‘I.Parties’ position

1. Claimants have requested … that Exhibits [1] and [2] filed by Respondent be withdrawn from the procedure,

[Exhibit 1] is a legal advice letter sent … to [Claimant 3] … This exhibit was filed by Respondent along with its Rejoinder and Counterclaim ...

[Exhibit 2] is a legal advice letter sent by [a] law firm in London to [Claimant 3] … and filed by Respondent with its Post-Hearing Submission …

Claimants argue in substance with respect to these two exhibits that they constitute privileged attorney-client communications whatever rule of law the arbitral tribunal might decide to apply. Claimants rely in particular on the article by Fabian von Schlabrendorff and Audley Sheppard, “Conflict of Legal Privileges in International Arbitration: An Attempt to Find a Holistic Solution”, published in International Law, Commerce and Dispute Resolution, ICC 2005.

2. … Respondent considers that the Arbitral Tribunal should reject Claimants’ request to consider Exhibits [1] and [2] as inadmissible, since such documents are submitted to enlighten the Arbitral Tribunal about the facts rather than the legal advice contained therein.

Respondent further considers that the ICC Rules do not contemplate evidentiary privileges and that the International Swiss Arbitration Rules (Swiss Private International Law Statute) at Art. 184 give total discretion to the Arbitral Tribunal in

the taking of the evidence, provided that the equality of the parties and due process are respected, the only limitation being the procedural public policy which does not include privileged communications.

3. By letter … the Arbitral Tribunal indicated with respect to Exhibit [1] that Claimants had only objected to such exhibit in their Post-Hearing Submission …, i.e. seven months after the exhibit was filed and, therefore, that the objection was not raised in a timely manner. With respect to Exhibit [2], the Arbitral Tribunal described the rules applicable to the client-attorney privilege under Swiss and English law and requested that the parties provide … a brief description of the set of rules applicable to the attorney-client privilege under Lebanese law.

4. The Claimants submitted … their position on Lebanese law, indicating in substance that the principle of privileged correspondence exists and is governed under Lebanese law by Art. 92 of the Rules of Conduct for Lawyers, Art. 160 and 264 of the Lebanese Code of Civil Procedure and Art. 579 and 581 of the Lebanese Penal Law.

With respect to Exhibit [1], Claimants pointed out that the objection to such exhibit had been raised in their Rejoinder … and that [a previous] Procedural Order … regarding the inadmissibility of certain portions of such Rejoinder provided that the Claimants would still have two Post-Hearing Submissions in which they could argue their case in writing.

5. Respondent stated its position with respect to the Lebanese rules on client-attorney privilege ... According to Respondent, Art 264 of the Lebanese Code of Civil Procedure prohibits attorneys from disclosing facts and information only if they are coupled with an instruction of non-disclosure. Finally, Respondent indicates that Art. 579 of the Lebanese Penal Code only deals with secrets divulged without legitimate cause and that, therefore, it is not applicable to this case.

II. Criteria applied by the Arbitral Tribunal with respect to the admissibility of Exhibits [1] and [2]

(i) Principles applicable to [Exhibit 1] and [Exhibit 2]

6. The Arbitral Tribunal notes that Exhibit [2] is a letter from the London law firm … addressed to [Claimant 3], with a copy to [other companies in the Claimants’ group].

Exhibit [1] is a legal advice letter sent … to [Claimant 3] …

How these documents were obtained by Respondent has not been indicated by the parties.

The IBA Rules on the taking of evidence at Art. 9.2 (b) provide that the Arbitral Tribunal shall, at the request of a party or on its own motion, exclude from evidence or production any document, statement, oral testimony or inspection for legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable.

In this case, the IBA Rules are not applicable but express the principle of the existence of such privilege under applicable legal and ethical rules. This confirms that an arbitral tribunal has to examine the legal rules and ethical regulations that it considers applicable in a particular case.

Furthermore, in most common law and civil law jurisdictions, communications with and the documents of external lawyers are confidential. The Arbitral Tribunal will examine hereunder the rules of legal privilege in the countries having the closest connection to this arbitration, i.e. the rules applied in England, Switzerland and Lebanon. Indeed, if the Arbitral Tribunal has its seat in Switzerland, the disputed exhibit was sent by an attorney of a London law firm to a Lebanese party in Lebanon.

