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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
The Chartered Institute of Arbitrators (CIArb) Protocol for E-Disclosure in Arbitration was issued in October 2008 to address the growing challenge posed by the disclosure of electronic documents in international arbitration proceedings. 1 Many parties now conduct substantially all of their business communications in electronic form, and it is common for the original copies of relevant and material documents in a dispute to exist substantially or even entirely in the form of electronically stored information (ESI).
One of the perceived advantages of international arbitration over litigation is the greater flexibility it offers to the tribunal, the parties and their counsel to meet the requirements of the particular dispute and the wishes of the parties. That flexibility permits due consideration of the appropriate means to address the issue of documentary disclosure in international arbitration where the originals of relevant and material documents are in electronic form. While the principal focus of the discussion of electronic disclosure in international arbitration has been on the twin threats of increased time and costs, it should also be considered that electronic disclosure offers the potential for efficiencies and cost savings. [Page396:]
Electronic data are created in the course of a business in a wide variety of forms. These include not only e-mail but Word and Excel documents, PDF files, voicemail and many other forms of electronic communication. Electronic data reside in a large number of locations, on desktops, laptops, hand-held devices and multiple servers, all maintained by a variety of custodians. This data includes both electronic documents and numerous fields of information about those documents, known as "metadata". 2
The ease of creation and exchange of electronic documents commonly results in multiple iterations of the original document into copies, replies and amended versions. Many multiples of copies, and copies of copies, are regularly stored on back-up tapes as data is deleted from hard drives and servers. The ease and low cost of the creation and storage of electronic documents can lead to unimaginably large volumes of electronic data. One gigabyte3 of files in MS Word format is equivalent to approximately 50,000 pages of text. Large businesses frequently deal in terabytes, or even petabytes, of electronic data. 4
An added challenge for multinational companies is the collection of electronic data from disparate sites and servers located in foreign jurisdictions, and the restrictions on data transfer that may be imposed by data privacy legislation (e.g. in EU countries5), a breach of which may carry severe penalties.
Many parties to international commercial arbitration will already have had considerable experience in managing their electronic data, in anticipation of the potential demands of litigation or regulatory investigations. The in-house counsel and IT departments of these parties may have had to meet the challenge of collecting and producing electronic documents in the context of court proceedings or a regulatory investigation, often using the assistance of IT providers to whom part of that work may be outsourced. Those efforts may have required them to rapidly collect relevant information from a large volume of electronic data created by many custodians in a variety of locations, under threat of sanctions and often at significant cost. 6 In addition to the requirement to efficiently organize electronic data for ordinary business needs, litigation readiness has become a key driver in the improvement of data management systems and tools. These tasks are increasingly being brought in-house in order to better manage costs. [Page397:]
Despite the powerful incentive that these experiences will have provided to improve the organization and efficiency of corporate data systems, in order to reduce the time and cost of data collection, very few companies have developed fully centralized data management systems ("enterprise systems") that would facilitate the rapid identification and retrieval of electronic data. 7 For most companies, the high cost of introducing such cutting-edge data management systems means that these efficiencies still lie in the future. But these developments are now underway.
Nevertheless, although the volume of electronic data maintained by businesses continues to expand rapidly, the constant improvements in the tools and techniques for electronic data organization and recovery have the potential to reduce the time and cost burdens of giving documentary disclosure, as compared with a paper environment. This is a changing paradigm. Arbitral tribunals must be alive to these developments to be able to adequately consider requests for disclosure of relevant and material electronic documents.
Although the majority of arbitrations may concern relatively small numbers of relevant documents, which the parties may choose to produce in the form of hard-copy paper documents, in many cases it will be necessary to address the particular challenges that arise when disclosure is sought of relevant and material documents that exist in electronic form.
