Add a bookmark to get started

13 December 20219 minute read

Disclosure dos and don'ts – ICSID Tribunal's reminder to parties of document production principles

1. Summary of the case and issues to be decided by the ICSID Tribunal

In ongoing arbitral proceedings between Gran Colombia Gold Corp and the Republic of Colombia under the Canada-Colombia Free Trade Agreement (the FTA) (ICSID Case No ARB/18/23), the Tribunal (comprised of President Ms Jean E. Kalicki, Professor Bernard Hanotiau and Professor Brigitte Stern) issued a procedural order in respect of the parties' requests for documents dated 28 September 2021 (the PO).

The PO contains useful reminders of general principles and best practice during the document production phase of international arbitration. In setting out the standards expected of parties, the Tribunal sought to reduce the burden of the document production process on the parties and the Tribunal, and to prevent it from becoming prolonged and inefficient.

The PO resulted from the parties' failure to reach agreement in the document production process, having exchanged the traditional document production requests, responses and replies. Both parties objected to most (if not all) of the other's requests, with the Claimant stating a general objection to the Respondent's requests for confidential documents, and the Respondent objecting to almost all of the Claimant's requests on the basis that some of "the requested documents may contain information that is subject to legal impediment under Colombian law". Neither party had made any material attempts to assist the other in narrowing its document production requests, despite a previous procedural order by the Tribunal to that effect.

In addition to setting out its responses to the parties' respective document requests in annexes, the Tribunal issued the PO in order to deal with issues relating to privilege, confidentiality and the disclosure obligations of parties and their legal counsel that went beyond the scope of the parties' individual document requests.

2. The ICSID Tribunal's PO

Document production generally

With respect to document production in general, the Tribunal reiterated its ruling in one of its previous procedural orders that the parties have a duty to act in good faith which requires them both to formulate narrow and specific document requests in the first instance, and to cooperate in the process of achieving such formulations with respect to the other party's requests.

In that previous order, since each of the parties had objected to the other's requests on account of them being overly broad or excessively burdensome, the Tribunal had directed that they should consider and indicate whether there were narrower formulations of the requests with which they would be willing to comply. In the PO, the Tribunal noted that the Claimant had made some efforts in this respect (even though it did not always result in agreement between the parties) but reproached the Respondent for agreeing to none of the requests and failing to suggest any narrower formulations as required.

The Tribunal observed that the parties' failure properly to comply with this obligation meant that it had fallen entirely to the Tribunal to narrow the scope of the document requests to ensure that the relevant and material documents are produced without causing the parties any unnecessary burden. It was with some frustration that the Tribunal explained that this was what it had "expressly sought to avoid through the process established" in its earlier procedural order.

Privilege

In confirming that its production orders applied only to non-privileged material, the Tribunal chose to apply the formulation of privilege in Article 9(3)(a) of the IBA Rules on the Taking of Evidence in International Arbitration pursuant to which parties are not required to produce documents, communications or statements (or portions thereof) created or made "in connection with and for the purpose of providing or obtaining legal advice". In the Tribunal's view, this provision represented a "common sense understanding of legal privilege, rooted generally in considerations of fairness that are common to many legal traditions", and in adopting that standard the Tribunal hoped both to avoid subsequent disputes over the scope of applicable privilege and to ensure the parties were treated equally.

Although the Tribunal noted that the FTA includes in its definition of "confidential information" in Article 838 "information that is privileged or otherwise protected from disclosure under the law of a Party" (ie. national law), it was not persuaded that the parties had been able to show that any potentially applicable national law adopted a definition of privilege that departed significantly from that set out in the IBA Rules.

The Tribunal also reminded the parties that determinations of privilege should be made by reference to particular passages of documents rather than by extrapolating a decision to cover an entire document (unless it would be appropriate to do so), and that non-privileged portions of documents ought to be produced.

Of particular note for any parties to ongoing arbitration proceedings was the Tribunal's indication, in declining to order either party to prepare a privilege log identifying the details of each document/partial document over which privilege was asserted, that parties' counsel are expected to:

  • act in good faith when they are making privilege determinations and come to their own conclusions as to whether documents are protected by legal privilege based on their own review of the documents, rather than relying on their instructing client's assertions in this regard;
  • exercise good faith and appropriate due diligence when representing that responsive documents do not exist; and
  • double check their prior representations if the other party identifies specific reasons to suggest that responsive documents do in fact exist.

