'282. In the course of the hearings in this matter, two procedural issues were reserved for decision in this final Award. These concerned:

(a) non-production of documents by [Claimant] in relation to the [Integrated Systems Test (IST)];

. . . . . . . . .

283. Given that each motion has a bearing upon the merits of this dispute, each is considered below, before the Parties' respective claims and counterclaims are addressed.

(1) Background to [Respondent]'s motion regarding IST documents

284. . . . [D]uring the course of his testimony, [Mr A, Claimant's expert] referred to a number of contemporaneous documents which were said to have emanated from, or to otherwise evidence, the IST that had been carried out in January / February 2002, and which hitherto had not been produced by [Claimant] in these proceedings . . . As described by [Mr A], these were documents which [Claimant] had supplied to him, but which he had not had time to review before he submitted his expert statements. The documents were also said to support his expert opinion on the IST . . .

285. Counsel for [Respondent] immediately raised an objection . . ., pointing out that the undisclosed documents were potentially "crucial", and could have a bearing upon a critical issue in this case. It was argued that the gravity of the non-disclosure, and the prejudice [Respondent] was caused in being unable to cross-examine upon the documents, warranted an order "striking out" [Mr A]'s evidence on the IST, or the drawing of adverse inferences (i.e. that had the documents been disclosed, they would have been favourable to [Respondent]). [Respondent] emphasised that blame for the non-disclosure must lie with the [Claimant] itself . . . For its part, [Claimant] observed that as matters then stood, the actual nature and significance of the documents in question remained unclear . . .

286. The Tribunal made a preliminary ruling in which it observed that the failure to disclose appeared to be serious, without any clear explanation so far having been given (other than one expert's own decision whether or not to look at the documents in question). Equally, however, the sanctions for which [Respondent] had applied were also very serious, and could not be ruled upon before the true nature of the documents in question had been considered. Accordingly, the Tribunal directed, inter alia, . . . that (1) [Mr A] undertake a complete search of documents relating to the IST in his custody or control; and (2) that any documents found be produced to [Respondent], following which any applications could be made and responded to by [Claimant] . . .

287. On . . . the second day of the experts hearing, counsel for [Claimant] produced 9 pages of documents related to the IST that had been faxed to [Mr A] by his . . . office earlier that day . . .

288. Following submissions by each party, the Tribunal restated and refined its previous direction, and imposed a time schedule for compliance . . .

289. [Some days later], pursuant to the Tribunal's directions, a signed statement by [Mr A] was provided, in which he confirmed, inter alia, that having personally conducted a search of all documents related to this case in the possession of his company . . ., no further documents related to the IST (other than the 9 faxed pages) had been found. The same 9 pages as previously produced, together with translations, were attached.

(2) [Respondent]'s motion regarding IST documents

290. By a "letter brief" . . ., [Respondent] responded to [Mr A]'s statement. [Respondent] characterised [Claimant]'s failure to disclose the documents in question as "intentional", and a violation of the IBA Rules and "the spirit of these proceedings". It set out detailed submissions, and attached a number of legal authorities.

291. [Respondent] noted that the IST was a critical event in the chronology of this case, since [Claimant] had cited the results of the IST as (1) its primary justification for its termination of the Project, and (2) support for its assertion that [the software application] "does not work in Spain". [Respondent]'s case was that the IST was a "sham", the purported results of which were a pretext for [Claimant] to prematurely and unjustifiably terminate the contract.

292. [Respondent] stressed that the limited sample of IST documents that had been produced (i.e. the nine pages) appeared to prove that [the software application] was working at [Claimant], stating that: "Specifically, at least seven out of the nine pages appear to be [the software application] output . . . "

293. [Respondent] recalled that until the conclusion of the expert hearing, it (and on its case the Tribunal) had been "misled" into believing that the only documents relating to the "IST" (which were relied upon by [Claimant] and [Mr A]) were the various . . . documents to which reference has been made in earlier sections of this Award. These, on [Respondent]'s case, are inconclusive as to the nature and success of the IST. Throughout these proceedings, [Respondent] had made repeated requests for "objective, raw data" on the IST, and yet no documents were voluntarily produced by [Claimant].

294. In support of its motions, [Respondent] submitted that had the nine pages been produced earlier, it would have "relied on them in unravelling what really occurred during the "IST'". However, given the late stage at which the nine pages were produced, [Respondent] stated that it was unable to have any of its seven fact witnesses testify about the documents. Further, [Mr B] ([Respondent]'s expert) was deprived of the opportunity to analyse and opine on the documents in his report or at the experts' hearing. Moreover, [Respondent] complained that it was unable to cross-examine any of [Claimant]'s fact witnesses about the documents in question.

