DR.

RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY, LUCKNOW

FINAL DRAFT

ADMISSIBILITY OF ILLEGALLY OBTAINED

EVIDENCE IN INTERNATIONAL ARBITRAL PROCEEDINGS

Submitted to: Submitted by:

Dr Prasenjit Kundu Shobhit Kumar Shukla

Assistant Professor Roll No. 138

(Law) Section B

IV Year (VII Sem)

2022 - 2023
 ACKNOWLEDGEMENT

Writing a project is one of the most significant academic challenges. Though this project has been
presented by me, but there are many people who remained in veil, who gave their support and
helped me to complete this project.

First of all, I am very grateful to my subject teacher Dr Prasenjit Kundu, without the kind support
of whom the completion of the project would have been a herculean task. She donated her valuable
time from her busy schedule and helped us from the very beginning.

I acknowledge my friends who gave their valuable and meticulous advice which was very useful
and could not be ignored in writing the project. I want to convey my sincere thanks to all the people
who have helped me directly or indirectly throughout the project.

Thanking You

Shobhit Kumar Shukla

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 TABLE OF CONTENTS

ACKNOWLEDGEMENT .............................................................................................................. 1

LAW CONCERNING ADMISSIBILITY OF ILLEGALLY OBTAINED EVIDENCE .............. 3

A. INSTITUTIONAL RULES ................................................................................................. 3

B. NATIONAL LEGISLATIONS ........................................................................................... 4

C. APPROACH TOWARDS ILLEGAL EVIDENCE............................................................. 7

D. TEST TO DETERMINE THE ADMISSIBILITY OF ILLEGALLY OBTAINED

EVIDENCE................................................................................................................................. 8

E. THE CONFLICT OF LAW CONUNDRUM ...................................................................... 9

F. NASCENT INDIAN JURISPRUDENCE ......................................................................... 10

G. CONCLUSION .................................................................................................................. 10

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 LAW CONCERNING ADMISSIBILITY OF ILLEGALLY OBTAINED EVIDENCE

Even though the exceptions to the principle of confidentiality discussed above may appear
straightforward, parties are likely to face tricky situations. For instance, in parallel arbitration
proceedings, where a party wishes to admit documents from another arbitration in the form of
evidence in the current arbitration (thus breaching confidentiality), if the arbitral tribunal admits
such evidence, it shall result in giving said party an unfair advantage by bending the rules in its
favour. On the other hand, if the tribunal refuses to do so, it may result in a violation of the party’s
right to present its case.

In this part, in order to comprehend the nuances of this issue, the authors delve into the relevant
provisions of institutional rules and further examine the law on admissibility of illegally obtained
evidence in various jurisdictions, with a special focus on India.

A. INSTITUTIONAL RULES

One way of addressing this conundrum is that the parties must mutually decide on the rules of
evidence that shall apply to the arbitral proceedings, for instance, the UNCITRAL Rules on
Transparency in Investment Treaty Arbitration1 and the IBA Rules on the Taking of Evidence in
International Arbitration (“IBA Rules”)2 amongst others. However, instead of addressing the
specific situation of illegally obtained evidence, institutional rules adopt broad permissive
admissibility powers.

For instance, the IBA Rules introduce the concept of “good faith” into the evidentiary process.3
Furthermore, the IBA Rules, while vesting discretion with the tribunal to admit evidence obtained
illegally, also empower the tribunal to impose costs on the party presenting such evidence to
effectively deter such instances.4 In international commercial arbitrations, not only the arbitral
awards, but also decisions on admissibility, which are determined by the order, and often taken at
an interim stage, are confidential. Thus, information on how tribunals address illegally obtained

1
UNCITRAL Rules on Transparency in Treaty-based Investment Treaty Arbitration, (‘The UNCITRAL Rules’)
(2014).
2
International Bar Association Rules on the taking of evidence in International Arbitration, (‘IBA Rules’) (29 May
2010).
3
Id., art. 9.8.
4
Ibid.

