芮安牟：普通法与大陆法视野下国际商事仲裁的发展与思考

2024-07-12

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2024年7月6日，由深圳国际仲裁院（SCIA）和华南（香港）国际仲裁院（SCIA HK）共同主办、美国司法仲裁与调解机构（JAMS）特别支持的SCIA开放日：中美国际仲裁对话在前海国际仲裁大厦（SCIA Tower）举办。SCIA仲裁员、香港资深大律师、新加坡国际商事法院国际法官、前香港高等法院法官Anselmo Reyes（芮安牟）以“Reflections on Differences between Common Law and Civil Law Approaches in International Commercial Arbitration”为主题发表演讲。现将其主旨演讲摘录如下。

Thank you very much. It’s a great honor to be invited to speak to the SCIA.

Today, when I was told what the topic was going to be ‘China-US International Arbitration Dialogues: Differences, Similarities, and Practice’. I wasn’t sure that I could say very much about Chinese or US practice. So to protect myself, I suggested that I would reflect on differences between common law and civil law approaches to international commercial arbitration. In the course of preparing for today’s presentation, it occurred to me that there were a number of differences, similarities, something in between a difference and a similarity between Chinese and US practice, not just in common law and civil law practice so that it occurred to me that there would be some things that I could say.

I initially intended to confine myself to three different institutions. In the event, I will refer to five in the half hour that has been allotted to me. Dr. Liu has, in his opening remarks, picked up on the title ‘dialogue’. This is indeed a dialogue. I don’t propose to give any particular solution or resolution of the differences or similarities that I identify. But what I propose to do is to give my take on it, you can take it or leave it, but at least we can engage in some dialogue.

The first institution that I want to focus on is discovery or disclosure. The common law in litigation takes a very general approach to disclosure. So as far as the common law is concerned, certainly litigation, there is a general obligation to disclose all documents that are relevant. The test of relevance is very wide in traditional common law, the Peruvian Guano test. It has two limbs, documents that are directly relevant, in other words, that assist the other side’s case or detract from my case. If you have any of such documents in your custody, possession of control, you must make disclosure of that. But you must also disclose documents which might reasonably be thought to lead to a train of inquiry, which would have the result of advancing the other side’s case or detracting from your case. So two means: the directly relevant link and what we might call the train of inquiry.

Now, it used to be popular in the United States, for international arbitration, including international commercial arbitration, to try to make use of 28 U.S. Code § 1782 if there was some link with the United States. As I understand it, this allowed parties to seek discovery in the United States, applying the wider principle of American law or common law discovery to obtain documents that could be used for arbitration, including, it was thought, international commercial arbitration taking place elsewhere in the world. A lot of applications were made to try to take advantage of section 1782, leveraging the very wide common law principle of disclosure in an attempt to assist one’s presentation of a case in an arbitration, wherever else it might be taking place in the world.

A recent supreme court decision in the US has closed an avenue, except possibly leaving it open in terms of investment treaty arbitration. That remains to be decided whether US section 1782 can apply in investment treaty arbitration that has cut down on the way. Now, that’s the common law point of view, very wide discovery. Something like a general discovery.

The civil law point of view is that to have no, almost no discovery at all. You can have specific disclosure, and I think this applies as well in Chinese arbitration. You can ask for specific documents to be disclosed, but you may have to make a case out that those documents are necessary for the proper disposition of the case, in saving of time, saving of costs and interests of justice. In other words, you don’t have the very wide test that you can have in many common law jurisdictions. Basically, you have to show direct relevance. That’s not enough. You have to show that it is just and appropriate, save time and cost to have such disclosure, you have to have very specific requests.

And typically, in civil law jurisdictions, disclosure that is not specific disclosure is not generally granted. So, how does this whole issue manifest itself in international commercial arbitration today? In international commercial arbitration, the civil law approach tends to be the one adopted. In other words, most arbitrations, at least in my experience, in international commercial arbitration, follow or take their cue from the guidelines in the IBA (International Bar Association) Rules on the Taking of Evidence, which tends to follow a civil law approach. The IBA has committees of common law and civil law lawyers that come together and put together rules, guidelines, and soft law instruments that are acceptable to both common law and civil law jurisdictions, including the US and China. And the approach followed in the latest edition of the IBA Rules on the Taking of Evidence tends to follow the civil law approach.

