Tribunal duties and the exclusion of evidence in international arbitration: the tug-of-war of fairness and efficiency

Abstract

Arbitral procedure aims to strike the right balance between fairness and efficiency in the specific and unique circumstances of the case. However, in some difficult cases, both considerations can pull in opposite directions. The exclusion of evidence provides a particularly apt example in which the dilemma arises, aggravated by the considerable evidentiary discretion vested in tribunals and the overall lack of guidance in applicable laws and rules on approaching such circumstances. This article argues that the tug-of-war between fairness and efficiency in the context of the exclusion of evidence can be resolved with the help of relevant tribunal duties, which should guide the exercise of tribunal discretion. These include the duty (i) to resolve the dispute; (ii) to observe due process; (iii) to conduct the procedure efficiently and effectively; (iv) to act with impartiality and independence; and (v) to render an award that is enforceable/not subject to set aside.

Introduction and background

International arbitration procedure is aimed at striking the right balance between two policy considerations: fairness and efficiency.¹ In an ideal world, these two are not contradictory, but in reality, they tend to come into conflict. Take, for example, circumstances in which a party obtains evidence that makes or breaks their case. However, the said documents are covered by legal privilege. What is the fair course of action for the tribunal in these circumstances? Taking another example, a party may wish to introduce new evidence days before the deadline for the final award. Would it be efficient for the tribunal to amend the procedural timetable in an effort to include the evidence at all cost, even if the new documents have a low probative value?

It is trite, therefore, that all evidence should not be treated identically for a variety of reasons. In some cases, evidence should not be included in the record altogether. Rules addressing such circumstances are an important aspect of civil procedure in any legal system, although considerable differences remain between civil and common law jurisdictions. The term ‘exclusionary rules of evidence’ pertains primarily to common law jurisdictions, which often contain principles that dictate which evidence should and should not be included in the record.² In contrast, civil law systems tend not to exclude evidence at an early stage but rather attribute lower or higher probative value to different forms of evidence.³

Although some evidentiary rules in international arbitration may stem out of the applicable substantive law,⁴ the arbitration procedure follows neither of those domestic systems. Instead, its endemic characteristic is the broad procedural flexibility that tribunals are vested with, giving them considerable control over how disputes are resolved.⁵ The various sources of procedural law in international arbitration, including the arbitration rules, the lex arbitri, and other applicable procedural principles, have effectively enshrined this flexibility.⁶ Therefore, on the face of it, arbitration has no strict rules or principles that determine what evidence should be excluded and when—no ‘exclusionary rules of evidence’ as such.⁷

Nonetheless, the practical effect of tribunal discretion is that some evidence can or even ought to be excluded. This article hence discusses the circumstances under which exclusion of evidence may be justified and tackles the question of how tribunals can preserve the balance between fairness and efficiency when confronted with such issues. Such an analysis would assist both arbitrators who must determine whether or not to exclude evidence, sometimes even sua sponte,⁸ and the parties who raise evidentiary objections.⁹ This article argues that striking the right balance may be achieved by reference to relevant tribunal duties that guide the way in which evidentiary discretion is exercised.

Tribunal duties are essential to international arbitration and their source is in party agreement to arbitrate itself, application of law as well as ethical obligations.¹⁰ Duties also typically introduce a sanction. If they are violated, the tribunal could face several consequences:

• - Removal of the arbitrator,

• - Annulment of an award,

• - Refusal of enforcement of the award,

• - Direct recourse against the arbitrator for breach of contract or tortious liability,

• - Impact on reputation and hence any possible future appointments,

• - No sanction at all.¹¹

The central tribunal duty relevant to this issue is that of affording the parties due process. However, other duties including that to resolve the dispute or conduct the procedure efficiently and economically, also play a role and are discussed further below.

