Arbitrators should not apply the law in the same strict way that a judge does that goes for procedure and the rules of evidence as well. –Illustrate &Explain
Arbitration is a dispute resolution process, which is an alternative to the traditional lawsuit in court. Rather than have a matter decided by a judge and jury, participants to arbitration proceeding have their dispute resolved by impartial persons who are knowledgeable in the areas in controversy. Those persons are called arbitrators.
Although arbitration and mediation have existed as dispute resolution mechanisms for well over 200 years, it was not until the decision of the United States Supreme Court, in Shearson v. MacMahon, 482 U.S. 220 (1987) that arbitration became the most widely used means of resolving disputes in the securities industry. Arbitration of broker-dealer disputes has long been used as an alternative to the courts because it is a prompt and inexpensive means of resolving complicated issues. There are specific laws which govern the conduct of an arbitration proceeding from both the federal government and the various states. One of the most important legal aspects of arbitration is that arbitration awards are final and binding, subject to review by a court only on a very limited basis. Parties should recognize, too, that in choosing arbitration as a means of resolving a dispute, they generally give up their right to pursue the matter through the courts.
For many lawyers worldwide arbitration is, and has been since its beginning, one of the most successful and flexible forms of dispute resolution. One of the reasons arbitration has become so enticing is because arbitration allows lawyers to choose the location of dispute resolution, the adjudicative bodies, and substantive and procedural bodies of law to apply to future potential conflicts. However, along with these benefits come significant potential pitfalls. Often one of the most unexpected and often shocking perils for lawyers remains the differences in legal systems and mentalities concerning the disclosure and collection of evidence during arbitration proceedings. This article explores the differences in the mentalities and expectations concerning the collection of evidence between European civil law systems and the American common law system and hopefully provides insight to lawyers considering arbitration in either of these forums. Even though, international commercial arbitration is a system of dispute resolution that permits parties to submit their disputes to a neutral non-national tribunal. The non-national tribunal is expected to apply its independent and impartial judgment to the determination of those disputes, in accordance with the applicable law in relation to both substance and procedure. In some circumstances, the laws of evidence under the applicable procedural law may apply in international arbitration proceedings.
However even when strict laws of evidence do not apply, the practice of the taking of evidence in international commercial arbitration proceedings almost always will be influenced by the legal background and cultural expectations of the parties, counsel and the arbitrators involved.
The laws of evidence are the rules that govern the relevance, admissibility and weight of documentary and oral evidence tendered by a party in order to prove or disprove a fact in issue in the course of legal proceedings. The nature of those rules is often significantly different in common law countries and civil law countries. Furthermore, the practices and procedures that apply to the taking of evidence in legal proceedings, including the preparation and presentation of documents, witnesses of fact, expert witnesses and inspections, and the actual conduct of evidentiary hearings, vary significantly from country to country and across different legal systems. To ensure effective arbitration and to increase the general credibility of the arbitral process, arbitrators will sometimes sit as a panel usually consisting of three arbitrators. Often the three consist of an expert in the legal area within which the dispute falls (such as contract law in the case of a dispute over the terms and conditions of a contract), an expert in the industry within which the dispute falls (such as the construction industry, in the case of a dispute between a homeowner and his general contractor) and an experienced arbitrator.
Broadly speaking, in common law countries litigation proceedings are adversarial in nature. The role of the judge is to apply the rules of evidence, which are detailed and complex, to determine the relevance and admissibility of documents and testimonial evidence tendered by each party. Any evidence tendered by one party in support of its case may be subject to legal challenge by the opposing party. It is the judge’s role to act as referee in disputes relating to the relevance and admissibility of evidence and he or she ultimately will determine whether or not evidence tendered by a party is permitted. The judge (or jury) must come to a decision based on the evidence that is presented by the parties and permitted by the judge.
Arbitration Agreement in Bangladesh
In Bangladesh, the present law of arbitration is contained mainly in the Arbitration Act, 1940, there being separate Acts dealing with the enforcement of foreign awards. There are also stray provisions as to arbitration, scattered in special Acts. Three types of arbitration are contemplated by the Arbitration Act of 1940, namely (i) Arbitration in the course of a suit, (ii) Arbitration with the intervention of the court, and (iii) Arbitration otherwise than in the course of a suit and without the intervention of the court In practice, the last category attracts the maximum number of cases.
Under the Act of 1940, an arbitration agreement must be in writing, though it need not be registered. The agreement might make a reference about present or future differences. The arbitrator may be named in the agreement or left to be designated later, either by consent of the parties or in some other manner specified in the agreement. Very often, the rules of prestigious commercial bodies lay down that a person who becomes a member of the association must accept the machinery of arbitration created or recognized by the rules of the association. This also amounts to an “arbitration agreement” for the purposes of the Arbitration Act, 1940.
Once an arbitration agreement is entered into for submitting future differences to arbitration, it is not, necessary to obtain the fresh consent of all the parties for a reference to arbitration at the time when the dispute actually arises.
