A case for adopting elements of international arbitration practices

Trond Sollund has 25 years of experience as a lawyer and has been a partner with Advokatfirmaet Schjødt since 2008. Trond has extensive experience from Norwegian ad hoc arbitration, commercial arbitration governed by various institutes. He is a member of the Arbitration and ADR commission in ICC Norway. 

Asade Pourmand is Senior Associate who joined Advokatfirmaet Schjødt's Stockholm office in 2019. She has experience from arbitrations under all major institutional rules and prior to her current role, Asade has experience from leading international arbitration law firms, recognized within the Global Arbitration Review's top 10 rankings.   

In Norway, for commercial matters, ad hoc arbitration is a common method of dispute resolution (i.e., an arbitration not administered by an arbitral institution). Regulated by the Norwegian Arbitration Act (the "Arbitration Act"), which closely adheres to the UNCITRAL Model Law, ad hoc arbitrations afford the arbitral tribunal broad discretion in procedural affairs.^[1]

Since in Norway, historically, a rather limited circle of persons has frequently been appointed as arbitrators and as they tend to have a similar approach on how to administer the proceedings, what could best be described as "Norwegian best practice" has evolved. This practice has for instance not entailed the issuance of a Procedural Order following the case management conference detailing the procedural and administrative issues (the "PO 1"). Instead, procedural timelines and logistical matters have been handled in a more informal fashion.

Procedurally, the "Norwegian best practice" differs from common practice in international arbitration. Having said that, there is a current trend where "Norwegian arbitration practice" is in the process of aligning with international arbitration practices. 

This short article delves into two key aspects of arbitration proceedings where the traditional Norwegian best practices diverge from international arbitration norms. 

In Norwegian ad hoc arbitration, it has traditionally not been common to agree on rules or procedures for production of documents. Rather, document requests are typically addressed and responded to in an ad hoc manner within the submissions process.

The arbitral tribunal will ensure that the parties follow-up in due time and issue an order if necessary. It is the experience of the authors that arbitral tribunals are proactive and set deadlines for the parties to respond. 

In international arbitration, the document production process typically adheres to a more rigid framework outlined in the PO 1 and the procedural timetable. It is commonly agreed upon that parties will exchange requests for document production by a specified date and subsequently provide reasoned objections a few weeks later. This phase typically occurs after the submission of the Statement of Claim and the Statement of Defense. The IBA Rules on the Taking of Evidence in International Arbitration (the "IBA Rules") are often referred to as guidance for the arbitral tribunal's decisions. It is also quite common that the tribunal instructs the parties to use a Redfern schedule for their requests. In the Redfern schedule, the parties provide a description of each document or category of documents sufficiently to identify it, a description of how the document is relevant and material to the outcome and a confirmation that the document is not within the requesting party's control. 

This first exchange of document requests normally does not involve the arbitral tribunal. Documents that a party have available shall be submitted within the deadline in the procedural timetable unless a party has objections to the production. 

The next step of the procedure is the exchange of objections to document requests. The objections shall be reasoned, which will allow the other party to comment on the objections. A schedule with all outstanding requests, objections, and responses to the objections shall thereafter be submitted to the arbitral tribunal for decision. 

There are advantages and disadvantages with the international procedure. The main advantage is that the document requests are handled separately from the main written submissions. This process forces the parties to be more specific and explain the reason for the requests, and the objections, which prevents unnecessary and overly broad requests. It is important, however, that the rules do not prevent a party from narrowing its document request if it is held to be overly broad by the tribunal, or from presenting additional document requests should the produced documents refer to other documents that have not been produced. If such flexibility is not written into the PO 1, the procedure could prevent reasonable document requests which may be material to the outcome of the arbitration. 

As long as the international practice concerning document production procedures offers flexibility, the Norwegian alignment to it will promote efficiency. 

