ’s counsel did not deliberately intend to deceive the court and believed that the advice they gave [to the plaintiff] was sound. But in my judgement they made a serious error of judgement in failing to advise him on the need for disclosure. By an over-technical construction of the rules and a failure to appreciate that their previous conduct of the case would result in the court reaching an unjust result unless disclosure was made, they found themselves in an impossible position. By the time the case came to this court they should have appreciated that they could no longer seek to uphold the judge’s judgement."

The defendant’s second appeal was allowed by the Court of Appeal; and damages were further reduced. However, Lord Justice Evans dissented and would have dismissed the first part of this appeal and, whereas Lord Justice Stuart-Smith decided (obiter) that counsel’s remedy was to resign if his advice to correct testimony or disclose documentation was rejected by his client, Lord Justice Thorpe decided that counsel’s duty went much further: counsel had an overriding duty to disclose the relevant material to his opponent and, unless there was agreement between the parties otherwise, to the trial judge.

For present purposes, the point is simple. Difficult as this case was for the ethics of English lawyers before an English court, what would the answer be in a like case for a party’s legal representatives acting in an international arbitration? For example, what would happen if a Hong Kong solicitor or counsel acting for an Australian party in an international arbitration in Singapore discovered weeks after the final hearing and as the tribunal was writing its final award, that part of their client’s case was now quite wrong? Would these lawyers advise their client that a correction must be notified to their opponent and the tribunal? And if their client said "no", as it might and then dismissed them if they pressed their advice, would that counsel and solicitor have a duty to notify their foreign opponents or the arbitration tribunal abroad? The answer should probably be "yes" but juridically why? It is regrettable that these questions are currently beyond any clear answer, both in Hong Kong and elsewhere.

FOUR CHARACTERISTICS

International arbitration clearly raises more difficulties here than national practice before State courts; and there are four distinguishing characteristics which any solution needs to address.

First, as already discussed, practitioners in the field of international commercial arbitration extend over the full rainbow colours of human diversity around the world; the legal representatives of parties do not usually share the same national legal culture or practise subject to the rules of the same professional body. In the United Kingdom, long after the Act of Union with Scotland, it was on occasion still difficult for Scots and English lawyers to work with each other¹², but those difficulties pale into insignificance compared to the brave attempts within the European Union to subject the Member State’s Bars and Law Societies to a uniform professional code of conduct, already mentioned above. Outside such legal regions, the problem is greater still. This does not mean that international practitioners are pirates sailing under no national flag; it means only that on the high seas, navigators need more than a coastal chart.

Secondly, unlike most national court systems, there is no appeal on the merits from an arbitration award. The need for finality generally outweighs justice in the particular case; and procedural mistakes can be left uncorrected even when caused by professional errors of judgement. In England, the 1996 Act has made an important difference in abolishing the English court’s old power to remit an award to the arbitration tribunal on the grounds either that fresh evidence has become available after the award or that a procedural mishap has occurred short of any misconduct by the arbitration tribunal. These procedures can still be invoked in respect of appeals from English court judgements, but not any more in respect of English arbitration awards. A disgruntled losing party is left with the traditional but extreme remedy, if available, of challenging the award on the basis that it was obtained by fraud or contrary to public policy¹³. This quality of finality special to arbitration, but particularly so to international arbitration, means that it is even more important that an arbitration award should be the product of procedural fairness.

Thirdly, there is a lack of transparency in international arbitration. There are no useful statistics for institutional arbitration; and there are no reliable data at all for non-institutional or ad hoc arbitration. The whole activity takes place in a cloud of privacy without the same public scrutiny directed at State courts. In the absence of sufficient reported cases, it is not easy to learn how many arbitrations are unfairly conducted and, in particular, how fairness can be harmed by the conduct of parties’ legal representatives. Yet the system of international arbitration does seem to work well. If so, like State litigation, the system must work because it is essentially self-policing – but self-policing by lawyers and arbitrators depends on practitioners having a clear idea of where the line is drawn between good and bad arbitration practices. If a lawyer advises a client that it must disclose voluntarily a relevant but harmful document or cannot plead fraud on existing materials, that client is entitled to know the reason why, and if there is no good reason, the pressures of international practice may mean that the client will find another lawyer who will do what the other has declined to do. In the field of international arbitration, like State litigation, there are many fish competing in the same sea. Clear rules and self-policing are an essential part of any solution.

