Time to Tame the Beast? Rethinking Document Production in International Arbitration

A working group of the Swiss Arbitration Association (“ASA") User Council (composed of experienced in-house counsel) has recently released a Whitepaper on Document Production entitled “Taming the Beast” (the “Whitepaper”), which this post discusses.

Background

Whilst the extent of document production varies across different jurisdictions, there appears to be a growing consensus amongst in-house lawyers hailing from both common and civil law legal systems that the current practice in international arbitration is often going too far and should be reined in. The Whitepaper accordingly calls for the beast of document production – which has been left to run wild for many years – to be tamed.

Recent surveys attest to the fact that international arbitration users often experience document production as a burdensome, costly and ineffective exercise. Indeed, according to the Queen Mary/White & Case International Arbitration Survey of 2021, arbitration users would be most willing to give up document production to make arbitration more efficient.

One should heed the call of the users. Surely, it must be in the best interest of the international arbitration community as a whole that arbitration remains efficient, and thus attractive in an increasingly competitive world of dispute resolution options.

The Whitepaper makes two main recommendations, which are both aimed at reining in the beastly practice of document production, as discussed below.

Substantive Recommendation: Restrictive Definition of the Standards of Relevance and Materiality under the IBA Rules

The Whitepaper sets out a useful clarification and insists on a more rigorous application of the standards of relevance and materiality under Article 3.3(b) of the IBA Rules on the Taking of Evidence (“IBA Rules”), in keeping with what was originally envisaged by the drafters of these Rules.

The Whitepaper firstly proposes that the standard of relevance should be understood to mean that: 

“The requested document relates to a factual allegation on which legal conclusions are drawn in support of the requesting party’s case.”

The Whitepaper secondly proposes that the standard of materiality should be understood to mean that: 

“The requested document is necessary to allow a complete consideration of whether a factual allegation is proven or not, which allegation must be necessary for the determination of a legal conclusion drawn, which must in turn be necessary for a determination of the case.”

Given that the relevance standard is subsumed within the materiality standard, the clarification of the standard of materiality will be, in practice, most useful. In the author’s view, these definitions could be most effective if they are incorporated in the specific procedural rules drawn up at the beginning of an arbitration as they would underline the importance for the parties of linking the requested documents with a specific factual allegation as well as a specific legal conclusion which is necessary for the determination of the case.

Although these definitions are a welcome effort to clarify how the frequently applied standards of relevance and materiality under the IBA Rules should be applied in order to narrow down the scope of document production, one would also have welcomed some guidance on the application of the standard of specificity under the IBA Rules and, in particular, what constitutes a narrow and specific category of documents. Indeed, a stricter application of this standard could also aid in narrowing down the scope of document production.

Procedural Recommendations

The Whitepaper also makes a series of procedural recommendations to parties, arbitral tribunals and arbitral institutions, which are discussed below.

Exclusion or Restrictions Placed on Document Production in Dispute Resolution Clauses

The Whitepaper firstly proposes that contracting parties may cull the beast by fully excluding document production in their dispute resolution clauses, whilst clarifying that this exclusion does not limit any contractual/substantive rights to information. Contracting parties may also include a safety valve in such an exclusion which allows for the arbitral tribunal to decide otherwise in exceptional circumstances (only).

The Whitepaper also suggests certain less radical limitations on document production that can be usefully agreed on by contracting parties in their dispute resolution clause. Such limitations include: (i) limiting document production expressly to material documents only; (ii) limiting the number of document production requests that a party may submit, possibly with a safety valve allowing this limit to be exceeded in exceptional circumstances; (iii) limiting document production to specific documents only, or to external documents; (iv) limiting document production expressly to documents required to discharge the requesting party’s burden of proof; (v) limiting document production to documents which parties have specifically invoked in their submissions; (vi) including production requests in submissions; and (vii) agreeing on cost consequences related to document production.

It would, of course, be preferable for the parties to agree upfront, in their dispute resolution clauses, on any restrictions to be placed on document production. However, it is not clear that, in practice, contracting parties will discuss the intricacies of document production at the contract drafting stage, given that they often pay little attention to dispute resolution clauses at the time of contract drafting anyway. In addition, parties may be reluctant to do so as until a dispute arises, it is difficult to anticipate which documents will be relevant and which party will be in possession of them. Nevertheless, it is submitted that contracting parties will more easily agree upfront on such exclusions or limitations if these are included in the parties’ own standard clauses or in the model clauses proposed by arbitral institutions (as discussed below).