295. Further, since [Mr A]'s expert report (on his own admission) was submitted without consideration of these nine pages, [Respondent] argued that his evidence was "thoroughly unreliable".

296. On [Respondent]'s case: "[Claimant]'s unexplained failure to produce the nine documents leads to only one conclusion-they were withheld because they were harmful to [Claimant]'s case." . . . ". . . it is telling that [Claimant] withheld this crucial evidence, which is highly relevant to its principal argument in this case. Rather, [Claimant] chose to produce only the . . ., a document prepared by [Claimant] employees when termination of the Project was imminent. Certainly, if the 'IST' documents lent any support to [Claimant]'s position, they would have been produced among the 227 exhibits submitted by [Claimant]in this arbitration. The fact that they were not produced compels the conclusion that [Claimant] intentionally withheld these, and other documents, because they are harmful to its case. . . . "

297. [Respondent] also suggested that there was reason to believe that there were more than just the nine pages of IST documents, and that these were still being withheld, based inter alia on [Mr A]'s passing references to a large bulk of material that he was given by [Claimant] to read, and inadequacies it perceived in [Mr A]'s statement dated . . . Further, [Respondent] pointed to [Mr A]'s and [Mr B]'s testimony that the typical IST produces numerous objective documents, including test plans, screen shots, data dumps, and error reports . . .

298. [Respondent] further placed this motion in the context of its overall submission that [Claimant] had been guilty of: ". . . wholesale document destruction and deletion, apparently in anticipation of this litigation".

299. In all the circumstances, [Respondent] applied for the following sanctions: "(1) strike all fact testimony relating to the "IST" contained in [Claimant]'s witness statements, two memorials and testimony of fact witnesses, (2) strike all statements relating to the "IST" contained in both [Mr A]'s written reports, (3) take a negative inference with respect to the nine pages [Mr A] has produced, (4) take a negative inference with respect to all other documents relating to the "IST", which were not produced by [Claimant], either because they were intentionally withheld or destroyed, and [(5)] award costs and attorney fees incurred by [Respondent] as a direct result of [Claimant]'s failure to disclose these documents, either prior to the evidentiary hearing or at all."

(3) [Claimant]'s response

300. On. . ., [Claimant] responded to [Respondent]'s motion. It recalled that the Tribunal had directed that [Respondent] explain how the contents of the nine pages (plus any others, to the extent there were any) impacted upon the issues in the case. In particular, after instructing [Mr A] to conduct an additional search for documents and to report back by . . ., the Tribunal had given [Respondent] seven days: "to provide any further comments in addition to the ones that have already been made in the course of this hearing as to the impact of these documents and any further documents that may have been provided, and as to the specific orders that are being sought with respect to striking-out or adverse inferences". . . .

301. [Claimant] observed that instead of offering any explanation as to how the specific contents of the nine pages impacted upon the issues in the case, [Respondent] had: ". . . merely paid lip service to the documents, and used them as a pretext to mount a vicious attack on [Claimant]'s (as well as [Mr A]'s) credibility".

302. [Claimant] noted that [Respondent] had singularly failed to provide any analyses of the nine pages by either its fact witnesses, or its expert.

303. On [Claimant]'s case, the nine pages are of little significance. In particular, it submitted that the pages do not shed any light on the problems that transpired during the IST because (1) the documents referred to one isolated "event" only-an event which succeeded-while there were many other events that failed . . . and (2) the pages were not the type of document that indicated anything meaningful about responsibility as between the parties. They were thus of little practical import, especially as compared to other evidence in the record . . .

304. Further, [Claimant] observed that [Respondent] had not drawn any connection between any item in the nine pages and anything to which [Mr A] had testified during the hearing. In fact, according to [Claimant], on a fair reading of the transcript the nine pages evidently had no impact at all on [Mr A]'s evidence. Indeed, in answer to a question from the Tribunal, [Mr A] had specifically stated that he had not seen anything in the nine documents that would have changed his opinion on the IST failure in any way . . .

