AuthorNicole S NG1 LLB (summa cum laude) (Singapore Management University).
Published date01 December 2020
Date01 December 2020

Protecting the Integrity of the Arbitral Process

The admissibility of illegally obtained evidence in international arbitration raises competing concerns: the tribunal should seek to form an accurate picture of the material facts, but it should not incentivise illegal activities. In addressing these concerns, some tribunals have offered the rationales of good faith and the equality of arms. These rationales, however, do not fully account for the existing legal principles governing admissibility. This article submits that the rationale of protecting the integrity of the arbitral process best explains the existing principles and helps to shed light on unresolved issues.

I. Introduction

1 Illegally obtained evidence can shape the factual narratives on which international arbitral tribunals base their decisions. In which of the following scenarios should an international arbitral tribunal exclude the evidence?

(a) An investor hires private investigators, who trespass onto private property to take discarded documents from a dumpster. The investor wishes to use the documents in an arbitration against a state, one of whose witnesses had created the documents.2

(b) A journalist contacts an official of the Fédération Internationale de Football Association (“FIFA”), posing as a lobbyist supporting a particular bid for a FIFA World Cup. The journalist secretly records a meeting in which the official agrees to help bribe other officials. Upon learning of the meeting,

FIFA obtains the recording from the journalist and uses it in disciplinary proceedings against the official.3

(c) Party A relies on a contract between Party B and a third party which the third party had independently posted on WikiLeaks in breach of its own agreement.4

(d) An investor relies on diplomatic cables of State A, which are available on WikiLeaks, to establish its claim against State B.5

(e) Party A discovers that e-mails by Party B have been leaked on a website and pays a fee to access them. Party A relies on them in proceedings against Party B.

2 The admissibility of illegally obtained evidence raises competing concerns. On the one hand, international arbitral tribunals seek to decide disputes based on an accurate picture of the material facts. In doing so, they need not consider domestic laws in the same way as domestic courts because they are not organs of any state. On the other hand, the admission of illegally obtained evidence can incentivise cybercrime and other illegal activities and can be seen to ignore or condone the violation of domestic laws. In addressing these competing concerns, some tribunals have relied on the rationales of enforcing the duty to arbitrate in good faith and of upholding the equality of arms between the parties.

3 This article considers whether these rationales adequately guide tribunals' exercise of their power to exclude evidence in cases such as the scenarios described above. Part II6 of this article gives a brief overview of the admissibility of evidence in international arbitration. Drawing on published arbitral awards, Part III7 seeks to identify existing legal principles governing the admissibility of illegally obtained evidence. Part IV8 discusses the inadequacy of the rationales of good faith and the equality of arms. It proposes that the existing principles are more coherently and completely explained by the rationale of protecting the integrity of the arbitral process. Using this rationale, Part V9 explores

some unresolved questions: which jurisdiction's laws are relevant to ascertaining whether evidence has been obtained illegally; whether and how different kinds of illegality should be distinguished; and whether and on what basis a tribunal should exclude evidence bought from a third party who had independently obtained it illegally.
II. Overview of the admissibility of evidence

4 Arbitral rules often provide that arbitral tribunals have the power to determine the admissibility of evidence. For example, Art 27(4) of the United Nations Commission on International Trade Law (“UNCITRAL”) Arbitration Rules10 states that the tribunal “shall determine the admissibility, relevance, materiality and weight of the evidence offered”.11

5 Some arbitral rules expressly highlight the tribunal's broad discretion. For instance, rule 19.2 of the Singapore International Arbitration Centre Arbitration Rules12 states:13

The Tribunal shall determine the relevance, materiality and admissibility of all evidence. The Tribunal is not required to apply the rules of evidence of any applicable law in making such determination.

