‘C.On the attorney-client privilege

11. In the Request for Reconsideration of [the Tribunal’s previous procedural order], Respondent relies on two privileges, the attorney-client privilege and the without prejudice privilege ... In the submissions produced by Respondent prior to [the previous procedural order], the two privileges were invoked together under a single category (“legal privilege”), while the distinction among them is eventually and clearly evidenced only in the Request for Reconsideration. Prior to [the previous procedural order], the attorney-client privilege seemed to play a predominant role, while, after the issuance of [that order], this predominant role seems now to be pleaded by the without prejudice privilege.

12. In any case, the Tribunal will examine the two invoked privileges separately and on the basis of the larger and/or new developments contained in the Request for Reconsideration by Respondent and in the Answer by Claimant.

13. As to the attorney-client privilege, in [the previous procedural order] the Tribunal decided that this privilege, if existent in the present case, had been waived by the submission of [a document (the “Document”)] to the European Commission.

14. In the Request for Reconsideration, Respondent presently notes that this privilege belongs to the counsel and not to the client itself (here Respondent), so that it could not be waived by Respondent transmitting the Document to a third party, especially when qualifying the Document as “confidential”.

15. The Tribunal is aware of the different nature of the attorney-client privilege in common law and in civil law countries. The two Legal Expertises provided by the Parties (Professor [A] for Respondent and Professor [B] for Claimant) have duly enlightened the Tribunal in this respect.

16. In the present case, in view of the qualities and nationality of the Parties, and considering that the seat of the Arbitration is placed in Paris, the Tribunal accepts the suggestion by Respondent that the privilege should be constructed [sic] according to the criteria prevailing in the civil law countries and thus basically protecting the counsel and the secrecy of the advice provided by it.

17. Apparently, [the Document] was created by [Respondent State’s] Ministry of Economy and communicated to [its] Government and contains reference to the legal advice expressed by external ... attorneys [in Respondent State] and by Swiss counsel on issues relevant for the present arbitration.

18. It is undisputed that [the Document], complete with all references and annexes, was subsequently transmitted by Respondent to the European Commission and this was done with the agreement of the attorneys and counsel involved, or, at least, without objection by them. In this respect it is striking that neither in the proceedings that led to the issuance of [the previous procedural order], nor in those resulting in this Order ... has it been argued by Respondent that neither ... Counsel [from Respondent State] nor Swiss counsel authorized disclosure to the EU. The Tribunal therefore is confirmed that such waiver has indeed been made by them.

19. The Tribunal notes, moreover, the lack of decisive effect of the alleged “confidential” character of [the Document] resulting from the cover page of the Document transmitted to the European Commission, as mentioned by Professor [A] in his Legal Opinion ... Actually the legal privilege is a specific principle which applies only to the advice of attorneys and counsel and not to an entire document globally classified as confidential.

20. In addition, the European Commission, when refusing access to [the Document] requested by Claimant – on the basis of Article 4 (1) and (2) of the Regulation (EC) 1049/2001 – did not rely upon the “confidential” classification of the Document, but on the argument that disclosure of the Document would undermine “the protection of the public interest as regards international relations” and “the protection of commercial interests of a natural or legal person” ... Thus, no reference was made by the Commission to the principle of legal advice in respect of [the Document] and, consequently, no argument or recognition of the privilege can be drawn from the refusal by the Commission to disclose [the Document], refusal which was therefore based on different grounds.

21. The Tribunal is not convinced by the conclusions reached by Professor [A], who suggests that, in view of the content of [the Document] (which Professor [A] had the opportunity to examine), “the Ministry of Economy effectively functioned as a legal advisor for the Government’ (Legal Opinion of Professor [A] ...).

22. The Tribunal is also not convinced by the suggestion presently made by Respondent that the Government of [Respondent State], transmitting [the Document], was in fact acting as a client seeking legal advice from the European Commission, which was supposed to act, respectively, as a legal counsel ...

23. In the civil law approach to the nature of the privilege which the Respondent suggests and the Tribunal adopts, the attorney-client privilege, if existent, is a privilege pertaining to communications between clients and their attorneys and counsel, and cannot be invoked by a Ministry in respect to its Government or the European Commission or by a Government in respect to the European Commission which is not and cannot be qualified as a legal counsel.

24. In conclusion, the Tribunal confirms the solution reached in [the previous procedural order] that the legal privilege, if existent in respect to some parts, and not the entirety of [the Document], had been waived by the in-house and external counsel, both national and foreign, (or by the Ministry of Economy according to the construction referred above), agreeing or not objecting to the transmission of [the Document] to third parties, namely the European Commission.

D.On the without prejudice privilege

25. Respondent, in the Request for Reconsideration of [the previous procedural order], amply develops the argument of the without prejudice privilege, which was simply indicated and treated jointly with the attorney-client privilege in the exchanges preceding the issuance of the Order.

26. Presently, Respondent concludes that “[the Document] is in any event inadmissible as evidence since it relates to settlement negotiations between the Parties and is thus without prejudice”. This conclusion is supported by Professor [A] in his Legal Opinion, where the without prejudice privilege is qualified as a genuine transnational privilege, generally applicable in international commercial arbitration.

