Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion

Abstract

IT HAS been said about the determination of privileges in international commercial arbitration that ‘[t]he only thing that is clear is that nothing is clear in this area’,1 that the law of evidentiary privileges in international arbitration is ‘substantially unsettled’2 and that ‘there is very little authority addressing how international arbitrators should proceed when presented with a claim of privilege’.3 In spite of these uncertainties, or because 4 of them, international arbitral tribunals have been facing an increasing number of claims of privilege in recent years. Arbitral practice and legal doctrine mention three reasons why legal issues related to privilege determination in international arbitration are regarded as diverse, complex and disputed: 1. the nature and concept of evidentiary privileges is different in civil law and common law; 2. there are essential differences in the qualification of privileges as substantive or procedural matters in common and in civil law; 3. there are no established conflict-of-laws rules for the determination of the law applicable to privileges in international arbitration. However, there is not only agreement on differences but also on two basic policy considerations. They form the bottom line of any discussion on the treatment of evidentiary privileges in international arbitration. First, international arbitrators should accede to an appropriate privilege objection raised in good faith.5 Secondly, the need for legal certainty and predictability and the need to safeguard the parties’ legitimate expectations as to the application of a certain privilege standard is particularly strong in this field of law because ‘[p]arties rely on privileges’6: > Parties are likely to be surprised, to say the least, to learn that their agreement to arbitrate could have the effect of imposing on them a general obligation to disclose all relevant documents including internal communications and legal advice which would not be subject to …