The story doesn’t end there. Let’s assume that the international commercial arbitration follows the civil law approach. My difficulty is that nowadays, whether you come from the common law or the civil law, whether you come from the US or China, when you adopt this specific disclosure procedure that is a hallmark of the civil law and is enshrined within the IBA Rules on the Taking of Evidence, what I find is that both parties make requests that are wide-ranging and effectively the equivalent of seeking general disclosure.

So, you get in your Redfern or Stern schedules any number of requests that go something like this: ‘Please disclose all documents evidencing (or whatever that means) this or that, not limited to, but including the emails and a whole list of all sorts of documents.’ But this is just an example. Otherwise, you’re supposed to give all documents that evidence (whatever that means) something, and then a reason is given like ‘this is necessary in order to prove our case,’ or ‘these documents are likely to be in the other side’s possession, custody, or control.’

You get a far wider scope of requests than you would in the norm of civil law, even though ostensibly international commercial arbitration is following the civil law. Possibly, you get something far wider than you would get with general discovery, or you get a request that is far wider than what would be expected in general discovery in the common law. You have the directly relevant line, but you’re also seeking documents along the train of inquiry line, and you’re seeking other documents anyway, just to add everything, get everything that you want.

My take on this is that this is not good for international commercial arbitration. I suggest that discovery should be specific disclosure in keeping with the civil law principles, strict civil law principles.

The idea is this: in an international commercial dispute, you have your side, I have my side, but really, the documents relevant to each of our sides must be documents across the line - documents I’ve provided you in the course of negotiation or in the course of our carrying out the contract, and you have provided me on your side. I’m not sure that we should be encouraging us arbitrators in this fishing for background documents, internal documents, hoping to find some sort of smoking gun that will further our case. That seems to me fishing in a big way. And that should not be encouraged. So that’s the first institution that I’d like to look at.

The second institution I want to move now to is interim measures. I’d like to refer to, in particular, security for costs. First, let me do deal with what I understand to be the common law approach. Let me choose here the common law approach in litigation. Then let me reflect on how that common law approach manifests itself or might manifest itself in arbitration, international commercial arbitration. And then let me say a few words about civil law, security for costs application.

I’ve done many applications for security for costs as a judge in Hong Kong. If you read my judgments, they’re always the same. Indeed, I just basically take my cue from every judgment ever written in Hong Kong on security for costs. Typically, the judgment will go like this: just because someone is a foreign party, doesn’t mean that security for costs will be ordered. So just because you’re from somewhere else outside of Hong Kong doesn’t mean that the security for cost order will be made. However, it is the practice to give security for costs in such situation, so I’m going to follow that practice anyway. Basically in Hong Kong, I have many judgments to this effect. If you are a foreign party, you can’t point to an asset in Hong Kong, because you’re a foreign party, you’re likely to get an order against you for security for costs. A foreign claimant is going to have order for security for costs, and that’s the typical Hong Kong approach. Just because you are from somewhere else, you have to pay security costs.

Does that approach translate well into international commercial arbitration? The answer is ‘No’. Because in typical international commercial arbitration, you have two parties, let’s say, one from China, one from the US. They’re looking for some neutral jurisdiction in which to have their dispute resolved. So they could choose Hong Kong or they could choose Singapore, they could choose some place where neither party has a connection. Each party will be foreign if you’re going to apply this principle: because you’re a foreign party, you have to provide security for costs. Then in every international commercial arbitration, there will be security for cost. So it’s not a good idea.

Now, I recently been brave enough to try to experiment with such a statement in one judgment that I recently handed down in Hong Kong as a deputy judge, but I’m not sure how well it’s been taken, because the commentators have not yet latched onto this little detail that I put. So the common law approach, which tends to favour the ground for security for costs where there is a foreign party, I don’t think is appropriate in international commercial arbitration.

Now, let’s look a little bit at civil law. The civil law approach is rarely to give security for costs. I don’t think China is any different from that. So it all depend on who you have as your arbitrator. If you have a common law arbitrator or arbitrary tribunal, you tend to have orders for security for costs against your claimant, a foreign claimant. If your arbitral tribunal is largely from the civil law, you tend not to have any order for security for costs. That’s not satisfactory as position.

