The IBA Rules, first issued in 1999, have been instrumental in shaping international arbitration procedure where parties from different legal cultures are involved. Parties and tribunals often refer to, or have regard to them, even when they are not formally adopted in the proceedings.
In certain parts of the civil law world however (most notably, but not exclusively, in eastern Europe), the IBA Rules are increasingly rebuffed as being too close to the common law adversarial system. They have been criticised for permitting extensive disclosure and prolonged cross-examination of witnesses, which add to the length and cost of proceedings. A working group was therefore established to draft an alternative set of rules, now referred to as the Prague Rules.
The Prague Rules centre around the key principle that the arbitral tribunal takes a proactive role in the proceedings, a fundamental concept in civil law inquisitorial systems. Key provisions include:
- Extensive disclosure (including any form of e-discovery) is to be avoided. However, production of specific documents may be ordered, including on the arbitral tribunal's own initiative (Article 4).
- The right to cross-examine factual witnesses is not to be assumed. The arbitral tribunal will decide which witnesses are to be called for examination during the oral hearing (Article 5).
- If expert evidence is required, the default position is for the arbitral tribunal to appoint an expert, rather than each party appointing its own (Article 6).
- An express provision permitting the arbitral tribunal to apply legal arguments not pleaded by the parties, but giving the parties the opportunity to express their views on such arguments first (a principle known as Iura Novit Curia which is largely alien to the common law) (Article 7).
- The arbitral tribunal is to assist the parties in reaching amicable settlement. This can be done in a number of ways; for example the tribunal expressing preliminary views prior to the conclusion of the proceedings or the arbitral tribunal (or any of its members) acting as a mediator. This provision has been criticised as a failure to settle in mediation could result in the arbitrator who acted as mediator continuing to act as arbitrator if the parties consent in writing. Failing consent, the relevant arbitrator will need to be replaced, causing delay to the proceedings (Article 9).
It remains to be seen how widely adopted the Prague Rules will be and whether they are successful in reducing the length and cost of arbitral proceedings. One of the criticisms made is that, despite the different approach and emphasis, there is little, if any, need for them. The IBA Rules are flexible enough and already allow everything that is envisaged by the Prague Rules. While this is technically true, it is equally true to say that the IBA Rules are ordinarily applied in a way that differs from what the Prague Rules are trying to achieve.
The principle of party autonomy which is fundamental to the process of arbitration should mean that wider choice of procedural rules, including those focussing on evidential issues, is inherently desirable. To that end, the advent of rules reflecting particular procedural preferences in terms of legal culture is to be welcomed. As is the debate the formulation and promulgation of these Rules has contributed to.
Authors: Matthew Saunders and Thomas Karalis
