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Overcoming the Debate IBA Rules vs Prague Rules: The Merits of a Joint Formula and the Need for Effective Sanctions in Arbitration

Jorge López Fung*


It is argued that Prague Rules and IBA Rules on the taking of evidence are incompatible and cannot be applied to the same arbitration proceeding. Regardless of the discussion of whether the rules are more favourable to parties from civil or common law, this post concludes that it is possible to apply them together. However, this ‘joint formula’ will not reduce the costs and duration of arbitral proceedings if the arbitrators are reluctant to impose sanctions on the parties' misconduct.


Since the publication of the Prague Rules on the Efficient Conduct of Proceedings in International Arbitration (‘Prague Rules’) in December 2018, an intense debate has been taking place as to whether this new set of rules will substantially reduce the costs and duration of arbitral proceedings (for related blog posts at Kluwer Arbitration Blog, go here, here, and here.) Particularly, when compared with the well-established IBA Rules on the Taking of Evidence in International Arbitration (‘IBA Rules’), a prior blog post stated that the Prague Rules would not improve the procedural efficiency in arbitral proceedings. To support this position has been argued that they ‘are intended to undermine the uniform character of arbitration practices’ set out by the IBA Rules while ‘setting out different standards’ based on an inquisitorial model of discovery practices. However, is necessary to respectfully disagree with this premise and the suggestion that the Prague Rules were conceived simply as a new regulation based on a civil law approach to the gathering of evidence and as an alternative to the IBA Rules. Instead, this post proposes to overcome such vail debate regarding this inexistent dichotomy between common or civil law approach and see the Prague Rules as a complement, and not a substitute, of the IBA Rules.[1]

Although some authors have already developed the compatibility of applying the Prague Rules together with other institutional arbitration rules,[2]  the possibility of a complementary application to the IBA Rules has not been explored yet. For that purpose, this post defends the merits of what can be called ‘joint formula’ while also addressing the main challenges of its implementation in a context of frequent parties’ misconduct in the arbitral proceedings that remain unsanctioned by arbitrators.


Despite some unique characteristics previously discussed, the Prague Rules are not as innovative as initially anticipated by the international arbitration community. Four long years of drafting and negotiations have resulted in a new ‘soft law’ set of rules that intends to ‘provide a framework for arbitral tribunals and parties […] to increase efficiency of arbitration.’ (Prague Rules, Preamble, paragraph 1). In similar terms, the IBA Rules share this broad objective and conclude in its Preamble, paragraph 1, that ‘[the IBA Rules] are intended to provide an efficient, economical and fair process.’ In essence, both sets of rules pursue the same objectives and seek to satisfy the parties’ expectations at the arbitral proceedings. However, although the final version of the Prague Rules is not that innovative, this new set of rules can certainly be a valuable addition to the IBA Rules in pursuit of a more efficient and cost-effective proceeding.

In this regard, the preamble of the Prague Rules states, in relevant part, that ‘[the Rules] are designed to supplement the procedure to be agreed by the parties.’ Similarly, the IBA Rules provide, in related part, that ‘the parties and arbitral tribunals may adopt the IBA Rules of Evidence, in whole or in part,’ and that the parties ‘may vary them or use them as guidelines in developing their own procedures.’ (IBA Rules, Preamble, paragraph 2). Nothing within the language of both sets of rules prohibits the parties to use them in conjunction. Consequently, there are no apparent obstacles for a joint formula if the parties benefit towards a more efficient and expedited resolution of the proceedings. In fact, this formula could provide the parties with additional guidelines when tailoring the practice of evidence to the specifics needs of their case.

Even if one of the parties prefers Prague and the other IBA Rules, there could be a situation in which they decide to make reciprocal concessions and, consequently, partially apply both rules to adapt the process to shared interests.

For instance, if the production of e-discovery was relevant due to the nature of a particular dispute, the parties could agree upon the use of the IBA Rules rather than the Prague Rules that, in Article 4.2., encourage the parties ‘to avoid any form of document production, including e-discovery.’ Additionally, the parties could disregard Article 4 of the IBA Rules dealing with the use of witnesses and, instead, apply Article 5 of the Prague Rules which allows the arbitral tribunal to control the number of witnesses testimonials throughout the proceedings in order to reduce the duration of the case. In summary, there are many examples of how the parties could benefit from the joint use of both soft laws.

However, a question remains unanswered: would such joint formula create redundancies, produce confusion and lack of communication between the arbitral tribunal and the parties? The response is no, or at least not necessarily if both sets of rules are combined exclusively by specific sections. For example, if the parties choose the provisions of the Prague Rules to witness evidence, they could no longer accept the similar section of the IBA Rules, but they could choose the sanctions regime of the latter, considering that those dispositions are not mutually exclusive. Thus, the suggest joint application must only be effective if the parties clearly establish and communicate their preferences while further complying with them in good faith and avoiding any dilatory practices.


Having concluded that Prague Rules and IBA Rules can be applied in a complementary manner (according to the convenience of the parties), there is a remaining issue whether this joint use would discourage the parties’ misconduct during the arbitral proceeding. The answer is no, at least ‘no’ without the rigour and severity by the arbitrators. To understand this premise is necessary to address the real problem, which is not, by the way, legally limitations.