This article will hence contribute to building a conceptual framework of the subject of exclusionary rules of evidence that is tied to tribunal duties. Rules pertaining to the assessment of evidence in arbitration have particularly suffered from poor analysis and a lack of structure,¹² despite a considerable volume of academic work dissecting the individual circumstances that may lead to exclusion of evidence.¹³ This article, however, takes a step back and considers the broader circumstances of exclusion of evidence and the relevant duties of the tribunal rather than attempting to provide a prescriptive and exhaustive evidentiary test. In doing so, procedural flexibility is preserved while tribunals can benefit from guidance to exercising discretion.¹⁴

This article will adopt the common law terminology of ‘exclusion of evidence’ which does not solely pertain to admissibility of evidence but also to document disclosure and even inspections.¹⁵ Indeed, issues that arise at these various stages are closely related,¹⁶ invoking identical tribunal duties albeit with subtle differences in practice. The issue is an important one given that, among many other reasons, the majority of international arbitrations anecdotally turn on facts rather than legal issues.¹⁷

In terms of structure, this article first discusses the range of circumstances in which issues of evidence exclusion arise in international arbitration. Secondly, it sets out the source of the difficulty, namely the broad evidentiary discretion vested in tribunals. Finally, it turns to the relevant tribunal duties that should guide tribunals in exercising the said discretion to decide whether or not to exclude the evidence in the specific circumstances of the case.

When can evidence be excluded?

Before considering the relevant duties of the tribunals, it is important to establish the range of circumstances in which the issue of exclusion of evidence arises. The IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules) can prove particularly helpful since they were, after all, designed as a compromise between common and civil law jurisdictions.¹⁸ For that reason, they should address the dichotomy of how legal systems approach the exclusion of evidence mentioned above. The IBA Rules contain a list of factors that tribunals ‘shall’ consider in relation to admissibility and disclosure of evidence:

1. Relevance and materiality,

2. Legal impediment or privilege,

3. Unreasonable burden to produce the evidence,

4. Loss or destruction of the document,

5. Confidentiality,

6. Political or institutional sensitivity,

7. Procedural economy, proportionality, fairness, or equality of the parties.¹⁹

Despite this limited guidance, the IBA Rules list the circumstances in which exclusion is warranted rather than set out a specific evidentiary test for exclusion and the exercise of tribunal discretion. After all, it is up to the tribunals to determine whether one of the above exclusionary rules applies in the circumstances of the case.

Other sources link rules of exclusion to some of the duties of tribunals, such as due process.²⁰ The difficulty around that consideration is that the evidence rarely trespasses on a single principle given that, as will be discussed below, their application far exceeds mere issues of evidence but pertains to arbitral procedure as a whole. This article, hence, proposes to assess exclusionary rules of evidence against the circumstances that taint the evidence and put exclusion into question. In doing so, three principles are proposed:

1. Exclusion of evidence on the grounds of its substance,

2. Exclusion of evidence on the grounds of how it was obtained,

3. Exclusion of evidence on the grounds of noncompliance with procedural directions of the tribunal.

The first exclusionary principle, unlike the other two, solely concerns the substance of the evidence. In fact, most of the aforementioned exclusionary grounds listed in the IBA Rules relate to it.²¹ Evidence having little relevance to the case or evidence not being material to the outcome of the case is perhaps the most frequently used exclusionary rule of evidence in practice.²² Privileged and confidential documents are also a frequent issue that often results in the exclusion of evidence.²³

The second and third principles of exclusion are concerned with procedure and not the substance of the evidence. Therefore, and secondly, some evidence is excluded solely on the basis of how it was obtained. Illegal conduct is a textbook example that is often discussed in doctrinal sources.²⁴ The component, hence, fits with Article 9(3) of the IBA Rules that allow tribunals to exclude such evidence. The ground of ‘unreasonable burden to produce the requested evidence’²⁵ would also fall under this category in the context of document disclosure and involve considerations of proportionality of the request.²⁶

The third exclusionary principle of evidence concerns noncompliance of the evidence with procedural directions of the tribunal. Tribunals may, for example, set hard deadlines for submitting documents. In the investor-state case of Zeevi Holdings v Bulgaria, the claimant attempted to introduce new evidence contrary to a procedural order of the tribunal stating that no further documents would be admitted in the record. The tribunal subsequently excluded the new documents.²⁷

Therefore, in an effort to address the lack of systematization in the area, three categories of exclusionary rules of evidence can be identified, depending on the circumstances that taint the evidence:

1. The substance of the evidence excludes it from the record: including circumstances where nothing was procedurally questionable in relation to the evidence, but rather the evidence itself was privileged,²⁸ confidential,²⁹ politically sensitive,³⁰ or otherwise should be excluded due to its substance.

