New York, 3 October 2019

Thinking strategically about the document production process

The first speaker, David Brown (Partner, Clyde & Co, Paris; Council Member, ICC Institute of World Business Law) provided an overview of document production in arbitration. Mr. Brown compared the common law and the civil law perspectives noting that the practice of disclosure is more characteristic of the common law tradition and providing the contrasting example of French court proceedings, where the parties rely solely on documents that are in their possession.

The discussion then moved to the realm of arbitration and to the ICC Arbitration Rules in particular, which do not include specific provisions on document production.1 For this reason, parties in an international arbitration often rely on soft law, or good practice, when establishing their rights and obligations vis à vis document production. The most obvious example being the IBA Rules on the Taking of Evidence in International Arbitration (‘IBA Rules’), which provisions seek to reflect international practice. But are the IBA Rules intended to be a compromise between the common law and the civil law traditions? According to Mr. Brown, this is unlikely to be the case, since there is very little document production regulation in civil law jurisdictions. In fact, a similar initiative led by civil lawyers culminated in the Prague Rules.2 In line with the practice of disclosure in civil law traditions, the provisions on documentary evidence in the Prague Rules encourage the arbitral tribunal and the parties ‘to avoid any form of document production, including e-discovery’.3

In light of these contrasting approaches to document production and the flexibility afforded to the parties in international arbitration, Mr. Brown invited participants to provide advice on the procedural and strategic aspects of document production. Answers touched upon the (i) identification of relevant and material information, (ii) document collection and (iii) preservation strategies. A key takeaway message was that the relative strength of the parties’ position based on documents known or thought to be known to be in possession of the other party is one of the key factors to be considered before an arbitration is even initiated.

Pro-active approaches to addressing data protection during the document production process

Kathleen Paisley (Partner, AMBOS Law, Brussels; Co-Chair, ICCA-IBA Joint Task Force on Data Protection in Arbitration Proceedings) addressed the role of data protection rules in document production, a topic that has received much attention since the enactment of the General Data Protection Regulation (‘GDPR’) in the European Union,4 but that has been part of most legal systems for decades. Indeed, Ms. Paisley explained that data protection laws have been in place for more than 20 years in over 75 countries. The novelty of the GDPR is that it provides much stricter enforcement measures, which range from the payment of fines to the imposition of civil and criminal liability.

Ms. Paisley then provided an overview of the GDPR and its relevance to arbitration proceedings, explaining that the regulation covers personal data and the processing of personal data, which includes anything that will allow an individual to be identified or identifiable. In terms of the individuals protected by the GDPR, Ms. Paisley explained that these are by no means limited to the parties to an arbitration, since it covers individual data subjects that also include the parties’ lawyers, the arbitrators and client representatives. Interestingly, data laws exclude international organizations, such as ICSID or the PCA, but these organizations are in the process of drafting their own data protection regulations.

Given its wide scope of application, data protection laws will evidently touch upon aspects of international arbitration, and in particular document production. The GDPR for instance, could constitute a legal impediment to the production of documents per Article 9.2(b) of the IBA Rules.5 Parties should therefore ensure compliance with these regulations without compromising the efficiency of the arbitration. The most recommended approach was for the parties to enter into contractual agreements to determine how to share and process data within an organization or for dispute resolution purposes.

Finally, Ms. Paisley provided greater context to the discussion by explaining that data protection laws do not apply in a black or white manner, but in a proportionate way that respects the rights to privacy of subjects, parties and the institutions involved. As part of the document production phase in an arbitration, an analysis should be made to determine whether the interests of justice warrant production despite data protection rules.

Party-promulgated document requests – How to draft effective requests

The second part of the advanced training focused on strengthening the participants analytical and drafting skills within the context of document production. Caline Mouawad (currently Partner, Chaffetz Lindsey, New York) led a workshop on the drafting of effective document requests. Her presentation began with a review of the most relevant and applicable rules. Ms. Mouawad noted that while there is nothing on point in the institutional rules, emphasis is placed on the efficient and expeditious resolution of disputes, on the proportionality of time and costs in the arbitration and on the importance of document requests being relevant and material to the outcome of the dispute.6

Drawing from these guidelines Ms. Mouawad provided participants with the following practical tips on how to draft effective document requests:

  • Keep a running list of document requests from the outset of the arbitration;
  • Include an opening statement in the Redfern Schedule with general objections to be referred throughout the requests;
  • Use definitions and instructions wisely;
  • Draft narrow and staged requests, taking into account the relevant timeframes and custodians, linking the requested documents to a specific allegation, to a witness statement or to another document already in the record;
  • Focus on the materiality of the outcome;
  • Organize requests by claim or topic;
  • Request documents that should exist, even if you know that they do not; and
  • Beware of retaliatory manoeuvres.

