Session 14

Wednesday, March 20, 2024 3:38 PM

Act 2: Pre-Hearing Advocacy

- It is possible in international arbitration to request all documents related to the call for bids and
the evolution of technical specifications
- If the parties cannot agree on the discovery method, then they have to rely on the arbitrators
○ Article 14.2 of the LCIA Rules provides them with a broad discretion concerning the power
to conduct the arbitration
○ Article 22.1 grants them discovery powers
- Arbitrators comprise on what rules to use, such as the IBA Rules of Evidence
○ Allows disclosure of specifically identified documents or narrowly defined categories of
documents, and require the party asking for discovery to show why each of the documents
is relevant and material to the case
- You should choose the rules that benefit your case. Sometimes rules might allow for all
documents to be disclosed. Is this good for you in all aspects? However, also think about what the
Tribunal would look. Don't suggest something they are completely alien with.
- Witness statements
○ A common practice in international arbitration is to work on the basis of witness statements
▪ Article 20.3 of the LCIA Rules specifically allows it.
▪ By using witness statements, we can ensure that our witnesses focus on good
engineering practice rather than getting confused and tied up in the details of the ACI
Code
○ Arbitrators are aware that witness statements are worked on. Hence, they examine them
closely
○ Statements must be signed by the witnesses
○ Witness statements substitute for depositions in that they give a notice of what a witness
will say
○ An important part of the presentation of the witnesses is to avoid having the statements
become just more lawyer advocacy. This can be done with various techniques.
▪ Witness should not be too argumentative
▪ Keep the testimony confined to the facts within the witness's personal knowledge
▪ Present the facts from the perspective of the witness
▪ Try to let some of the witness's voice come through in the statement
○ Hence, written statements are better than no testimony or putting witnesses on direct
examination
○ But once again, think about the tribunal, think about the kind of law system (civil or
common), and think about the witness (can they communicate their points well, do they
crack under pressure)
- Expert witnesses
○ Experts can either be examined and cross-examined in the traditional way or with witness
confrontation. A combination of procedures can be done too.
○ Witness confrontation
▪ experts take the stand at the same time, the Tribunal asks questions of them, and the
experts can each respond and comment on each other's statements
▪ Can be better at getting the Tribunal the information it needs to make a decision
▪ More time-efficient, stories do not have to be repeated
▪ Witnesses explain themselves better, overcoming linguistic or communication issues
▪ Be careful to summarize the point after you have heard it so that if you are wrong, the
witness can say something about it
▪ Make experts meet each other so that they can discuss the issues among themselves

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 ▪ Make experts meet each other so that they can discuss the issues among themselves
and bring expertise to the matter by perhaps narrowing them down or striking out
issues that are not really issues but mentioned in the request for arbitration
▪ Cons
□ Losing the plot, people talking over each other, going off-topic
□ Must be clear who is questioning otherwise it can get confusing
○ Think about what you need from the expert testimony. Here, they needed the tribunal to
know that good engineering practice does not mean a slavish dedication to the engineering
code. They can get this through two world-class engineers sitting next to each other and
describing their experiences
○ Chair can hire its own independent expert under Article 21 of LCIA Rules to help them ask
questions in confrontations
▪ However, this can have issues. Under Article 21.2 of LCIA Rules, a Tribunal appointed
expert presents a report, and then the parties have the right to cross examine him and
present expert witnesses to testify on the points at issue
- Joinder of parties
○ Multiparty arbitration complicates the issues in the arbitration as new parties will raise new
issues.
○ It slows down the proceedings, brings up the need to sign new agreements with parties
○ Article 22.1(h) presupposes that the Tribunal is already formed, and therefore that any non-
party to be joined must accept the Tribunal as formed and waive any right to appoint its
own party-appointed arbitration
- The arbitration can be divided into halves as well, with each half focusing on a particular part
- Tribunal Hearing
○ First, the chair asks if there is any objection to the constitution of the Tribunal
○ Then, they turn to issues that have not been agreed upon. First, they do procedural issues
○ The parties give their opinion on the matter
▪ Here, the claimants want broad discovery so they can get all kinds of documents
related to the issue, but this doesn't work for the respondents so they are objecting to
this by putting up arguments that such broad discovery would be too costly, etc
▪ Respondents want the IBA rules that call for narrow and specific discovery
○ Chairs probe into each reasons
○ Chairs suggest alternatives that work for both parties
▪ Here, they suggest taking the IBA rules as just a guide and allowing counsel to explain
why requests should be broader on a case-by-case basis