2. How the evidence was obtained excludes it from the record: addressing whether the evidence was obtained inappropriately or not. It stretches from the evidence obtained in breach of ius cogens principles, such as torture,³¹ via evidence obtained through corruption, to evidence obtained through civil wrongs.³²

3. The evidence does not comply with procedural directions of the tribunal: concerning the phase in which evidence was introduced, such as after the close of hearing or even moments before the final award.³³ Other considerations include noncompliance with the language requirements or submission of overly voluminous evidence contrary to tribunal directions.³⁴

These categories of exclusionary rules are not mutually exclusive and can be argued and analysed in parallel. A recent case before the English courts relating to the setting aside of a commercial arbitration involving a state, Nigeria v P&ID,³⁵ provides an apt example. In this case, the USD 11 billion award rendered against Nigeria in favour of P&ID was successfully challenged on several grounds of fraud and corruption. Among them was the fact that P&ID’s counsel were being live-fed privileged communication between Nigeria and their legal representatives.³⁶ Although the issue was never put to the arbitral tribunal, such evidence would trespass on the two exclusionary principles mentioned above: substance (due to the documents being covered by legal privileged) and how the documents were obtained (through corrupt conduct).

The three principles above are certainly equally relevant to document disclosure/production, albeit with some subtle differences. For example, the exclusionary principle relating to noncompliance with the tribunal’s procedural direction would be less relevant in cases of document disclosure. After all, at that stage, a party is merely applying for tribunal permission to request evidence from the opponent that may be simply refused. On the other hand, the tribunal can prescribe a specific procedure for requesting documents, such as a Redfern Schedule,³⁷ and the failure to comply with it may lead to the exclusion of the evidence. The other principles would be equally relevant to disclosure.³⁸

Having discussed the three circumstances in which issues of exclusion arise, it is worth turning to how tribunals should reach a decision in the matter. The starting point is broad evidentiary discretion.

Evidentiary discretion

The applicable laws and rules in international arbitration set out two key principles in relation to evidence. On one hand, they afford tribunals with broad and discretionary procedural authority. On the other hand, the discretion tends to be limited by the principle of party autonomy since arbitration is an inherently private dispute resolution process, and the parties should be able to have a say in how their disputes are resolved.³⁹ Nonetheless, where parties do exercise their rights and agree upon a procedure, it rarely concerns the admissibility and disclosure of evidence.⁴⁰ The issue of admissibility and disclosure of evidence is, therefore, left to the discretion of tribunals.

This discretion has many sources. The ICC Rules note broadly that ‘[i]n order to ensure effective case management, after consulting the parties, the arbitral tribunal shall adopt such procedural measures as it considers appropriate, (…).’⁴¹ The VIAC Rules follow a similar approach.⁴² Other leading arbitration rules contain some minimal guidance pertaining to the scope of discretion. The SCC Rules state, for example, that ‘[t]he admissibility, relevance, materiality, and weight of evidence shall be for the Arbitral Tribunal to determine.’⁴³ Most other arbitration rules contain provisions to a similar effect,⁴⁴ but none prescribe a formal procedure or criteria for the inclusion or exclusion of evidence.⁴⁵

Therefore, arbitration rules leave issues of inclusion or exclusion of evidence to the tribunals, unless parties agree otherwise. Procedural discretion is also enshrined through the various arbitration laws. For example, the English Arbitration Act states that tribunals have discretion on ‘procedural and evidential matters’ that encompasses questions on ‘the admissibility, relevance or weight of any material’.⁴⁶ The Act is also nonexhaustive in listing procedural and evidential matters and hence the discretion inevitably extends to other aspects of evidence such as document disclosure and inspections.⁴⁷

Other arbitration laws vest the tribunals with similar broad powers. The German Code of Civil Procedure states that ‘The arbitral tribunal is empowered to determine the admissibility of taking evidence, take evidence and assess freely such evidence.’⁴⁸ Belgium and the Netherlands contain equivalent provisions in their arbitration laws, whereas the principle has been consistently upheld by US courts.⁴⁹ Most other arbitration laws, including those based on the UNCITRAL Model Law on International Commercial Arbitration, follow a similar approach, with little divergence between civil and common law jurisdictions.⁵⁰

The IBA Rules provide more prescriptive rules on evidence in arbitration but tend to be treated as nonbinding guidance in the majority of cases.⁵¹ The Rules attempt to ‘preserve the lines of distinction between the rights of the parties and the authority of the arbitral tribunal’.⁵² They, hence, make references to the circumstances in which exclusion may or even should be warranted but do not set out a prescriptive evidentiary test for doing so, preserving the evidentiary discretion of tribunals.