Lastly, in arbitration, where the legal links between the parties usually derive from the contractual agreement to arbitrate (in whole or in part), the legal roots of a party’s duty to play the game fairly must begin with that arbitration agreement, as a general contractual obligation to arbitrate in good faith. This is the most awkward characteristic: how can such a general obligation impose practical rules; and how does a contractual duty imposed on a party work itself through to rules influencing that party’s legal representative? As to the former, it is obvious, even more so than in State litigation, that the rules need to be practical; and it is useless to maintain any rule at the level of supreme generality. A formulation based only on good faith could be too vague to be of practical use, and yet, in default of any other available legal principle, it is the necessary starting point. There is also a particular problem with a general principle of good faith as an English legal concept; in short, in recent history, it has not been very English at all.

GOOD FAITH

Good faith in the performance of civil procedural obligations is assumed by civilian lawyers. This duty of good faith is readily transposed from the duty of good faith in civil law. Professor Hanotiau, from Brussels, concluded in his work on multiparty arbitrations that it is a "basic principle of international commercial arbitration that the parties have the duty to co-operate in good faith in the performance of their agreement as well as in the arbitral proceedings", and another distinguished commentator from Greece, Antonias Dimolitsa, identified the source of that obligation: "the international principle of the inviolability of the arbitration agreement is actually just a special application of the principle of pacta sunt servanda which, together with the parallel application of good faith, is strictly applied to arbitration agreements"¹⁴.

To an English lawyer, regrettably, the concept of good faith remains somewhat vague, and although the House of Lords has recently defined the term in the different context of a regulator’s exemption from liability for the tort of misfeasance¹⁵, English law on good faith says nothing about the activities of a party’s legal representatives in an international arbitration. Former students of English law may recall that Professor Sir Roy Goode QC concluded in the first edition of his great work on commercial law¹⁶ that, surprisingly, there was no general principle of English law that requires legal remedies to be exercised in good faith, adding that it was "at once the most remarkable and most reprehensible feature of English contract law". That was written even before the House of Lords decided in Walford vs Miles (1992)¹⁷ that English law could not recognize and enforce obligations to negotiate "in good faith".

Nonetheless the contractual duty to arbitrate in good faith is recognized in the common law outside England. It is rare in international arbitration to see this duty spelt out, but there is a useful example in Hong Kong. In China Nanhai Oil vs Gee Tai Holdings (1994)¹⁸, the Hong Kong High Court granted leave to enforce a CIETAC award on the ground that the losing defendant was estopped from relying on the improper constitution of the arbitration tribunal, which had been formed in Beijing and not Shenzhen as required by the parties’ arbitration agreement. The facts need not concern us here, but Mr Justice Kaplan did not base his decision on the classic English equitable doctrine of estoppel. He cited the work on the New York Convention by the civilian Professor van den Berg, recognizing estoppel as a principle emanating from a party’s general obligation to arbitrate in good faith "enshrined in the [New York] Convention’s provisions". The learned Judge applied that duty of good faith so as to have required the defendant promptly to bring to the notice of the arbitration tribunal or CIETAC in Beijing its objections to the tribunal’s formation, rather than wait two years after losing the arbitration before complaining for the first time that the arbitrators were chosen from the wrong CIETAC list of arbitrators.

What is needed is this kind of practical guidance on good faith for the legal representatives of parties. There is nothing to prevent that same approach being applied to the most contentious areas of professional practice: document production, the preparation of factual witness statements and the commissioning of independent expert reports. These procedures are now increasingly common in international arbitrations, given the widespread interest in the International Bar Association’s Rules on the Taking of Evidence in International Commercial Arbitration of June 1999, and the success of this initiative may answer the second part of the problem raised above, namely: how to influence the parties’ lawyers.

