The gathering of evidence in arbitration

Determination of facts and the application of rules of evidence are at the core of arbitration law. The application of rules of evidence in arbitration is guided by the principle of autonomy of the parties and the discretion of the arbitration tribunal.

The rules of evidence

Generally, the parties to an arbitration are free to choose which rules of evidence will apply. However, in practice, the parties often fail to agree upon specific rules of evidence, whereupon the arbitration tribunal may, subject to due process, decide which rules to apply.

Factors that arbitrators consider include:

• the laws of the place where the arbitration tribunal is sitting and the requirements of local arbitration rules, including the fundamental rights that the parties enjoy in the arbitration procedure;
• the experience that the arbitrators have of the rules of evidence; and
• the Rules for the Taking of Evidence in International Arbitration of the International Bar Association. These rules offer a choice to the arbitration tribunal for determining the rules of evidence, and are not mandatory.

The arbitration laws of various countries, international conventions and various sets of arbitration rules grant a tribunal substantial leeway. In the majority of circumstances, merely setting out a framework to facilitate compliance with due process is all that is required.

For example, article 43 of the PRC Arbitration Law provides that “a party shall provide evidence in support of his claims”. In an effort to ensure the autonomy of arbitration, it allows the parties themselves to choose the rules of evidence.

An arbitration tribunal will normally give due consideration to the reasonable expectations of the interested parties, as well as the nature of the dispute and the arbitration claims, before issuing its final decision. As the preamble to the International Bar Association rules states, “the rules are not intended to limit the flexibility that is inherent in, and an advantage of, international arbitration”.

Ways to gather evidence

In arbitration, there are three main methods of gathering evidence: by the parties themselves, by the arbitration tribunal itself and with the assistance of a court.

Of these, the gathering of evidence by the parties is the most common. The evidence-gathering activities of the parties directly relate to the truthfulness of the facts supporting their claims.

In addition to article 43 of the PRC Arbitration Law mentioned above, the arbitration rules of most permanent international arbitration institutions provide that the parties bear the burden of proving the facts relied on to support their claim, defence and counterclaim. For example, article 24 of the arbitration rules of the United Nations Commission on International Trade Law provides that “each party shall have the burden of proving the facts relied on to support its claim or defence … At any time during the arbitral proceedings the arbitral tribunal may require the parties to produce documents, exhibits or other evidence within such a period of time as the tribunal shall determine”. Article 19 of the international arbitration rules of the American Arbitration Association and the CIETAC Arbitration Rules 2005 also contain similar provisions.

In addition to the parties gathering evidence, the arbitration tribunal may itself gather evidence. The second paragraph of article 43 of the PRC Arbitration Law specifies that “if the arbitration tribunal is of the opinion that there is evidence that must be gathered, it may itself gather the same”. Thus the gathering of evidence by an arbitration tribunal is at its discretion and is not an obligation. Arbitration tribunals may summon witnesses, gather evidence from relevant entities and individuals other than the parties, examine a site or inspect the subject matter of the dispute and appoint an expert witness to conduct an evaluation. However, arbitration tribunals do not have the authority to compel witnesses to testify or to demand that any entity or individual present evidence or cooperate in the gathering of evidence.

Accordingly, if a third party refuses to cooperate, the arbitration tribunal will usually have to obtain the assistance of a court.

Where a party or arbitration tribunal faces difficulty in gathering evidence, and failure to secure the relevant evidence could result in adverse consequences for a party, the arbitration tribunal or the relevant party may petition a court to assist in gathering evidence.

For example, section 7 of the US Federal Arbitration Act provides that “if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States”.

Section 26 of the Swedish Arbitration Act provides that “where a party wishes a witness or an expert to testify under oath … the party may, after obtaining the consent of the arbitrators, submit an application to such effect to the District Court”.

The PRC Arbitration Law only provides that a party has the right to apply to a court for the preservation of evidence, but makes no mention of an arbitration tribunal or a party petitioning a court to assist in gathering evidence.

Accordingly, the gathering of evidence by the parties and by the arbitration tribunal remain the principal means of gathering evidence in the PRC.

Flexibility

There is a great deal of flexibility in the choice of the rules of evidence and the gathering of evidence in arbitration. Clearly, the greater simplicity, convenience and effectiveness of arbitration, as compared to litigation, contribute to its being a favoured method of dispute resolution.

Charles Pan is a senior consultant and Will Lu is an associate in the Shanghai office of Yao Liang Law Offices

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