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evidence is, at best, anecdotal rather than forensic. However, what is fairly settled is that in
institutional arbitrations, tribunals are not bound by strict rules of evidence and are conferred with
broad discretion to decide issues of admissibility, relevance, and weight of evidence.5

International arbitration rules provide wide discretion to the arbitration tribunal to determine the
admissibility of evidence. The International Centre for Settlement of Investment Disputes
Arbitration Rules by virtue of Article 34(1) state that “the Tribunal shall be the judge of the
admissibility of any evidence adduced and of its probative value”, the same being contained in
Rule 19.2 of SIAC Arbitration Rules. Similarly, Article 19(2) of the United Nations Commission
on International Trade Law (“UNCITRAL”) Model law dictates that “the power conferred upon
the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and
weight of any evidence”.

In a recent turn of events, the International Bar Association (“IBA”), decided to make its rules in
coherence with a digital surge in international arbitration and protect the commercial value of
documents involved in the virtual proceedings, and brought a new amendment in the IBA Rules
of Taking Evidence in International Arbitration 2020 (“2020 IBA Rules”).

The 2020 IBA Rules under newly embedded Article 9.3 stated that “Arbitral tribunal may, at the
request of a party or on its motion, exclude evidence obtained illegally.” The power is solely vested
with the tribunal for deciding the fate of illegal evidence. Article 9.2 of the IBA Rules use the word
‘shall’ while declaring grounds of privilege communication, legal impediment and politically
sensitive information to be excluded from admission. Moreover, if the tribunal is of the opinion
that evidence is obtained illegally by one of the parties, then Article 9.7 will come into the picture,
thereby imposing cost and other ramifications made available in rules.

In any case, regardless of the parties agreeing upon such rules, tribunals are still likely to consider
the law of the seat on the subject in order to render an enforceable award.

B. NATIONAL LEGISLATIONS

The law on the admissibility of illegally obtained evidence across jurisdictions is replete with

5
UNCITRAL Arbitration Rules 2014, art. 27(4); SIAC Rules 2016, r. 19.2; AIAC Rules 2018, art. 6(f); LCIA Rules
2020, art. 22(iv).

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inconsistencies. In the United Kingdom, it is widely recognized that an illegally procured evidence
shall be admitted if the same is relevant and material, subject to the court’s discretion.6 The same
is the case in Singapore,7 Malaysia8 and Ireland.9 The approach adopted by Australia, however,
is to weigh the desirability of admitting the evidence against the undesirability of doing so.10 This
is similar to the Indian position, i.e., illegally obtained evidence is not per se inadmissible.11

On the other hand, the United States12 has a history of excluding such evidence in line
with the doctrine of the “fruits of the poisonous tree”,13 except where the evidence is obtained
by a private individual.14

The Indian Evidence Act, 1872 postulates relevance as the only criterion for the admissibility of
evidence.15 Though the courts have uniformly adopted the position that illegal evidence is not
per se inadmissible,16 the development of an ascertainable trend in the context of arbitration
proceedings in India is not deducible; the reason being that courts have had the opportunity to deal
with the question of admissibility of evidence in breach of confidentiality principles only in a few
cases.

In this regard, it is pertinent to refer to a crucial judgment on this issue, i.e., R.M. Malkani v.
State of Maharashtra,17 wherein the Supreme Court considered the admissibility of evidence
obtained in contravention of Section 25 of the Indian Telegraph Act and held that even illegally
obtained evidence is admissible. In several other cases such as State (NCT of Delhi) v. Navjot
Sandhu (Afsan Guru)18 and Umesh Kumar v. State of A.P.,19 the Supreme Court has held that