The issue of the disclosure of electronic data in international arbitration proceedings has provoked vigorous expression of a wide range of views, from those that believe that the challenge can be usefully met by guidelines, protocols or institutional rule changes to those who believe that existing rules make adequate provision for electronic disclosure or that additional measures are both unnecessary and inappropriate. 8
There is nevertheless a broad and strong consensus among arbitration users from both civil and common law jurisdictions that litigation-style "discovery" (in particular US litigation-style discovery), which is based upon a positive obligation to disclose and produce all non-privileged documents relevant to the issues pleaded (whether helpful or harmful to a party's case), has no place in international arbitration. [Page398:]
Fulfilling the obligation to give discovery in a litigation context is frequently extremely burdensome. That obligation may be enforced by serious sanctions and penalties that can be applied to parties and their counsel. 9 Indeed, the obligation to give discovery in litigation may be so onerous that it is frequently used as a tactical weapon to procure settlement.
Under the English Civil Procedure Rules (CPR), the obligation of "standard disclosure" in litigation compels a party to disclose materials on which it intends to rely; that adversely affect its own case; that adversely affect another party's case; or that support another party's case. The scope of litigation discovery in the United States is wider and extends to any material relevant to the subject matter of the action and also any material that "appears reasonably calculated to lead to discovery of admissible evidence". (This is similar to the English position before the CPR, when parties were required to produce all background materials and any documents leading to a "train of enquiry", in addition to all documents supportive of or adverse to each party's case.) Civil law jurisdictions impose few, if any, documentary disclosure obligations on parties to litigation.
While some arbitral rules require the parties to disclose documents on which they choose to rely, 10 there is no disclosure obligation in arbitration equivalent to the wide obligation of discovery that exists in litigation in many common law jurisdictions. The arbitration rules agreed by the parties or the arbitral law of the agreed seat of the arbitration will frequently give the tribunal a discretionary power to order the production of documents. 11 However, it is not appropriate to speak of a "discovery" obligation in international arbitration. Rather, it is appropriate to speak of the "disclosure" of documents in arbitration proceedings. (The ICC working party prefers the term "production" in the context of its forthcoming report on Techniques for Production of Electronic Information in International Arbitration, which is discussed below. However, it may be considered that "production" normally connotes the act of delivery of documents, whereas "disclosure" (like "discovery" in a litigation context) covers the stages of requests for, and objections to, the physical production of otherwise relevant and material documents.)
While the parties to an international arbitration will frequently come from different cultural and legal traditions, there has been a substantial convergence in international arbitration practice and procedure. The main instruments of this convergence have been the 1958 New York Convention, 12 the UNCITRAL [Page399:] Arbitration Rules, 13 the UNCITRAL Model Law14 and the rules of the various international arbitration institutions, which frequently borrow from each other with each successive revision.
In matters of evidence, this convergence is reflected in the 1999 IBA Rules on the Taking of Evidence in International Commercial Arbitration (the "IBA Rules"), 15 the product of an extensive process of consultation that included arbitrators and counsel from both civil and common law jurisdictions.
The convergence of international arbitration practice reflected in the IBA Rules makes permissible narrow and specific requests for documents, or categories of documents, that are considered relevant and material to the outcome of the case. 16 However, the tribunal may at its discretion refuse such a request on the grounds, inter alia, of unreasonable burden to produce the requested evidence, as well as on the basis of considerations of fairness or equality of treatment of the parties. 17
The exercise of that discretion will require the tribunal to balance considerations of the amount and nature of the dispute, and the likely relevance and materiality of the documents requested to the outcome of the case, against the cost and burden of giving disclosure. That balancing exercise will also be influenced by the legal and cultural background of the tribunal. Arbitrators from civil law jurisdictions, in which the production of documents is usually restricted to documents upon which a party chooses to rely, may be less disposed to make orders for disclosure than arbitrators from common law jurisdictions.
Moreover, the parties remain free to reach agreement on limiting the scope of documentary disclosure, either prior to or during the arbitration proceedings. It therefore lies in the hands of the parties, their counsel and the tribunal to address the appropriate scope of the documentary disclosure that will be permitted in an international arbitration. [Page400:]
A constant challenge in arbitration is meeting the overriding requirements of fairness and equality of treatment and allowing the parties an opportunity to present their case, 18 while adequately controlling time and costs. 19 The complaint is frequently heard from users that arbitration too often resembles litigation and is equally if not more expensive and time-consuming. This is often the result of counsel simply applying their litigation practice in an arbitration context.
