C-1.1 The principles of interpretation correspond to similar principles incorporated in most procedural systems. As applied in transnational disputes, Rule 1.2 requires the court and the parties to apply the Rules with awareness of the differences in the legal systems with which the parties may be familiar. The term “having regard for the legal and cultural traditions of the litigants” does not mean that foreign law will supersede local law or that foreign parties may be excused from compliance with the Transnational Rules or the local rules. It means only an appreciation that every system has its own culture and tradition.

C-1.2 The primary guiding principle is that the evidence and legal contentions of the parties be fully considered and that procedural restrictions and penalties be imposed only as reasonably necessary to assure orderly determination of the dispute.

C-2.1 Rule 2.1 defines the matters governed by these Rules. The Rules shall apply to contract disputes and disputes arising from contractual relations; injuries to property, including immovable (real property), movable (personal property), and to intangible property such as copyright, trademark, patent rights; and injuries resulting from breach of obligations and commercial torts in business transactions. The term “business, commercial, or financial transaction” includes a series of related events, such as repeated interference with property.

C-2.2 The scope of application of these Rules is limited to commercial disputes as a matter of comity in public policy, not because the rules are inappropriate for other types of legal disputes. In many countries, for example, disputes arising from employment relationships are governed by special procedures in specialized courts. The same is true of domestic relations matters.

Commercial disputes include disputes involving a government or government agency acting in a proprietary capacity. The court should apply the definition of proprietary capacity established in forum law.

C-2.3 The term “dispute” as used in Rule 2.1 may have different connotations in various legal systems. For example, under Rule 20 of the Federal Rules of Civil Procedure in the United States, a dispute would be interpreted in accordance with the broad concept of “transaction or occurrence.” Under the civil-law systems, the term “dispute” would be interpreted in accordance with the narrower concept of dispute as framed by the plaintiff’s claim.

C-2.4 Rule 2.1.1 establishes that these Rules apply when a plaintiff and a defendant are habitual residents of different states. Thus, these Rules would apply in a dispute between a Japanese on one side and a Japanese and a Canadian on the other side. However, the transaction itself must be transnational. Accordingly, these Rules should not apply to disputes related exclusively to the forum state.

C-2.5 Rule 2.1.2 provides that these Rules apply in a dispute concerning fixed property located in one state as to which a claim is made by a plaintiff or a defendant who is a habitual resident of another state. Whether a legal claim concerns property and whether it is a claim of ownership or of a security interest is determined by general principles of private international law.

C-2.6 The habitual residence of an individual is determined by general principles of private international law. The definition in Rule 2.2 of residency of a juridical entity, such as a société anonyme, partnership, or unincorporated association, corresponds to generally accepted principles of private international law. When an organization is chartered in one state and has its administrative headquarters in another, both attributed residences must be different from the habitual residence of at least one opposing party.

C-2.7 Legal disputes may involve claims asserted on multiple substantive legal bases, one of which is under these Rules but another which is not. The court may entertain both the claim under these Rules and the other claim or claims and apply the Rules as provided in Rule 2.3.

C-2.8 A case may be one not included in Rule 2 at the outset of the litigation, but a claim or a party may later be joined that would justify application of these Rules. For example, in a claim based on contract by A against B, B could implead C on the basis of an indemnity obligation. If A and C or B and C are habitual residents of different states, and the claim between them did not arise wholly within the forum state, these Rules would apply. Rule 2.3 confers authority on the court to determine whether the principal matters in dispute are within these Rules and thereupon to direct that the dispute be governed by these Rules or forum law, according to that determination.

C-2.10 Rule 2.6 recognizes that the forum law may adopt provisions that enlarge or restrict the scope of application of the Rules.

C-3.1 Typically it would be convenient that a specialized court or division of court be established in a principal commercial city, such as Milan in Italy or London in the United Kingdom. Committing disputes under these rules to specialized courts would facilitate development of a more uniform procedural jurisprudence.

C-4.1 Rule 4.1 states rules of jurisdiction that are recognized in virtually all legal systems. A court whose jurisdiction is established by agreement among the parties, as provided in Rule 4.1.1, may decline to exercise jurisdiction if the transaction has no relationship to that forum. A plaintiff submits to the court’s authority by commencing the proceeding under these Rules. That submission extends to counterclaims and third-party claims permitted under these Rules.