Procedure and Proof - James Crawford

- Procedure is the set of procedural rules that govern the conduct of dispute resolution in a
predictable and orderly manner
- Procedure is governed by any relevant
○ Contractual provisions
○ Treaty provisions
○ Arbitration rules
○ Applicable arbitration law, usually that of the situs of the arbitration
- Two most significant institutions for foreign investment disputes are
○ ICSID
○ Iran-US Claims Tribunal
- Typical pattern of dispute settlement gives one of three fora
○ before the courts or administrative tribunals of the host country,
○ any forum chosen by the parties in a previously-agreed dispute settlement procedure (such
as a contractual arbitration clause or forum selection clause), or
○ international arbitration through ICSID, the ICSID Additional Facility or an ad hoc proceeding
using the UNCITRAL Arbitration Rules.

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 using the UNCITRAL Arbitration Rules.
- The fundamental principle underlying procedural and evidentiary decisions in international
arbitration is that tribunals must treat the parties fairly and equally
- Duty to arbitrate in good faith and equality of arms
○ equality of arms obligates a judicial body to ensure that neither party is put at a
disadvantage when presenting its case
○ Earlier it meant that the court only had to take care to administer its procedural measures
fairly
○ But through the ECHR and Tadic case, the courts have to take a more proactive approach
○ Tribunals now have power that are necessary to conserve the rights of the parties and
ensure the tribunal's jurisdiction and authority are made effective, including
▪ exclusion of the misbehaving party from the process;
▪ holding the party in contempt of court;
▪ issuing cease and desist orders;
▪ non-admission of evidence procured by improper means;
▪ adverse inference and cost sanctions.
○ Methanex Corporation v. United States
▪ There was dispute over how the Vind documents were obtained. It was thought they
were obtained unlawfully through spying
▪ Disputing parties have a legal obligation to each other and the tribunal to conduct
themselves in good faith during arbitration proceedings and respect the equality of
arms between them
▪ USA provide the unlawfulness of documents, Methanex couldn't dispute it
○ Libananco Holdings Co. Limited v. Republic of Turkey
▪ Turkey had surveillance on Libananco and intercepted documents related to
correspondence between counsel's communications with clients and other parties
▪ Libananco had prima facie evidence of this so tribunal took notice
▪ The principles at the heart of the ICSID arbitral process were compromised
▪ Turkey said the surveillance would not be used in the proceedings, hence no prejudice
would be caused
▪ But tribunal said bhai it cant be like that
▪ Ordered Turkey to not intercept or record communications, must not surveil, destroy
previous surveillance pertaining to this case, must not use surveillance in regards to
this case but can otherwise do surveillance for security or whatever reasons as a
sovereign state
- Arbitral Procedure (ICSID)
○ Written phase and oral phase
○ Written
▪ Pleadings
□ Memorial by requesting party and counter-memorial by other party
□ Reply by requesting party
□ Rejoinder by the other party
▪ Memorial contains
□ a statement of the relevant facts;
□ a statement of law; and
□ the submissions.
▪ A counter-memorial, reply or rejoinder shall contain
□ admission or denial of the factsstated in the last previous pleading; any
additional facts, if necessary;
□ Observations concerning the statement of law in the last previous pleading; a
statement of law in answer thereto; and
□ the submissions
○ Oral
▪ Hearing by the Tribunal, their agents, counsel and advocates, witnesses, experts

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 ▪ Hearing by the Tribunal, their agents, counsel and advocates, witnesses, experts
▪ Members of Tribunal can put questions to parties
○ Marshalling Evidence
▪ Each party will communicate to the Sec-Gen precise info regarding evidence it intends
to produce and request and the points it will be directed to
○ Evidence (General)
▪ Tribunal judges admissibility of evidence
▪ Tribunal may call upon parties to produce documents, witnesses, experts etc
▪ Tribunal can visit any place connected with the dispute or conduct inquiries there
▪ Parties have to cooperate with tribunal

