International arbitration proceedings, by definition, allow parties to resolve their disputes worldwide. In particular, they allow parties from different jurisdictions and with different legal backgrounds to do so. With the number of international arbitration cases steadily increasing over the past decades, instances in which parties with a common law background faced parties with a civil law background have become increasingly frequent, leading to cultural and legal clashes, since the two legal traditions entail divergent approaches to the procedural conduct of the proceedings.[1] In the following, it will be shown how These problems were addressed through the creation of soft law in the form of the IBA Rules, which have been in effect since 1999, and the Prague Rules, adopted 20 years later, and how these rules are best applied in practice.
The IBA Rules on the Taking of Evidence in International Arbitration (“IBA Rules”[2]) were designed to specifically address the growing need to prevent situations involving conflicting procedural approaches, which often cause significant delays in proceedings[3]. The IBA Rules claim to be a blend of common law and civil law principles and strive to represent the best of both worlds.
However, despite the unparalleled success of the IBA Rules[4] over two decades, a number of civil law practitioners began to question the need for this hybrid approach, particularly when dealing with disputes involving only civil law jurisdictions. Some practitioners went so far as to argue that the IBA Rules were not the compromise solution they claimed to be, but were in reality much more driven by and oriented toward common law.
Against this backdrop, the Prague Rules[5] were adopted in December 2018 by a group of civil law practitioners discussing the various issues that negatively impact arbitration, particularly the perceived problems with the IBA Rules. Thus, the Prague Rules establish evidentiary rules based primarily on civil law traditions and the inquisitorial model of procedure.
It is important to note that neither the IBA Rules nor the Prague Rules are intended to replace the arbitration rules established by various institutions. They are designed to supplement the procedure to be agreed upon by the parties or otherwise applied by arbitral tribunals in a particular dispute.
Although it is, at this stage, too early to assess the future success of the Prague Rules, their key provisions continue to be the subject of heated debates and discussions.
However, rather than trying to determine which rules take precedence over the others and which set of rules should therefore be applied, the following factors should be kept in mind.
First, it should be noted that the Prague Rules, like the IBA Rules, provide for maximum flexibility regarding their scope of application. The parties and arbitral tribunals may therefore decide to apply the Prague Rules as a binding document or as a mere guideline to all or any part of the proceedings. They may also exclude the application of any part of the Prague or IBA Rules or decide to apply only parts of them.
In practice, the IBA Rules—or parts thereof—are in most cases treated merely as guidelines and a source of inspiration and are therefore rarely applied as a binding document. It is likely that the same will be true of the Prague Rules. In fact, although both the IBA Rules and the Prague Rules are already quite specific, arbitral tribunals prefer to propose a set of specific procedural rules to the parties, which are designed to meet the specific procedural requirements of the case at hand. It is in this context that arbitral tribunals have regularly drawn inspiration from elements contained in the IBA Rules. They may henceforth incorporate elements from the Prague Rules, provided that these elements are compatible and meet the parties’ specific needs and expectations.
For example, it is quite conceivable that the parties, while generally willing to draw inspiration from the IBA Rules, would prefer to limit or even exclude the use of document production. The IBA Rules[6] do not provide specific guidance on this matter, and Article 4 of the Prague Rules may be helpful[7]: under that provision, the parties are encouraged to avoid any form of document production, and a party’s specific need for document production must be clearly stated at the very beginning of the case—that is, at the Case Management Conference—and is left to the discretion of the Arbitral Tribunal.
By contrast, even parties with a civil law background should exercise caution before agreeing to the binding application of the Prague Rules as a whole. In fact, legal traditions can vary significantly among civil law countries. Thus, the proactive role of the Arbitral Tribunal set forth in Article 2 of the Prague Rules[8]—which includes the Arbitral Tribunal’s issuance of a preliminary assessment of the case and its active role in facilitating an amicable settlement—is, for example, uncommon in jurisdictions such as France and would therefore often fail to meet the expectations of parties with a French legal background.