For the above reasons, tribunals have a considerable degree of procedural discretion which extends to their treatment of evidence, including the exclusion of evidence. Although parties can agree to restrict that discretion, they rarely do so. Nonetheless, while discretion constitutes a starting point to approaching the exclusion of evidence, it is not entirely ad hoc. Duties of the tribunal play a particularly strong role in guiding the way in which this discretion is exercised.

Duties of the tribunal and exclusion of evidence

The nature of discretion is such that tribunals can take any approach that they deem appropriate towards the exclusion of evidence. Of course, discretion that is entirely arbitrary is neither fair nor efficient. This is where duties of the tribunal and their sanction come into play to limit and guide the exercise of evidentiary discretion. Therefore, applying their duties is key for tribunals to decide issues of exclusion of evidence fairy and efficiently. This section will, therefore, discuss how the key duties intersect with exclusionary rules of evidence in order to guide tribunal evidentiary discretion.

Duty to resolve the dispute

The raison d’etre of international arbitration is the resolution of the dispute.⁵³ The central duty of the tribunal is, therefore, to complete its mandate and render an arbitral award.⁵⁴ Unlike the other duties below that are more concerned with how the tribunal conducts the proceedings, this duty focuses purely on the result: the resolution of the dispute and the rendering of an award. Doing so necessitates that tribunals apply the relevant law to the case and conduct the proceedings in accordance with the law of the seat of the arbitration.⁵⁵

This duty has several implications for issues of exclusion of evidence. For example, tribunals must conduct the arbitration in the right language, as required by the arbitration agreement or otherwise.⁵⁶ Consequently, tribunals should be able to exclude evidence that does not comply with the language requirement of the dispute and where the party proffering the evidence refuses to provide a translation.⁵⁷

However, and more importantly, the duty to resolve the dispute implies that the issued award must be reasoned, meaning that it should take into account the arguments raised by the parties.⁵⁸ If so, a part of this duty must be for arbitrators to uncover the truth and hence to appreciate evidence to get a full picture of the facts of the case and the relevant law. It would be impossible, for example, to render a reasoned award by appreciating the law but not the facts. The resolution of any dispute implies the application of the former to the latter. On this basis, the duty to resolve the dispute would typically prompt the tribunal to include evidence.

Although this aspect of the duty to resolve the dispute has not been addressed in doctrinal sources at all, it would explain why many arbitral tribunals show a degree of reluctance to order any exclusion of evidence.⁵⁹ This being said, ‘too zealous [of a] pursuit of evidence can easily transform institutions designed to resolve conflict into a rationalization and a setting for possibly even more rancorous conflict’.⁶⁰ The equation becomes even more complicated once the other duties are factored in that may prompt tribunals to exclude evidence. The most important of those is due process.

Duty to afford due process

A cardinal principle of international arbitration that deserves specific attention is due process, which supersedes tribunal discretion and party autonomy.⁶¹ In various sources, it is also referred to as natural justice,⁶² procedural fairness,⁶³ or the rules of fair trial.⁶⁴ Others mention the right to be heard, the so-called principe de la contradiction or equal treatment.⁶⁵ These differences reflect the various municipal terminologies, but at the heart of the concept is the notion that parties should be treated fairly and equally.⁶⁶ For this reason, it is the duty that plays the most significant role in determining the exclusion of evidence and its application can lead to different outcomes. Indeed, both the inclusion and exclusion of evidence can trespass on this duty in the right circumstances.