6
Civil Procedure Rules, part 32.1; Jones v. Warwick University (2003) 1 WLR 954: 2003 EWCA (Civ) 151, (2003)
3 All ER 760; Ras Al Khaimah Investment Authority v. Azima 2021 EWCA (Civ) 349; The courts have also taken to
admitting such evidence while imposing costs on the party that seeks to present it, see Imerman v. Imerman (2010)
EWHC 64 (Fam), 2010 All ER (D) 219.
7
Law Society of Singapore v. Tan Guat Neo Phyllis (2008) 2 SLR (R) 239
8
Re Kah Wai Video Ipoh Sdn Bhd [1987] 2 MLJ 459.
9
People (Attorney General) v. O’Brien 1956 IR 142.
10
Uniform Evidence Acts 1995, s. 138.
11
Indian Evidence Act 1872; Ukha Kolhe v. State of Maharashtra AIR 1963 SC 1531: (1964) 1 SCR 926.
12
Nardone v. United States 1939 SCC OnLine US SC 151: 84 L Ed 307: 308 US 338 (1939).
13
Nardone v. United States.
14
Burdeau v. McDowell 1921 SCC OnLine US SC 140.
15
Indian Evidence Act 1872, s. 5.
16
Yusufalli Esmail Nagree v. State of Maharashtra AIR (1968) SC 147.
17
R.M. Malkani v. State of Maharashtra (1973) 1 SCC 471.
18
State (NCT of Delhi) v. Navjot Sandhu (2005) 11 SCC 600.
19
Umesh Kumar v. State of A.P. (2013) 10 SCC 591.

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illegally obtained evidence is admissible so long as it is relevant, and its genuineness is proved.
Thus, under Indian law,illegally obtained evidence is admissible so long as it is not prohibited by
the Constitution or any other law in force.

More importantly, a key judgment which discussed the admissibility of illegally obtained evidence
in context of confidentiality was the Rafale deal case.20 In this case, it was contended by the Centre
that the review petition challenging the Rafale judgment dated 14th December, 2018 ought to be
dismissed since the documents relied upon by the review petitioners were protected under the
Official Secrets Act, 1923, and illegally procured in violation of the said Act. Said documents
were published in certain news items in The Hindu.21

As a result, the question before the Supreme Court was whether these documents can be considered
while deciding the reviewpetition. The Court observed that there exists no provision in the Official
Secrets Act or any other statute vesting power in the Executive to restrain publication of documents
marked as secret or prevent them from being placed before a Court of Law. The Court further held
that Section 123 of the Indian Evidence Act applies to unpublished documents, and as said
documents were already in public domain, the Court is not barred from relying upon them as
evidence. The Court then referred to S.P. Gupta v. Union of India22 and held that even in case of
unpublished documents, the Court shall first assess the nature of the document, and then determine
whether it can be placed on record. The Court further referred to Pooran Mal v. Director of
Inspection,23 wherein it was held that “…in India, as in England, where the test of admissibility of
evidence lies in relevancy, unless there is an express or necessarily implied prohibition in the
Constitutionor other law, evidence obtained as a result of illegal search or seizure is not liable to
be shut out.” On the basis of the abovementioned reasoning, the Supreme Court dismissed the
objection of the Centre with respect to the maintainability of the review petition and allowed the
leaked documents to be relied upon.

20
Yashwant Sinha v. CBI (2019) 6 SCC 1: 2019 SCC OnLine SC 518.
21
Ibid.
22
S.P. Gupta v. Union of India 1981 Supp SCC 87: AIR 1982 SC 149.
23
Pooran Mal v. Director of Inspection (1974) 1 SCC 345.

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 C. APPROACH TOWARDS ILLEGAL EVIDENCE

In one of the earliest judgments of Methanex v. USA,24 delivered in the year 2005, the NAFTA
Chapter Eleven Arbitral held that evidence acquired illegally cannot be weighed in arbitration
proceedings as both the parties owe a general duty of care and procedural fairness, to conduct
themselves in ‘good faith’ during these arbitration proceedings and to respect the equality of arms
between them, as required by Article 15(1) of the UNCITRAL Rules.

Furthermore, in the year 2009, by the case of EDF (Services) Ltd v Romania,25 the ICSID tribunal
held that illegally obtained audio recordings of conversations would constitute a breach of privacy
and is against good faith and fairness principles, thereby not admitting the evidence viz. otherwise
relevant to the issue.

