Rules of Evidence in International Arbitration

Nathan D; O'Malley; LLM

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CHAPTER 8 Evidentiary hearing

Introduction

8.01 In the vast majority of international arbitrations, the balance of the evidence will be taken before holding an evidentiary hearing. The exchange of documents, submission of fact witness statements, and expert reports will often be submitted over the course of the arbitration, before a scheduled hearing is held. 8.02 From the standpoint of taking evidence, a hearing is often the place where the record is both challenged and refined through the questioning of witnesses. Usually arbitrators will attempt to avoid raising new issues and/or allegations at the hearing by insisting that the parties refrain from last minute submissions of new evidence, whether it be witness statements or documents. It is often the intention that the parties and the tribunal will come to a hearing well versed in the issues and evidence, so that the scheduled time will be spent honing in on the important questions left to be answered.1 8.03 The approach set forth above leads to the fact that a hearing in international arbitration often takes on different characteristics to one held in domestic legal systems. For instance, the practice of international arbitration has developed so that the predominant purpose of the evidentiary hearing is not to hear the direct testimony of witnesses and experts, but rather to allow for the questioning of witnesses and experts by the tribunal and/or the adverse party. Thus, the hours spent on direct examination of witnesses and experts in the courtrooms of common law jurisdictions is avoided in international arbitration. Also, whereas in some civil law jurisdictions the judge will take the leading role in questioning witnesses and experts, in the modern practice of arbitration it is the counsel who will do most of the questioning of witnesses and experts. 8.04 Of course there are exceptions; nevertheless, the rules set forth in article 8 generally support the above described practices. The following chapter considers these issues and the other questions which arise in regard to the organisation and conduct of an evidentiary hearing.

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Notification of witnesses and the right to a hearing

Article 8.1 2010 IBA Rules:	Within the time ordered by the Arbitral Tribunal, each Party shall inform the Arbitral Tribunal and the other Parties of the witnesses whose appearance it requests. Each witness (which term includes, for the purposes of this Article, witnesses of fact and any experts) shall, subject to Article 8.2, appear for testimony at the Evidentiary Hearing if such person’s appearance has been requested by any Party or by the Arbitral Tribunal. Each witness shall appear in person unless the Arbitral Tribunal allows the use of videoconference or similar technology with respect to a particular witness.
Other Statements of the Rule
Article 24(1) UNCITRAL	Subject to any contrary agreement by the parties, the arbitral tribunalModel Law: shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials. However, unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall hold such hearings at an appropriate stage of the proceedings, if so requested by a party.

General discussion

8.05 Practically speaking, an evidentiary hearing may not always be required. Given the extent to which written submissions are used in international arbitration, it is quite possible that a tribunal will be able to adequately decide the matter without oral witness testimony. Nevertheless, the parties, or even the arbitrators, will often seek to hold an evidentiary hearing for the purpose of hearing witnesses. Article 8.1 therefore presupposes that the tribunal has informed the parties of the respective dates for the hearing, and imposed deadlines by which notice of the witnesses expected to attend the hearing should be given. The above notwithstanding, whether a party has a right to a hearing, and, if so, who may call the witnesses, as well as whether the witness must appear in person (as opposed to via video-conference) are all questions which may arise, and are addressed below.

Right to a hearing

8.06 The position historically adopted in international arbitration is that an oral hearing should generally be afforded to the parties in the event that it is requested.2 This practice is reflected in many of the well-known procedural rules as well as in the Model Law.3 The

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general presumption is that arbitrators will in most instances be compelled to hold an oral hearing of some type when one is requested.4 8.07 The above notwithstanding, a party’s right to a hearing is not without limits. The practice reflected in the Model Law is that where a previous agreement has been reached to waive the right to a hearing by either the adoption of rules that restrict a party’s right to a hearing or by express agreement, a subsequent request for a hearing by a party may be denied.5 Moreover, as the right to an oral hearing pertains to the hearing of witnesses, the authority vested in the tribunal over the proceedings implies that it has the right to determine the extent to which witnesses should be heard (see comments on article 8.2).6

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Broadly speaking, a tribunal may choose not to hear certain witnesses as part of the legitimate exercise of its authority.7 As is noted in the comments to article 8.2, however, arbitrators must be mindful of whether a decision not to hear a witness will, depending on the facts of the case, violate a party’s right to be heard.8 8.08 A party’s right to request a hearing is also circumscribed by a tribunal’s authority to impose notice periods. The 2010 version of the IBA Rules, article 8.1, presupposes that the tribunal has provided a time frame within which a party must notify the tribunal and its adverse party which witnesses they wish to hear. Furthermore, article 8.1 is drafted in mandatory language reflecting that if a party fails to satisfy the notice obligation, such a failure may be construed as a waiver of the right to hear a particular witness or to have a hearing.9 The

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above being said, it is imperative that the tribunal ensures that reasonable notice is afforded to the witnesses summoned.10 8.09 The duty to abide by the procedural time frames for the notification of witnesses to be heard correlates to the tribunal’s authority and control over the arbitral procedure, which is often given considerable deference by reviewing courts.11 Thus, rules of procedure or arbitration laws which grant a party the right to a hearing, should be read as providing for such a right subject to the case management authority of the tribunal to determine when the hearing will be held and when notice of the witnesses is to be provided. This point was addressed by an Iran-US Claims Tribunal panel in the World Farmers Trading Inc v The Islamic Republic of Iran case in relation to a party’s failure to abide by the proper notice period:

WFT did not file a request for Hearing by the 18 February 1987 deadline established by the Tribunal’s Order filed 4 August 1986. Eleven months after the deadline, however, WFT requested a Hearing. Article 15(2) of the Tribunal Rules … states that a party may request a Hearing at “any stage of the proceedings”. This provision should be interpreted, in the light of the particular circumstances of the case, to mean that hearings are to be held upon the reasonable request of a party made at an appropriate stage of the proceedings. The Tribunal determines that, in light of all the circumstances of this Case, WFT having failed to request a Hearing within the deadline set by the Tribunal’s Order, WFT’s request is not reasonable or appropriate at this stage. Therefore the Tribunal will decide the remaining jurisdictional issues and the merits on the basis of the documents that have been submitted without holding a Hearing.12

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