Party-promulgated document requests – How to draft effective objections

The morning session ended with a practical workshop on the drafting of effective objections led by Jacob Grierson. The participant-led discussion was based on the factual scenarios that were circulated and provided an opportunity to hear diverse approaches from practitioners as well as insight from arbitrators. Privilege and confidentiality were the most common grounds for the objections and were also the subject of lengthy discussions concerning the right balance between providing the other party with material information for its case, while at the same time ensuring trade secrets and similar sensitive information remains protected.

As a final takeaway, participants were advised to ask themselves the following four questions when drafting objections to document requests:

  • Will the documents do any harm to the case?
  • Will the amount of work involved in objecting, and in the search and review of the documents be worth it?
  • Is it important for the case to appear to be open?
  • Is it possible to fully comply with the request?

Electronic documents: Unique challenges and opportunities

The afternoon session began with Prof. Robert H. Smit (Arbitrator; Professor at Columbia Law School, New York) discussing the use of e-disclosure in international arbitration. He referred to the 2010 IBA Rules on Taking of Evidence (IBA Rules) as the most important guidelines on electronic disclosure. Their definition of ‘documents’ includes electronic documents, and the 2010 amendments introduced provisions dealing with the form of production and the use of search terms.7 However, the idea is to apply the same principles of specificity, relevance, materiality, and proportionality to the disclosure of physical and electronic documents. The ICC Commission Report ‘Managing E-Document Production’ reaches the same conclusion.8 Prof. Smit also drew attention to the fact that the use of e-disclosure in international arbitration has not become an unmanageable process as in US civil litigation. The reasons for this are threefold:

  • the scope of disclosure in international arbitration is narrower than in American litigation;
  • there is a tacit understanding between the parties that they will not make excessive e-document requests; and
  • older arbitrators are less receptive to e-discovery than American courts.

Prof. Smit noted that e-documents are greater in volume, can be easily disseminated, and tend to be more durable, dynamic, and transience. Such features create new challenges and opportunities.

  • The challenges: E-disclosure is potentially more burdensome and costly. US courts have developed techniques to tackle e-disclosure efficiently, such as cost shifting and privilege claw-backs. Nonetheless, many civil law lawyers consider these techniques controversial. Another challenge is the preservation of documents: According to the ICC Report, there is no automatic duty to preserve documents in international arbitration. Nevertheless, the Report advises about the risks of adverse inferences if the e-documents are destroyed.9
  • The opportunities: E-documents offer arbitrators a more complete and contemporaneous factual record of the dispute. They also provide new sources of information (for example, metadata), and enable the use of more efficient document search techniques, such as search terms, data sampling, and name/date restrictors.

Finally, Prof. Smit discussed strategies to conduct e-disclosure in international arbitration. Parties can address the issue either in the arbitration clause or once the dispute has arisen. He advised against the first option because of the unpredictability of the client’s interests in case of a dispute. He also recommended that requests be specific, indicate that the relevance and materiality of the e-document outweigh the burdens of production, and propose search terms to the tribunal.

Protecting legal privileges and commercial confidences

The session continued with a lively discussion on privilege and commercial confidences in international arbitration led by Yasmine Lahlou (Partner, Chaffetz Lindsey LLP, New York). She indicated that because arbitrators, parties, and counsel often come from different legal backgrounds, they must grapple with deciding how to approach these problems, including what law to apply, and how to implement such duties in practice. Ms. Lahlou explained the differences between common law and civil law jurisdictions on the issue of privilege. She emphasized that privileges are rooted in common law systems where document disclosure is the norm, and that civil law lawyers are less familiarized with these notions. However, as a result of the broad use of the IBA Rules, it has now become very difficult to avoid some form of document disclosure in international arbitration.

Ms. Lahlou then referred to different approaches to determine the law applicable to privilege and confidentiality questions. With the exception of the ICDR Rules,10 arbitration rules are silent on this issue. While some arbitrators have referred to a transnational law standard, the majority looks at the national laws on privilege, usually the law most closely connected to the privileged or confidential communication.