However, if it is accepted that parties should be entitled to seek disclosure of documents that are relevant and material to the outcome of the case, having due regard to balancing the amount and nature of the dispute, the likely relevance and materiality of the documents and the cost and burden of giving disclosure, it is not productive to take the position that electronic disclosure "has no place in international arbitration". Rather, it is appropriate to address constructively the proper application of the balancing exercise to be conducted by the tribunal given the special considerations that arise in the giving of electronic disclosure. Arbitrators and counsel are required to get to grips with these issues if they are to meet the requirements of the dispute and the wishes of the parties.
International arbitration is not litigation. 20 However, for international arbitration practitioners it is instructive to observe the parallel developments in electronic disclosure that have taken place in a litigation context in the United States, and the experience of US in-house counsel faced with the often onerous challenges of electronic discovery. While many will say that commercial parties resort to arbitration precisely in order to avoid these experiences, which are to be avoided in international arbitration at all costs, these lessons are instructive for the purpose of informed debate on how best to address the issue of disclosure of electronic documents when and to the extent that this issue arises in international arbitration.
The most helpful groundwork in the litigation area was performed by the Sedona Conference, commencing in 2002, in which knowledgeable counsel, judges and IT experts sought to address discovery of electronic data in a litigation context. The result of those efforts was the Sedona Principles on the Disclosure of Electronic Data, which were issued in 200421 and reissued in 2007. 22 The work of the Sedona Conference was drawn upon in the [Page401:] Cresswell Report of 200523 in the United Kingdom, resulting in the Practice Direction to Part 31 of the English Civil Procedure Rules (CPR 31) in November 2005, 24 followed by amendments to the US Federal Rules of Civil Procedure25 in December 2006.
All reflect a broad and helpful consensus on a variety of practical means to address the disclosure of electronic documents. These principles include the essential principle of early consideration of electronic disclosure by the parties, their counsel and by the tribunal, for use only in those cases (by no means all arbitrations) in which the time and cost of electronic disclosure may become burdensome and contentious.
Large volumes of electronic data may include documents that are privileged under the applicable law or procedure. The producing party is particularly vulnerable to the inadvertent disclosure of privileged material, with the accompanying risk of deemed waiver of privilege, unless a careful and potentially expensive review is made to identify claim privilege in respect of such documents. Sedona Principle 10 suggests that a "responding party should follow reasonable procedures to protect privileges and objections in connection with the production of electronically stored information". The introduction to the Sedona principles states that Sedona Principle 10 was intended to emphasize "the need for reasonable, mutually agreed-upon procedures to protect privileges and objections to production". CPR section 31.20 provides "[w]here a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court".
In an arbitration context, Article 9.2(b) of the IBA Rules allows the tribunal to refuse an order for disclosure if there is a "legal impediment or privilege under the legal or ethical rules determined" by the tribunal to be applicable.
Parties wishing to protect themselves against inadvertent waiver of privilege may consider entering into "quick peek" or "claw back" agreements with the requesting party. Under a "quick peek" agreement, the parties agree to disclose information before production but reserve the right to assert privilege later in the disclosure process. Under a "claw back" agreement, the parties agree a procedure for the return of inadvertently produced privileged material within a reasonable time of its disclosure. The parties can seek to have such agreements confirmed or reflected in an order or direction of the tribunal. [Page402:]
Under most arbitration rules, the tribunal has a discretion to award costs, including the costs associated with documentary disclosure, in the absence of agreement between the parties. The allocation of costs is one means available to the tribunal to moderate the potentially oppressive effects of extensive requests for electronic disclosure.
In a litigation context, Sedona Principle 13 permits the shifting of all or some of the costs of production from the producing party to the requesting party where the electronic data sought are not reasonably accessible. Factors to be applied include the extent to which the request is specifically tailored to discover the relevant information; the availability of such information from other sources; the total cost of production compared to the resources available to each party; the relative ability of each party to control costs and its incentive to do so; the importance of the issues at stake; and the relative benefits of obtaining the information.
In the context of the balancing exercise to be conducted by the tribunal in considering a request for disclosure, it is open to the requesting party to offer to bear the cost of disclosure, either on a final basis or subject to the final discretionary award on such costs dependent upon the outcome of the arbitration. Such an offer may tip the balance in favour of an order for disclosure, where the costs of compliance would otherwise be a basis for objection, in all the circumstances of the case.