27. According to the principle, the privilege applies to the documents and proposals exchanged by the Parties or produced by them “stemming from mediation, conciliation and similar ADR processes”, and “this privilege applies also to ‘plain’ settlement negotiations without the involvement of a third neutraI” (Legal Opinion of Professor [A] ...).

28. The Tribunal is aware of the different nature and contents of the without prejudice privilege in the common law countries where the principle originated and largely applies and in the civil law countries where the privilege has a narrower scope, essentially referred to conciliation, mediation and other forms of intervention by third neutrals. The submissions of the Parties and, especially, the Legal Opinions of Professors [A] and [B] have greatly contributed to the clarification of the impact of this principle in the present case.

29. The Tribunal does not need to take a position on the somehow different historic and theoretic constructions presented to it. It can simply accept the conclusions shared by the two Parties and their Experts, also with respect to the other invoked privilege, namely the attorney-client privilege, that the present arbitration should remain within the basic framework of the civil law countries approach as to the scope of the principle and its application.

30. Coming to the application of the principle in the present case, the Tribunal notes that, according to the case law, the practice of international commercial arbitration and the Iran-U.S. Tribunal, quoted in the Request for Reconsideration and in the attached Legal Opinion by Professor [A] ..., documents and proposals covered by the privilege are always those transmitted by the Parties to the third neutral or exchanged between them.

31. In the legal framework described above, it appears to the Tribunal unjustified to extend the privilege also to documents not communicated to the other party or to a third neutral, but only internally prepared in view of planned or simply possible future negotiations. In this respect the Tribunal notes, however, that this was not the case with [the Document], which was an “Information” to the European Commission and, apparently, did not contain settlement proposals and was not prepared in view of a genuine attempt to settle of the dispute between the Parties.

32. Finally the argument drawn from the UNCITRAL Model Law on International Commercial Conciliation (Article 10.1.f) appears not applicable in a context where no conciliator or third neutral was appointed or envisaged by the Parties. Thus, the internal unilateral documents produced by one party result immune from disclosure only if covered by the legal privilege protecting the attorney-client relations examined under C above.

33. In conclusion, on the without prejudice privilege, the Tribunal notes that also in this respect the transmission of [the Document] to the European Commission appears decisive. The communication was made to a third party which was not a conciliator or a third neutral chosen by common agreement by the Parties. This communication, in the absence of any reference to the attorney-client or the without prejudice principles, but with the mere indication “confidential” on the face of the Document, represents a clear waiver of both privileges, if existent or to the extent they can be deemed existent.

E. On the considerations of fairness and equality of the Parties in respect to the disclosure of [the Document]

35. Respondent in the Request for Reconsideration of [the previous procedural order] finally invokes Article 9(2)(g) of the IBA Rules, according to which the “Arbitral Tribunal shall exclude from evidence or production any document ... [for] considerations of fairness or equality of the Parties, that the Arbitral Tribunal determines to be compelling’’.

36. As to fairness, Respondent invokes the need to safeguard its legitimate expectations as to the application of the legal privilege to [the Document]. And this legitimate expectation should not be violated afterwards in the course of an arbitration procedure.

37. The Tribunal notes, however, that the expectation of non-disclosure of [the Document] could be considered legitimate if the invoked privileges actually existed or, if existent, were not waived. As clarified above, under C and D, the Tribunal found that no legal privilege exists in respect of [the Document]. Accordingly no obligation of fairness can prevent from ordering the disclosure of such Document.

38. As to the equality of the Parties, it is clear for the Tribunal that ordering the disclosure of [the Document] cannot be conceived in itself as a violation of the due process in respect to Respondent, because the Tribunal has applied and will apply identical criteria in the matter of discovery of documents by Respondent and Claimant.

In consideration of all the above, the Arbitral Tribunal, having studied the written submissions of the Parties with attached Legal Opinions and Legal Authorities, having unanimously deliberated on all the various issues raised by the Request for Reconsideration of [the previous procedural order] and the Answer to the Request for Reconsideration, decides that:

A. The Request for Reconsideration of [the previous procedural order] is admitted;

B. [The Document] appears to be relevant;

C. The attorney-client privilege, if existent, has been waived by the submission of [the Document] to the European Commission;

D. The without prejudice privilege, to the extent it is applicable in this arbitration procedure, does not apply to the case at issue, because [the Document] was not transmitted to the European Commission in the quality of third neutral in charge of facilitating the settlement of the dispute between the Parties and was not prepared in view of a settlement;

E. [The previous procedural order] cannot represent violation of the principle of due process between the Parties, because the Arbitral Tribunal issued [that order] having been provided, as stated by Respondent ..., “with all the information required to take a decision’’, and the criteria on which the Order is based are and will be applied equally to both Parties.

Therefore the arguments developed by Respondent are not sufficient for the Arbitral Tribunal to modify its [previous procedural order], which is hereby confirmed.’