Once arbitrators have identified the applicable law, the next step is to determine whether they should apply different laws to the parties and documents involved. She indicated that the practice has been to apply the same set of rules to the entire arbitration. Relying primarily on the IBA Rules, practitioners have applied the ‘most favored nation rule’, i.e. the application to both parties of whichever jurisdiction’s rules afford the greatest degree of protection. This approach ensures fairness, and is the most accepted trend in international arbitration. Alternatively, another approach is to apply the ‘less protective set of rules’, which is problematic because it often betrays the expectations of the parties.11

Ms. Lahlou tackled the issue of waiver. In particular, whether the parties waive privilege when they consult a third party funder. She also referred to the issue of whether the arbitral tribunal can delegate the resolution of privilege and confidentiality questions to a third party, often called ‘privilege master’ or ‘privilege expert’; third parties who are agents of the tribunal and who should therefore be subject to the same independence and impartiality requirements than arbitrators and make the same disclosures. Once appointed, the arbitral tribunal will issue terms of reference describing the issues that the privilege master must resolve. Ms. Lahlou advised that parties should be mindful when they decide to engage in this process, and clarify that they are not waiving privilege.

Ms. Lahlou then led the discussion of three case scenarios on privilege and confidentiality. Two of them focused on how the tribunal should apply Article 22.3 of the ICC Rules12 so that documents material to the dispute do not result in commercial prejudice for the parties. Ms. Lahlou suggested that the tribunal could order the production of the documents subject to procedural measures such as in camera review (without the presence of the parties), redactions, and attorney’s eyes only. The last scenario addressed the problem of inadvertent disclosure by the client.

Non-party documents: techniques to get them if you need them

The final session was led by Carolyn Lamm (Partner, White & Case LLP), who discussed the different set of rules that provide the legal basis for non-party discovery in international arbitration, including the IBA Rules (often incorporated by reference in the tribunal’s first procedural order), the Federal Arbitration Act (FAA), Section 1782, and the Freedom of Information Act (FOIA). She then moved to analyze the benefits and problems arising under each of them.

  • Article 3.9 of the IBA Rules13 allows parties to request the production of non-party documents. However, as Ms. Lamm indicated, the challenge with this provision is the tribunal’s lack of compulsory power.
  • Section 7 of the FAA14 allows arbitrators to summon ‘any person’ to testify or produce documents. There is a federal circuit split on whether Section 7 allows for non-party discovery only at a hearing, or whether it also allows for pre-hearing discovery. She explained that the location of the arbitral seat within the US determines the scope of discovery, especially because parties must enforce that subpoena in court (whose power is limited geographically). There are some state laws that permit discovery from third parties, for example, Florida. Jurisdictional issues over out-of-state witnesses arise here as well because state courts only retain compulsive powers within the boundaries of the state.
  • Section 1782: issues include the statutory threshold requirements to make a Section 1782 request.15 While the leading case Intel Corp. v. Advanced Micro Devices identified the discretional factors,16 Ms Lamm indicated that the Court offered limited guidance as to the meaning of ‘foreign or international tribunal’. Another issue raised was whether Section 1782 can be used in purely commercial cases, or if it only applies when a State is involved. Ms Lamm indicated that the Fifth Circuit and federal district courts in Illinois, South Carolina, Colorado, and California have continued denying discovery in aid of ‘private’ arbitrations. On the contrary, the Sixth Circuit and federal district courts in Connecticut, Delaware, Florida, Georgia, Massachusetts, Minnesota, and New York have held that ‘private’ arbitrations do qualify for Section 1782 requests. Ms. Lamm also referred to a Connecticut federal district court decision declining to limit the use of discovered materials to the foreign litigation for which discovery was requested, where respondents raised the concern that the materials might also be used in a related commercial arbitration.17 She also discussed another precedent from the D.C. federal district court rejecting a Section 1782 request, and holding that such request was an attempt to circumvent the ICSID tribunal’s control of the proceeding.18
  • Lastly, Ms. Lamm analyzed the issue of obtaining government files under FOIA, and its exceptions.


1
The https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/ address document production briefly in Article 25 (‘Establishing the Facts of the Case’): ‘1) The arbitral tribunal shall proceed within as short a time as possible to establish the facts of the case by all appropriate means. 2) After studying the written submissions of the parties and all documents relied upon, the arbitral tribunal shall hear the parties together in person if any of them so requests or, failing such a request, it may of its own motion decide to hear them. 3) The arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned. 4) The arbitral tribunal, after having consulted the parties, may appoint one or more experts, define their terms of reference and receive their reports. At the request of a party, the parties shall be given the opportunity to question at a hearing any such expert. 5) At any time during the proceedings, the arbitral tribunal may summon any party to provide additional evidence. 6) The arbitral tribunal may decide the case solely on the documents submitted by the parties unless any of the parties requests a hearing’.