In recognition of the need to address the challenge of electronic disclosure, a number of international arbitration institutions have introduced or are considering rule changes, guidelines or protocols, including the AAA/ICDR, 26 the Chartered Institute of Arbitrators and the CPR. 27 ICC28 formed a working party in June 2008 to provide a report on techniques for the production of electronic documents. The IBA has formed an IBA Rules of Evidence Subcommittee to consider appropriate revisions to the IBA Rules. Much of the discussion among the IBA Arbitration Committee members leading up to IBA annual meeting in October 2008 concerned the disclosure of electronic documents. [Page403:]
Given the particular challenges raised by disclosure of electronic information, and the fact that individual arbitrators, parties and their counsel may be unfamiliar with these challenges, it is helpful for arbitration institutions to provide an appropriate measure of guidance in order to address and avoid the potential issues and problems that may arise in some cases.
Such rules or guidelines for electronic disclosure in international arbitration should aim to distil from the litigation experience only those principles that are appropriate for application in an arbitration context, always recognizing the fundamental difference between the discovery obligation in common law litigation and the disclosure of documents in an arbitration.
In the course of 2006, the AAA undertook a review aimed at ensuring that its practices and procedures were responsive to the requirement that arbitration remained a cost-effective and expedient process for its end users. The AAA Taskforce on the Exchange of Documentary and Electronic Materials began its work in July 2007. It noted the apprehension, particularly in civil law jurisdictions, of a trend towards the "Americanization" of international arbitration and therefore decided to focus on the exchange of documentary and electronic material. It considered that the AAA, as one of the leading dispute resolution service providers, was particularly well placed to proffer guidance to arbitrators, counsel and parties as to the best practice in tackling issues arising out of document disclosure and evidence gathering in international arbitration.
In May 2008, the ICDR Guidelines for Information Exchanges in International Arbitration were issued. They are meant to apply to all international cases administered by the ICDR commenced after 31 May 2008, unless the parties agree expressly to opt out of their application. The Guidelines adopt a strictly minimalist approach to guidance on the disclosure of electronic documents, which are addressed in a single paragraph:
"4. Electronic Documents
When documents to be exchanged are maintained in electronic form, the party in possession of such documents may make them available in the form (which may be paper copies) most convenient and economical for it, unless the Tribunal determines, on application and for good cause, that there is a compelling need for access to the documents in a different form. Requests for documents maintained in electronic form should be narrowly focused and structured to make searching for them as economical as possible. The Tribunal may direct testing or other means of focusing and limiting any search." [Page404:]
The taskforce concluded that "… no further provision made specifically with electronic disclosure in mind was appropriate. The concern of the Taskforce was that if further specific rules were to be developed, it might encourage a line of argument that issues in respect of electronic disclosure should be treated differently from similar issues arising in the context of any other documentary disclosure requests: the fact that such specific provision had been made could be said to be indicative of an acknowledgement that the general standard imposed by the Guidelines should not necessarily be applied to electronic disclosure. The Taskforce determined, therefore, that no separate guidelines would be drawn up for electronic disclosure." 29
The CIArb Protocol for E-Disclosure in Arbitration was issued in October 2008. As stated in the introduction ('Purpose of the CIArb Protocol for E-Disclosure in Arbitration'), it is not intended to be applied in all arbitrations but only in those cases in which the time and cost burdens of giving disclosure of electronic documents may be an issue. Nor is it intended to be overly prescriptive. The parties are free to agree otherwise than as provided. It is intended to act as a useful prompt or checklist for those arbitrators, parties and counsel who may be less familiar with the issues that may arise in giving disclosure of electronic data. 30
The CIArb Protocol flags for early consideration by the parties and by the tribunal those techniques and tools that are available to reduce the burdens of giving electronic disclosure in those cases in which issues relating to disclosure of electronic documents are likely to arise. 31 In such cases, the tribunal should raise with the parties the question of whether e-disclosure may arise for consideration at the earliest opportunity and in any event no later than the preliminary hearing. 32
Matters for early consideration by the parties in such cases may include:
Whether documents in electronic form are likely to be the subject of a request for disclosure (if any) during the course of the proceedings, and if so; what types of electronic documents are within each party's control, and what are the computer systems, electronic devices, storage systems and media on which they are held. 33
What (if any) steps may be appropriate for the retention and preservation of electronic documents, having regard to a party's data retention policy and practice (provided that it is unreasonable to expect a party to take every conceivable step to preserve every potentially relevant e-document). 34[Page405:]
What rules and practice apply to the scope and extent of disclosure of electronic documents in the proceedings, whether under the agreed arbitration rules, the applicable arbitral law or under any agreed rules of evidence (e.g. the IBA Rules). 35
Whether the parties have made, or wish to make if they have not done so, an agreement to limit the scope and extent of electronic disclosure of documents. 36
What tools and techniques37 may be usefully considered to reduce the burden and cost of e-disclosure (if any), including:
limiting disclosure of documents or certain categories of documents to particular date ranges or to particular custodians of documents;
the use of agreed search terms;
the use of agreed software tools;
the use of data sampling; and
the format and methods of e-disclosure.
