Ethics in International Arbitration - Part 5 Chapter 20 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
International arbitration is unlike litigation in the courts of any single country. Although there are rules – such as those of the American Arbitration Association or of the International Chamber of Commerce – that generally govern the conduct of international arbitrations, these rules are vague and unspecific when it comes to such matters as discovery and the presentation of evidence. This lack of specificity is intended to permit the parties to exercise what is often referred to as their "autonomy" to arrange their own procedures for what is, ultimately, their arbitration. However, the freedom and uncertainty that it creates can also give rise to ethical dilemmas for participating attorneys, especially when the parties have not adequately defined the procedures to be used in the arbitration.
International arbitration can be complicated by confusion between or among legal cultures. For instance, the lawyer on one side may come from a common law jurisdiction while the other practices in a civil law country, or the three arbitrators may come from two or more legal cultures. The roles of lawyers differ dramatically between the two types of system, as do the means by which information may obtained in litigation by attorneys from opposing parties and the means by which evidence is presented to tribunals. Meanwhile, how the arbitration is conducted, in terms of discovery and the presentation of evidence, will depend on how and whether the parties and their legal representatives are able to agree on procedures, or, in the absence of such an agreement, on how the arbitrators - particularly the chairman - decide to rule in this regard.
Out of this interaction of cultures, there may emerge issues of an ethical nature. That is, there may be advantages that could be taken by a lawyer of certain situations that he or she may be ethically bound not to take. This, after all, is what legal ethics – indeed, ethics and morality in general – are all about: doing what is right when it is not to one's advantage to do so.
Disclosure of documents that are relevant to the issues in international arbitration is by no means a given in international arbitration. Continental European arbitrators and practitioners are unused to producing documents in international arbitration because they have no obligation to do so in the courts of their own countries, where they may also practice. American lawyers, on the other hand, may feel distinctly uncomfortable if denied the opportunity to see what the other side has in its hands in the way of documents. Arbitrators (particularly chairmen) of continental European backgrounds may be, prima facie, disinclined to contemplate the notion that discovery should be engaged in, in the absence of a showing of specific need. Although such arbitrators may, when applications are made to them by one of the parties, issue orders requiring the production of specifically identified documents, they are often disinclined to do so before facts have been developed that show a need for information that is possessed, but not presented, by the other party.
Therefore, American practitioners participating in an international arbitration have to decide, early on in a case, whether discovery is or is not to their clients' advantage. One of their considerations has to be whether, if, an order for the production of documents is issued by the arbitrators, it will be thoroughly complied with. American lawyers are accustomed to working in environments where violations of discovery obligations are severely punished, even as criminal conduct; on the other hand, lawyers from civil law countries may have less experience with, and sensitivity to, discovery obligations and may therefore be less insistent with their clients about producing every document that is relevant - particularly internal documents. The result may be that even a European lawyer with good intentions may not provide the same kind of disclosure as his or her American counterpart.