Author: Kabir Duggal*
Published: November 2017
In the early stages of my career, one particular instance highlighted the importance of evidence in investor-state arbitration. In an arbitration involving Venezuela, opposing counsel put in the record a blog post on the creation of a new state—“Bolizuela”—through the merger of Bolivia and Venezuela. This blog post had a reference to a New York Times article and when you clicked on that link, the image of a joker popped up with the words “Happy April Fool’s Day.” It had been admitted in the record, shockingly, not as a joke, but to make a serious legal argument. The tribunal did not, however, reprimand opposing counsel in any way, which appeared to be in sharp contrast to the grim view that most domestic courts would take if something similar would have happened there. This episode highlighted the importance of evidentiary matters and a general lack of clear evidentiary principles in investor-state arbitration.
The marshaling of evidence in investment arbitration is generally similar to the process in commercial arbitration, in the sense that it can depend on the rules chosen, the procedural law applicable to the arbitration, the particular experience of the arbitrators, and the location of the relevant evidence. However, the evidentiary process in investor-state arbitration acquires a unique dimension considering that one of the parties is a state or state-owned entity in these proceedings. Further, matters relating to evidence, burden of proof, and document production present an interesting tension in investor-state arbitration. On the one hand, the arbitral rules do not provide significant guidance on these issues; on the other, tribunals routinely make critical result-determinative decisions to admit or reject defenses solely on evidentiary grounds.
Considering that almost every arbitral case is decided on the basis of evidence, a careful examination of the principles underlying them is warranted. In an effort to address the myriad issues that arise in relation to evidence, this paper begins in Part II with a summary of the principles of evidence as provided under the different arbitration rules. This is followed by a discussion in Part III on document production in investor-state arbitration. Part IV then deals with basic rules relating to burden of proof, while Part V deals with a discussion of standard of proof.
*Kabir A. N. Duggal is a senior associate in Baker McKenzie’s New York office and a Lecturer-in-Law at Columbia Law School.