Whether any special arrangements with regard to privilege or waiver of privilege in respect of electronic documents disclosed may be agreed. 38
Whether any party and/or the tribunal may benefit from professional guidance on IT issues relating to e-disclosure having regard to the requirements of the case.
Reflecting the appropriate scope of disclosure in international arbitration contained in the IBA Rules, any request for the disclosure of electronic documents should properly contain a description of the document or a narrow and specific requested category of documents; a description of how the documents requested are relevant and material to the outcome of the case; a statement that the documents are not in the possession or control of the party requesting the documents, and a statement of the reason why the documents are assumed to be in the possession or control of the other party. 39
In making any order or direction for e-disclosure, or for the retention and preservation of electronic documents, the tribunal should have proper regard to the appropriate scope and extent of disclosure of electronic documents in the proceedings, whether under the agreed arbitration rules, the applicable arbitral law or any agreed rules of evidence (e.g. the IBA Rules). The tribunal should also have due regard to any agreement between the parties to limit the scope and extent of disclosure of documents. 40[Page406:]
In making any order or direction for e-disclosure, the tribunal should have regard to considerations of reasonableness and proportionality; fairness and equality of treatment of the parties and ensuring that each party has a reasonable opportunity to present its case, by reference to the cost and burden of complying with the order or direction. This will require balancing considerations of the amount and nature of the dispute and the likely relevance and materiality of the documents requested against the cost and burden of giving e-disclosure. 41
The primary source of disclosure of electronic documents should be reasonably accessible data, namely active data, near-line data or offline data on disks. In the absence of particular justification, it will normally not be appropriate to order the restoration of back-up tapes; erased, damaged or fragmented data; archived data; or data routinely deleted in the normal course of business operations. A party requesting disclosure of such electronic documents may be required to demonstrate that the relevance and materiality outweigh the costs and burdens of retrieving and producing the same. 42 However, in considering these issues due regard must be paid to improvements in the available techniques for recovery of electronic data (for example, in the recovery of data from back-up tapes).
The production of electronic documents ordered to be disclosed should normally be made in the format in which the information is ordinarily maintained or in a reasonably usable form. The requesting party may request that the electronic documents be produced in some other form. In the absence of agreement between the parties, the tribunal should decide whether production of electronic documents ordered to be disclosed should be in native format or otherwise. 43
A party requesting disclosure of metadata in respect of electronic documents should be required to demonstrate that the relevance and materiality of the requested metadata outweigh the costs and burdens of producing the same, unless the documents will otherwise be produced in a form that includes the requested metadata. 44
The tribunal should consider the appropriate allocation of costs in making an order or direction for e-disclosure. 45 The judicious use of cost shifting may be an effective means of controlling requests for electronic disclosure, with the ultimate decision on where such costs will ultimately lie being reserved for the final award on costs. [Page407:]
The tribunal should establish a clear and efficient procedure for the disclosure of electronic documents, including an appropriate timetable for the submission of requests for e-disclosure and compliance with the same. 46 It will be obvious that early consideration of e-disclosure issues is essential in fixing the procedural timetable for documentary disclosure.