7. English law recognizes two types of evidentiary privileges relating to lawyers: a) legal advice privilege which are communications made between a legal advisor and his client, and are protected from disclosure if such communications are made for the purpose of obtaining or giving legal advice and b) litigation privilege which are communications between a legal advisor and his client once litigation is contemplated or has been commenced, and where the communications have been created in relation to that litigation for the purpose of obtaining or giving advice or collecting evidence (see Fabian von Schlabrendorff and Audley Sheppard, op. cit. p. 743 ff. and the references mentioned therein). Such privileges belong to the client and may only be waived by the client.

8. In Switzerland, neither Chapter 12 of the Swiss Private International Law Statute, nor the ICC Arbitration Rules mention the issue of privileged or professional secrecy. However, Art. 13 of the Federal Act on the Freedom of Movement of Lawyers provides that lawyers are subject to a professional secrecy obligation with respect to their clients. Such legal privilege under Swiss law includes everything in connection with the mandate. Furthermore, Article 321 of the Swiss Criminal Code prohibits lawyers from disclosing information that was given to them in their professional capacity unless the client has given authorization thereto or if the lawyer has been authorized by his control authority. These professional secrecy rules for Swiss lawyers are essentially established to allow a client to seek legal advice in full confidence that the information given to the lawyer will not be used against him. Consequently, in the opinion of the Arbitral Tribunal, the foregoing legal rules should be construed in the sense that attorney-client communications are protected not only in respect to the prohibition made to the attorney to safeguard the confidentiality but also to the extent that such communications should have come in the possession of a third party without the consent of the client.

9. In Lebanon, the situation appears similar to the one in Switzerland. Indeed, Art. 264 of the Lebanese Code of Civil Procedure prohibits lawyers from disclosing facts or information obtained through the exercise of their profession. The aim of this rule is clearly that a client may seek legal advice in full confidence that the information provided to the attorney will not be disclosed. The fact that the attorney-client communication is not marked “confidential’’ is not determining since the secrecy obligation in principle covers all information that the attorney became aware of through his professional activity. The situation may be different if the attorney became aware of facts or information outside of his professional activity, which is not the case here since [Exhibit 1] and [Exhibit 2] constitute legal advice given to a client.

10. Based on the above, the question of the law applicable to this issue can be left open since whether the Arbitral Tribunal applies the domestic law of the place of arbitration, i.e. Switzerland, the law governing the dispute, i.e. Lebanese law, or, with respect to [Exhibit 2], the law of the place where the document was created or of the domicile of the lawyer, i.e. England, the result would be the same. Indeed, under all such jurisdictions, a client seeking advice from an external lawyer would expect such communication to be privileged and kept secret. Also, in the opinion of the Arbitral Tribunal, such privilege and confidentiality must extend to attorney-client communications which have come into the possession of a third party without the consent of the client.

(ii) Time limit for raising the objections

11. Exhibit [2] was filed by Respondent with its Post-Hearing Brief ... Claimants objected to such exhibit ... Such objection, made less than a month after the filing of the exhibit and including [a holiday] period, was raised in due time.

12. … the Arbitral Tribunal has indicated that Exhibit [1] was filed by Respondent with its Rejoinder and Counterclaim … and that Claimants did not object to such exhibit until their Post-Hearing Submission ... Therefore, the Arbitral Tribunal considered that such objection regarding client-attorney privilege was not raised in a timely manner. However, … it appears that the objection was in fact already raised by Claimants in their Rejoinder ... Because the major part of this Rejoinder has been struck off the record by the Arbitral Tribunal in [a previous] Procedural Order …, such objection was not taken into account by the Arbitral Tribunal. However, on the basis of [the aforementioned] Procedural Order …, Claimants could put trust in the fact that they could raise this issue subsequently in writing in Post-Hearing Submissions. Although [Exhibit 1] was indeed not mentioned by Respondent at the Hearing, it would have been desirable that Claimants raise the matter since such type of issue can be most usefully dealt with in the presence of the parties and the Arbitral Tribunal. Nevertheless, and because the objection was raised in writing already one month after the Exhibit [1] was filed, the Arbitral Tribunal considers that the objection was raised in a timely manner.

III. Order

13. On the basis of the foregoing, the Arbitral Tribunal now orders as follows:

13.1. Exhibit [1] is to be stricken from the record by the Arbitral Tribunal and neither the Arbitral Tribunal nor the parties will rely on such exhibit or the parts of their submissions referring thereto.

13.2. Exhibit [2] is to be stricken from the record by the Arbitral Tribunal and neither the Arbitral Tribunal nor the parties will rely on such exhibit or the parts of their submissions referring thereto.’