Evidence And Discovery In American Arbitration: The Problem Of "Third Parties" - ARIA Vol. 19 No. 1 2008
Alan Scott Rau - Burg Family Professor of Law, University of Texas at Austin School of Law.
Originally from American Review of International Arbitration - ARIA
“The law of discovery has been invested at times with unnecessary mystery. There are few fields where considerations of practical convenience should play a larger role.”
--- Sinclair Refining Co. v. Jenkins Petroleum Process Co., (Cardozo, J.)
“All things are lawful; but not all things are expedient. All things are lawful; but not all things edify.” -- Corinthians
In all our discussions of the fact-finding process in arbitration, one common theme is inevitably the extent to which arbitral discretion can be deployed in the service of extracting necessary evidence from a recalcitrant party. Even here, it has been noted, the ability of arbitrators to ensure exchanges of information is uncertain, the tribunal’s power of enforcement being quite “limited” in circumstances where “one of the parties simply refuses to comply with [its] demands relating to discovery.” But where information is in the hands of a non-signatory – or more properly, someone who is not himself a party to the arbitration proceeding – the problem is much exacerbated.
In the United States in particular, one would naturally assume that the exercise of arbitral power with respect to “third parties” would be particularly suspect: After all, in no other state have the courts so uniformly taken to heart, so wholeheartedly embraced, the notion that the arbitration process should be understood above all as an exercise in private autonomy – understood, that is, “through the lenses of contract rather than of adjudication.” Nowhere else has the resolution of any concrete issue arising in arbitration been so dominated by the assumption that “our only serious inquiry ought to be one into the understanding and underlying assumptions of the contracting parties themselves.” (This is a theme I have sounded again and again (and again) in earlier writing.)
So it would seem natural for American commentators to find the exercise of arbitral powers over third parties to be theoretically unsustainable – to be contrary to fundamental principle: To some, it might even appear axiomatic that “no party should have a duty to provide evidence in arbitration unless that party has agreed to do so,” and that “forcing a non-participant to provide information in support of the arbitration is fundamentally at odds with its consensual nature.” But of course, the error in such commentary is that it treats as simple deduction what is instead the search for a proper adjustment of competing tensions, for the product of colliding vectors: Unqualified positions are rarely wise, and to proceed “logically” on the basis of “first principles” is usually a pretty good roadmap for winding up in a ditch.