Due process, therefore, sets the outer limit to how tribunals can approach evidence through their discretion. Given the divergence in defining due process and its scope, domestic arbitration laws provide a necessary reference point for understanding this limit. For example, the UNCITRAL Model Law does not make an express reference to due process, albeit the mandatory Article 18 states that tribunals should treat the parties with equality and afford them the full opportunity to present their case.⁶⁷

Similar due process obligations are found in non-Model Law jurisdictions. For example, the English Arbitration Act provides in Section 33 for the general duty of the tribunal to ‘act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent’. This has been said to represent the notion of due process under the Act.⁶⁸

Despite some differences across jurisdictions, violation of due process represents a ground on which an award may be set aside.⁶⁹ The Model Law, for example, specifies that an award may be set aside if the party making the application furnishes proof that it was unable to present its case, the procedure was not in accordance with party agreement or was contrary to a mandatory provision of the lex arbitri.⁷⁰ Many other arbitration laws follow an approach similar to the Model Law. The English Arbitration Act allows an award to be set aside on the grounds of a serious irregularity, which includes violations of the aforementioned Section 33.⁷¹ However, unlike the Model Law, the threshold for such a challenge to succeed is higher as the court must consider that the irregularity was ‘serious’ and affected the tribunal, the proceedings, or the award.⁷² Despite some differences, there is a significant degree of convergence between jurisdictions.⁷³

Principles of due process can also be distilled from the New York Convention and the grounds on which courts can refuse to enforce a foreign arbitral award. These grounds include a party not being afforded the right to be heard or being properly put on notice, the arbitral procedure being contrary to party agreement, or the award being contrary to public policy of the state where enforcement is being sought.⁷⁴

Although the domestic sources of due process contain key differences regarding the necessary threshold or extent to which due process considerations can lead to the award being set aside, the general principle remains.⁷⁵ An award, therefore, may be challenged on the grounds of lack of due process which essentially functions as a limit to the exercise of tribunal discretion and party autonomy in the area of evidence.⁷⁶ Having established that due process and its various iterations appear in most if not all domestic arbitration laws and the New York Convention, it is worth discussing how the inclusion or exclusion of evidence can trespass on this duty and its various manifestations.

The right to be heard is the first and perhaps most significant element of due process from the standpoint of evidence exclusion. It will come into focus particularly if the opponent makes objections to the inclusion of evidence. If tribunals do not discuss the objections but admit the said evidence outright, it could be perceived as a failure to afford the party its right to be heard.⁷⁷ Conversely, a decision to exclude evidence could amount to denying the party its ‘due opportunity to present proofs and arguments’.⁷⁸

The right to be heard also underpins tribunal control over the procedural timetable. Evidence that is introduced late and subsequently excluded by the tribunals would typically not amount to a breach of due process,⁷⁹ nor must the tribunal afford a party indefinite opportunities to respond.⁸⁰ For example, the English court held that the exclusion of a 2,000-page document three months after the hearing did not amount to a violation of due process.⁸¹ The tribunal acting contrary to their own procedural directions in order to include new evidence might, however, trespass on the duty. In the Fraport v Philippines⁸² investment arbitration, a party applied to introduce new evidence after the close of the hearing, which the tribunal admitted. The Decision on Annulment found that this decision breached due process as it restricted the opponent’s right to be heard and respond to the new evidence.⁸³ Nonetheless, if the evidence was only uncovered after the expiration of the deadline, due process may require the opposite.⁸⁴

Outright rejection of evidence that is relevant and material might also, without a good reason, amount to tribunal’s failure to consider party submissions and hence trespass on the right to be heard.⁸⁵ Equally, admitting evidence without giving the opponent the opportunity to produce counter evidence could also fall short of the duty.⁸⁶ On the other hand, tribunals retain a considerable degree of discretion. Determinations of what is relevant and material, as well as decisions on admissibility and disclosure, are a prerogative of the tribunal and, without more such as perhaps outright arbitrariness, would not trespass on the right to be heard.⁸⁷

Secondly, due process encompasses the principle of equality of arms, also called the principle of equal treatment. While the right to be heard above is concerned with the mere opportunity to make submissions, the principle of equal treatment connotes a certain adequacy of that opportunity.⁸⁸ The investor-state tribunal in Tulip Real Estate v Turkey⁸⁹ stated that a party must not be under conditions that place it at a substantial disadvantage vis-à-vis the opponent.⁹⁰ For example, allowing one party to produce evidence but not the other could trespass on equality of arms (as well as right to be heard).⁹¹ It has also been suggested that tribunals should not uncritically accept the evidence of a party in the face of objections as to its credibility.⁹²

Equality of arms also implies that parties have a general duty not to obtain evidence through improper means.⁹³ Although due process provides for equal treatment, it does not require that the parties should be treated identically. The circumstances of the parties not being ‘comparable’ typically suffice to avoid a successful equality of arms challenge.⁹⁴

The third due process principle relevant to the subject is the duty of tribunals to afford the parties sufficient notice.⁹⁵ This element is concerned with the parties being kept informed of procedural developments in the arbitration such as the submission of new documents by their opponent.⁹⁶ Although it does not directly relate to exclusion of evidence, it often concerns the surrounding circumstances in which parties introduce the said evidence.