305. As to [Respondent]'s overall allegations of non-disclosure against [Claimant], it was observed that [Respondent] had never made a formal discovery request for IST documents. Further, the evidence in this case was that [Respondent's project managers] . . . were present throughout the IST, billing full days during a period when the IST was the only significant activity that was taking place . . . As the IST was being conducted, [Respondent's project managers] were sending regular "log reports" back to [Respondent] headquarters in New York-documents which [Respondent] did not produce in these proceedings.

306. There was also no serious dispute that the IST was almost entirely devoted to testing code that [Respondent] had written, with [Claimant]'s minor contribution being its code for its portion of the joint interfaces.

307. In all the circumstances, therefore, [Claimant] contended that [Respondent]'s motion be dismissed.

(4) Modifications to the motion

308. At the final hearing in these proceedings, the Parties reached an agreement on the admission of the nine pages as part of the evidential record of this case, on the basis of an express concession by [Claimant] that they reflect a single event that succeeded. . . .

309. Accordingly, to this extent, [Respondent] modified its motion. However, the balance of its motion (e.g. the drawing of adverse inferences beyond the nine pages / the striking out of other evidence concerning the IST, including that of [Mr A and others . . .] is still pursued. Indeed, on [Respondent]'s case, the other parts of its motion found further support in [Claimant]'s concession that the nine pages evidenced a successful IST event . . .

310. The Tribunal indicated that it would rule on this motion, as modified, in its final Award.

(5) Analysis

311. On any view, the late production of the nine pages by [Mr A] and [Claimant] was extremely unfortunate. Even if [Respondent] had not made a separate, formal, discovery request for IST documents (which is by no means clear, given its frequent references to non-disclosure by [Claimant]), it was incumbent upon [Claimant] to produce all documents that were relevant to its case, within the spirit of the IBA Rules. An ICC proceeding such as this does not import the same disclosure obligations of many national court systems, yet there remains a basic obligation of fairness and due process, in particular when the IBA Rules have been adopted, by which documents that are patently relevant to central issues ought not to be concealed. This is particularly so if partial disclosure of such documents is likely to give rise to a misleading impression.

312. Having said this, on a careful analysis of the record, the Tribunal is not prepared to draw the adverse conclusions that [Respondent] seeks with respect to [Claimant]'s conduct in this case. There is insufficient evidence that the non-disclosure was a result of design on the part of either [Claimant] or [Mr A]. On the contrary, in a case that involved a very large amount of material, it is more likely, and the Tribunal so concludes, that the omission was simply an oversight. As soon as the oversight came to light, there was no delay in the production of the documents in question.

313. More importantly, although the documents came to light late in the proceedings, the Tribunal established a special framework to allow each side to consider the documents, and make whatever submissions they considered appropriate as to the impact of the documents upon the issues in dispute.

314. In the event, [Respondent] did not take this opportunity. Whilst it had already made submissions as to the content of the 9 pages, it did not develop these any further in its subsequent filings. Further, [Respondent] did not seek permission to adduce further evidence or witness or expert statements, or to recall witnesses. Instead, it relied upon its previous submissions, and it focused upon an alleged lack of opportunity to deal with the evidence in question. Yet the Tribunal had specifically afforded it such an opportunity.

315. To this end, [Respondent] failed to make good its assertion that the nine documents were of material relevance to the issues in dispute.

316. Further, the Tribunal is of the view that there is insufficient evidence to conclude that there are other IST documents in existence that [Claimant] is concealing, and no basis to disbelieve [Mr A]'s own statement in this regard. The Tribunal takes note of the submissions [Claimant] has made on this point-and in particular the fact that if there were such documents, it is equally likely that [Respondent] would have custody of control of the same, yet it has produced none . . . The argument that IST's usually generate a bulk of documentation takes matters no further here, since it is common ground as between the Parties' experts . . . that this was not an IST that would have been recognised as such by the industry-indeed it was at best chaotic. Industry standards, therefore, are of little assistance on the facts here.

317. In all the circumstances, the Tribunal is unprepared to take any of the steps for which [Respondent] has applied in its motion. "Striking out" of evidence is unusual in arbitral proceedings such as these, where such issues are normally addressed by reference to "weight" as opposed to "admissibility", but even aside from this, none of the steps for which [Respondent] has applied is justified on, or proportionate to, the specific omission in question. Further, the Tribunal does not consider that the events concerning the 9 pages warrant any special disposition as to costs.

318. The Tribunal notes further that even if [Respondent]'s motion had been accepted, and even if adverse inferences had been taken as to the IST, this would have made no difference to the outcome of this case, given the Tribunal's approach to the IST as set out later in this Award.'