Illegal and Inappropriate Evidence in International Investment Law: Balancing Admissibility
| Pages | 60-96 |
| Date | 01 April 2021 |
| Published date | 01 April 2021 |
| Author | Aleksander Kalisz |
| Subject Matter | Derecho Civil |
Balancing Admissibility of Illegal and Inappropriate Evidence’ 60
Illegal and Inappropriate Evidence in
International Investment Law:
Balancing Admissibility
A K*1
A
The question of the admissibility of illegal or inappropriate evidence tests the limits
of procedural flexibility of the arbitral process. Balancing admissibility requires a
case-by-case approach. Tribunals will have to balance (or ‘weigh’) the substance of
such documents with procedural fairness and general principles of law. In other
words, the relevance of the evidence is weighed against the adverse and unfair
eect that admission would have on the opponent. From an empirical perspective,
reliance solely on the substance of the evidence rarely succeeds in outweighing
procedural fairness. Exceptionally, however, publicly available documents, such as
diplomatic cables leaked by WikiLeaks, have better chances of being admitted.
The severity of the wrongfulness or unfairness may always tilt the balance in the
opposite direction. Tribunals also unconditionally resist the admissibility of legally
privileged documents. In any case, attempts to admit tainted evidence do not leave
the opponent unprotected. The doctrine of equality of arms, good faith, and,
debatably, the principle of clean hands safeguard them against unfairness. Finally,
arbitrators have tools to tilt the scales of admissibility if the evidence is highly
relevant. They may draw on the coercive powers of domestic courts through
* Commercial dispute resolution paralegal and future pupil barrister at CANDEY in London,
akalisz@candey.com. I am grateful to the anonymous reviewers for their comments on earlier
drafts. Any errors that remain are my own.
Cambridge Law Review (2021) Vol VI, Issue i, 60–96
Balancing Admissibility of Illegal and Inappropriate Evidence’ 61
judicial assistance or order the production of documents to level the playing field
for both parties.
Keywords: investment arbitration, international law, evidence, admissibility, procedural fairness
I. I
One of the most eagerly cited advantages of arbitration is the flexibility of the
process compared with litigation.1 Tribunals generally have broad freedom to
determine the procedural aspects of their cases. Despite clear advantages to
the eciency of proceedings, this flexibility can become a double-edged sword.
Admissibility of evidence is one example. Arbitral tribunals, free from the
requirements of civil procedure rules, might feel inclined to consider evidence that
is inadmissible under domestic laws or vice versa. The treatment of such tainted
evidence is further complicated by investment law being nested at the crossroads
of public and private international law, and the principles from both influence
the findings of tribunals.2 The subject is particularly complex when the investor-
sovereign State relationship is added to the discussion. Nonetheless, even in such
complex circumstances, there must exist some principles on the admissibility of
evidence to guide the tribunals.
This article analyses a narrow area of admissibility of evidence in investment
arbitration — namely, the admissibility of illegally and inappropriately obtained
evidence. It is clear that the process by which such tainted evidence is admitted
is a weighing or balancing exercise — balancing the substantive relevance of the
evidence with procedural fairness. The tainted evidence might be, after all, highly
relevant to the dispute. On the other hand, the methods by which the evidence
was procured may have been illegal or inappropriate. States have vast intelligence
services, military technologies, and spying techniques to assist them. Investors,
on the other hand, might be global corporations that are far more powerful and
wealthy than some of the less economically developed respondent States. Such
considerations of the balance of powers would fall into the procedural fairness
analysis. In the end, tribunals balance these two considerations in deciding
admissibility. This article takes a closer look at this process.
This article relies heavily on case law. The question asked is whether a
common test for admissibility can be inferred from arbitral decisions, given that
1 William Park, ‘Two Faces of Progress: Fairness and Flexibility in Arbitral Procedure’ (2007) 23(3)
Arbitration International 499, 499.
2 Andrea Brojklund and others, ‘Investment Law at the Crossroads of Public and Private Interna-
tional Law’ in August Reinisch, Mary Footer and Christina Binder (eds), International Law and…
Select Proceedings of the European Society of International Law (Hart Publishing 2016) 151.
Balancing Admissibility of Illegal and Inappropriate Evidence’ 62
no clear test has been laid down in the applicable procedural rules or treaties.
In addition, the article considers the procedural principles enshrined in Bilateral
Investment Treaties (BITs), arbitration rules, and rules on the taking of evidence.
This article focuses on the International Centre for Settlement of Investment
Disputes (ICSID) Convention and Arbitration Rules and the United Nations
Commission on International Trade Law (UNCITRAL) Arbitration Rules since
they are the most widely used procedural rules in investment law. Case law is
relevant because, although there is no doctrine of precedent in investment law,
tribunals are prompted to follow a harmonious interpretation of inter national law
and previous cases are clearly deemed highly authoritative.3 In addition, the 2020
International Bar Association (IBA) Rules on the Taking of Evidence (IBA Rules)
as well as the 2018 Rules on the Ecient Conduct of Proceedings in International
Arbitration (Prague Rules) will be considered. They are frequently referred to by
arbitral tribunals, despite being non-binding by themselves.4
The rationale for the research originates from the fact that rules on the
admissibility of illegal and inappropriate evidence are scattered. Tribunals appear
to lack a systematic approach to the issue and hence its resolution has been taken
on a case-by-case basis. The situation is similar within the jurisprudence of the
International Court of Justice (ICJ) and other international courts. This article
hence considers whether any general tribunal practice may emerge from cases,
hinting at the considerations which would or should be taken into account by future
tribunals in admitting or rejecting tainted evidence. This is a complex question.
Hence, the article takes a broad approach to the narrow issue of the admissibility
of illegal and inappropriate evidence in investment arbitration.
Firstly, the article briefly discusses the ability of arbitral tribunals, which are
not criminal courts, to analyse matters of illeg ality and impropriety associated with
tainted evidence. Investment tribunals are arguably not created for that purpose, so
this question of arbitrability deserves a mention.
Secondly, the article analyses the considerations for the balancing exercise.
In particular, the relevant arbitration rules as well as case law are considered.
Arbitration rules are relevant because they contain the framework of the tribunals’
procedural powers, granted to the tribunals by the consent of States or party
agreement. The extent of wrongfulness associated with admitting evidence
3 AES Corporation v Argentina, ICSID Case No ARB/02/17, Award (26 April 2005) [17]–[33];
Saipem SpA v Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommen-
dation on Provisional Measures (21 March 2007) [67].
4 See Cambodia Power v Cambodia, ICSID Case No ARB/09/18, Decision on the Claimant’s
Application to Exclude Mr Lobit’s Witness Statement and Derivative Evidence (29 January 2012)
[1]; Hrvatska Elektroprivreda DD v Republic of Slovenia, ICSID Case NoARB/05/24, Order Con-
cerning the Participation of Counsel (6 May 2008) [19].
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