In arbitration, the taking of evidence is a crucial part of the proceedings. The parties have the opportunity to present their case and provide evidence to support their arguments. However, what happens when a party refuses to produce evidence that is required by the tribunal or the IBA Rules on the Taking of Evidence?
On the one hand, a party’s refusal to produce evidence can be seen as an obstruction of justice. It can delay the proceedings, increase costs, and deprive the other party of the opportunity to present its case fully. On the other hand, a party may have legitimate reasons for refusing to produce evidence, such as confidentiality concerns, relevance considerations, or practical limitations.
The IBA Rules on the Taking of Evidence provide guidance on how to deal with a party’s refusal to produce evidence. Rule 9(2) states that “the tribunal may draw such inferences from the evidence presented, including the absence of evidence, as it deems appropriate.” This means that if a party refuses to produce evidence that is relevant and material to the case, the tribunal may draw adverse inferences against that party.
However, before drawing such inferences, the tribunal must give the party an opportunity to explain why it cannot produce the evidence. Rule 9(3) provides that “the tribunal shall give the parties a reasonable opportunity to present their comments on the authenticity, relevance, materiality, and weight of the evidence, and to address any other matter that the tribunal considers appropriate.” This means that the party that refused to produce evidence can explain its reasons for doing so and provide supporting evidence or legal arguments to substantiate its position.
The question then arises, what happens if the party’s reasons for refusing to produce evidence are not considered legitimate by the tribunal? In this case, the tribunal may draw adverse inferences against the non-compliant party. For example, if the party refuses to produce a document that is relevant and material to the case, the tribunal may infer that the document would have been unfavorable to the non-compliant party. The tribunal may also impose sanctions on the non-compliant party, such as an order to pay the costs of the other party or even dismissal of the non-compliant party’s claims or counterclaims.
While adverse inferences and sanctions may be effective tools to ensure compliance with procedural orders and the IBA Rules on the Taking of Evidence, they can also be a double-edged sword. On the one hand, they can encourage parties to comply with their obligations and ensure the integrity of the proceedings. On the other hand, they can also unfairly penalize parties that have legitimate reasons for refusing to produce evidence.
For example, a party may refuse to produce evidence because it is confidential or privileged. In this case, the party may be reluctant to disclose the evidence because it would violate legal or ethical obligations. However, if the tribunal orders the party to produce the evidence or draws adverse inferences against the party for failing to do so, the party may be forced to choose between complying with the tribunal’s order and violating its legal or ethical obligations.
Similarly, a party may refuse to produce evidence because it is not relevant to the issues in dispute or is of marginal probative value. In this case, the party may believe that producing the evidence would unduly prolong the proceedings or cause unnecessary expense. However, if the tribunal orders the party to produce the evidence or draws adverse inferences against the party for failing to do so, the party may be unfairly penalized for exercising its judgment and discretion.
In conclusion, refusing to produce evidence in arbitration can have both positive and negative consequences. While it is important for parties to comply with procedural orders and cooperate with the tribunal in the taking of evidence, the IBA Rules on the Taking of Evidence also recognize that parties may have legitimate reasons for refusing to produce evidence. Thus, it is essential for tribunals to strike a balance between ensuring compliance with procedural orders and respecting parties’ legal and ethical obligations.