2
Rules on the Efficient Conduct of Proceedings in International Arbitration (‘https://praguerules.com/prague_rules/’), 2018. For a commentary on the Prague Rules, see C. Tevendale, L. Franc-Menget, ‘The Prague Rules: Arbitral Efficiency under the Lens’, ICC Dispute Resolution Library (https://library.iccwbo.org/[#).

3
Prague Rules, Article 4.2.

4
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), available at https://eur-lex.europa.eu/eli/reg/2016/679/2016-05-04.

5
Article 9.2(b) of the IBA Rules: ‘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 any of the following reasons: … (b) legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable’. Available at https://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx.

6
See ICC Arbitration Rules, Art. 22 (‘Conduct of the Arbitration), paras (1) and (2): ‘1) The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute. 2) In order to ensure effective case management, the arbitral tribunal, after consulting the parties, may adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties’; ICC Arbitration Rules, Art. 24.1 (‘When drawing up the Terms of Reference or as soon as possible thereafter, the arbitral tribunal shall convene a case management conference to consult the parties on procedural measures that may be adopted pursuant to Article 22(2). Such measures may include one or more of the case management techniques described in Appendix IV’) and Appendix IV (‘Case Management Techniques’); IBA Rules, Art. 9 (‘Admissibility and Assessment of Evidence’).

7
See the ‘Commentary on the revised text of the 2010 IBA Rules on the Taking of Evidence in International Arbitration’, available at https://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx.

8
ICC Report ‘Techniques for Managing Electronic Document Production When it is Permitted or Required in International Arbitration’, available at https://iccwbo.org/publication/icc-arbitration-commission-report-on-managing-e-document-production/.

9
See paras 3.10 and 5.31 of the ICC Report.

10
2014 ICDR Rules, Art. 22 ‘Privilege’: ‘The arbitral tribunal shall take into account applicable principles of privilege, such as those involving the confidentiality of communications between a lawyer and client. When the parties, their counsel, or their documents would be subject under applicable law to different rules, the tribunal should, to the extent possible, apply the same rule to all parties, giving preference to the rule that provides the highest level of protection’.

11
On this issue, see J.M. Júdice, A. Coimbra Trigo ‘Dealing with Privilege Claims in International Arbitration: A Pragmatic Approach’ (https://library.iccwbo.org/).

12
Art. 22.3 of the ICC Rules: ‘Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information.’

13
Art. 3.9 of the IBA Rules: ‘If a Party wishes to obtain the production of Documents from a person or organization who is not a Party to the arbitration and from whom the Party cannot obtain the Documents on its own, the Party may, within the time ordered by the Arbitral Tribunal, ask it to take whatever steps are legally available to obtain the requested Documents, or seek leave from the Arbitral Tribunal to take such steps itself …’.

14
9 U.S. Code § 7: ‘The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case ...’.

15
The statutory threshold requirements discussed by Ms. Lamm are: (i) the person from whom discovery is sought must reside in the court’s district, (ii) the request must be made by a foreign or international tribunal or by an ‘interested person’, and (iii) the evidence is to be used in a ‘foreign or international tribunal.’

16
Intel Corp. v. Advanced Micro Devices, 542 U.S. 241, 264-65 (2004). The discretional factors identified in Intel include: (i) whether the party from whom discovery is sought is a participant in a foreign proceeding, or already subject to the jurisdiction of the foreign tribunal, (ii) the nature and character of the foreign proceeding, (iii) the receptivity of the foreign tribunal to such judicial assistance, (iv) whether the request is an attempt to circumvent foreign discovery restrictions, and (v) whether the requests are unduly intrusive or burdensome.

17
See https://us-arbitration.shearman.com/siteFiles/24707/2018.10.30_In%20re%20Application%20of%20Luis%20Javier%20Martinez%20Sampedro%20for%20an%20Ord....pdf, No. 3:18mc47 (JBA), 2018 U.S. Dist. LEXIS 186586, at *18 (D. Conn. Oct. 30, 2018).

18
See https://www.courtlistener.com/opinion/2473275/in-re-application-of-caratube-intl-oil-co-llp/., 730 F. Supp. 2d 101, 106-108 (D.D.C., 2010).