C-4.2 Rule 4.1.2 incorporates by reference the domestic law of the forum concerning exercise of personal jurisdiction. This provision could apply, for example, to a defendant who has committed a legal wrong while temporarily present in the state or who conducted a commercial transaction in the state, etc. It applies to organizations, such as corporations, as well as to individuals. Domestic law may be superseded by international law or by international convention, for example the Brussels and Lugano Conventions.

C-4.3 Rule 4.1.3 provides that the court where fixed property is located has authority over the parties who make claims to the property, whether of ownership or a security interest. This expresses a concept that is almost universally recognized.

C-5.1 It is a generally recognized principle that a plaintiff may, at its option, join as defendant any person against whom a claim is asserted concerning the transaction involved in the dispute. In addition, other parties may be added under the principle of intervention and the principle of necessary party.

C-5.3 Rule 5 states the concept of necessary party. The precise definition of this concept varies somewhat among legal systems. However, in general, a person (whether individual or juridical entity) is a necessary party when it would be difficult for the court to adjudicate the dispute among the existing parties without taking into account the legal interests of that person. If a necessary party cannot be brought into the proceeding, the proceeding should not continue unless the existing parties have a definite need for a resolution of the dispute.

C-5.4 When a necessary party is not subject to the compulsory authority of the court, that person may nevertheless be interested in participating in the case. Rule 5.2 specifies the procedure for giving notice to a necessary party. Even if that person does not participate, it may be useful to send a copy of the decision to that person.

C-5.5 Rule 5.4 permits, for example, a party to join a noncommercial claim along with a claim that is within the scope of these Rules, so long as the additional claim arose from the same dispute. However, under Rule 2.3 the court may determine that the additional claim is the principal subject of the dispute and adjudicate the dispute according to the law of the forum.

C-5.6 Rule 5.5 permits a party to employ procedures of the forum to add additional parties, but it does not authorize class-suit procedure. Whether class-action procedure is permitted depends on the law of the forum. If a defendant asserts in another forum a claim that could be a counterclaim in the proceeding under these Rules, the other forum may apply its own rules of deference to require the claim to be asserted as a counterclaim in the proceeding under these Rules.

C-5.7 Rule 5.5 provides that the Rules have precedence over the forum’s ordinary procedure when additional parties participate in the litigation. However, the court has authority to apply the forum’s ordinary procedure when, for example, the dispute involving the additional parties is more complex or significant than the original dispute. See Rule 2.3.

C-6.1 Rule 6 states the concept of intervention by a third party. The precise definition of intervention varies somewhat among legal systems. However, in general a person (whether individual or juridical entity) who has some interest that could be affected by the proceedings, and who seeks to participate, should be allowed to do so.

C-6.2 The amicus curiae brief is a useful means by which any nonparty may supply the court with information and legal analysis that may be useful to achieve a just and informed disposition of the case. Therefore, any person should be allowed to file such a brief, notwithstanding a lack of legal interest sufficient for intervention. It is in the court’s discretion whether such a brief may be taken into account. A judge has authority to refuse an amicus curiae brief when such a brief would not be of material assistance in determining the dispute. An amicus curiae does not become a party to the case but is merely an active commentator. Factual assertions in an amicus brief are not evidence in the case.

C-6.4 In civil-law countries there is no established practice of allowing third parties without a legal interest in the merits of the dispute to intervene in a proceeding. However, the amicus curiae brief is an important device, particularly in cases of public importance.

C-7 This Rule specifies the locality within a state where the proceeding is to be conducted. In common law this concept is called “venue”; in the civil law it is called territorial competence. The locality is to be determined by the domestic procedural law of the state where the proceeding is conducted.

C-8.1 In most legal systems today the courts of first instance are constituted of a single judge. However, many civil-law systems normally use three judges in courts of general authority. In some legal systems the composition of the court may be one or three judges, according to various criteria.

C-8.2 Lay experts or assessors are included in a tribunal under various procedures in various systems. This Rule authorizes neutral assessors in cases involving technical or scientific issues, or any other situation in which specialized knowledge is relevant. The assessors sit with the judge only when necessary. If there is a need for an assessor to understand a technical issue, the assessor does not have to sit with the court and hear oral evidence of a different issue.

The appointment of assessors does not preclude use by the parties of expert witnesses or appointment by the court of a neutral expert. See Rule 26. The assessors are to help the judge understand the case and the evidence, not to conduct investigation or research, which could be a function for a neutral expert. The assessor sits with the judge, the expert sits in the witness stand.