THE IBA RULES

In 1983 there was a muted welcome for the first edition of these IBA Rules. Nonetheless, their quiet acceptance in practice over the next decade paved the way for the more ambitious second edition in 1999¹⁹. There was then criticism from some quarters over the new procedures for document production under Article 3 of the 1999 Rules – it either went too far in allowing a party to request unspecified documentation or not far enough in limiting that request to narrow and specific categories reasonably believed to exist. That criticism seems now to have died down. What was not at first controversial were Articles 4 and 5 dealing with factual witness statements and the written reports of party-appointed experts.

For international arbitration, the procedure whereby a party and not the tribunal leads its own factual and expert testimony is now well accepted by both civilian and common law practitioners and arbitrators, and it is the well-worn practice for a factual and expert-witness to reduce into writing in advance what would be their evidence-in-chief or direct examination, confining their oral testimony largely to cross-examination by the adverse party and the tribunal. This procedure removes the unfair element of surprise or deliberate ambush at the main hearing; it allows expert witnesses to meet and exchange views before the hearing (a procedure now reflected in Article 5(3) of the IBA Rules); and since hearing time is money, it saves both time and money by having everyone read these materials in advance of the main hearing without the need for direct testimony to be recited aloud. That is the theory, but as experience now shows, the practice can be different, and here experience has begun to mean bad experience.

There is an increasing tendency for a factual witness statement to take the form of special pleading prepared substantially by lawyers and not the witness (albeit later formally "approved" by that witness). This practice diminishes the statement’s probative value and increases the need for oral cross-examination. There is again a similar practice whereby expert reports express less than independent expert opinions, again substantially prepared by lawyers and not the expert (albeit also "approved" by that expert); and this practice significantly complicates the task of the arbitration tribunal. As regards document production, there is increasing evidence that such production is assessed not by any uniform professional standards, but rather by subjective, client-driven rules calculated to support the factual and witness testimony to be adduced by that client.

THE PROBLEM IN PRACTICE

Why does any of this matter for international arbitration? It matters first because it can easily breed procedural unfairness in the particular case, and it matters generally because it attacks the integrity of the system of international arbitration. The system of self-policing may become impossible and there may be a gradual deterioration in the standards of legal professional conduct. The international arbitral process would then be brought into disrepute and, once its good reputation was lost, it could take decades to rebuild confidence²⁰. To date, for example, the English court has rejected every attempt to attack a foreign award on strictly procedural grounds under the New York Convention. Indeed, there is still no reported case of an English court refusing enforcement of any foreign award on the ground of English public policy. However, there are now cases where the English court has broadened the public policy exception for English awards in section 68(2)(g) of the Arbitration Act 1996²¹, and there is one recent case which illustrates that the English court may in future look critically at serious procedural unfairness under the same public policy exception in Article V(2)(b) of the New York Convention.

1. Document disclosure

The case related to documentary disclosure, allegedly made deficiently in the arbitration by the successful claimant. In Profilati Italia SRL vs Paine Webber Inc & anr (2001)²², the losing applicant challenged the award on the grounds that part of it had been procured by the claimant in a way which was contrary to public policy under section 68 of the Arbitration Act 1996. The substance of its argument was that the claimant had wrongly failed to disclose two material documents which would have supported the applicant’s case and, having failed to do so, that the claimant allowed its counsel to make submissions to the arbitration tribunal which could not have been made in the same way or with the same force if those documents had been disclosed and, to that extent, therefore, the award was improperly procured because the tribunal was effectively misled.

The English Commercial Court (Moore-Bick J) dismissed the application on its factual merits, but the judgement makes clear that, subject to factual proof, the application could be well founded under section 68(2)(g) of the 1996 Act. The learned Judge held:

"17. It would be unwise in my view to attempt to define the circumstances in which an award might be set aside or remitted on public policy grounds, but in the light of that comment and of the language of subsection (2)(g) as a whole I think that where the successful party is said to have procured the award in a way which is contrary to public policy it will normally be necessary to satisfy the court that some form of reprehensible or unconscionable conduct on his part has contributed in a substantial way to obtaining an award in his favour."

