It is often asserted that neither the Code of Civil Procedure, 1908 (‘CPC’) nor the Evidence Act, 1872 (‘Evidence Act’) apply to arbitration proceedings. Such an assertion is further fueled by the perception that arbitration proceedings should fundamentally differ from civil court processes.
While the procedural approach to handling evidence and documentation may differ in arbitration, the ultimate objective remains the same: to secure a valid and enforceable award that can be effectively enforced as a decree of the court.
Although the evidentiary value of such documentation may vary, the level of thoroughness and rigor in preparation remains comparable, more so when Section 19(4) of the Arbitration Act, 1996 (‘Arbitration Act’) mandates that the Arbitral Tribunal does have the power to determine the admissibility, relevance, materiality and weight of any evidence adduced.
Just as documents are a vital lifeline to aid and support factual submissions, it is equally significant to understand how documents are proved to avoid the pitfalls in presenting documentary evidence.
A typical commercial arbitration places heavy reliance on documents to arrive at a fair and reasonable outcome in the form of its award. Oral evidence, often, is of no credit without supporting documentary evidence to prove a fact. Evidence which does not qualify as pleadings supported by due verification or affidavit cannot be equated with proof of a claim. If there is documentary evidence as to whether a fact exists, then such document must be produced as the best evidence to the exclusion of oral evidence. The documents so produced form the backbone of arguments, either oral or through affidavits. As such, proving of documents is quintessential as it is paramount in interpreting commercial contracts, more so where terms are ambiguous, extrinsic evidence such as correspondence and conduct may also be considered as a supplement.
A document which is disputed by a party, if not proved, cannot be considered, even by the arbitrator, to be on record or as a piece of evidence. Taking into consideration an unproved document by an arbitrator would be in violation of principles of natural justice. The arbitrator is also not bound to refer the document to an expert witness suo motu. [Pradyuman Kumar Sharma v. Jaysagar M. Sancheti (2013 SCC OnLine Bom 453, pr. 33)]
When a document is produced in a Court or a Tribunal, the questions that naturally arise are: Is it a genuine document? What are its contents? And are the statements contained therein true? Admitting certain documents in evidence by the arbitrator, without being proved, is a clear procedural error. Although strict rules of evidence do not bind arbitrators, the principles underlying the Evidence Act must be respected, especially when the genuineness of documents is challenged. [Bi-Water Penstocks Ltd. vs. Municipal Corporation of Greater Bombay; 2010 SCC OnLine Bom 1784, pr 13 & 13A] In practice, this means parties should produce originals, certified copies, or duly authenticated electronic records, and be prepared to prove the contents of the document, execution through witnesses or affidavits.
An arbitrator shoulders the direction of evaluating and discussing crucial documents. This creates a two-fold obligation - that parties must diligently prove their documents, and arbitrators must consider them in arriving at their conclusions in the form of an award.
A recurring concern in arbitral practice is the tendency of parties, especially claimants, to submit voluminous documents without adequate linkage to specific pleadings or factual assertions. In such a case, does such ‘document dumping’ burden the Arbitral Tribunal with the task of sifting through extensive, unstructured records to identify relevancy?
No, it does not. Merely placing documents on record without explaining their relevance or evidentiary purpose does not satisfy the threshold of “proving” a document, since an unproved document cannot be considered by the arbitrator.
Courts have repeatedly held that while arbitrators are not strictly bound by the Evidence Act, they must uphold its underlying principles, such as relevance, authenticity, and burden of proof; otherwise, the same would be a procedural irregularity making the award subject to challenge.
Such indiscriminate filing of documents also dilutes the strength of a claim, and therefore, it is in the best interest of the party to essentially link each document to the facts pleaded
In commercial arbitrations, parties often rely on documents generated by third parties, such as a certificate by a Chartered Accountant, certified books of Accounts, Balance Sheets, etc. Proving such third-party documents presents unique challenges, particularly in arbitration proceedings where procedural flexibility exists. But the principles of natural justice and fairness remain paramount. As such, such self-serving documents, on their own, are not considered to be sufficient proof of their contents unless the author of such a document is brought before the arbitral tribunal. [Petlad Turkey Red Dye vs. Dyes and Chemical Workers Union & Ors. [AIR 1960 SC 1006] pr. 3, 4, 5, 6; Messrs. Gannon Dunkerlay & Co. Ltd. vs. Workmen [(1972) 3 SCC 443] – pr. 6 or CBI vs. V.C. Shukla [(1998) 3 SCC 410] – pr. 34, 35, 36, 37, 38, 39]
It is, however, trite that a document becomes inadmissible in evidence unless the author is examined and is subjected to cross-examination.
The application of principles of natural justice means that no materials can be relied upon to establish a contested fact which are not spoken to by persons who are competent to speak about them - i.e., witnesses or deponents - and unless they are subjected to cross-examination by the party against whom they are sought to be used. The arbitrator is not bound to refer the document to an expert witness suo motu, reaffirming that the burden of proving documents rests with the party relying on them. [Pradyuman Kumar Sharma v. Jaysagar M. Sancheti (2013 SCC OnLine Bom 453)]
Section 27 of the Arbitration Act empowers the Arbitral Tribunal or any party with the Arbitral Tribunal’s consent to apply to the Court for assistance in taking evidence. This includes issuing summons for the production of documents or the examination of witnesses, including third parties. Section 27(2)(c) of the Arbitration Act uses the phrase "any person", which has been interpreted by courts to include both parties and non-parties. This broad construction ensures that even those not bound by the arbitration agreement can be summoned to produce documents or testify if their evidence is material to the dispute. [Delta Distillers Ltd. v. United Spirits Ltd., (2014) 1 SCC 113, pr. 19 o 21]
However, proving of such third party documents is also not without its accompanied unique practical considerations, such as issuing a notice to produce such document/ witness through the Arbitral Tribunal, particularly where a party believes the document is in possession of the other side or a related entity or seeking court assistance - if the third party is unwilling or outside the reach of party control - by justifying materiality and relevance, since courts are not inclined to compel production unless the documents are clearly necessary for adjudication, etc.
Arbitration proceedings being conducted on the backbone of party autonomy, it is open for the parties to mutually decide the manner in which the proceedings will be conducted. Yet, this flexibility does not dilute the critical importance of proving documents properly.
If evidence is adduced by the parties, the arbitral tribunal may decide the admissibility and relevance of the documents produced. These decisions, unless provided otherwise in the agreement, are within the exclusive domain of the arbitral tribunal and determine the outcome of the dispute, underlining the importance of proving documents.
A practical takeaway from the judicial decisions may be that the parties aiming to secure an award in their favour must ensure their documents are arranged in sequence and in coordination with their facts, and such documents formally proved, if not admitted by the other side. Ultimately, effective proving of documents is not just a procedural formality—it is the pivot that can decisively sway the outcome of arbitration proceedings.
About the authors: Amit Meharia is the Managing Partner of MCO Legals (Meharia & Company). Paramita Banerjee is an Associate Partner at the Firm.
Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.
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