Confidentiality

As for whether the parties were able to resist the production of confidential documents, the Tribunal was not sympathetic to the parties' generalised objections to the other's document requests on the grounds of confidentiality in circumstances where the FTA (i) places any party claiming confidentiality under the burden of designating confidentiality of those documents with particularity; (ii) addresses confidentiality concerns by restricting the parties' dissemination of the other's documents beyond the confines of the arbitration; and (iii) gives the Tribunal authority to establish specific procedures to protect particular confidential information, if necessary.

On that basis, the Tribunal considered that the parties' blanket confidentiality objections did not constitute the "basis for any overarching restriction on disclosure for purposes of this case" and therefore declined to adopt such objections.

3. Disclosure in litigation under the Civil Procedure Rules

The approach of the Tribunal in the PO is not dissimilar to the approach which is currently being taken to document production in court proceedings in England and Wales under Practice Direction 51U of the Civil Procedure Rules (PD 51U).

PD 51U places a similar emphasis on cooperation between the parties and on ensuring that disclosure is no wider in scope than necessary in order to resolve the issues fairly and efficiently. Paragraph 2.3 states that the parties and their representatives should "cooperate with each other and assist the court" to agree or determine the scope of disclosure required as efficiently as possible, and paragraph 2.4 provides that disclosure should be "directed to the issues in the proceedings", with the scope of disclosure not to be "wider than is reasonable and proportionate […] in order fairly to resolve those issues […]". Furthermore, a party's legal representatives should "liaise and cooperate with the legal representatives of the other parties to the proceedings […] so as to promote the reliable, efficient and cost-effective conduct of disclosure, including through the use of technology" (PD 51U paragraph 3.2(3)).

Finally, the Tribunal's expectation of good faith on the part of legal counsel (with respect to privilege determinations and assertions that responsive documents do not exist) is comparable to the various duties which parties and their legal representatives owe to the court in respect of the disclosure process under PD 51U. In particular, counsel should "act honestly in relation to the process of giving disclosure and reviewing documents disclosed by the other party" and "undertake a review to satisfy themselves that any claim by the party to privilege from disclosing a document is properly made and the reason for the claim to privilege is sufficiently explained" (PD 51U paragraphs 3.2(4) and 3.2(5)).

4. Key takeaways for parties to arbitral proceedings

Formulation of document requests

The PO emphasises that parties should be wary of making overly wide document production requests unless these can be properly justified with specific reasons. Parties should generally cooperate in narrowing the other's document production requests, and it may be difficult for them to justify a failure to do so. The effect of making overly broad requests combined with failing to suggest and agree more appropriate, narrow requests is to place the burden of identifying alternative formulations on arbitral tribunals, which is unlikely to be well received.

As a practical point, parties may wish to consider adopting (or, at the very least, referring to) the CIArb Protocol for E-Disclosure in International Arbitration at an early stage of the proceedings. As that protocol indicates in its Article 1, parties may wish to consider and "confer at the earliest opportunity regarding the preservation and disclosure of electronically stored documents and seek to agree the scope and methods of production". This may include the agreement of search terms (along with date ranges and custodians if appropriate) at the start of the document production process, in order to avoid disputes arising as to the scope of either party's production.

Claims of privilege and objections to production of confidential documents

Parties and counsel should be mindful of the guidance set out above in relation to their obligations of good faith and due diligence when identifying privileged material and asserting that responsive documents do not exist.

The PO also indicates that arbitral tribunals may not be convinced by generalised objections to document production requests made by parties simply on the grounds that the requested documents are "confidential", without proper justification. The reasoning of the Tribunal, which noted that "[t]he very nature of disclosure orders is that they require production of material that normally would not be shared outside of the company or the government", suggests that objections of this kind, made without proper particularisation, may well be refused.

Compliance with procedural directions

Parties to arbitration proceedings should also be careful to comply with any specific provisions as to procedure/approach for document production which are contained in previous procedural orders (as was the case here with the Tribunal's requirement that the parties cooperate and instruction to suggest narrower formulations of document requests).

Print