1. The mandate of the task force

In April 2008, the US national committee of ICC, the US Council for International Business, submitted a report to the Steering Committee of the Commission on Arbitration, requesting the creation of a task force of the ICC Commission. The US proposal advocated the establishment of a task force requested "to study the practice of electronic discovery or disclosure ('e-discovery' or 'e-disclosure') in international arbitration" and to prepare notes or recommendations for arbitrators and parties for the use of e-discovery or e-disclosure in arbitration proceedings.

While stressing the importance of the disclosure of e-documents, the proposal of the US national committee also warned of the dangers of extensive discovery for international arbitration, including possible inefficiency, increases in costs and delays in the proceedings.

Following the recommendation of the Steering Committee of the Commission on Arbitration, the chair of the commission suggested to the ICC Secretary General the creation of a task force with the following mission:

- to study and identify essential features and effects of the disclosure of electronic documents in international arbitration; and

- to establish a report, possibly in the form of notes and recommendations for the production of electronic documents in international arbitration. [Page416:]

Thus, the mandate of the task force adopts a more cautious approach to the issue than that originally suggested by the US national committee, to the extent that it does not mention discovery or e-discovery but, rather, disclosure or production of electronic documents, or electronically stored information (ESI).

2. Composition of the task force

The number of people who have asked to join the task force reflects the growing interest in this subject in the international arbitration community. The task force presently numbers over 60 members from 14 countries representing both the civil and common law traditions. A common law-civil law balance has also been maintained for the co-chairs of the task force: Robert Smith, an American lawyer and a partner with Simpson Thatcher & Bartlett in New York, and myself, an Italian lawyer by training, practicing in France with the English law firm Eversheds.

3. Expected work product

These are early days for the work of the task force, as a detailed outline of the report is still under discussion. However, the general methodology and approach of the report can be briefly anticipated, with the caveat that there will inevitably be adjustments down the road.

First of all, the work of the task force will not depart from the generally accepted principle that US-style discovery has no place in international arbitration. There is no question that this practice is neither acceptable nor desirable in international arbitration.

It is also evident that-when a document production exercise that involves ESI is carried out-the essential advantages of international arbitration need to be maintained and preserved. They can be summarized as follows:

- Arbitral proceedings must remain flexible, and, when it comes to document production, including the production of ESI, they cannot be constrained by national laws applying to disclosure and discovery.

- Parties must remain free to produce the documentary evidence they rely upon in support of their case. There can be no obligation to produce documents, electronic or otherwise, absent specific agreement between the parties or a ruling of the arbitral tribunal to that effect, having regard to the needs and circumstances of each case. [Page417:]

- Conversely, there is no right to disclosure or discovery in international arbitration. However, tribunals do have the power to request document production if the circumstances of the case so warrant.

It is important to stress that the report that will result from the work of this task force does not intend to impose on parties and arbitral tribunals an automatic reference to the production of electronic information when the need does not present itself, and it will not purport to prescribe potentially inflexible "rules", or even "recommendations", that should be applied in international arbitration with respect to those issues. The purpose of the report is to provide practical guidance to parties, counsel and arbitrators in addressing these issues, if and when they arise.

In the context of ICC arbitration, the general procedural framework is of course provided by the ICC Arbitration Rules. Under Article 15(1), the arbitral proceedings are governed by the rules and, where these are silent, by the procedural rules that the parties or, in the absence of agreement between the parties, the arbitral tribunal may settle on. Moreover, the same provision expressly states that parties and arbitral tribunals do not need to refer to the specific rules of procedures of any national law. This provision also covers the rules applicable to the production of documents, including ESI. Article 15(2) further provides that the tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case. Article 20(1) authorizes the tribunal to proceed within as short a time as possible to establish the facts of the case by all appropriate means. Finally, if need be, any production of documents should also take into account the protection of trade secrets and confidential documents (Article 20(7)).

Therefore, under the ICC Arbitration Rules, any decision as to whether any document production, including production of electronic documents, should occur, and whether production of electronic documents qualifies as "appropriate means" to establish the facts of a given case, is left to the parties and the arbitrators. Naturally, any such determination must respect the fundamental principles of due process, i.e. it must ensure that the parties are treated fairly and impartially and have a reasonable opportunity to present their cases.

When dealing with requests for production of documents, arbitral tribunals are usually guided by the IBA Rules on the Taking of Evidence in International Commercial Arbitration, which seek to combine civil and common law practice. Relevance, materiality and proportionality are the key principles [Page418:] that inspire document production under the IBA Rules. The rich body of practice developed by tribunals under these rules cannot be ignored by the task force. As part of its work, the task force will thus address the extent to which the existing IBA Rules on the Taking of Evidence in International Commercial Arbitration provide guidance on e-production issues, and whether and how the IBA Rules might be complemented by the task force's work product. The task force plans to work in close cooperation with the IBA Rules of Evidence Subcommittee, which is currently amending these rules.

With these general considerations in mind, the objective of the task force's report is two-fold: (i) to educate arbitrators, parties and counsel in international arbitration about the features of ESI that distinguish it from paper documents and to identify the issues and special challenges presented by e-production in international arbitration; and (ii) to set forth factors, guidelines and techniques that parties and arbitrators may consider in dealing with the production of ESI.

