“Documents create a paper reality we call proof.”
(Mason Cooley, American writer, 1925 – 2002)
Construction and engineering projects, and the disputes that sometimes arise from them, throw up a great deal of paperwork and data. While that is probably true of the majority of joint enterprises that continue over a substantial period, it is ensured in construction and engineering projects by contracts which typically require the creation of long paper-trails of minutes, progress reports, programme updates, cost data, notices, instructions, certificates and determinations throughout the project.
In modern times, we can also add to the above list the less formal means of communication that are now prevalent. Even where a formal project correspondence or collaboration system is used (and is supposed to be used exclusively), people may still send emails on the side (sometimes copying in colleagues, sometimes not; sometimes from their formal work email, sometimes from a personal address but using their employer’s device). We have recently seen increased use of messenger apps such as WhatsApp to transmit what would traditionally have been formal communications between individuals – even attaching documents or other images, sometimes saying things unofficially that could be used against the individual or their company.
The importance of properly managing documents and data
Those involved in projects need to find way of managing the creation and retention of documentation and data. In the event of claims and disputes arising, it can be challenging to compile it all but it is necessary to do so, and to realise early on whether there is any prejudicial documentation or data in existence so that its effect can be assessed.
In the event of a formal dispute, arbitral tribunals and other forums in which disputes are resolved have to somehow manage that mass of paperwork and data. Within it there will be crucial documents, admissions, contemporaneous records and statements of position that may be core to the tribunal being able to do its job. Some material will be common to the parties (that is, in the custody or control of both) but one side might have overlooked or omitted a communication that the other side considers significant; often a particular communication might require context in order to be properly understood. So the list of documents in play grows. Some documents or data may only be possessed or accessible by one party but the other party might know of their existence and want to refer to them and/or put them in front of the tribunal. And dealing with those issues can be controversial.
What do the institutional arbitral rules say about document production?
Under most institutional arbitral rules the detailed procedure for document production and/or disclosure is not stipulated: it is left to the parties to agree or to the arbitrators’ discretion to order. The result, if ordered by the tribunal, typically needs to balance between the evidentiary rules of different legal traditions (for example, the applicability of rules of admissibility relating to privilege, the rules of relevance and materiality and so on) and overall considerations of proportionality, efficiency and cost.
Some parties, or their advisers, will seek to gain an advantage through various means including:
- Trying to influence the tribunal by highlighting (or creating the appearance of) a failure by a party to present properly substantiated or supported allegations through multiple requests for documents which purportedly should have been submitted already.
- Exploring issues that have not necessarily been pleaded (or not in particular detail) in the hope that the disclosure process might reveal helpful documents that enable a case to be developed.
- Causing mischief, inconvenience and cost by broad and unspecific requests.
- Adopting the type of documentary production they are familiar with in their home jurisdiction in order to try and coerce the tribunal into that way of thinking (thus negating one of the perceived advantages of international arbitration as being flexible enough to accommodate different practices).
An alert and well-briefed tribunal, which has devoted the requisite time to reading-in the early exchanges before getting into the disclosure process, will be alive to the above issues and can level the playing field. However, this is not always a given; sometimes the parties can do little more than guess at the pre-conceived thoughts of the tribunal in this type of case. However, as tribunals typically have absolute discretion on matters of evidence, guessing at how the tribunal might view the process might be inadequate.
The IBA Rules v the Prague Rules
So it is helpful for the parties to have some advance knowledge of the process and the framework the tribunal will apply. Two broad frameworks have emerged that tribunals and parties adopt in practice in construction and engineering disputes: the 2010 International Bar Association Rules on the Taking of Evidence in International Arbitration (IBA Rules) and the 2018 Rules on the Efficient Conduct of Proceedings in International Arbitration (Prague Rules).
Put very broadly, as far as document production is concerned, the IBA Rules are said to be inspired by the common law adversarial tradition whereby disclosure is accepted but managed (and in some jurisdictions very broad in its ambit, in others more limited).
By contrast the Prague Rules are said to be more reflective of the civil law inquisitorial tradition whereby document production is the exception, and it is up to the parties only to adduce the documents on which they rely. On that note, both sets of rules stipulate (as do the majority of institutional arbitration rules) that the parties are each to submit voluntarily (and early in the proceedings) the documentary evidence on which it intends to rely.
The key conceptual difference between the rules when it comes to document production is that the starting point of the Prague Rules is:
“Generally, the arbitral tribunal and the parties are encouraged to avoid any form of document production, including e-discovery.”
Subject to that general discouragement, a party may request an order that a “specific document” be produced at the tribunal’s discretion.
The IBA Rules on the other hand assume that there will be a document production process (also based on requests) and go on to focus on trying to limit and contain those requests to specific documents or “narrow and specific categories” to avoid fishing expeditions and generally to promote efficiency in the proceedings. There are several grounds on which objection can be raised by the receiving party with the tribunal stepping in to decide the matter if the parties cannot find an accommodation after one or two rounds of argument on each request.
Anecdotal evidence suggests that there has been general wide and international take-up of the IBA Rules over the last decade but the document production process can nonetheless still be overly controversial and expensive. Nothing in the rules can negate the problems caused by a tribunal not yet being ready to determine what is relevant to each facet of the parties’ cases. There is no concept of overall proportionality (that is, the notion that the sheer number of requests, however legitimate each may be in isolation, can be abusive). With broad tribunal discretion on all these matters, the parties can be forgiven for pushing the envelope in each of their requests or objections without having some advance indication of what the tribunal’s thinking will be on matters such as relevance, materiality, privilege and confidentiality. The result can all seem a little arbitrary.
The Prague Rules are newer and it remains to be seen how widely they will be used. With respect to the working group who produced them, the apparent lack of any institution or organisation endorsing them might count against them.
Either way, neither set of rules addresses the difficulties arising out of modern communication practices. If personnel are using work devices to send, receive and store data, and the company which is the party to the proceedings has robust data monitoring and retention policies (as most do) then it will be difficult to resist the argument that they should be admissible as they may establish material and weighty facts. This is worth bearing in mind as a management consideration before embarking on any project and perhaps when negotiating notice and communications provisions in the underlying contract.