And later:

"19. Where an important document which ought to have been disclosed is deliberately withheld and as a result the party withholding it has obtained an award in his favour the court may well consider that he has procured that award in a manner contrary to public policy. After all, such conduct is not far removed from fraud."

Fraud is here actual dishonesty in the English legal sense. It is much more than a failure to disclose a document as a result of negligence or mishap or a simple error of judgement; but the Court acknowledged that something less than fraud might suffice if it qualified as "reprehensible or unconscionable conduct" – but what is that in an international commercial arbitration? It must presumably include "bad faith", even if that civilian term was never uttered by the English Court. If this analysis were correct, subject to further elaboration, the Court’s approach could be readily imported into the IBA Rules on document production.

2. Factual witness statements and expert reports

For witness statements and expert reports, it is here again necessary for practical guidance to turn to court decisions because of the paucity of arbitration materials. It can be found in the English cases leading to the recent Woolf reforms.

• Expert reports

The House of Lords held in Whitehouse vs Jordan (1987)²³ that even though some degree of consultation between experts and legal advisers was entirely proper, it was necessary that expert evidence presented to the court should be, and should be seen to be, the independent product of the expert, "uninfluenced as to form or content by the exigencies of litigation". In the Court of Appeal, which reversed the trial judge, Lord Denning MR had identified a number of flaws in a joint experts’ report submitted by the plaintiff. Most prominent among these flaws was the intrusively editorial role played by the plaintiff ’s lawyers in preparing that evidence, as described by Lord Denning:

In the first place, their joint report suffers to my mind from the way it was prepared. It was the result of long conferences between the two professors and counsel in London and it was actually "settled" by counsel. In short, it wears the colour of special pleading rather than an impartial report. Whenever counsel "settle" a document, we know how it goes. "We had better put this in". "We had better leave this out" and so forth. A striking instance is the way in which Professor Tizard’s report was "doctored". The lawyers blacked out a couple of lines in which he agreed with Professor Strang [another expert-witness] that there was no negligence.

That counsel was a distinguished senior silk, of impeccable character and now an English High Court Judge. What he did was only what we all once did; it was a professional practice not only not wrong under the standards then prevailing in England; but not to do what he did could have been widely regarded at that time as professional negligence. Lord Denning’s strictures changed that practice at the English Bar, almost overnight.

This new approach to expert evidence later formed part of Cresswell J’s classic summary of the duties and responsibilities of expert witnesses in The Ikarian Reefer (1998)²⁴. Foremost among those duties was the importance of the expert’s autonomy from the influence of the parties to the litigation, as emphasized in Whitehouse. It required the expert-witness to provide "independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise". That expert opinion must also be complete. Where there are conflicting experts’ reports, the tribunal cannot reach any satisfactory finding if the relevant materials have been partially withheld by one or more expert witnesses. As Bracewell J held in Clough vs Tameside & Glossop HA (1998)²⁵:

"It is not for one party to keep their cards face down on the table so that the other party does not know the full extent of information supplied. Fairness dictates that a party should not be forced to meet a case pleaded or an expert opinion on the basis of documents he cannot see. Although civil litigation is adversarial, it is not permissible to withhold relevant information, or to delete or amend the contents of a report before disclosure."

The early identification and narrowing of expert issues is increasingly important in international commercial arbitration and, as already mentioned above, the practice of expert meetings is reflected in the IBA Rules. To make these procedures work fairly (and indeed to work at all), they must be played candidly, with open hands. As the English Court of Appeal noted in Naylor vs Preston Area Health Authority (1987)²⁶, the English courts:

"have moved far and fast from a procedure where tactical considerations which did not have any relation to the achievement of justice were allowed to carry any weight. [W]hilst a party is entitled to privacy in seeking out the "cards" for his hand, once he has put his hand together, the litigation is to be conducted with all the cards face up on the table."

All this is a sea change from the former practice of lawyers in the English courts. It has all happened within the last 15 years without primary legislation until the Woolf reforms, being driven by English judges and practitioners.