The main features of electronic information that have been identified so far include:

- the greater volume of ESI as opposed to paper documents;

- the greater dispersion of ESI, due to the fact that it can be stored in mainframe computers, network servers, desktop computers, laptops, blackberries, etc.;

- the greater durability of e-documents, which, due to their nature, are more difficult to discard or destroy;

- the wide range of problems that may arise when e-documents are modified, over-written or changed;

- the need for computer hardware and software to "produce" ESI;

- the availability of search engines; and

- the fact that ESI contains metadata, i.e. information that describes how, when and by whom a document was created, collected, accessed or modified, its size and how it was formatted.

The report proposes to tackle a number of the more difficult issues raised by the use of electronic information, including the following:

1. What constitutes a reasonable search for responsive electronic documents? More particularly:

- Which custodians' electronic files must be searched? [Page419:]

- For each custodian, which sources of electronic information must be searched: only accessible active outline sources or less accessible, inactive and/or archived sources as well?

2. What steps, if any, must be made to preserve electronic information? In addition, it must also be established when any such steps should be undertaken: once a dispute arises, when an arbitration is commenced or when a document request is made?

3. Who should bear the cost of producing electronic documents?

4. How should privileged information be protected given the vastly greater volume of e-documents to be reviewed and produced?

5. In what form should ESI be produced: electronic form or native format? For instance, in the case of a spreadsheet, it may be useful to retrieve the original formulas and sub-routines, as the end result of the calculation may not be sufficient.

The task force also hopes to identify-with the help of the members who have had first-hand experience with respect to the production of electronic documents in international arbitrations-some of the recurring issues that may arise in practice. We are considering doing so by reference to factual scenarios, explaining how certain situations may arise and seeking to provide techniques or practical guidance for addressing them.

With respect to the techniques to be employed by parties and tribunals if and when the production of ESI is required, the report will first consider the timing of this production, i.e. when to address the issues arising from the production of this type of information. The question is whether this should be done as early as the arbitration agreement, in a preliminary conference with the arbitrators or, rather, on an ad hoc basis, if and when an issue arises in response to a particular e-document request.

As to whether the production of ESI ought to be authorized by tribunals in general terms, the work of the task force will be inspired by some important considerations. First, the need to balance the benefits versus the burdens and costs of e-production in light of the particular circumstances of the case and of the actual request. In this respect, it will be necessary to verify the relevance and materiality of the request, its specificity and the [Page420:] possible availability of the information from other sources. Due account will also be given to the ease or difficulty of searching for and retrieving ESI in each particular case and of rendering it into an acceptable format. Finally, the request should also be assessed in relation to the importance of the issues and the amounts at stake in the arbitration, the parties' resources, their reasonable expectations and any other relevant factors.

The task force will seek to identify possible ways to address and reduce the burdens of the production of electronic documents, depending on the specifics of each case, including:

- forbidding such production altogether;

- limiting the amount, types or sources of e-documents to be produced;

- requiring a greater showing of materiality or need for e-documents;

- using search words to identify relevant ESI;

- using sampling of electronic sources to identify relevant ESI;

- using IT experts;

- using a referee appointed by the tribunal to resolve ESI production disputes, if any (with the caveat that this practice adds to complexity and costs); and

- shifting the cost of review and production of e-documents from the producing party to the requesting party.

- In allocating costs, the tribunal may take into account the conduct of a party during the e-document production process.

The task force also proposes to offer guidelines to deal with a handful of specific issues relating to the production of electronic documents that are more amenable to resolution through guidelines or presumptions, such as, for example, limiting such production to active and accessible e-files (e.g. e-mails and hard drives), unless an overriding need for less accessible e-sources (e.g. back-up tapes) is established by the requesting party, and creating a presumption against the production of metadata absent special circumstances shown by the requesting party.

Other issues that will be considered in the task force's report include the form of the production, issues relating to privilege and the possible use of "claw-back" arrangements to reduce the burdens of privilege review and the need to preserve e-documents (as part of the general power to recommend the preservation of evidence). In addition, the report will consider the sanctions, if any, beyond the possibility to draw adverse inferences, that may be ordered by arbitral tribunals in case a party fails to produce e-documents. [Page421:]

While it is undeniable that the production of electronic information presents a number of challenges, it also offers unique opportunities that should be not underestimated. ESI makes it possible to search for documents and obtain information in a more efficient manner and yield better results than the production of papers.

When it comes to the challenges of ESI, the lack of technical knowledge on the part of parties, their counsel and arbitrators should not be neglected. In order to assist arbitrators, parties and counsel in dealing with ESI, the task force is planning to attach two specific tools as appendices to its report: a glossary of technical terms and a technical primer, which, drawing on the expertise of some of the task force's members, will endeavour to explain in simple terms what electronic information is and how it is created and stored.

The realities of the electronic age cannot be ignored any longer. Requests for production of documents in international arbitration already include ESI. This does not mean that ESI should be perceived as a threat to international arbitration as we know it or as the vehicle through which US-style discovery will penetrate the world of international arbitration. Such fears are, in my view, unjustified. Ignoring the challenges posed by electronic information will not make them go away but may by contrast create greater uncertainty and lead to further complications.

It is in this framework that the ICC Task Force on the Production of Electronic Documents in Arbitration sees its work. As stated above, the task force purports to identify and analyze the complex technical and legal problems arising as a result of the production of electronic data, but it intends to do so while fully respecting the principles inspiring the production of documents in international arbitration. Clearly, the parties' and arbitrators' flexibility to address these issues in the light of the specific circumstances of each case should not be compromised. Indeed, the task force's report should be viewed as complementary to the ICC report on Techniques for Controlling Time and Costs in Arbitration, to the extent that it will provide a methodology for the parties, their counsel and arbitral tribunals to approach the practical issues that may arise in relation to ESI in the most efficient and cost effective manner.