On February 15, 2021, the International Bar Association (the “IBA”) officially announced the second amendment to the IBA Rules on the Taking of Evidence in International Arbitration (the “IBA Rules”) which is widely used in international arbitration.  This is the second amendment that has been made in about ten years after the first amendment dated May 29, 2010.  This second amendment will apply or apply mutatis mutandis if the parties agree to apply the IBA Rules to any arbitration case commenced after December 17, 2020, when the second amendment was adopted by the IBA Council (the “2020 IBA Rules”).

Background

Unlike court litigation where there are detailed regulations on procedures such as the Civil Procedure Act, Rules of Civil Procedure and Rules of Court, there are no detailed regulations on procedures for international arbitration.  In most cases, the arbitration laws of countries and arbitration rules of arbitral institutions only provide general rules requiring that arbitration proceedings shall be conducted in a prompt and fair manner and simple provisions on the arbitral tribunal’s authority to examine evidence and hold hearings.  Therefore, the details of arbitration proceedings are generally determined by mutual consultation between the arbitral tribunal and the parties.  In the course of such consultation, the arbitral tribunal and the parties often rely on the guidelines or recommendations provided by arbitral institutions or arbitration committees such as the IBA.  One representative guideline is the IBA Rules, which set forth guidelines on the submission of evidence, admissibility of evidence, and method of evidence examination in international arbitration proceedings.  To date, the IBA Rules have been applied or applied mutatis mutandis in many international arbitration cases by mutual consultation between the arbitral tribunal and the parties. 

Since most dispute cases are determined based on evidence, the matters related to the submission of evidence, admissibility of evidence, and method of examination of evidence in international arbitration proceedings are all critical.  Given the significant implications of the amended IBA Rules in international arbitration, we briefly introduce below the amendments in relation to COVID-19 and other notable amendments which would be helpful when proceeding with arbitration under the 2020 IBA Rules.

Details

1.   Amendments to Reflect Evolving Arbitration Practices Resulting from COVID-19

In response to the COVID-19 pandemic, many arbitral institutions and arbitration rules have proposed guidelines to adopt a “virtual hearing.”  In line with this recent development, the 2020 IBA Rules have introduced a new provision that allows evidentiary hearings may be conducted in the form of a “remote hearing.”  Most hearings in international arbitration are held for the purpose of hearing evidence from fact or expert witnesses, which is often known as oral testimony.  Therefore, the changes in the guidelines that deal with the method of conducting hearings is significant from the perspective of the IBA Rules, and accordingly, the IBA Rules have been amended to include new provisions reflecting the recent trends in practice since the COVID-19 pandemic.  According to the definition provided in the 2020 IBA Rules, the term “remote hearing” is used in a broad sense, encompassing various forms of hearings that are conducted for the entire dispute in question or parts thereof, or only with respect to certain participants, using videoconference or other communication technology by which persons in more than one location simultaneously participate.

The 2020 IBA Rules provide that the arbitral tribunal may have the evidentiary hearing conducted in the form of a remote hearing at the request of a party or on its own motion.  In addition, under the new 2020 IBA Rules, the arbitral tribunal is required to consult with the parties on whether to prepare in advance, and the details of, a remote hearing protocol which sets forth the procedural methods of a remote hearing for an efficient and fair remote hearing (Article 8.2 of the 2020 IBA Rules).  The remote hearing protocol may address, among others, (i) the technology to be used; (ii) advance testing of the technology or training in use of the technology; (iii) the starting and ending times considering, in particular, the time zones in which participants will be located; (iv) how documents may be placed before a witness or the arbitral tribunal; and (v) measures to ensure that witnesses giving oral testimony are not improperly influenced or distracted.  That said, the 2020 IBA Rules do not specify which party to the arbitration should establish a remote hearing protocol in order to provide flexibility in establishing the protocol.

2.   Amendments to Increase Efficiency in Document Production Phase

The 2020 IBA Rules have deleted the provision that previously required the arbitral tribunal to consult with the parties in dealing with any request for document production or objection to such request, allowing the arbitral tribunal to make a decision more promptly and efficiently (Article 3.7 of the 2020 IBA Rules).  In addition, a party is not obligated to produce multiple copies of documents which are essentially identical, unless the arbitral tribunal decides otherwise (Article 8.12(c) of the 2020 IBA Rules).  The 2020 IBA Rules also provide that documents to be produced in response to a request of the other party are not required to be translated, while documents in a language other than the language of the arbitration that are submitted to the arbitral tribunal as evidence should be accompanied by translations (Articles 8.12(d) and 8.12(e) of the 2020 IBA Rules).

3.   Other Amendments

Other significant amendments to the 2020 IBA Rules are as follows. 

First, the 2020 IBA Rules specify that a party may submit additional witness statements or expert reports if there are new factual developments that could not have been addressed in a previous witness statement or expert report (Articles 4.6 and 5.3 of the 2020 IBA Rules).  Second, even if one party refuses to conduct cross-examination of the other party’s witness, the arbitral tribunal, upon hearing the parties’ position, may permit the concerned witness who submitted the witness statement to appear in person and give oral testimony before the tribunal (Article 8.5 of the 2020 IBA Rules).

The 2020 IBA Rules also provide that the arbitral tribunal may, at the request of a party or on its own motion, exclude evidence obtained illegally (Article 9.3 of the 2020 IBA Rules).

Implications

The 2020 IBA Rules appear to have intended to maintain the overall framework of the existing IBA Rules, which have been widely used in international arbitration proceedings for the past decade, but also to promote more efficient and practical proceedings by reflecting the recent trends in practice.  As the 2020 IBA Rules apply to the methods and procedure for document production in most arbitration cases, it is important to be fully aware of these changes and utilize them in actual arbitration cases.