• Factual witness statements

The practice of taking factual witness statements requires urgent reform. Increasingly, many international arbitrators pay little credence to written witness statements on any contentious issue, unless independently corroborated by other reliable evidence. It is perhaps surprising that many sophisticated practitioners have not yet understood that their massive efforts at reshaping the testimony of their client’s factual witnesses is not only ineffective but often counter-productive. Most arbitrators have been or remain practitioners; and they can usually detect the "wood-shedding" of a witness26. In England, there is a recent case where wood-shedding was taken to an extreme.

In Aquarius Financial Enterprises vs Lloyds’ Underwriters (2001),(28) where the English Commercial Court was concerned with a vessel allegedly destroyed deliberately by fire, Toulson J. held that it was the English solicitor’s duty to ensure that any factual witness was interviewed by the solicitor himself, or if that was not practicable, by a person who could be relied upon to exercise the same standard as an English solicitor. This decision was provoked by the treatment of a particular witness, Mr Schoenig, who was on board the vessel when the fire broke out; and the interviewer was Mr Ashton, a marine surveyor and investigator, previously a police officer and (more significantly) for many years a CID officer attached to the anti-terrorist squad. In cross-examination, Mr Ashton had explained his interviewing technique as follows:

• Q. You resorted to intimidation to obtain the evidence you wanted?

A. I don’t call it intimidation, I was forceful. I was dealing with a person that I thought was lying to me; I was not going to pussyfoot around. I knew the type of person I was dealing with. This was a very streetwise person.

• Q. You had formed the conclusion that this man was not going to give you the evidence that you needed unless you bullied him, so you set about bullying him?

A. I had not formed that conclusion. I formed that conclusion at the end when he didn’t give me the evidence that he could have given me. I didn’t set out to bully him, I set out to talk to him in a nice manner and to deal with the matter as I would with any other witness. It was his attitude that made me become forceful and angry at times.

The learned Judge commented adversely on this style of interrogation. He said:

"43. In English litigation, civil or criminal, there can be no proper place for trying to persuade a potential fact witness what he should say, let alone by bullying, threat or inducements²⁹. Such methods are totally unacceptable. Mr Ashton’s conviction that Mr Schoenig was lying is no conceivable justification. If Mr Ashton had succeeded, and if Mr Delettrez [another witness] had not been recording the conversation, the result would have been a [written witness] statement from Mr Schoenig which could have been put in evidence under the Civil Evidence Act without either the court or the opposing party knowing how it had been obtained."

The learned Judge then referred to the procedure by which witness statements ordinarily stand as witnesses evidence in chief, an integral part of practice in the English Commercial Court for some years but now prescribed under Rule 32.5(2) of the Civil Procedure Rules. He then cited Part H1.3 of the Commercial Court Guide, which provides that: "whilst it is recognised that in commercial cases, a witness statement will usually be prepared by legal representatives, the witness statement must, so far as practicable be in the witness’s own words". His judgement continued:

"46. It cannot be too strongly emphasised that this means the words which the witness wants to use and not the words which the person taking the statement would like him to use.

47. Part H1.4 of the Commercial Court Guide provides that the rules of any professional body regarding the drafting of witness statements must also be observed.

48. The Law Society’s Guide to the Professional Conduct of Solicitors provides guidance on the taking of witness statements. It requires a high degree of skill and professional integrity. The object is to elicit that which the witness is truthfully able to say about relevant matters from his or her own knowledge or recollection, uninfluenced by what the statement taker would like him or her to say.

49. Counsel on both sides expressed anxiety that this is in practice not what generally happens even when statements are taken by solicitors. If it is not, the situation is worrying. In the USA pre-trial depositions of witnesses are a standard feature of civil litigation³⁰. The process is costly and time-consuming. Our system is quicker and cheaper, but it depends for its proper working on witness statements being properly taken. Bad practices, like bad money, tend to drive out good. If bad practices in the taking of witness statements come to be seen as normal, so that witness statements become lawyers’ artefacts rather than the witnesses’ words, their use will have to be reconsidered. Central to the problem is the ignorance of the court and the other party about how any witness statement has in fact been taken. It might therefore be thought salutary that there should be a written declaration by the person who prepared the statement giving information about how, when and where it was prepared and certifying compliance with any appropriate code of practice.

