A tribunal in an investment arbitration pursuant to the UNCITRAL Arbitration Rules between South American Silver Limited (“Claimant”) and The Plurinational State of Bolivia (“Bolivia”)[1] decided in several procedural orders on the question whether the parties are allowed to submit witness statements in redacted form. The most recent decision stems from 6 May 2016[2].
In its first decision of 1 April 2016[3] the tribunal had to decide whether to grant a protective order for one of Bolivia’s witnesses. According to Bolivia, its witness was going to confirm unlawful actions committed by Claimant and was therefore afraid of retaliation from Claimant. Bolivia requested the tribunal to keep the witness’ identity and the content of his/her statement confidential. After signing a confidentiality undertaking, only Claimant’s counsel, witnesses and independent experts should learn about the witness’ identity and should be allowed to read / hear the witness statement.
In its decision, the tribunal had to balance on the one hand Bolivia’s interest to prove its defense by way of the available evidence and on the other hand Claimant’s right to respond to evidence submitted to the tribunal. Balancing these interests, the tribunal granted the protective order: The tribunal held that under the conditions laid down in the order Bolivia could appropriately present its case without violating Claimant’s rights.
A few weeks later, quite similar to the situation described above – only with reversed roles – Claimant requested the tribunal to grant a protective order for two of its witnesses. Claimant contended that two of its witnesses, members of the indigenous communities in Bolivia, did not want to be identified in the proceedings because they were afraid of retaliation from Bolivia, mainly to suffer physical harm or to lose their property. According to Claimant, Bolivia’s witnesses intimidated members of the indigenous communities who provided testimonies against Bolivia. Therefore, Claimant requested the tribunal to authorize the submission of redacted witness statements, i.e. witness statements which would not allow Bolivia to identify the witnesses.
This was the main difference to the order previously granted to Bolivia: While this previous order did not prevent Claimant’s counsel and witnesses from knowing the identity of Bolivia’s witness, Claimant wanted only the tribunal to know the witnesses’ identity. Only the tribunal should get unredacted statements and only the tribunal was supposed to question the witnesses.
This difference was the reason for the tribunal to reject Claimant’s request in its decision from 29 April 2016[4]. Again, the tribunal had to balance the parties’ interests Balancing these interests the tribunal held that the procedure proposed by Claimant would lead to an unjust inequality:
“In fact, if the procedure proposed by Claimant was followed, one of the Parties would be allowed to meet with two witnesses to hear and determine the relevant facts -including the possibility of assisting them in the preparation of the witness statements and examinations- while the other Party would only know the redacted versions of said witness statements and would have no right to know the identity of the witnesses, investigate fully the facts to which they refer to in their statements, respond to them, and cross-examine the witnesses. […] this would be a situation that would create a manifest inequality between the Parties in their opportunity of presenting their case, and would violate the Respondent’s right to due process.”[5]
Since the tribunal was not in general reluctant to grant a protective order, Claimant made a second attempt. This time Claimant proposed that an external counsel of Bolivia could know the witness’ identity and see an unredacted version of his/her testimony after signing a confidentiality undertaking. Other than this external counsel and the tribunal no one else should know the witness’ identity and see the unredacted version. Further, Claimant suggested that Bolivia’s external counsel could cross-examine the witness.
At first sight, Claimant’s new request seems to be very similar to the protective order granted to Bolivia on 1 April 2016. However, there is a decisive difference: The order granted to Bolivia provided not only for Claimant’s counsel, but also for Claimant’s witnesses to know the identity of Bolivia’s witness. Claimant in its request, however, suggested that Bolivia’s witnesses could not be informed about the content of the witness statement, and consequently, could not provide Bolivia with information to rebut the statements.
While Claimant held that this procedure would balance the parties’ interest, Bolivia argued that it would violate its right to due process. The tribunal agreed with Bolivia and rejected Claimant’s request.[6] The crucial reason for the tribunal’s decision was that Claimant would not allow Bolivia’s witnesses to respond to Claimant’s witnesses while Claimant’s witnesses could reply to Bolivia’s witnesses. According to the tribunal this would amount to a violation of Bolivia’s right to due process.[7]
The tribunal suggested to grant a protective order under terms and conditions as those contained in the protection order for Bolivia if Claimant submitted unredacted witness statements to Bolivia and the tribunal.[8] However, Claimant refused to do so.
When deciding on the requests for the protection orders the tribunal based its decisions on Art. 17 (1) of the UNCITRAL Arbitration Rules and Art. 9 (4) of the IBA Guidelines on Taking of Evidence. According to Art. 17 (1) of the UNCITRAL Arbitration Rules the tribunal has the power to conduct the arbitration in a manner it considers appropriate as long as the parties are treated with equality, each party having a reasonable opportunity to present its case – a rule which in similar kind is contained in other institutional arbitration rules as well. Art. 9 (4) of the IBA Guidelines on Taking of Evidence provides that the tribunal has the power to permit evidence subject to suitable confidentiality protection. Accordingly, the tribunal has the discretion to order protective measures for witnesses. Tribunals can for example use their discretion to provide for suitable confidentiality protection by making certain documents only available to counsel or by displaying documents without the possibility to take copies.[9] It will remain to be seen whether other tribunals will be less reluctant in allowing redacted witness statements.
[1] PCA Case 2013-15.
[2] PCA Case 2013-15 PO. No. 18, 6 May 2016.
[3] PCA Case 2013-15, PO. No. 14, 1 April 2016.
[4] PCA Case 2013-15, PO. No. 17, 29 April 2016.
[5] PCA Case 2013-15 PO. No. 17 p.4, 29 April 2016.
[6] PCA Case 2013-15, PO. No. 18, 6 May 2016.
[7] PCA Case 2013-15, PO. No. 18 p.5, 6 May 2016.
[8] PCA Case-2013-15, PO. No. 19 p.2, 17 May 2016.
[9] Zuberbühler, Commentary on the IBA Rules on the Taking of Evidence, Article 9 para.53.