Due to the severe consequences of the lack of due process, it is easy to see why some tribunals might experience ‘due process paranoia’. Its consequence is to reduce the exercise of tribunal procedural discretion to a minimum.⁹⁷ This, in turn, leaves scope for parties to raise unmeritorious due process objections in an effort to influence the tribunal to their advantage.⁹⁸ The problem is aggravated given that oftentimes the line between complying and falling short of due process is subtle.

However, there is a silver lining. The above examples of due process violations suggest that if the tribunal engages with party submissions and avoids arbitrariness, a challenge to the award is unlikely to succeed. Due process, after all, is an obligation of conduct and not of result. What domestic courts search for in set-aside proceedings is the engagement of tribunals with the arguments put to them by the parties.⁹⁹ This suggests that, if the tribunals show engagement with the evidentiary objections or requests for inclusion of evidence, they will stay well within the boundaries of due process. The wide scope of evidentiary discretion is still largely intact.

Although the fear of due process is very much a storm in a teacup, it is plain to see why many tribunals view admitting virtually all evidence in the record as the less risky approach. However, this is nothing more than an extension of the due process paranoia problem and can cause injustice to parties where exclusion is warranted. Instead, this article proposes that the due process paranoia can be addressed if tribunals follow their other duties as well and exercise the discretion that they are vested with.

Duty to conduct the procedure efficiently and economically

More evidence inevitably means more work for the tribunal, the parties and the arbitral institutions, who are often committed to strict deadlines and a tight procedural calendar. This translates to increased costs and delays. An important duty that guides tribunals in excluding evidence is hence ensuring procedural efficiency and economy. It has many sources, including some of the leading lex arbitri and arbitration rules, which consider it a ‘general’ duty of the tribunal.¹⁰⁰ It consists of two limbs: the avoidance of unnecessary delay, connoting the need for haste in resolving disputes and, secondly, factoring in cost-effectiveness.¹⁰¹ The principle is significant and has been treated by some authorities as an iteration of due process.¹⁰² After all, a procedure that is grossly inefficient can be viewed as depriving the parties of their right to be heard. The overlap between the two principles might, hence, be a question of scope and practical effect.

Nonetheless, procedural efficiency and economy certainly affect the exclusion of evidence in their own right. Many arbitration laws attribute special importance to the principle. The English Arbitration Act¹⁰³ and the Swedish Arbitration Act¹⁰⁴ are two examples, expressly connecting procedural economy with the exercise of tribunal discretion. Indeed, without a duty to conduct the procedure efficiently and economically, one of the key advantages of arbitration and dispute resolution would be lost.¹⁰⁵

The possible sanction for tribunals falling short of their duty of efficiency and economy lies in targeting the tribunal personally. For instance, a forfeiture of remuneration is one possible avenue permissible under some arbitration rules. The ICC, for example, envisages a forfeiture of arbitrators’ fees if the award is rendered after the deadline prescribed by the arbitration rules.¹⁰⁶ Several arbitration laws also envisage the removal of the arbitrator in cases of undue delay.¹⁰⁷ Principles on expediency would be inevitably violated if the tribunal indefinitely allowed parties to introduce new evidence and hence delay the proceedings.

In this context, the line between violating the duty to conduct the procedure efficiently and economically and the duty to afford due process is blurred. An arbitrator’s pursuit of efficiency can be easily argued by a party to trespass on due process and in particular the right to be heard. For instance, that party may seek to introduce last-minute evidence. Although the tribunal could include such evidence and revisit the procedural timetable in an effort to ensure the opponent’s opportunity to respond, it is clear that due process does not require the tribunal to afford the parties endless opportunities to respond.¹⁰⁸ The solution must hence be a balancing exercise, weighing the circumstances of the case, resulting in the tribunal to use their discretion to determine the appropriate course of action.