50. Moreover where parties are represented in litigation by solicitors (as is almost invariably the case in the Commercial Court), I would regard it as part of their duty to ensure, so far as lies within their power, that any witness statements taken after they have been instructed are taken either by themselves or, if for some reason that is not practicable, by somebody who can be relied upon to exercise the same standard as should apply if the statements were taken by the solicitors themselves."

It would be a foolish English practitioner who did not now take heed of the strictures in this judgement.

THE WOOLF REFORMS

The Woolf reforms have accelerated but did not initiate these judicial reforms in the English courts. All these reforms have undoubtedly made English practice easier by setting out more clearly the rules for English lawyers to follow, particularly in the preparation of factual witness statements and expert reports³¹. The cardinal principle requires the draft witness statement to reflect accurately the witness’ evidence³², and the Commercial Court Guide expressly warns that: "great care should be exercised when excluding any material which is thought to be unhelpful to the party calling the witness and no material should be excluded which might render the statement anything other than the truth, the whole truth and nothing but the truth". Expert witnesses must certify that they understand their duty to the court, as set out in Appendix 12 to the Guide (which derives substantially from Cresswell J’s judgement in The Ikarian Reefer), and experts must address their reports to the court. It is the express duty of experts to help the court on the matters within their expertise (CPR 35.3(1)). This duty is paramount and overrides any obligation to the person from whom an expert has received instructions or by whom he or she is paid (CPR 35.3(2)).

This Appendix 12 lists specific rules:

1 Expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert uninfluenced by the exigencies of litigation.

2 An expert-witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise. An expert-witness should never assume the role of an advocate.

3 An expert-witness should not omit to consider material facts which could detract from his concluded opinion.

4 An expert-witness should make it clear when a particular question or issue falls outside his expertise.

5 If an expert’s opinion is not properly researched because he considers that insufficient data is available, then this must be stated with an indication that the opinion is no more than a provisional one.

6 In a case where an expert-witness who has prepared a report could not assert that the report contained the truth, the whole truth and nothing but the truth without some qualification, that qualification should be stated in the report.

7 If, after exchange of reports, an expert-witness changes his view on a material matter having read another expert’s report or for any other reason, such change of view should be communicated in writing (through legal representatives) to the other side without delay, and when appropriate to the Court.

The expert-witness must certify that he or she has read and understood Appendix 12 and that he or she has complied and will continue to comply with its terms at all stages of involvement in the case. The expert must also certify that the assumptions on which his or her opinion are based are not unreasonable or unlikely or that if they are, the expert has said so; the expert must certify that the facts stated in his or her report within his or her own knowledge have been identified as such and are true; the expert must certify that the opinions expressed in the report represent his or her true professional opinion; and the expert must of course sign the opinion so as to make it his or her own expert opinion. This is all very uncontroversial; it works in practice for the English Commercial Court and suitably adapted it could work equally for international commercial arbitration.

POSSIBLE SOLUTIONS

The question first arises whether international arbitration is susceptible to reform at all. From the English perspective, the answer is easy: if Lord Woolf could so massively reform English civil procedure, then nothing is beyond reform anywhere. For international commercial arbitration, such reforms must be possible; but equally these cannot be achieved by a mono-cultural approach, and, as indicated above, there are also certain criteria for any possible solutions. The initiative lies in the hands of international arbitrators and practitioners and, if ignored for much longer, it may pass to state or regional regulators with less affection for the arbitration process.