What my own take is what is suggested in the Chartered Institute of Arbitrators Guidelines on Applications for Security for Costs, that is to say something like this: when two parties enter into a contract, they size up the risk of each other not being able to honour their commitments under the contract, including the risk of one party or other not being prepared to honour arbitration awards against it, where there is an arbitration clause. If that’s the case, then the fact that someone is a foreign party – you choose a neutral value – the mere fact that someone is a foreign party is not enough to justify security for costs. It has got to be some risk that you could not have appreciated at the time of contracting. If there was some sort of risk which justifies the grant of security for costs that you could not have calculated or taken into account at the time of contracting with the other party, then perhaps you have a case for security for costs, but that’s very hard to imagine.

Let’s take a typical situation that arises in international commercial arbitration. One often is dealing with an international BVI company. In the BVI, there is an International Business Companies Act , which is much more liberal regime. If you contract with a company, a BVI company, you failed to take security, adequate security for the performance of the contract, it seems to me odd if, when you come up in a neutral jurisdiction for arbitration, you say this is a BVI company, so it has no assets, we don’t even know who’s in control of it. That was a risk you undertook when you entered into an arbitration agreement on commercial contract with that party. That doesn’t seem to me to justify an award for security for costs. I would suggest, therefore, that the CIArb Guidelines approach is the approach to take. That’s what I would suggest is the way to mitigate or mediate between the common law approach and the civil law approach.

Let me move now to the third institution that I’m going to cover. The third institution comes in a package with the 4th and 5th institutions that I’m dealing with. These reflections arise out of a workshop that has been conducted over the last 3 days here at SCIA focusing on the actual trial of an international commercial arbitration, focusing on cross examination, and focusing on closing submissions in an international commercial arbitration.

The first reflection comes from something that Marcus said yesterday in relation to one of the witnesses. We had a number of individuals playing as witness for cross examination in a mock arbitration dispute; many of you who took part in that present today will remember that very well. And Marcus said, ‘Whoever prepped this witness did a good job’. This immediately came to my mind: there is a major difference between certainly the US (and China is very similar here) and the rest of the common law world. In the common law world, it is to be frank, professional failure to prep a witness, to tell witness what the witness is going to say. In Hong Kong, in Singapore, in Malaysia, in the UK, I think even in Australia, it is combined with professional disciplinary procedures. You tell the witnesses, ‘When you are asked this, this is the way you should reply.’ That’s wrong. In China and the US, my understanding is, if you don't prep witnesses, that's a disciplinary failing.

So, how do you ensure a level playing field? In international commercial arbitration, you have parties represented by counsel from different parts of the world. That means, if you’re a Chinese party represented by Chinese counsel, they can prep you because that’s okay in China, and that’s okay in the US if you are US party that has US counsel. But if you’re on the other side, and you have Singapore counsel or Hong Kong counsel or UK counsel, tough luck, they can’t prep witnesses because that would be a professional disciplinary offense in their jurisdiction.

This is a problem that has troubled my court, the Singapore International Commercial Court (the SICC), because before my court, the SICC, we are able to hear submissions from lawyers from different parts of the world. You can apply, you can register to make submissions directly to the SICC and we’ve been troubled about how do we ensure a level playing field so that you don’t get into a position where one side said ‘I perfectly came prepared witness, and in fact, if I didn’t I would be professionally negligent,’ while the other side says ‘I can’t do that, because I’d be professionally irresponsible and I may lose my license.’ How do you ensure that? I guess in SICC, the way we do it is to require all counsel appearing before us to subscribe to a series, a code of ethics. Let me go into that in a moment.

There is no one code of ethics in international commercial arbitration. The IBA Rules on Taking of Evidence has some suggestions on how to deal with this to ensure a level playing field. But even then, it doesn’t go so far as to say don’t prep witness. What it does say is witnesses should give their evidence in their own words. Now you can read into that what you want. That might mean you don’t tell the witness this is how you should answer and that’s not the witness’s words, it is your words. But there are many other ways to do it. You might say, ‘You might be asked this question. You might reflect on how you might answer it, because you might answer thinking about this, thinking about that.’ You don’t actually tell the witness what words to use, but you give a context for the witness to take into account.

Now, the SICC, my court, has taken its cue from the IBA Rules on Taking of Evidence, but we ourselves have not been so bold, as to say, ‘Don’t prep witnesses’. But we have said something like what the IBA Rules on Raking of Evidence says: that one should have the witness use the witnesses’ own words. And you might reflect, in any event, you say ‘Professor, very theoretical, not practical. Anyway, we all know, nowadays, the witness statements that are put in international commercial arbitration are drafted by the lawyers anyway, and the way that is introduced is the witness statement that you ask: “Is this your witness statement?” “Yes.” “You stand by it?” “Yes.” Evidence-in-chief gone, on to cross-examination. So what’s the difference?’ Here I leave you to reflect on that. My own take is that you need some sort of measure. I’m not sure of what measure, but there is a need to ensure a level playing field.