C-8.3 Since the parties have no opportunity to ask questions of assessors, the parties should be enabled to comment and challenge the assessors’ opinions before they are considered by the court.

C-8.4 The court has discretion to allocate the costs of the assessors. However, this allocation is provisional, because the loser is liable for the costs and expenses of the winner. See Rule 33.

C-8.5 Rule 8 excludes the use of juries, notwithstanding that jury trial is a matter of constitutional right under various circumstances in some countries, notably the United States. Where jury trial is of right, the parties may waive the right or these Rules can apply with the use of a jury. See Rule 2.1.

C-9 Rule 9 confers general judicial authority on the court to give direction to the proceedings. All judicial systems have a concept of a court’s general authority. In common-law jurisdictions, it is expressed as “inherent authority.” In most civil-law systems a similar concept is implied from general terms in the codes of civil procedure. In some civil-law systems, the court’s authority is specified in detail. When confronted with a question of its own authority, a court should refer to the concepts of authority in its domestic legal system.

C-10.1 The Transnational Rules of Civil Procedure are not a comprehensive “code” in the civil-law sense of the word. They are a set of rules to supersede inconsistent local law and to be supplemented by local law whenever local law is not inconsistent with the Transnational Rules system.

C-10.2 Rule 10 is a rule of interpretation. It does not authorize nationals to use local concepts to interpret these Rules. The Transnational Rules should develop an autonomous style of interpretation.

C-11.1 Rule 11 specifies the rule for commencement of suit for purposes of determining the competence of court, lis pendens, interruption of statutes of limitations, and other purposes as provided by the forum law. The competence of a court, once established, is not ousted by subsequent changes in the facts supporting jurisdiction. Designation of the suit as a Transnational Proceeding provides notice to the defendant that these Rules will govern the matter.

C-11.2 Rule 11 also provides for giving notice of the proceeding to the defendant, or “service of process” as it is called in common-law procedure. The Hague Service Convention specifies rules of notice that govern proceedings in countries signatory to that Convention. When judicial assistance from the courts of another country is required in order to effect notice, the procedure for obtaining such assistance should be followed. In any event, the notice must include a copy of the statement of claim, a statement that the proceeding is conducted under these Rules, and a warning that default judgment may be taken against a defendant that does not respond. See Rule 15. Requiring notice to be in the language of the defendant is designed to assure that it will be understood. Beyond these requirements, the rules of the forum govern the mechanisms and formalities for giving notice of the proceeding. In some states it is sufficient to mail the notice; some states require that notice, such as a summons, be delivered by an officer of the court.

C-12.1 Rule 12.1 requires the plaintiff to state the facts upon which the claim is based. This Rule calls for particularity of statement, such as that required in most civil-law and most common-law jurisdictions and traditionally required in American “code pleading.” In contrast, some American systems, notably those employing the “notice pleading” under Federal Rules of Civil Procedure, permit very general allegations. In these Rules, the facts pleaded in the statements of claim and defense establish the standard of relevance for exchange of evidence, which is limited to matters relevant to the facts of the case as stated in the pleadings. See Rule 20.4.

In addition, the complaint must refer to the legal grounds on which the plaintiff relies to support the claim. Reference to such grounds is a common requirement in many legal systems and is especially appropriate when the transaction may involve the law of more than one legal system and present problems of choice of law. Rules of procedure in many national systems require a party’s pleading to set forth foreign law when the party intends to rely on that law. However, according to Principle 19.1, the court has responsibility for questions of law and is responsible for determining, upon consultation with the parties, the correct legal basis for its decisions.

C-12.2 Rule 12.2 requires a statement of the amount of money demanded and, if injunctive or declaratory relief is sought, the nature and terms of the requested remedy. If the defendant defaults, the court may not award an amount greater than that demanded in the complaint, so that the defendant can calculate on an informed basis whether to dispute the claim. See 15.3. It is a general principle that a default judgment may be entered only when the plaintiff has offered sufficient proof of the claims for which judgment is awarded. See Rule 15.2.3. Forum procedure in many systems requires that, after a defendant has failed to respond, an additional notice be given to the defendant of intention to enter default judgment.