However, in the year 2012, in the case of Caratube International v Kazakhstan,26 the ICSID
tribunal explicitly admitted 2000 hacked emails from a site called ‘KazakhLeaks’, following a
cyberattack on the Kazakh government’s computer network, only due to the fact that the evidence
was non-privileged. The tribunal laid down the following reasons for admitting evidence: (i)
documents were relevant to dispute (ii) some documents were widely available in the public
domain, so no element of privilege or confidentiality can act as a hurdle.

The extent of admissibility of IOE was liberated in the year 2019 in Conoco Phillips v. Venezuela.27
In this case, Venezuela sought to rely on evidence leaked by WikiLeaks after the award had been
rendered. The majority present in the International Centre for Settlement of Investment Disputes
(ICSID) tribunal refused to reopen the case as it had been rendered on merit and execution was
pending. However, the ‘dissent’ by Prof. Georges Abi-Saab lays down the foundation of the
admissibility of IOE. He opined that Venezuela produced glaring evidence, which is crucial to the
proceedings, and the said document is already in public. Consequently, he opined that the dispute
can be reopened on public policy grounds, as ignoring its existence and relevance would lead to a
travesty of justice.

24
Methanex Corporation v. United States of America, UNCITRAL.
25
EDF (Services) Limited v. Romania, ICSID CASE NO. ARB/05/13.
26
Caratube International Oil Company LLP v. The Republic of Kazakhstan, ICSID CASE NO. ARB/08/12.
27
Conoco Phillips v. Venezuela, ICSID CASE NO. ARB/07/30.

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Therefore, over the mixed decisions rendered by various tribunals, the principles of procedural
fairness, public interest, privileged communication, and good faith are considered as tenets to
determine the admissibility of IOE, and recognized by tribunals in international arbitration.

D. TEST TO DETERMINE THE ADMISSIBILITY OF ILLEGALLY OBTAINED

EVIDENCE

One of the renowned academicians in the field of international arbitration, Ms. Cherie Blair has
given a two-step admissibility test of IOE, i.e.-

1. Clean hands Doctrine

2. Public Interest Doctrine

The doctrine of ‘clean hands’ is a common law principle which states that “no one should be
profited from its own misconduct”. If the party to the dispute wrongfully acquires the IOE then
they should be precluded from relying on such evidence, as they cannot seek benefit of their own
misconduct, as highlighted in the case of Libananco v Turkey,28 delivered by ICSID.

Obtaining evidence which is otherwise present in the public domain can be used by the party to
the proceedings. However, evidence obtained through breaches of international law constitutes a
wrongdoing from which the responsible party should not be able to take advantage or receive
rights, this inevitably breaches the doctrine of clean hands.

For the purpose of the discussion, a disinterested person, one who does not have any interest in the
proceedings, will be considered as a party to the dispute if he acts as a middleman in procuring the
evidence, in exchange for money consideration. The same has been held in the case of Caratube
v. Kazakhstan,29 where the ICSID considered a disinterested person a party to the dispute, who for
money consideration, adduced illegal evidence.

28
Libananco Holdings Co. Limited v. Republic of Turkey, ICSID Case No. Arb/06/8.
29
Caratube International Oil Company LLP v. The Republic of Kazakhstan, ICSID Case No. Arb/08/12.

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On the issue of Public interest doctrine, due regard is given to the work of Blair and Gojkovic in
IOE vis-a-vis Public interest, which laid down specific questions which should be answered before
admitting IOE-

1. Whether IOE is obtained by a party interested?

2. Whether public interest favours rejecting the evidence?

3. Do the interests of justice favour the admission of evidence?

The tribunal in many cases has rejected the admissibility of IOE on grounds of public interest, with
no definite precedent to determine the parameters. The author firmly believes that evidence, though
obtained illegally, must be admitted into proceedings in order to do absolute justice. The real
criteria should be whether the IOE is quintessential to determine the rights of the parties, if yes,
then the interest of justice favours the admission and if it is in the nature of supplementing the real
evidence, then IOE must be made inadmissible.