The rationale of procedural economy and efficiency dictates perhaps the most common exclusionary rule of evidence—evidence lacking relevance to the case or having negligible materiality to the outcome of the case need not be admitted.¹⁰⁹ This is perhaps the most common reason for documents to be excluded.¹¹⁰ It is a general element present in the IBA Rules¹¹¹ as well as many of the domestic laws and arbitration rules mentioned above.

Duty of independence and impartiality

An auxiliary duty that is often alleged in combination with violation of the due process right to be heard or equality of arms is impartiality and independence of arbitrators,¹¹² although some authorities treat it as a manifestation of due process as well.¹¹³

Impartiality and independence are invoked since decisions to include or exclude evidence are typically prejudicial to one party. Therefore, it is not uncommon for that party to challenge the award on grounds of actual or apparent bias. In analysing such a challenge, domestic courts would look for the rationale behind the tribunal decision. Following a principled approach to exclusion of evidence that treats parties equally allows the mitigatation of the risk of such allegations succeeding.¹¹⁴ Therefore, in the context of evidence, the observance of the right to be heard and equality of arms would in most cases suffice to defend against allegations of lack of impartiality or independence.

If the tribunal is found to be biased, the sanction is not just the challenge to the arbitral award but also a possible sanction against the arbitrators personally such as a reduction in fees or even personal liability, subject to the laws and rules on immunity.¹¹⁵ They may also be removed in such circumstances.¹¹⁶

Duty to render an enforceable award?

While various arbitration rules make a reference to tribunals having to render an enforceable award,¹¹⁷ this duty is not a stand-alone one. Rather, it is a corollary of the other duties, such as the duty to afford due process or impartiality and independence.¹¹⁸ For that reason, there are no consequences for tribunals falling short of this duty per se. Nonetheless, many authorities recognise it as separate, albeit its precise scope is subject to ongoing debate.¹¹⁹ The possible explanation is that, given the aforementioned evidentiary discretion of tribunals, whether or not the award will be tainted by an incorrect exercise of discretion will be a question of degree in the circumstances. For example, if the tribunal violated due process by excluding evidence which subsequently results in a successful challenge to the award, the duty to render an enforceable award would also be undermined.

There is no reason, however, for the duty not to extend to set-aside proceedings as well.¹²⁰ Tribunals should arguably be aware of any mandatory laws of the seat, including its public policy that may result in challenges to the award. If so, the reference to ‘enforceability’ is inaccurate and the duty should also (or only) relate to set aside proceedings. After all, arbitrators typically cannot foresee in advance where the parties will enforce the award, although sometimes they can if, for example, they know of significant assets of one party in a specific jurisdiction.¹²¹ Furthermore, international public policy is also a concept that applies universally. The duty to render an enforceable award could hence be an iteration of the duty to observe international public policy, which has been often cited in the context of tackling corruption.¹²² Therefore, for instance, arbitrators might arguably rely on this duty to exclude evidence if it offends international public policy.

For this reason, although the duty to render an award that is not subject to set aside/is enforceable has bearing on the exclusion of evidence, it is auxiliary to the other duties. Nonetheless, it serves to remind tribunals of the outer boundaries of their evidentiary discretion.

Conclusions

Arbitral tribunals tend to exclude evidence on the basis of (i) the substance of the evidence, (ii) how it was obtained, and (iii) noncompliance with procedural directions of the tribunal. That being said, the exclusion of evidence represents one of the most difficult issues that an arbitral tribunal can be faced with from the angle of striking the right balance between fairness and efficiency—the underlying policy objectives of international arbitration.

Tribunals have a broad evidentiary discretion although that discretion has limits and also suffers from poor guidance. In resolving the issue, tribunals should consider the unique circumstances of the case and factor in their duties, which guide them whether or not to include or exclude evidence. These duties are the:

• - Duty to resolve the dispute which prompts tribunals to uncover the truth;

• - Duty to afford due process and its various manifestations such as the right to be heard and equality of arms;

• - Duty to conduct the procedure efficiently and with expediency, which may in particular prompt tribunals to exclude evidence that would delay justice;

• - Duty to remain independent and impartial that may be invoked if parties are treated unequally;

• - Duty to render an enforceable award or, at the very least, an award that is not subject to set aside.

This article, hence, argued that tribunals should consider the above duties in the circumstances of the case to guide their exercise of evidentiary discretion to include or exclude evidence.

Footnotes