C-13.1 Rule 13.1 requires that the defendant’s response address the allegations of the complaint, denying or admitting with explanation those allegations that are to be controverted. Allegations not so controverted are admitted for purposes of the litigation. An “alternative statement of facts” is simply a different narrative of the circumstances that the defendant presents in order to clarify the dispute. Whether an admission in a proceeding under these Rules has effect in other proceedings is determined by the law governing such other proceedings. An “affirmative defense” is the allegation of additional facts or arguments that avoid the facts and arguments raised by the plaintiff, rather than contradict them directly. An example is the defense that an alleged debt has previously been discharged in bankruptcy. The most important example of a “negative defense” is the denial.

C-13.2 A period of 30 days in which to respond generally should be sufficient. However, if the defendant is at a remote location, additional time may be necessary and should be granted as of course.

C-13.3 Rule 13.3 applies to the defendant’s answer the same rules of form and content as Rule 12 provides with respect to the statement of claim. Thus, additional facts stated by the defendant, by way of affirmative defense or alternative statement, must be in the same detail as required by Rule 12.1. If a counterclaim is asserted, the defendant must make a demand for judgment as required by Rule 12.2.

C-13.4 This subsection applies to counterclaims, third-party claims, cross-claims, and other claims available in the proceeding. Such claims are permissive. These Rules do not provide for compulsory counterclaims, so that omission to interpose a counterclaim does not result in a preclusion.

C-13.5 Rule 13.2 permits the defendant to assert a counterclaim, third-party claim, or cross-claim. In most civil-law systems, a counterclaim is permitted only for a claim arising from the dispute addressed in the plaintiff’s complaint. See Comment C-2.3 for reference to the civil-law concept of “dispute.” In common-law systems a wider scope for counterclaims is generally permitted, including a “set off” based on a different transaction or occurrence. Compare United States Federal Rules of Civil Procedure, Rule 13.

C-13.6 Rule 13.4 requires a plaintiff, third party, or co-defendant to submit an answer to a counterclaim or cross-claim. No such response is required to an affirmative defense or other allegations in the answer that do not constitute a counterclaim or cross-claim.

C-13.7 Rule 13.5 authorizes a defendant to make objections referred to in Rule 18.1 either by a motion pursuant to that Rule or by answer to the complaint. Rule 13.5 further provides that making such objections by answer does not result in waiver of any such objection. Traditionally, in common-law procedure, a defendant waived objection to jurisdiction over the person unless that objection was asserted in a preliminary “special appearance.” Similar waiver of objection to venue is imposed in some civil-law systems. These Rules do not impose such a waiver.

C-14.1 The scope of permissible amendment differs among various legal systems, the rule in the United States, for example, being very liberal and that in many civil-law systems being less so. In many civil-law systems amendment of the legal basis of a claim is permitted, as distinct from the factual basis, but amendment of factual allegations is permitted only upon a showing that there is newly discovered probative evidence and that the amendment is within the scope of the dispute. See Comment C-2.3, supra, for reference to the civil-law concept of “dispute.”

C-14.2 The appropriateness of permitting amendment also depends on the basis of the request. For example, an amendment to address material evidence newly discovered should be more readily granted than an amendment to add a new party whose participation could have been anticipated. An amendment could have some adverse effect on an opposing party. On the other hand, compensation for costs reasonably incurred by the party, or rescheduling of the plenary hearing, could eliminate unfair prejudicial effects. Accordingly, exercise of judicial judgment may be required in considering an amendment. See Rule 14.2.

C-14.3 In accordance with the right of contradiction stated in Principle 5, Rule 14.4 requires that if the complaint has been amended, default judgment may be obtained on the basis of an amended pleading only if the amended pleading has been served on the party against whom default judgment is to be entered.

C-14.4 Rule 14.5 permits a party to request that another party be required to state facts with greater specificity or to admit or deny specific material facts. Failure to comply with an order so requiring may be considered as a concession as to those facts. Making such a request for more specific allegations temporarily suspends the duty to answer.

C-15.1 Default judgment permits termination of a dispute if there is no contest. It is a mechanism for compelling a defendant to acknowledge the court’s authority. If the court lacked authority to enter a default judgment, a defendant could avoid liability simply by ignoring the proceeding and later dispute the validity of the judgment. It is important to analyze the reason why the party did not answer or did not proceed after having answered. For example, a party may have failed to answer because that party was not found and did not receive personal notice, or because the party was obliged by his or her national law not to appear by reason of hostility between the countries.