The tribunal should require that a producing party gives advance notice to the requesting party of the electronic tools and processes that it intends to use in complying with any order for disclosure of electronic documents. 47 This may be of considerable practical importance if objections to the adequacy and cost of these measures can be raised only after they have been carried out.
The tribunal may, after discussion with the parties, obtain technical guidance on e-disclosure issues as it considers necessary and appropriate. Such discussion shall include who shall be instructed to provide technical guidance and the costs expected to be incurred. The costs of the same shall be included in the costs of the arbitration. 48 The tribunal should expect to be able to look to the assistance of counsel for the parties in the first instance. Familiarity with e-disclosure issues may be amongst the factors influencing the parties' choice of arbitrator(s) in those cases in which issues of electronic disclosure are expected to arise.
In the event that a party fails to provide disclosure of electronic documents ordered to be disclosed or fails to comply with any agreement between the parties or any order of the tribunal as to the giving of electronic disclosure, the tribunal shall be entitled to draw such inferences as it considers appropriate when determining the substance of the dispute or any award of costs or other relief. 49
A draft CPR Protocol on Pre-Hearing Disclosure of Documents and Information in Arbitration was circulated in early 2008. The CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration was issued in December 2008.
Recognizing that there may be different expectations on the part of arbitration users and their counsel, the CPR Protocol offers various "modes" of electronic disclosure (listed in Schedule 2) "ranging from minimal to extensive", so that the parties may choose the general way in which their arbitration proceedings will be conducted in the area of (inter alia) document [Page408:] disclosure. The listed modes of disclosure of electronic information range from disclosure by each party limited to copies of electronic information to be presented in support of that party's case (Mode A) to disclosure of electronic information regarding non-privileged matters that are relevant and material to any party's claim or defence, subject to limitations of reasonableness, duplicativeness and undue burden (Mode D).
In addressing the disclosure of electronic information, the CPR Protocol states: "Production of electronic materials from a wide range of users or custodians tends to be costly and burdensome and should be granted only upon a showing of extraordinary need." 50 "Extraordinary need" is not defined. Given the continuing advances in the methods, speed and costs of storage and retention of electronic data, it may be the case that gathering data from even a wide range of users or custodians will not be particularly costly or burdensome in the circumstances of the case. The circumstances of the particular case may in any event justify such efforts even if costly or burdensome, applying the balancing exercise described above.
The CPR Protocol also provides that issues regarding the scope of the parties' obligation to preserve documents for potential disclosure in the arbitration should be dealt with at an early scheduling conference or as soon as possible thereafter. 51 It may be noted that parties to an international arbitration are generally under no obligation to preserve documents and that sanctions for non-preservation tend to be limited to the drawing of negative inferences by the tribunal. However, preservation of documents may nevertheless be an appropriate matter for early consideration.
The Rules of Evidence Subcommittee of the IBA Arbitration Committee has commenced a wide-ranging review of the IBA Rules, which were first issued in 1999. This process will take account of the views of arbitration users from a wide range of jurisdictions and legal traditions. The lengthy and careful process of consultation that led to the 1999 IBA Rules of Evidence resulted in a broad consensus of support that has been their greatest strength. It is to be hoped that the revisions to the IBA Rules will make adequate and helpful provision for the challenges posed by the disclosure of electronic documents, either by way of revisions to the IBA Rules or in the form of a protocol or guidelines for disclosure of electronic documents that may accompany the revised IBA Rules of Evidence for use in those cases where such issues arise. The latter approach may answer the concerns of those who believe that rule changes will induce parties to refer to them in cases where this is not appropriate. [Page409:]
In June 2008, ICC established a working party to produce a report on Techniques for Production of Electronic Information in International Arbitration. The report is intended to identify the special challenges that arise from "e-production" and to set out factors and techniques that parties and arbitrators may consider adopting to deal with the production of electronic documents, without compromising the flexibility of the parties and the tribunal to address these challenges. This report will hopefully be able to draw upon the efforts of other institutions in this area, as described above.
Unsurprisingly, the techniques and tools for managing the storage and recovery of electronic data continue to evolve. Improved software tools for identifying potentially relevant documents by search characteristics and concept software tools for arranging documents for more efficient attorney review (normally the largest cost item in giving disclosure) continue to develop.