Differences between arbitrators and judges in applying the law
There are key differences among which one of them relates to the treatment of documentary evidence. The reason for this discussion, ‘documents’ include any written or printed material capable of being made evidence. Given recent technological advances, in most jurisdictions it is well-accepted that the definition of a document must extend well beyond conventional ‘paper documents’ and will cover a wide range of media including computer records, tape recordings, television film and photographs.
There are viable documents which are central to the arbitral process and, often, the most important and valuable evidence available to the tribunal. First, arbitral proceedings are, by their nature, less formal than court proceedings, in particular witnesses may not be under oath in the same way as when giving oral evidence in a common law court. The effect of that, coupled with the different philosophies as to the role of witness evidence, is that tribunals often place greater reliance on documentary than testimonial evidence. Secondly, international commercial arbitration usually involves the presentation of a party’s case in full and in writing from the outset which are usually in the form of written submissions, written witness statements, supporting documents and, if appropriate, written experts’ reports. This puts the documentary evidence, together with written submissions and written statements, at the forefront of a party’s case. Thirdly, documents can be a less time consuming and less expensive form of adducing evidence than the production of witnesses and, therefore, documents are frequently relied on heavily by parties. The importance of the role of documents in international commercial arbitration is therefore, a universal concept. However, what is not universal is the method of obtaining documents, particularly from the opposing party, to which parties are accustomed.
The approach in litigation in many civil law jurisdictions has always been one of upfront disclosure, whereby a party is expected to submit the substance of its case, including the evidence that it relies on, from the commencement of the proceedings (or soon thereafter). Full disclosure of one’s case from the outset is not the same thing as full disclosure of documents. Document disclosure in civil law jurisdictions has always been less onerous than in common law jurisdictions. A party is required to produce those documents that it relies on in support of its submissions. Therefore, it is not necessary for a party to disclose to the opposing party documents that are harmful to its own case or to respond to broad or searching requests for documents.
The civil law practice of submitting one’s case in full to the judge and to the opposing party from the outset, and permitting the judge to take an inquisitional role toward fact-finding, carries its own checks and balances. The judge in civil law jurisdictions will place a great deal of emphasis on the rules relating to burden of proof.
In international commercial arbitration a practice has evolved that goes some way toward reconciling the differences between the various jurisdictions. A commonly adopted procedure is for the tribunal to make orders for the production of documents pursuant to a carefully drafted, reasonable request for a particular document or documents and, if the order is not complied with, the tribunal may draw appropriate adverse inferences in respect of the documents in question. It is not uncommon for there to be no formal disclosure (or discovery) phase in international commercial arbitration proceedings as such, unless the parties agree otherwise.
The evolving common practice in international commercial arbitration is reflected in the IBA Rules, which were drafted by a working group comprised of both common law and civil law experts. The IBA Rules are specifically designed to be acceptable to lawyers from both common and civil law backgrounds and will apply to international commercial arbitration proceedings when the parties agree or the tribunal orders. They do not take precedence over applicable national laws governing procedure, or applicable institutional or ad hoc rules, but rather supplement those laws and rules.
In the absence of the application of the IBA Rules, the national law of the seat of the arbitration may have a significant impact on the conduct of document disclosure in international commercial arbitration proceedings. Under English law for example, a party to arbitral proceedings may use the same court procedures as are available in relation to legal proceedings in order to secure the attendance before the tribunal of a witness to produce documents. However, such procedures may only be used with the permission of the tribunal or the agreement of the parties and, even then, only if the witness is in the UK and the arbitral proceedings are being conducted in England and Wales or Northern Ireland. In other jurisdictions it also may be open to the parties to apply directly to the national court to order a party to produce documents, and seek sanctions if it fails to do so.
Written witness statement
Under common law legal systems, the written witness statement is a relatively new instrument in litigation (and it is by no means used in all common law countries). Traditionally, witnesses would be expected to attend the hearing and, at the hearing, would present their evidence in full in the course of examination-in-chief by counsel for the party seeking to rely on that evidence. Counsel for the opposing party would be entitled to cross-examine the witness and, following cross-examination, the original party’s counsel would be entitled to re-examine. The judge (or jury) would not be expected to have an active role in independently questioning the witness.
In international commercial arbitration, the IBA Rules contain a ‘middle ground’ approach, which reconciles the major differences that exist between the common law and civil law systems.
As written witness statements are now widely used in international commercial arbitration, most experienced international arbitrators are aware of the issues faced by lawyers from different legal systems and will ensure that adequate safeguards are in place to avoid any procedural disadvantage to one party. However, parties should bear in mind that the weight that the members of a tribunal will be prepared to give to written witness statements will be determined to a large degree by the background of the arbitrators themselves.
Oral witness Testimony
Oral witness testimony in common law jurisdictions comprises the examination-in-chief, cross-examination and re-examination of witnesses of fact. In recent years, in litigation in many common law jurisdictions, the role of examination-in-chief has become largely superseded by the written witness statement (although this is certainly not the case in the US).