It has been argued for a long time that the IBA Rules, promoting a broad document production and usually allowing the interrogation of all proposed witnesses, provoke the arbitration proceedings to become more expensive and lengthier for the parties. In response to these valid concerns, allegedly, the Prague Rules were conceived as the final solution to this problem by taking away power from the parties and granting it to the arbitral tribunal. Nevertheless, neither the application of the IBA Rules nor that of the Prague Rules will truly achieve its mission if the arbitrators refuse to apply the sanctions available to them under both sets of rules.[3]

In general terms, the arbitrators’ refusal to sanction any parties’ misconduct during the arbitral proceedings, and particularly during the document production phase, may respond to the so-called ‘due process paranoia,’[4] or the lack of guidelines to understand the scope of privileges to oppose the production and sanctions before the misconduct of the parties (not producing the document, alleging non-existence [falsely], fishing expedition, among others). Thus, as long as the arbitrators continue to be reluctant to impose the sanctions recognised under both sets of rules, the problem of an inefficient and lengthy arbitral proceeding will inevitably remain unsolved.

In consequence, it is not true that Prague Rules are per se a solution to the problem and the arbitration community does not need an inquisitorial system because there is not a problem of legally limitations. Instead, the problem is related to a lack of application of sanctions (which are also within the IBA Rules) by arbitrators. This conclusion is supported by the periodic surveys published by the School of International Arbitration of the Queen Mary University of London, in which 69% of respondents (main arbitration actors) have indicated that IBA Rules are an effective mechanism in the development of its arbitrations and 70% consider them to be an efficient mechanism for civil law and common law systems.[5]

Henceforth, to the extent that arbitral tribunals impose exemplary sanctions for parties acting in bad faith like, for instance, adverse inferences or cost imposition, a more efficient process could be achieved.[6] What the arbitration market should be looking for is to encourage arbitrators the use of sanctions as a necessary and efficient tool. If the arbitrator’s decision is well-motivated, an adverse inference or imposition of costs must not be understood as a violation of the parties’ right of defence. Also, the arbitration community has proposed [...] should make use of this power more often, as long as they give appropriate warnings to the parties in advance of doing so [adverse inferences]. [7] Thus, as the arbitral community itself suggests, perhaps the arbitrators should warn the parties that if not act in good faith, the tribunal will be forced to apply the sanctions that the same parties have accepted when referring to a specific regulation. Of course, the criteria for annulling an award depend on where the arbitration is based; however, it is not legally logical for an arbitrator to fear for the annulment of a decision that has adhered to what is strictly agreed by the parties as evidence rules in their arbitration agreement or during the arbitral proceeding.

* LLM Candidate in Comparative and International Dispute Resolution at Queen Mary University of London

[1] Mario Reggiardo and Eduardo Dibos, ‘Las Reglas de Praga no son tan malas como parecen,’ Forseti Revista de Derecho, Vol. 7, Issue 10 (August 2019): 08-28, available here. The authors argues at page 9 that the IBA Rules, since their publication in 1999, had as their primary purpose to fill the gap between the practices of common and civil law easily available for both legal traditions.

[2] Juan Pablo Valdivia Pizarro et al., ‘Compatibility, Novelty, ¿Practical Corollary? A Collective Analysis of the Prague Rules,’ Young ICCA Mentoring Programme, available here.

[3] For additional reference, see: White & Case, Queen Mary University of London & School of International Arbitration, ‘2018 International Arbitration Survey: The Evolution of International Arbitration,’ 8, available here; identifying ‘the lack of effective sanctions’ as top 2 current problems in international arbitration. In particular, answering this survey, ‘respondents complained about the various dilatory tactics employed by counsel that go unsanctioned either because the arbitrators are reluctant to order appropriate sanctions or because they do not possess the right instruments to do so.’

[4] This phenomenon is understood as the reluctance of the arbitrators to act with a decision in critical situations for fear that the arbitral award can be questioned on the basis that a party did not have the opportunity to present their case. For additional reference, see: Klaus Peter Berger and Ole Jensen, Due process paranoia and the procedural judgment rule: a safe harbor for procedural management decisions by international arbitrators. Arbitration International, Vol. 32, 3rd edition (Oxford: Oxford University Press, 2016), 415-435.

[5] For additional reference, see: White & Case, Queen Mary University of London & School of International Arbitration, ‘2012 International arbitration Survey: Current and Preferred Practices in the Arbitral Process,’ 21, available here.

[6] For additional reference, see: Jorge López Fung, ‘¿Tsunami de documentos o sequía de información? Posiciones a favor y en contra de la producción de documentos como regla estándar en el arbitraje comercial internacional,’ Spain Arbitration Review, Vol. 2019, Issue 35 (May 2019): 122 - 151, available here.

[7] For additional reference, see: White & Case, Queen Mary University of London & School of International Arbitration, ‘2012 International arbitration Survey: Current and Preferred Practices in the Arbitral Process,’ 21, available here.

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