TeCSA/TECBAR Symposium
25 June 2013
Privilege in International Arbitration
Rupert Choat, Head of Construction Disputes,
Partner and Solicitor Advocate,
CMS Cameron McKenna LLP
Issues
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CO (contractor from a common law system) engages CIVIL (subcontractor from a
civil law system) under a subcontract incorporating FIDIC Conditions of Subcontract
for Construction 2011.
In a dispute between them over a claim by CIVIL that eventually goes to arbitration:
(1) CIVIL seeks disclosure of CO’s note of a without prejudice meeting between CO
and its Employer, in which (as CIVIL rightly suspects) both parties recognise the
merit of CIVIL’s claim (the “Note”)
(2) CO seeks disclosure of advice given by CIVIL’s in-house lawyer that (CO rightly
suspects) is prejudicial to CIVIL’s claim (the “Advice”)
Issues:
(a) Document sought not privileged under law of the “home country” of the party
seeking disclosure (i.e. the legal system it is most familiar with) but is under that
of the party who created it (perhaps the Note)
(b) The reverse: document sought would be privileged under the law of the “home
country” of the party requesting it, but might not be be under that of the party
who created it (perhaps the Advice)
(c) Resolve issues such as these by reference to legitimate expectations of the
document creator [Note is privileged; Advice is not] and/or fairness [Note is still
privileged; Advice may be] and/or relevant laws applicable to privilege issues
arising (whatever those laws might be)?
The rules in practice or the impractical rules
 Most arbitral rules silent on privilege (and even those that are not
say little of assistance)
 Usually it is for the tribunal to decide (subject to any agreement
between the parties) which rules of evidence and procedure to
apply
 IBA Rules on the Taking of Evidence in International Arbitration
2010
IBA Rules on the Taking of Evidence in
International Arbitration
 Only apply if parties agree (but research suggests used in 60% of
international arbitrations)
 Each party serves request to produce on other
 Party receiving request may object to produce on grounds inter alia
of legal impediment or privilege under legal or ethical rules
determined by tribunal to be applicable
 Tribunal rules on objection to produce
 If party fails without satisfactory explanation to produce document
ordered to be produced, tribunal may infer that such document
would be adverse to that party
IBA Rules on the Taking of Evidence in
International Arbitration (cont’d)
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In considering legal impediment or privilege tribunal may take into account,
inter alia
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Any need to protect confidentiality of document created in connection with and
for the purpose of providing or obtaining legal advice (eg English law legal
advice privilege?)
Any need to protect confidentiality of document created or statement or oral
communication made in connection with and for purpose of settlement
negotiations (eg English law without prejudice privilege?)
Expectations of the parties and their advisors at time legal impediment or
privilege is said to have arisen
Need to maintain fairness and equality as between parties, particularly if they
are subject to different legal or ethical rules
Tribunal to exclude from evidence any document on grounds of
considerations of fairness or equality of parties that tribunal determines
compelling
The analytical approach
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See above for legit expectations and fairness re the Advice and the Note
Taking account of laws relating to privilege: which laws potentially apply?
• Law of the sub-contract? (But, query relevance, not just re the Note but also the
Advice. Also, while CoL systems tend to say that the question of privilege is a
matter of substantive law, CiL systems tend to say it is a procedural matter)
• Law of the seat? (But why, especially where document came into existence
before arbitration commenced? Again query relevance, especially re the Note.
Also, parties to DABs (eg FIDIC rules) must provide DAB with docs that DAB
requests. But no seat. If irrelevant for the DAB, might be too late for the arb)
• Law of place where document was created or communicated? (Often incidental)
• Law of the jurisdiction where lawyers involved practise? Ethical considerations?
(May be more than one jurisdiction & conflicting at that, if WP discussions)
Does the status of the Note call for a decision on matters for which the tribunal does
not (and cannot) have full information?
Two other approaches
 “Pro-privilege approach” – risks excluding documentation that
should be seen?
 “Anti-privilege approach” – risks including documentation that
should not be seen.
 Challenge to award less likely to succeed on the former than the
latter -> one popular (cynical or well-intentioned?) answer.
(Especially where the party challenging the pro-privilege approach
does not have – and cannot adduce in support – the undisclosed
document)
Other Points
 Waiver, e.g. sub-contract DRP suspended pending main
contract DRP (see FIDIC Conditions of Subcontract for
Construction 2011); sub-contractor obliged to provide main
contractor with all info reasonably required to enable main
contractor to diligently pursue subcontract dispute under
main contract – not privileged documents as a matter of
interpretation – or = waiver of privilege?
 How much should any of this matter? In practice do docs
such as the Advice and the Note affect results?
 See the IBA Rules’ sometimes overlooked requirement of
materiality to the case’s outcome (in addition to relevance). A
further basis for the pro-privilege approach?