Originally from The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration, Fifth Edition

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I.            INTRODUCTION

A.           Arbitral Authority to Grant and Limit Information Exchange

In the court system, information exchange between the parties is referred to as “discovery.” Arbitral institution rules, however, use such terms as “disclosure,” “production of information,” or “exchange of information.” See AAA Rule R-23; JAMS Rule 17. Decisions regarding the manner and degree to which information exchange is permitted involve a complex assessment of the arbitrators’ authority to control information exchanges and considerations of cost and fairness. Given arbitration’s emphasis on speed and efficiency, as a general rule information exchange in arbitration is more limited than discovery in court.

When arbitrators assess what information, if any, the parties are to exchange, they must first examine the arbitration agreement and determine whether the parties have limited the exchange or, conversely, created an affirmative right to certain information. Some arbitration agreements permit depositions, others provide for broad information exchange—for example, by adopting the Federal Rules of Civil Procedure (“FRCP”) that permit broad-reaching discovery in federal court. Other agreements only allow a narrowly defined exchange and prohibit exchange of information in certain areas. Arbitrators must be aware of these contract rights and constraints.

Most often, the arbitration agreement incorporates institutional rules that govern the proceeding. All contemporary institutional rules now address information exchange to some degree. With the exceptions noted in this chapter, they give the arbitrators the authority to control the amount and nature of the exchanges. Arbitrators must be familiar with these rules and ensure their decisions conform to them.

In addition to contractual requirements and arbitration rules, decisions on information exchange must ensure a fundamentally fair hearing with the parties treated equally. See, e.g. Article 22(1) of the ICDR Rules (2021), which requires treating parties equally. Unequal treatment can raise legitimate concerns about arbitrator partiality.

Best practice requires having a flexible approach to information exchange. Arbitrators must make sure information they order exchanged fits the nature

of the case and the parties’ needs. They should not preclude exchange

of material, important information merely for the sake of efficiency. At the same time, they should not allow requests that are overbroad or unduly burdensome.

B.           Achieving Proportionality in Information Exchange

Before the 1930s, parties in the United States arbitrated and litigated disputes without exchanging information. Lawyers often “hid behind the log” and sprang surprises on opponents in court. A variety of states enacted rules of civil procedure to give parties the right to compel production of factual information before trial. The FRCP, which became effective in 1938, built on state experience and included a panoply of tools referred to today as discovery —depositions, document production, interrogatories, and requests for admissions—designed to lay a foundation for summary judgment when material facts are not in dispute, and generally to prevent surprise at trial and permit fair trial preparation.

As the volume of paper and electronically stored information (“ESI”) produced in court cases has increased, court rules have been amended to give judges more authority to control the scope of discovery. For example, on December 1, 2015, FRCP Rule 26 was modified to limit discovery to information (1) that is relevant to a claim or defense and (2) “proportional to the needs of the case.”

Although guided by many of the same purposes as these court rules, arbitrators have the broad authority to use flexible approaches to control information exchange. Subject to limitations imposed by the arbitration agreement, applicable rules, and sometimes statutory or case law, arbitrators have discretion to adjust, and even disallow, exchanges of information. The Federal Arbitration Act (“FAA”), enacted thirteen years before the FRCP, does not refer to information exchange or related details. The Revised Uniform Arbitration Act (“RUAA”) does address information exchange but uses the judicial term “discovery” for it. See RUAA § 17.