Most participants in international arbitration proceedings now recognize that, quite appropriately, common lawyers may be closely involved in the preparation of witness evidence, including written witness statements. In turn, common lawyers also expect witnesses to be subjected to fairly intensive cross-examination by the opposing party’s counsel (such cross-examination being intended to provide an effective check and balance to the testimony in chief). However the practice of intensive cross-examination by opposing counsel remains a foreign concept to many civil lawyers who expect the judge to assume the role of inquisitor. Civil lawyers not trained in the skills of cross-examination may find themselves at a disadvantaged position by their common law counterparts.
In practice, in most international commercial arbitration proceedings the tribunal will permit the cross-examination and re-examination of witnesses. However, the tribunal itself is also likely to put questions of its own to the parties’ witnesses. The IBA Rules again set out the ‘middle ground’ that has evolved in respect of the presentation of oral witness evidence at hearings. The Rules provide that each witness who has submitted a written witness statement must appear for testimony at an evidentiary hearing unless the parties agree otherwise
There may be situations where a party will wish to enforce the attendance of a witness at a hearing. In those circumstances, the party must look to the applicable procedural law of the arbitration (usually the law of the seat) for assistance. Under English law, for example, a party to arbitral proceedings may use the same court procedures that are available in relation to legal proceedings to secure the attendance before the tribunal of a witness in order to give oral testimony, although it may only do so with the permission of the tribunal or agreement of the other parties and only if the witness is in the UK and proceedings are being conducted in England and Wales or Northern Ireland.
In common law countries, parties generally submit expert evidence in a similar form to evidence from witnesses of fact, but most lawyers accept that the role of an expert witness is to provide objective and neutral evidence of a technical nature. Accordingly, the expert witness is expected to be independent of the parties. Therefore, it is less common for counsel to assist in the preparation of expert witness reports to the same extent that counsel would assist in the preparation of written statements by witnesses of fact. If counsel were to do so, there would be a risk that the credibility of the so-called independent expert be seriously undermined. In international commercial arbitration, both practices are common. It may be the case that each party will choose to appoint its own independent expert. If the party-appointed independent experts are unable to provide the arbitral tribunal with sufficient assistance to enable it to resolve the relevant technical issues, or the tribunal prefers to appoint its own expert in any event, it will remain open to it to do so.
Based on the practice of common law and civil law systems, both the parties can appoint experts and tribunal-appointed experts. Under the Rules, party-appointed experts are assumed to be providing technical evidence in support of a party’s case. Tribunal-appointed experts are expected to report to the tribunal and assist the tribunal to determine the technical facts and issues. It is becoming more common in international commercial arbitration proceedings for tribunals to make orders that the party-appointed experts meet separately, before the hearing, to establish a set of agreed technical facts and issues. Occasionally a tribunal may require its own expert to attend such a meeting or, alternatively, report to the tribunal in respect of the outstanding technical issues.
Experienced arbitrators tend to apply practical solutions to avoid inconsistent, inequitable or simply unhelpful practices in the taking of evidence in international commercial arbitration proceedings. The overriding objective, which should consistently apply to all international commercial arbitration proceedings, is to obtain the fair resolution of the parties’ disputes by a neutral and impartial tribunal.
Arbitration Law in Bangladesh. Retrieved June 21, 2012, from
 Written statements are admissible in evidence if a copy has been served under the provision of s9 CJA 1967 on the other parties (together with any other document referred to in it), and there is no objection within seven days to it being tendered in evidence. If the prosecution intends to use written statements under these provisions, it must therefore be served on the defense at least seven days before the relevant hearing. In practice, if the prosecution receive an objection from the defense outside the seven day time limit, it is strongly advised that the witness is called, since the court always has discretion to require the witness to be called, and is likely to do so in such circumstances (As cited in http://www.hse.gov.uk/enforce/enforcementguide/court/physical-written.htm)
 The International Bar Association Working Group and ensuing Guidelines on Conflict of Interest in International Commercial Arbitration not only included some of the most brilliant arbitrators, they also found middle ground in a minefield that, until their involvement, was marked by both rigidity in international rules governing conflicts of interest and widely disparate practice in domestic jurisdictions. Nor should the Working Group and Guidelines be held responsible for a pervasive problem that has plague modern international commercial arbitration from the outset.
 There are two different types of cross-examination: (1) Supportive (Concession Based) Cross-Examination: This type of cross is employed when you want to ask questions and get answers that support and advance your case. In a supportive cross, you won’t use your questions to attack, pillage, and plunder the witness. Instead, you use cross to obtain favorable information, e.g., admissions, fill-in-the-gaps in the story facts, etc., from the witness. (2) Discrediting Cross-Examination: A discrediting cross-examination occurs when you attempt to discredit the believability of a witness’ factual testimony by showing that it doesn’t jibe with common sense and/or with what others say. You may want to use cross to show what the witness does not know or what the witness did not do in investigation. You may want to employ cross to impeach the witness. Evidentiary procedure and rules provide a number of traditional modes of impeachment (as cited at http://criminaldefense.homestead.com/cross.html)