Under pressure from litigation and regulatory investigation requirements, many businesses are already moving towards more efficient and centralized enterprise data management systems that will further enhance the speed, cost and efficiency of the identification and recovery of electronic data.
The above developments will make it less onerous and burdensome for a party to produce requested "relevant and material" electronic documents as these enhancements are implemented. These improvements, as they occur, should therefore be factored into the decision of the arbitral tribunal when applying the balancing considerations described above, including due consideration of fairness and equality of treatment where there is an imbalance between the parties in terms of the ability to disclose documents.
However, the ongoing developments in electronic data storage do not all tend towards quicker, cheaper and more efficient recovery of electronic data. The trend towards storage of data on platforms maintained by outside providers (such as Microsoft, Yahoo and Google), which is sometimes referred to as the "Cloud", may increase the complexity of data retrieval. Users may not have control over, or even knowledge of, the IT technology [Page410:] that supports them . Forms of electronic communication, such as increasingly popular Twitter, and the particular dynamics and complexities that such instantaneous communications generate, give rise to particular challenges in the context of evidential issues in commercial disputes.
The need to monitor these ongoing developments for the purpose of keeping guidelines and protocols on electronic disclosure up-to-date is demonstrated by the example of back-up tapes. It is currently a generally accepted principle in both litigation and in arbitration that "[i]n the absence of particular justification it will normally not be appropriate to order the restoration of back-up tapes; erased, damaged or fragmented data; archived data or data routinely deleted in the normal course of business operations". 52 This reflects the onerous time and costs normally associated with retrieving and restoring data that is stored on back-up tapes. However, recent developments have considerably improved the accessibility of data stored on back-up media that previously might have been considered unattainable. Restoration of data in non-native formats allows for the restoration of data (including metadata) outside of its originating application, even if the owner of the data cannot find the original software versions under which the data was stored. To the extent that the restoration of back-up tapes is becoming cheaper and more efficient, it will be appropriate to take this into account in deciding whether the restoration of data from back-up tapes is reasonable and proportionate, in all the circumstances of the case.
It will be evident that, without having to become IT experts, international arbitrators will be required to have an increasing awareness of the practical considerations that arise in the giving of electronic disclosure in international arbitration in those cases in which it is an issue. Counsel for the parties have an important role in assisting the tribunal to achieve this awareness. However, parties are entitled to expect that arbitral tribunals will address these issues in an informed and constructive manner. Guidelines, protocols or institutional rule changes may act as a useful prompt or checklist for those less familiar with the issues that may arise in the disclosure of electronically stored information in those cases (not all cases) in which they arise for consideration.
1 See: http://www.arbitrators.org/institute/EDisclosure.asp.
2 Sometimes referred to a "data about data", metadata is data describing context, content and structure of records and their management through time, including schema, table, index, view and column definitions.
3 A measure of computer processor storage and real and virtual memory, a gigabyte is bytes or 1,073,741,824 bytes in decimal notation.
4 A terabyte is 1,000 gigabytes and is 240 bytes or 1,099,511,627,776 bytes in decimal notation. A terabyte of text printed out would create 500,000,000,000 text pages, a paper stack 85,000 feet high. A petabyte is 1,000 terabytes.
5 Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, implemented in 1995.
6 See infra note 7.
7 This has been described as the ability to "google" an organization's entire database in real time in order to identify relevant documents.
8 See, e.g., Michael E. Schneider, 'A Civil Law Perspective: "Forget E-discovery!"', in David J. Howell (ed.), Electronic Disclosure in International Arbitration (Juris Publishing 2008).
9 Coleman (Parent) Holdings Inc. v. Morgan Stanley, Inc. 2005 WL 674885 Fla.Cir.Ct.; and Qualcomm Inc. v. Broadcom Corp. 2008 U.S. Dist. LEXIS 911, 7 January 2008.
10 For example, Article 15.6 of the LCIA Arbitration Rules.
11 For example, Article 20(5) of the ICC Rules; Article 19 of the ICDR International Arbitration Rules; Article 22(e) of the LCIA Arbitration Rules; and Article 24(3) of the UNCITRAL Arbitration Rules.