Measures to be Taken by Arbitral Tribunals to Exclude or Limit Document Production

The Whitepaper secondly suggests that an arbitral tribunal can incorporate limitations on, or even exclude, document production in the specific procedural rules. These limitations include those that the Whitepaper suggests may be incorporated by parties in their dispute resolution clause at the time of contract drafting.

The Whitepaper also proposes that arbitral tribunals restrain and streamline document production by, inter alia, addressing document production at the case management conference, setting a timetable for document production early, encouraging restraint, holding a separate case management conference on requests and objections filed, requesting the parties to integrate requests in their submissions, setting limits on the number of document production requests or setting word or page limits on requests and corresponding objections, as well as requiring separate reasoning for each request and limiting replies to objections.

The Whitepaper further underlines that artificial intelligence (“AI”) may play an important role in narrowing down and assessing document production requests. Indeed, AI can already be programmed to analyze document requests for overbreadth and lack of specificity and, presumably, it could also be trained to assess the relevance and materiality of requested documents. AI could thus help parties draft narrower and more specific document requests and could assist arbitral tribunals in determining whether requests are specific enough as well as relevant and material to the case.

Out of all these suggestions, the proposed requirement that parties integrate their document production requests in their submissions is innovative and, potentially, highly effective. Indeed, this would force the parties to link the requested documents with their factual allegations and legal conclusions drawn therefrom as well as reduce the length of the proceedings given that there would be no separate document production phase.

In addition, whilst controversial given its arbitrary nature, the proposal of limiting the number of document production requests is a simple but effective way of limiting document production (see here). In the author’s view, given that it is rare for parties to agree on limitations on document production in their arbitration agreement and for them to agree on such limitations once a dispute has arisen, it will be for arbitral tribunals to take the lead role in proposing the suggested measures aimed at limiting document production.

Steps to be Taken by Arbitral Institutions to Exclude or Limit Document Production

The Whitepaper suggests that arbitral institutions can also promote a restrictive approach to document production by: (i) incorporating limitations on document production in their model clauses, model procedural orders, guidelines or case management checklists; (ii) expanding expedited procedures, where document production is frequently disallowed or simply not pursued by the parties (apparently without significant problems); (iii) empowering arbitral tribunals in expedited procedures, and beyond, either to allow document production only where it is called for in the circumstances of the case or to disallow it in their discretion; and (iv) establishing rules providing for a frontloaded system of ongoing document production to be integrated into the exchange of submissions with a defined cut-off date before the hearing.

In practice, the most effective of these measures would be an exclusion of, or restrictions on, document production in a model clause which could be adopted by contracting parties in their dispute resolution clauses at the stage of contract drafting. In addition, publishing model specific procedural rules which include limitations on document production (similar to the Armesto model procedural order, see here) which arbitral tribunals could adopt, would also be highly effective.

Conclusion

The Whitepaper recently issued by the ASA User Council has importantly raised to the fore the unsatisfactory status quo regarding document production in international arbitration.

It is submitted that to maintain the attractiveness of international arbitration as a dispute resolution method, a change in mindset is needed with respect to document production. As expounded by the Whitepaper, quite often “less is more” and document production should be limited to what is really necessary.

This change in mentality, however, needs everyone’s involvement:

• Contracting parties should weigh the benefits and risks associated with document production and seek to exclude or limit document production accordingly in their dispute resolution agreements;

• Arbitral tribunals should take a proactive approach and consider, at the outset of a dispute, the extent of document production required for the case, taking into account the legal background of the parties. Thereafter, arbitral tribunals should courageously seek to impose their view on the extent of document production required by proposing either an exclusion or other restrictions on document production;

• Parties and their counsel should also consider the extent of document production required for the dispute at hand and be more receptive to either excluding or limiting document production to what is genuinely necessary; and

• Arbitral institutions should use their influence to promote the various ways of excluding, or limiting the extent of, document production.