The only provision in the Norwegian Arbitration Act dealing with evidence is section 28, which states that "[t]he parties are responsible for clarifying the facts of the case and are entitled to present such evidence as they wish." If no specific rules are agreed upon, it is to a great extent for the parties to decide how and when they will present the evidence, within the limits of the applicable law. 

Each party must present the evidence it relies upon. The rules of the proceedings should generally ensure that the evidence, including any witness statements and expert reports, are presented early in the procedure (unless case-specific reasons merit the evidence being presented at a later stage). 

Written witness statements from witnesses of fact are sometimes submitted in Norwegian ad hoc arbitrations. However, it is not common that the witness statements have the status of main evidence and very often, fact witnesses only testify in the oral hearing without any prior written submission. In international arbitration it is much more common that witness statements are prepared, and also that the written witness statements have the status of evidence in chief. Where the IBA Rules serve as guidance, the content of the witness statements follows from the IBA Rules Article 4 (5). It follows from Article 4 (5)(b) that the statement shall include:

a full and detailed description of the facts, and the source of the witness’s information as to those facts, sufficient to serve as that witness’s evidence in the matter in dispute. Documents on which the witness relies that have not already been submitted shall be provided

It is normal that the parties, within a deadline set out in the procedural timetable, shall notify each other as to witnesses (and experts) to be called for cross examination. A decision not to call a witness to appear for cross examination shall not be considered as a concession as to the substance of the written witness statement. This is sometimes explicitly stated in the PO 1, but it also follows from the IBA Rules Article 4 (8). 

The advantage of witness statements lies in their potential to streamline direct examination, allowing more time during the oral hearing to focus on cross-examination. This allocation of time can enhance efficiency and concentrate oral examination efforts on key issues that could significantly influence the case's outcome. Another benefit is that the witness statements offer foreseeability regarding the subject matter and details of the testimony of the witness, providing the opposing party and its counsel the opportunity to prepare a defense. 

While witness statements offer benefits, they are often meticulously edited by legal professionals and may occasionally prioritize the establishment of legal issues over presenting an unembellished factual account. In contrast, the traditional Norwegian practice may provide a less polished but arguably more authentic portrayal of the facts. For this reason, lengthy witness statements might represent an aspect of international arbitration practice that Norwegian proceedings should approach with caution before adopting.

In international arbitration proceedings, a PO 1 will normally set out rules for expert witnesses reflecting Article 5 of the IBA Rules. The expert report shall contain a description of the instructions, a statement of independence, a statement of the facts it bases its opinion on and the opinions and conclusions. Although there are no established rules for the content of expert reports in "Norwegian best practice", it is our experience that expert reports in general meet the requirements set out in the IBA Rules. 

Examination of experts will normally follow the same procedure that has been agreed for witnesses of fact. 

Efficient and cost-effective management of proceedings stands as a primary responsibility for an arbitral tribunal. This duty enjoys broad recognition and is enshrined in the national arbitration acts across most jurisdictions, as well as in institutional arbitration rules. The international arbitration practice, which is often recorded in the PO 1, is a vital tool for achieving the goal of conducting proceedings efficiently and cost-effectively.

It is with interest we note that leading individuals within the arbitration community are seeking to establish a "pan-Nordic arbitration environment" which benefits from the broad practice of the various Nordic countries, guided by international arbitration practices. 

The traditional Norwegian ad hoc approach is flexible and effective, especially insofar as the stakeholders are well-versed in its intricacies. Yet for those unacquainted with its nuances, it may seem like a "black box". Since international arbitration per definition involves cross-border commercial relationships, there arises a need for an arbitration culture that is not only somewhat harmonized, but also accessible to foreign parties. The ongoing movement to align Norwegian arbitration practices with international standards is therefore imperative in fostering transparency and inclusivity.

^{[1] The Arbitration Act § 21 sets out that "Within the framework of the parties' agreement and the provisions of this Act, the arbitral tribunal shall conduct the arbitration in such manner as it considers appropriate."}