The general contractual duty of good faith can provide the legal umbrella for both civilian and common law lawyers, but by itself the doctrine is too general to provide an effective practical guide for parties’ lawyers practising in the field of international arbitration. Also, that guide cannot be a national or regional code of conduct, crudely transplanted to apply to transnational lawyers arbitrating in that country or applied to its own national lawyers practising in another host State. Equally, it cannot be a guide designed to govern a lawyer’s relations with a State court. International arbitration is different from State and national practice: it is sui generis, and, in its different forms, it is a much more varied and flexible procedure which requires its own guide. Nonetheless, despite its practitioners’ legal and cultural differences, the practice of international arbitration is increasingly subject to harmonization. It is becoming supra national and the solution could also be supra national. We saw this with the 1986 IBA Code of Ethics for International Arbitrators³³, and we see it with the 1999 IBA Rules of Evidence. Like these IBA Rules, what is needed is a voluntary solution – a guide rather than a model law or disciplinary code – and the best way to start is with micro-solutions, rather than a grand project where the usual difficulties could hinder progress for a long time, even then leading perhaps only to moralistic and impractical solutions³⁴. If the first step is the hardest, however long the eventual journey, let us make it small and easy.

For witness statements under the 1999 IBA Rules, taking the suggestion proposed in the Aquarius case, let there be appended to the witness statement a written declaration by the parties’ legal representative who procured the statement giving his or her name and professional qualification, and giving information about how, when and where the statement was prepared, including a statement of time spent by witness and representative respectively. For expert reports under the 1999 IBA Rules, taking the success of the Woolf reforms, let there be a similar declaration by the party’s legal representative, together with a statement by the expert-witness acknowledging his or her independent duty along the lines of the Woolf requirements, listed above. For document production, international arbitrators should more readily complain at a party’s delinquent conduct, to the extent of drawing expressly an adverse inference on the merits from procedural delinquency or making a special order on costs.

These are modest suggestions; and others will wish to add their own suggestions derived from their own experience. Once collated by the IBA or another international organization, they could make a difference in improving best practice. Bad practices, like bad money, do tend to drive out good. If bad practices in the taking of written witness statements or commissioning independent expert reports come to be seen as normal by users and by international arbitrators, their probative value will be diminished still further; and their use will have to be reconsidered. As for deficient documentary production, cynicism will breed contempt for the arbitral process. None of this is a cry of despair. On the contrary, it is a measure of the ever-increasing success of international arbitration that it must meet new challenges and provide new practical solutions on a larger scale. If, as has been said, international arbitration is the only show in town for international trade, let it at least not be a tennis game played with half the court always missing or a rugby match played by lawyers, like Sisyphus, eternally uphill.

Appendix

An old ethical Code (to be adapted)

Gilbert and Sullivan’s "Iolanthe" was first performed at the Savoy Theatre on 25 November 1882 and the libretto contains in Act One a possible starting point in the distant future for an ethical code for international arbitration practitioners, substituting international arbitration for the English Bar, etc. It is the song of the Lord Chancellor of England and Wales, who (as he sang in Arcadia) always kept his duty strictly before his eyes, and it was to that fact (he sang) that he owed advancement to his distinguished position:

When I went to the Bar as a very young man,

(Said I to myself, said I),

I’ll work on a new and original plan,

(Said I to myself, said I),

I’ll never assume that a rogue or a thief

Is a gentleman worthy of implicit belief,

Because his attorney has sent me a brief,

(Said I to myself, said I).

Ere I go into court I will read my brief through

(Said I to myself, said I),

And I’ll never take work I’m unable to do

(Said I to myself, said I),

My learned profession I’ll never disgrace

By taking a fee with a grin on my face,

When I haven’t been there to attend to the case

(Said I to myself, said I).

I’ll never throw dust in a juryman’s eyes

(Said I to myself, said I),

Or hoodwink a judge who is not over-wise

(Said I to myself, said I),

Or assume that the witnesses summoned in force

In Exchequer, Queen’s Bench, Common Pleas, or Divorce,

Have perjured themselves as a matter of course

(Said I to myself, said I).

In other professions in which men engage

(Said I to myself, said I),

The Army, the Navy, the Church, and the Stage

(Said I to myself, said I),

Professional licence, if carried too far,

Your chance of promotion will certainly mar-

And I fancy the rule might apply to the Bar

(Said I to myself, said I!).

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