E. THE CONFLICT OF LAW CONUNDRUM

It is to be borne in mind that the method adopted to procure evidence might be legal in one country
and illegal in another. For example, the law of privileged communication differs from country to
country. The general practice adopted by tribunals, with regards to conflict of laws, is to consider
the law where the evidence was procured. However, there are instances where the tribunal has
undertaken a contrary approach, like in the case of Adamu v. FIFA,30 where despite the
procurement of evidence being legal in England, the tribunal followed the law of arbitration of
Switzerland i.e., the seat of arbitration.

The author believes that the Closest Connection Test should be adopted while determining the law
of jurisdiction. If the document is the subject matter, then the law of the place where the document
was signed, entered into, or created should be considered, and if the question is with regards to the
validity of privilege claim, then the law of the domicile of the party claiming the privilege should
be applied.

30
Adamu v. FIFA, CAS 2011/A/2426.

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In Hulley Enterprises v. Russia,31 the Permanent Court of Arbitration ("PCA") has laid down that
evidence should be considered as illegally obtained if it was obtained in breach of the law of the
place of procurement. Similarly, in Adamu v. FIFA,32 the Court of Arbitration for Sport ("CAS")
held that if evidence is procured by violating the law of the seat, then it should be considered
illegal.

F. NASCENT INDIAN JURISPRUDENCE

The admissibility of evidence in arbitral proceedings in India is governed by the Indian Evidence
Act, 1872. The sole test to determine the admissibility of IOE is the extent of its relevance. The
same has been upheld by the court in the cases of Natwarlal Damodardas Soni33 and R.M.
Malkani.34 The Supreme court held that IOE must be made admissible, if it is relevant to the
dispute, however, it is to be dealt with much care by the court.

The Apex court, while dealing with IOE, also remarked in Pooran Mal v. Director of Inspection
of Income Tax,35 that if no constitutional or statutory construction prescribes exclusion of IOE,
then the IOE must be admitted if it is pertinent to the matter. The same dictum has been recently
reiterated by the Supreme Court in the Rafael Case.

G. CONCLUSION

The rising instances of cyber hacking have resulted in a breach of confidentiality in many cases
and subsequently, the scenario of IOE has questioned the international arbitration rules to the very
core. The earlier approach of upholding the integrity of the arbitration process and good faith is
long gone. Since the rules regarding the admissibility of evidence predominantly rest on the
tribunals, the recent decisions, as in the case of ConocoPhillips followed by the decision given in
the Caratube case highlights the liberal approach adopted by tribunals in admitting IOE. This
approach certainly does not endorse admitting every kind of IOE as the past decisions are clear
regarding certain types of IOE that are not admissible, such as privileged documents, hacked

31
Hulley Enterprises Limited (Cyprus) v. The Russian Federation, UNCITRAL, PCA Case No. 2005-03/Aa226.
32
Adamu v. FIFA, CAS 2011/A/2426.
33
State of Maharashtra v. Natwarlal Damodardas Soni, (1980) 4 SCC 669
34
R.M. Malkani v. State of Maharashtra, AIR 1973 SC 157.
35
Pooran Mal v. Director of Inspection (Investigation) Of Income-Tax Mayu, 1974 SCC (1) 345.

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evidence by either of the party or politically sensitive content. This has also been recently codified
in the amended rules of the IBA.

However, the 2020 IBA Rules are silent on many issues, like in a given case, do either of the
parties have the right to challenge the decision of the tribunal admitting IOE, what will be the
procedure to challenge and what if the tribunal considered the wrong national law in determining
the admissibility of IOE, and finally that can the award be set aside on that ground. The institutional
arbitration centres must carve out a scheme, entailing a framework regarding the admissibility of
IOE in order to clarify the ambiguities. Moreover, there is a possibility that parties may specify in
their contract precluding the admissibility of IOE on any ground as they deem fit by embodying a
clause to that effect.

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