It is expected that the Prague Rules will primarily serve as an additional source of inspiration for the parties and arbitral tribunals when drafting the Specific Procedural Rules for a given case. In that respect, they can indeed be considered an alternative to the IBA Rules. However, parties—even those with a civil law background—who are considering the application of the Prague Rules should ensure that they are fully familiar with these Rules before agreeing to their binding application[9].
1 Obviously, common law and civil law also take different approaches with regard to the law applicable to the merits of the case.
2 www.ibanet.org. The original set of Rules from 1999 was revised in 2010.
3 The arbitral tribunals faced with that situation were expected to establish procedural rules that met the expectations of both parties, which often proved to be a very challenging task.
4 The IBA Rules are often applied in arbitration proceedings, either by incorporation or by reference as a source of guidance.
5 The Prague Rules were adopted on December 14, 2018, in Prague (https://praguerules.com/).
6 Article 3 of the IBA Rules provides for a document production phase.
7 Article 4. Documentary Evidence:
“4.1. Each party shall submit the documentary evidence on which it intends to rely in support of its case as early as possible in the proceedings.
4.2. Generally, the arbitral tribunal and the parties are encouraged to avoid any form of document production, including e-discovery.
4.3. However, if a party believes that it will need to request certain documents from the other party, it should inform the arbitral tribunal of this at the case management conference and explain why document production may be necessary in this particular case. If the arbitral tribunal is satisfied that the production of documents may be necessary, it should establish a procedure for document production and include an appropriate provision for it in the procedural timetable.
4.4. A party may request that the arbitral tribunal order the production of documents at a later stage of the arbitration only in exceptional circumstances. Such a request should be granted only if the arbitral tribunal is satisfied that the party could not have made such a request at the case management conference.
4.5. Subject to Articles 4.2–4.4, a party may request the arbitral tribunal to order another party to produce a specific document that: a. is relevant and material to the outcome of the case; b. is not in the public domain; and c. is in the possession of another party or within its power or control.
4.6. The arbitral tribunal, after hearing the party’s position on such a request, may order the party to produce the requested document. […]”
8 Article 2. Proactive Role of the Arbitral Tribunal:
“2.1. The arbitral tribunal shall hold a case management conference without any undue delay after receiving the case file. 2.2. During the case management conference, the arbitral tribunal shall:
- discuss a procedural timeline with the parties;
- clarify with the parties their respective positions regarding:
- the relief sought by the parties;
- the facts that are undisputed between the parties and the facts that are disputed; and
iii. the legal grounds on which the parties base their positions.
2.3. If the parties’ positions have not been sufficiently presented at the time of the case management conference, the arbitral tribunal may address the issues mentioned in Article 2.2.b at a later stage of the arbitration.
2.4. The arbitral tribunal may, at the case management conference or at any later stage of the arbitration, if it deems it appropriate, inform the parties:
- the facts that it considers to be undisputed between the parties and the facts that it considers to be disputed; b. with regard to the disputed facts—the type(s) of evidence that the arbitral tribunal would consider appropriate to prove the parties’ respective positions;
- its understanding of the legal grounds on which the parties base their positions
- the actions that may be taken by the parties and the arbitral tribunal to determine the factual and legal basis of the claim and the defense;
- its preliminary views on:
- the allocation of the burden of proof between the parties;
- the relief sought;
iii. the disputed issues; and
- the weight and relevance of the evidence submitted by the parties. The expression of such preliminary views shall not, in and of itself, be considered evidence of the arbitral tribunal’s lack of independence or impartiality, and cannot constitute grounds for disqualification.
2.5. “When establishing the procedural timetable, the arbitral tribunal may decide—after hearing the parties—to determine certain issues of fact or law as preliminary matters, limit the number of rounds for the exchange of submissions and the length of such submissions, and set strict deadlines for their filing, as well as the form and scope of document production (if any).”
9 To be fair, it should be noted that these considerations generally apply to the IBA Rules as well.