The parties may nevertheless agree on rules to govern the taking of evidence, such as the International Bar Association Rules on the Taking of Evidence in International Arbitration14 (“IBA Rules”). In addition, the tribunal's discretion is limited by mandatory procedural rules, which in most jurisdictions include the requirement that the parties be treated with equality.15

III. Admissibility of illegally obtained evidence

6 In this article, illegally obtained evidence refers to evidence that has been procured in breach of legal prohibitions or obligations. This encompasses both violations of criminal law, such as violations of US law in relation to some WikiLeaks publications,16 as well as conduct giving rise to civil liability, such as trespass to land.17

7 This article analyses published awards in investment arbitration and sports arbitration in which tribunals gave reasons for admitting or excluding illegally obtained evidence. Although the public interests that arise in investor–State disputes and sports disciplinary proceedings do not arise in international commercial arbitration, the relevant legal principles apply equally to international commercial arbitration. Since the principles are informed by general concerns in international arbitration, commentators do not distinguish between illegally obtained evidence in international commercial arbitration and in other kinds of arbitration.18

8 The principles developed in arbitral awards, discussed below, may be summarised as follows:

(a) as a starting point, tribunals should admit illegally obtained evidence, like any other evidence, unless there are grounds for exclusion;

(b) where the party seeking to admit the evidence was involved in its illegal procurement, this is a ground for exclusion; and

(c) whether the evidence is widely and freely available to the public is a relevant but not decisive factor.

Other exclusionary grounds, such as legal privilege and a lack of sufficient relevance or materiality, apply equally to both legally and illegally obtained evidence.19

A. Tribunals' liberal approach to admitting illegally obtained evidence

9 In exercising their broad discretion to determine the admissibility of illegally obtained evidence, arbitral tribunals tend to take a more liberal approach than domestic courts. Tribunals tend to admit virtually any evidence.20 They address any concerns about the evidence by giving it appropriate weight.21 For example, tribunals readily admit hearsay evidence.22 This liberal approach is reflected in Art 9.2 of the IBA Rules, which are used in the majority of international arbitrations as guidelines or as binding rules.23 Article 9.2 lists grounds on which the tribunal may

exclude evidence, thus implicitly presuming that evidence is admissible unless there are grounds for exclusion.24

10 One reason for the presumption of admissibility is that a discretion to include rather than exclude evidence “would put a large burden on the arbitral tribunal to assess each piece of evidence for potential inclusion”.25 More significantly, tribunals take a liberal approach so as to find the whole truth about the claim.26 Arbitral tribunals are reluctant to exclude evidence partly because, compared to domestic courts, they have limited means to secure evidence.27 Further, the exclusion of evidence is viewed as generally impoverishing the quality of the tribunal's factual findings and thus its ultimate decision: the exclusion reduces direct evidence that is already scarce or deprives the tribunal of indirect evidence to weigh alternative inferences.28

11 Tribunals apply the same liberal approach to illegally obtained evidence. They consider whether there are any reasons to exclude illegally obtained evidence, rather than whether there are any reasons to admit it.29

B. Evidence is excluded where the adducing party was involved in the illegal procurement

12 Where the party seeking to submit illegally obtained evidence had been directly or indirectly involved in its illegal procurement, tribunals have consistently declined to admit the evidence. In Caratube International Oil Co LLP v The Republic of Kazakhstan30 (“Caratube v Kazakhstan”), a tribunal constituted under the International Centre for Settlement of Investment Disputes (“ICSID”) stated that the party's

involvement is “an irresistible reason to bar that party from profiting from its own misconduct”.31

13 An example of direct involvement is Libananco Holdings Co Ltd v Republic of Turkey32 (“Libananco v Turkey”). Turkish public prosecutors had intercepted communications sent to and received from Libananco Holdings Co Ltd's (“Libanco's”) counsel in the arbitration.33 According to Turkey, the purpose of the interceptions was to investigate money laundering unrelated to the arbitration.34 Although the ICSID tribunal did not hold that Turkey's conduct was illegal, it ordered the exclusion of all such privileged communications.35 This was justified not only by the need to protect legal privilege but also by the parties' obligation to arbitrate fairly and in good faith; by the need to preserve basic procedural fairness; and by respect for the tribunal as the body freely chosen by the parties to adjudicate their dispute.36 Although the tribunal declined to decide whether the interceptions had in fact prejudiced Libananco...

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