One year with the 2020 IBA Rules of Evidence: revised to reflect the last ten years of practice and increased use of communication technology
On 17 February 2021, the International Bar Association (IBA) released its revised Rules on the Taking of Evidence in International Arbitration that were adopted on 17 December 2020 (2020 IBA Rules). The 2020 IBA Rules reflected established practices and continuing developments in the taking of evidence in international arbitration, influenced in no small part by the increased use of technology resulting from the global COVID-19 pandemic.
After almost one year with the 2020 IBA Rules, this post highlights the changes that have proven most relevant in practice, specifically in relation to data protection, cybersecurity and the increased use of communication technology as a direct reaction to the ongoing pandemic.
Aim of the 2020 IBA Rules
At the time of their publication in 1999, the IBA Rules represented a first attempt to codify international best practices for the taking of evidence in international arbitration while trying to balance civil and common law practices. The IBA Rules have since gained wide acceptance with tribunals, which, in whole or in part, apply them directly or use them as guidance.
The IBA Rules have only been updated twice, once in 2010 (2010 IBA Rules) and for the second time in 2020. For the second revision, a task force established by the IBA Guidelines and Rules Subcommittee (2020 Task Force) proposed changes to the IBA Rules after having considered feedback from over 160 arbitral institutions worldwide. As a result, the 2020 IBA Rules provided needed clarifications as well as amendments to the continued developments and practices established over the previous ten years.
Redline and Commentary
A helpful redline comparison of the 2020 and 2010 IBA Rules and a comprehensive updated Commentary on the 2020 IBA Rules (Commentary) issued by the 2020 IBA Review Task Force can be found on the IBA website.
Consideration of cybersecurity and data protection issues
First, the 2020 IBA Rules addressed the ever-increasing importance of cybersecurity and data privacy/protection in the international arbitration realm. Companies deal with sensitive data such as personal data and company secrets in digital form on a daily basis. If such information is submitted in arbitration proceedings, it may be the target of cyber-attacks aimed at companies, law firms or institutions.
The 2020 IBA Rules therefore highlighted how imperative it is for parties and tribunals to consider issues of cybersecurity and data protection at an early stage of the arbitration. This aspect was included in Art. 2 of the 2020 IBA Rules as Art. 2.2(e), which recommended that parties and the tribunals address issues of cybersecurity and data protection in the early consultation on evidentiary issues between the parties and the tribunal.
Second, the articles on document production were only slightly revised to reflect already established practices. For instance, the best practice of affording a requesting party an opportunity to file a response to an objection by the opposing party was previously not expressly permitted by the 2010 IBA Rules. The practice was subsequently added to the revised Art. 3.5 of the 2020 IBA Rules.
Another very practical revision of the document production phase – that significantly helps to reduce the time and costs spent on document production – concerns the translation of documents produced inter partes in response to a request for document production. The previous requirement to submit translations of such documents was removed in the 2020 IBA Rules, (Art. 3.12(d) of the 2020 IBA Rules). Only documents submitted to the arbitral tribunal in a language other than the language of the arbitration shall be translated (Art. 3.12 (e) of the 2020 IBA Rules). While the 2010 IBA Rules also required the production of translations together with the originals for documents provided to the other party, this requirement was often altered in practice by more experienced users due to the high costs associated with submitting translations, particularly in larger international cases where more than a limited number of documents had to be produced.
Revised or additional expert reports and witness statements
Third, under the 2010 IBA Rules, rebuttal expert reports were limited to responding to matters contained in another party’s expert report, witness statement or other submissions that were not previously presented in the arbitration. In practice, this limitation, which gives a party only one opportunity to present its arguments, was interpreted broadly and enforced rather loosely by tribunals, as parties frequently introduced new developments in the second round of expert reports. The newly introduced exception in Art. 5.3(b) of the 2020 IBA Rules explicitly afforded parties the right to submit revised or additional expert reports to address new developments that could not have been addressed in a previous expert report. In parallel to extending the scope of the second round of expert reports, the 2020 IBA Rules also extended the scope of the second round of witness statements to address new factual developments that could not have been addressed in the first round (Art. 4.6(b) of the 2020 IBA Rules).
It should be noted, however, that the Commentary clarifies that the exception in Art. 5.3(b) of the 2020 IBA Rules is intended to grant a party the opportunity to present new arguments in the second round of expert reports only if they could not have been addressed in a previous expert report. This is justified by grounds of procedural efficiency and aims to prevent a party from surprising the other party with evidence at a late stage of the proceedings to avoid a derailment of the procedural timetable.
Fourth, the 2010 IBA Rules did not expressly deal with the question of whether and under which circumstances hearings may be conducted remotely or virtually. The 2020 Task Force introduced a definition of remote hearings into the 2020 IBA Rules that also covers hybrid hearings conducted by the use of communication technology:
“’Remote Hearing’ means a hearing conducted, for the entire hearing or parts thereof, or only with respect to certain participants, using teleconference, videoconference or other communication technology by which persons in more than one location simultaneously participate;”
Additionally, the 2020 IBA Rules introduced a new second paragraph to Art. 8 allowing the tribunal to order the remote conduct of evidentiary hearings:
“At the request of a Party or on its own motion, the Arbitral Tribunal may, after consultation with the Parties, order that the Evidentiary Hearing be conducted as a Remote Hearing. (…)”
The change was a direct reaction to the national lockdowns and travel restrictions in 2020 which greatly affected international arbitration proceedings. In comparison to other areas, the world of international arbitration adapted rather quickly to the changed circumstances and switched from in-person to remote hearings.
The Commentary states that Art. 8.2 of the 2020 IBA Rules shall encourage tribunals to be pro-active when assessing whether the evidentiary hearing should be conducted remotely. It is still disputed whether a tribunal has the power to order a remote hearing against the will of a party. This also depends on factors outside the scope of the IBA Rules, for example, on the applicable lex arbitri and whether this could constitute an obstacle to enforcement in the relevant national jurisdiction.
Exclusion of illegally obtained evidence
Lastly, another noteworthy change was the newly introduced Art. 9.3 of the 2020 IBA Rules which allows the tribunal to exclude evidence that was obtained illegally, either at the request of a party or on its own motion. The issue of illegally obtained evidence frequently arises in connection with cyber-attacks or cybersecurity breaches. In some previous cases, for example, submitted evidence had been obtained via WikiLeaks and tribunals decided differently on the admissibility of such evidence. According to the Commentary, tribunals considered, inter alia, whether the submitting party was involved in the illegality, whether the evidence was “material and outcome-determinative”, whether the evidence entered the public domain through public “leaks” and on the clarity and severity of the illegality. The 2020 Review Task Force sought to allow for a diversity of decisions by giving the tribunal the option (“may”) to exclude illegally obtained evidence.
Conclusion and outlook
The revised 2020 IBA Rules provided some welcome clarifications that reflected the established standards in international arbitration over the last ten years. One of the biggest changes was the codification of remote hearings through which the Task Force reacted to 2020’s national lockdowns and travel restrictions. The past year has shown that this change was of particular practical relevance and that the option of remote hearings was widely utilized in the international arbitration world. Other changes, such as the consideration of cybersecurity and data protection issues as well as the option to exclude illegally obtained evidence addressed the standards and challenges of our increasingly digitalized world. While these revisions in the 2020 IBA Rules were less clear and detailed, they gave tribunals guidance in their procedural decisions. This allows room for assessment and argumentation on a case-by-case basis.
Do you have any questions? Feel free to contact: Meike von Levetzow, Lucie Gerhardt