The next aspect of what I’d like to say is something that I’m increasingly seeing nowadays. The typical style of, shall we say, pleading a case – I believe in the US, in China, and in many civil law countries – is what is called a memorial style. That is to say, you have your pleading and the pleading can be quite discursive. The pleading can take into account law and take into account facts and take into account opinion. Very often, when I read them, more or less, they often are also sarcastic, ironic. But that’s to me a stylistic problem. They are wide ranging, and they attach to the memorials with the statements, expert reports, all supporting documents. It takes some time to produce these memorials. The typical common law style used in Hong Kong, used in Singapore, etc, where a lawyer somewhere used to a sparse pleading style. They have adopted some of the civil law in that they attach in international commercial arbitration documents in support. But they typically will not, at least in the first round, include witness statements and certainly not expert reports.

Now, what I’m finding increasingly is that there’s a debate before we put out Procedural Order No.1, where one party says we should do it memorial style. The other party says we should do it pleading style, common law style. And we have a long debate before we even start as to whether it should be memorial style or pleading style. And if you go for memorial style, ‘Oh, we need at least 6 weeks if not 7 weeks.’ If you go for pleading style, ‘Oh, we shouldn’t get more than 4 weeks.’ And there’s a long debate about this. But increasingly, I think - and there’s no easy answer - you will find as international commercial arbitrators that you will be facing this. Arbitration has, as one of the great benefits of arbitration, the diversity of styles, the diversity of rules, the diversity of approaches that it enables, but that flexibility of arbitration can often lead to long debates, perhaps too long at the very beginning, just to get the arbitration started as to what the rules should be, especially if the parties are taking every point and the parties are not going to cooperate with each other.

The last institution is an interesting one, that I take my cue from Marcus on the rules of cross examination. And I stressed ‘Fairness’ in dealing with the witness. For those from common law jurisdictions, it’s known as the rule in Browne v Dunn. I say ‘for those from common law jurisdictions’, but the United States doesn’t follow this rule. Fairness under the rule in Browne v Dunn requires that if you’re going to say to the witness, ‘What you say is wrong,’ whatever you’re going to say about the witnesses evidence, you must give the witness a fair opportunity to say whatever the witness would like to say about that. So at some point, you have to put your case on a key matter to a key witness. Now you don’t have to do it as dramatically as in the movies or in the soap opera in television. Singapore-style in court used to have at the end of a cross examination, a litany of so called ‘puts’: ‘I put it to you that this is the case. You can say whatever you want.’ The counsel then tells the witness, ‘You can agree or disagree.’ Then ‘I put it to you that, I put it to you that, I put it to you that.’ So a formal, lengthy litany of putting the case. I’ve questioned whether that’s necessary, as long as you are fair and you put it to witnesses.

Now, I think this is true – certainly in Hong Kong, I believe this is true of China, and China uses a memorial style, it’s part certainly of domestic Chinese arbitration – it’s part of the job of the arbitral tribunal to give the witness a fair opportunity to say whatever the witness has to say on matters at issue. But in the United States, and I’ve heard some arbitration involving lawyers trained in the American style, what I find maddening is that they never put their case. They say something like, ‘Look at this email. You said that in your email. You stand by it?’ ‘Yes, I do.’ ‘Okay, then next document.’ We never get the case or challenge to allow the witness to say whatever the witness would like to say. That troubles me. Marcus says that of course we will never do that. He said that with certainty, and I stopped right there yesterday, but we’ll hear what he has to say in a moment, in rebuttal. But I just find as an arbitrator that without that challenge, I’m not really able to come to a conclusion. That challenge is necessary as a matter of fairness. And it goes so far as in the common law system, if someone says this person was not telling true, but has not put the case, you can’t make that closing submission. You have to be fair.

There is my take on various matters of differences in common law and civil law. Hopefully some differences between US and China and some similarities between US and China. Given my thoughts, I hope the dialogue continues. Thank you.

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芮安牟：普通法与大陆法视野下国际商事仲裁的发展与思考

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