12 New York Convention on the Recognition and Enforcement of Awards of 1958.
13 UNCITRAL Arbitration Rules adopted on 5 December 1976.
14 UNCITRAL Model Law on International Commercial Arbitration adopted on 21 June 1985.
15 IBA Rules on the Taking of Evidence in International Commercial Arbitration adopted by a resolution of the International Bar Association Council on 1 June 1999.
16 Article 3.9 of the IBA Rules.
17 IBA Rules Article 9.2 of the IBA Rules.
18 Article 18 of the Model Law.
19 For example, Section 33(1)(a) of the English Arbitration Act 1996 imposes a positive duty on the tribunal to "… adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined". Article 14.1 of the LCIA Arbitration Rules provides: "The parties may agree on the conduct of their arbitral proceedings and they are encouraged to do so, consistent with the Arbitral Tribunal's general duties at all times: … (ii) to adopt procedures suitable to the circumstances of the arbitration, avoiding unnecessary delay or expense, so as to provide a fair and efficient means for the final resolution of the parties' dispute."
20 Nor is international arbitration "arbitration" in the narrow sense. See Jan Paulsson, 'International Arbitration is Not Arbitration', John E.C. Brierley Memorial Lecture, McGill University, Montreal, 28 May 2008.
21 Sedona Principles: Best Practices, Recommendations and Principles for Addressing Electronic Document Production, January 2004.
22 The Sedona Principles for Electronic Document Production, 2nd edn., produced by the Sedona Conference Working Group on Best Practices for Electronic Document Retention and Production, June 2007.
23 The English Commercial Court Working Party's Report on Electronic Disclosure was published on 6 October 2004. The Working Party, chaired by Mr Justice Cresswell, was set up under the auspices of the Commercial Court Users' Committee.
24 See: http://www.justice.gov.uk/civil/procrules_fin/ contents/parts/part31.htm. See also the Practice Direction to CPR 31 (October 2005), available at: http://www.justice.gov.uk/civil/ procrules_fin/contents/practice_directions/pd_ part31.htm.
25 A number of substantive revisions were made to the Federal Rules of Civil Procedure (FRCP), effective 1 December 2006. Some of the most significant changes were made to Rule 26, which governs the production of evidence in most federal court cases, in particular as the rule applies to electronically stored information (ESI).
26 International Centre for Dispute Resolution (ICDR) Guidelines for Information Disclosure and Exchange in International Arbitration Proceedings. The ICDR is the international division of the American Arbitration Association (AAA) and the Guidelines were produced by the AAA Task Force on Exchange of Documentary and Electronic Materials.
27 CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration was issued in December 2008.
28 The ICC Task Force on the Production of Electronic Documents in Arbitration was formed in June 2008.
29 John Beechey, 'The ICDR Guidelines for Information Exchanges in International Arbitration: An Important Addition to the Arbitral Toolkit', 63(3) Dispute Resolution Journal (2008).
30 'Purpose of CIArb Protocol for E-Disclosure in Arbitration'.
31 § 1 of the CIArb Protocol for E-Disclosure in Arbitration. The importance of early consultation on these issues by counsel for the parties, and the potential costs consequences of a failure to do so, were highlighted in the recent English High Court decision in Digicel (St. Lucia) Ltd. & Ors. v. Cable & Wireless PLC & Ors. [2008] EWHC 2522 (Ch), per Morgan, J.
32 § 2 of the CIArb Protocol.
33 Ibid., at § 3(i) and (ii).
34 Ibid., at § 3(iii).
35 Ibid., at § 3(iv).
36 Ibid., at § 3(v).
37 Ibid., at § 3(vi).
38 Ibid., at § 3(vii).
39 Ibid., at § 4.
40 Ibid., at § 5.
41 Ibid., at § 6.
42 Ibid., at § 7.
43 Ibid., at § 8.
44 Ibid., at § 9.
45 Ibid., at § 10.
46 Ibid., at § 11.
47 Ibid., at § 12.
48 Ibid., at § 13.
49 Ibid., at § 14.
50 CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration, Section 1(d)(1) (General Principles).
51 Ibid., at Section 1 (d) (3) (Preservation of Electronic Information).
52 §7 of the CIArb Protocol; see also Sedona Principle 8.