Witness testimony and written witness statements in international arbitrations seated in Portugal and in Brazil
Catarina Monteiro Pires | Salvador Branco Vicente
1. The foundation of international arbitration is the parties' private autonomy which allows them to shape procedural rules, including how evidence is produced and valued. This flexibility can set international arbitration apart from traditional judicial systems.
2. The Portuguese Arbitration Law (PAL) follows a dualistic mitigated model of regulation of international arbitrations. In Brazil, the lack of a specific regime in the law leads to the conclusion that the Brazilian Arbitration Law (BAL) does not differentiate between domestic and international arbitration. It is our contention that the absence of a defined regulatory framework for international arbitration disputes, coupled with the absence of a legal concept of international arbitration, does not lead to the conclusion that international arbitration disputes seated in that country do not exist and does not imply the absence of specific approaches and standards applicable to such disputes. In addition, the distinction between international and domestic arbitration lies in the involvement of multiple states, either due to the nature of the parties or the nature of the dispute. Consequently, it is not accurate to perceive the arbitral tribunal as solely affiliated with a single state (without prejudice to the arbitration being seated in a state). Furthermore, the applicable sources of law (lex arbitration and New York Convention) do not provide an exhaustive and comprehensive regulatory framework. This inevitably entails a degree of flexibility, with aspects often determined by the arbitral tribunal autonomously (through procedural orders) or in collaboration with the parties (through terms of reference or similar agreements).
3. Both BAL and PAL allow written statements. In Brazil, art. 22 of the BAL empowers arbitrators to gather testimonies and evidence, “at the request of the parties or on its own initiative”[1]. In Portugal, similar article doesn’t exist in the PAL, but article 30/4[2] typically admits all type of proofs.
4. The international practice seems to favor written statements. BAL and PAL do not favor oral or written statements. Therefore, in cases where the Parties do not share a common view, the Arbitral Tribunal will not find legal grounds to prefer one of them, despite the existence of a legal culture in both countries that favors oral statements.
5. The guidelines included in soft law may also be relevant, particularly if there is an agreement as to the application of such soft law guidelines or if the Arbitral Tribunal in its own discretion bases its decision on such soft law.
In this context, Article 4(2) of the IBA Rules sets forth that “any person may present evidence as a witness, including a Party or a Party’s Officer, employee or other representative.”
On the other hand, Article 5 of the Prague Rules allows the arbitral tribunal to “decide that a certain witnesses should not be called for examination during the hearing”, however “if the arbitral tribunal decides that the witness should not be called for examination during the hearing prior to any witness statement being submitted, this does not, by itself, preclude a party from submitting a witness statement for that witness”. If one party insists on calling a witness whose statement has been submitted by the other party, “as general rule, the arbitral tribunal should call the witness to testify at the hearing, unless there are good reason not do so”. Additionally, the tribunal may invite parties to submit written witness statements. Most important, in both situations a arbitral tribunal decision not to call a witness does no limit the “authority to give as much evidential value to the written witness statement as it deems appropriate”
6. The rules of arbitral institutions differ as the choice or as to the reference to a model. For example, the ICC Rules determine that “the arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned “(article 25/2). Differently, the LCIA Rules state in Article 20.3 that “subject to any order by the Arbitral Tribunal, a witness’s testimony may be presented in written form” and in Article 20.5 that “the Arbitral Tribunal may request a witness to attend for oral questioning”. Article 20.6 adds that “it shall not be improper for any party to interview potential witnesses to present their testimony in written form or as oral witnesses"
7. Considering the background of civil procedure and the legal cultures of the jurisdictions, in most cases the best approach will be to address the matter at the beginning of the proceedings, in the first case management conference, in the Terms of Reference or in Procedural Order no. 1, after having received the Parties’ positions on the matter.8. The choice between written statements and oral testimony is influenced by the position on the arbitration proceedings’ ultimate purpose and on the role of the arbitral tribunal. However, in our view it is possible to discuss the pros & cons of witnesses’ statements both in a pure “adversarial model” or in a model based on a greater level of intervention of the arbitral tribunal in the production of evidence. Both models are often combined in international practice.
8. The advantages and disadvantages of each model are subject to debate. Which criteria may be considered in this discussion?
9. There are four considerations that may shed some light into this discussion:
First, the principle of defense and due process. If the authors argue that cross-examination is essential for safeguarding these principles, which option maximizes the pursuit of such purpose? Is it the model where the defense learns about the witness's testimony during the hearing, with preparation for cross-examination limited to a specific timeframe? Or is it the one where one party has access to written statements beforehand, allowing for more efficient and thorough consideration of the cross-examination?
Second, efficiency and time considerations. Which model allows the tribunal and the parties to better conduct the proceedings and to optimize it? Written statements may be combined with different models of organization of the hearing. However, written statements frequently allow for a more efficient allocation of time, requiring less time to spend with witness evidence at the evidentiary hearing, reducing (or suppressing) direct examination and concentrating the acts in the cross-examination of the witness, sometimes limited to facts included in the written statement.
Third, which model is preferable to ascertain the truth about the facts and expose falsehoods? Which model creates better conditions to deal with truth-subverting pressions? Critics of witness statements argue that this practice can result in statements serving as advocacy tools rather than accurate reflections of witness memories. This critique may be unfounded because there will always be an opportunity for cross-examination later. In addition, some positions consider that oral examination leads to greater quality. However, such conclusion cannot be assumed. Written statements imply a more intense degree of preparation on the witnesses’ side and therefore may also lead to a better result.
Fourth, which model is the best approach in a case of inequal litigants?
10. In any case, any decision implies consideration of the circumstances of the case, notably the degree of complexity of the case and the number of witnesses
11. The fundamental premise of arbitration is the principle of private autonomy. Even after considering the factors and seeking the best way to address them, the primary aspect mentioned at the beginning remains: private autonomy, specifically the freedom of the parties to shape the procedure to their needs, which is a fundamental characteristic of arbitration and one of the key reasons the parties chose arbitration.
REFERENCES
PEREIRA, Laura França; MATTHES, Felipe Lima. Depoimentos escritos em arbitragem (Brasil). In: PIRES, Catarina Monteiro; COELHO, Eleonora; PITTA E CUNHA, Carolina; VAUGHN, Gustavo Favero (Coord.). Arbitragem 2 Mundos: Diálogos entre o Brasil e Portugal. São Paulo: Quarter Latin, 2024.
ALVES, Rute; SOUSA, Ana. Os depoimentos escritos de testemunhas enquanto meio de prova em arbitragem (Portugal). In: PIRES, Catarina Monteiro; COELHO, Eleonora; PITTA E CUNHA, Carolina; VAUGHN, Gustavo Favero (Coord.). Arbitragem 2 Mundos: Diálogos entre o Brasil e Portugal. São Paulo: Quarter Latin, 2024.
LEE, Hangul. Witness evidence in international arbitration: pitfalls and the way forward. In: GONZÁLEZ-BUENO, Carlos (Coord.). 40 Under 40 International Arbitration. Madrid: Dykinson, S.L., 2024.
HOBER, Kaj; SUSSMAN, Howard S. Cross-examination in International Arbitration. Oxford: Oxford University Press.
HARBST, Ragnar. A Counsel's Guide to Examining and Preparing Witnesses in International Arbitration. 2015
29.10.2024
[1] “The arbitrator or the arbitration tribunal may take the testimony of the parties, hear witnesses, and order the performance of expert examinations or other evidence deemed necessary, either at the request of the parties or on their own initiative”.
[2] “The powers granted to the arbitration tribunal include the authority to determine the admissibility, relevance, and value of any evidence produced or to be produced”.