- UNICTRAL rules more or less the same

- IBA rules
○ Witness statements include
▪ the full name and address of the witness, a statement regarding his or her present and
past relationship (if any) with any of the Parties, and a description of his or her
background, qualifications, training and experience, if such a description may be
relevant to the dispute or to the contents of the statement;
▪ a full and detailed description of the facts, and the source of the witness's information
as to those facts, sufficient to serve as that witness's evidence in the matter in
dispute. Documents on which the witness relies that have not already been submitted
shall be provided;
▪ a statement as to the language in which the Witness Statement was originally
prepared and the language in which the witness anticipates giving testimony at the
Evidentiary Hearing;
▪ an affirmation of the truth of the Witness Statement; and
▪ the signature of the witness and its date and place.
○ Oral testimony
▪ Claimant first presents testimony of its witnesses, then respondent does same
▪ Following direct testimony, any party may question it, in a way determined by the
Tribunal
▪ Party who presented the witness can then ask additional questions of the witness on
the matters raised in the other Parties' questioning
▪ Same procedure for experts
▪ if the arbitration is organised into separate issues or phases(such as jurisdiction,
preliminary determinations, liability and damages), the Parties may agree or the
Arbitral Tribunal may order the scheduling of testimony separately for each issue or
phase;

- Under Article 10(1) of the UNCITRAL Arbitration Rules: “An arbitrator may be challenged if
circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or
independence.” The words “justifiable doubt” clearly indicate that Article 10(1) establishes an
objective, rather than a subjective standard for determining the existence of a circumstance that
creates justifiable doubts as to an arbitrator's impartiality and independence
- Would a reasonable, informed person viewing the facts be led to conclude that there is a
justifiable doubt asto the challenged arbitrator's independence and impartiality?
- Such a connection must be significant and direct, such as an economic relationship causing an
arbitrator to be dependent in some way on a party
- Article 57 of the ICSID Convention provides that a party may “propose … the disqualification of any
arbitrator on account of any fact indicating a manifest lack of the qualities required by paragraph
(1) of Article 14.”
- Article 14 of the ICSID Convention requires as a quality of an arbitrator that he or she be a person
“who may be relied upon to exercise independent judgment.”
- Generally speaking, independence relates to the lack of relations with a party that might influence

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 - Generally speaking, independence relates to the lack of relations with a party that might influence
an arbitrator's decision. Impartiality, on the other hand, concerns the absence of a bias or
predisposition toward one of the parties
- The fact of an alleged connection between a party and an arbitrator in and of itself is not sufficient
to establish a fact that would establish a manifest lack of that arbitrator's impartiality and
independence. Arbitrators are not disembodied spirits dwelling on Mars, who descend to earth to
arbitrate a case and then immediately return to their Martian retreat to await inertly the call to
arbitrate another.
- Proximity: How closely connected is the challenged arbitrator to one of the parties by reason of
the alleged connection? The closer the connection between an arbitrator and a party, the more
likely that the relationship may influence an arbitrator's independence of judgment and
impartiality
- Intensity: How intense and frequent are the interactions between challenged arbitrator and one
of the parties as a result of the alleged connection? The more frequent and intense the interaction
by virtue of the relationship between an arbitrator and a party the more probable that such
relationship will affect the arbitrator's independence of judgment and impartiality;
- Dependence: To what extent isthe challenged arbitrator dependent on one of the parties for
benefits as a result of the connection? The more an arbitrator is dependent on a relationship for
benefits or advantages the more likely that the relationship may influence the arbitrator's
independence of judgment and impartiality;
- Materiality: To what extent are any benefits accruing to the challenged arbitrator as a result of the
alleged connection significant and therefore likely to influence in some way the arbitrator's
judgment? Obviously significant benefits derived from a relationship will be more likely to
influence an arbitrator's judgment and impartiality than negligible or insignificant benefits.
- A reasonable interpretation of ICSID Arbitration Rule 6 is that an arbitrator is required to disclose a
fact only if he or she reasonably believes that such fact would reasonably cause his or her
reliability for independent judgment to be questioned by a reasonable person
- In the absence of any agreement between the parties on this issue, there is no provision imposing
a general duty of confidentiality in ICSID arbitration, whether in the ICSID Convention, any of the
applicable Rules or otherwise. Equally, however, there is no provision imposing a general rule of
transparency or non-confidentiality in any of these sources

Class Notes

- Documentary evidence is very strong/useful

- Every major business etc has document production
- Civil law arbitrators have narrow discovery

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