C-15.2 Reasonable care should be exercised prior to entering a default judgment because notice sometimes may not have been given to a defendant, or the defendant may have been confused about the need to respond. Rule 15.3 limits a default judgment to the amount and kind demanded in the statement of claim. See Rule 12.2.

This Rule is important in common-law systems in which the judge is normally not limited to the original claims made by the parties on the pleadings. In civil-law systems and some common-law systems, however, there is a traditional prohibition against a judgment that goes beyond the pleadings (ultra petita or extra petita prohibition).

C-15.3 The decision about whether the claim is legally justified does not require a full inquiry on the merits of the case. The judge must only determine whether the default judgment is not inconsistent with the evidence on file and is not legally unconscionable. For that decision, the judge must analyze critically the evidence supporting the statement of claims. See Rule 19.1. For this purpose, the judge may request production of more evidence or schedule an evidentiary hearing.

C-15.4 The absence of a substantial answer may be treated as no answer at all.

C-15.5 The party who has defaulted should not be permitted to produce evidence in an appeal, unless to prove that the notice was not proper.

C-16.1 Rule 16 is based on a similar rule under Ontario (Canada) civil procedure and Part 36 of the new English Procedural Rules. The detailed protocol is designed to permit submission and consideration of serious offers of settlement, from either a plaintiff or a defendant. At the same time, the protocol prohibits use of such offers or responses to influence the court and thereby to prejudice the parties. Experience indicates that a precisely defined procedure, to which conformity is strictly required, can facilitate settlement. The law of the forum may permit or require the deposit of the offer into court.

This procedure is just a mechanism whereby a party can demand from an opposing party serious consideration of a settlement offer. It is not exclusive of the court’s authority and duty to conduct informal discussions and does not preclude parties from conducting settlement negotiations by procedures that are not subject to the Rule 16.5 sanction.

This Rule departs from traditions in some countries in which the parties generally do not have an obligation to negotiate or otherwise consider settlement proposals from the opposing party.

C-16.2 This Rule aims at encouraging compromises and settlements and also deters parties from pursuing or defending a case that does not deserve a full and complete proceeding.

C-16.3 The offeree may deliver a counter-offer. A counter-offer is regulated by the same rules of the offer.

C-16.4 Rule 16.4 prohibits public disclosure of the offer or disclosure to the court before the entry of judgment. Parties might be reluctant to make a settlement offer if that could be interpreted as an admission of liability or of weakness of one’s position.

C-16.5 If the offeree fails to obtain a judgment that is more advantageous than the offer of settlement under this Rule, that party loses the right to be reimbursed for the costs and expenses incurred from the date of rejection of the offer. Instead, the winning party must pay the costs and expenses thereupon incurred by the loser.

When the offer is partial, or the offeree fails only in part to obtain a more advantageous judgment, the court may order a sanction that is proportional. The rejection may have been reasonable under the specific circumstances of the case, and the judge may apply the sanction accordingly.

C-17.1 The term “injunction” refers to an order requiring or prohibiting the performance of a specified act, for example, preserving property in its present condition. Rule 17.1 authorizes the court to issue an injunction that is either affirmative, in that it requires performance of an act, or negative in that it prohibits a specific act or course of action. Availability of other provisional remedies or interim measures, such as attachment or sequestration, should be determined by forum law, including applicable principles of international law.

C-17.2 Rule 17.1.1 authorizes the court to issue an injunction without notice to the person against whom it is directed where doing so is justified by urgent necessity. “Urgent necessity,” required as a basis for an ex parte injunction, is a practical concept, as is the concept of preponderance of considerations of fairness. The latter term corresponds to the common-law concept of “balance of equities.” Considerations of fairness include the strength of the merits of the applicant’s claim, the urgency of the need for a provisional remedy, and the practical burdens that may result from granting the remedy. Such an injunction is usually known as an ex parte injunction. In common-law procedure such an order is usually referred to as a “temporary restraining order.”

The question for the court, in considering an application for an ex parte injunction, is whether the applicant has made a reasonable and specific demonstration that such an order is required to prevent an irreparable deterioration in the situation to be addressed in the litigation, and that it would be imprudent to postpone the order until the opposing party has opportunity to be heard. The burden is on the party requesting an ex parte injunction to justify its issuance. However, opportunity for the opposing party or person to whom the injunction is addressed to be heard should be afforded at the earliest practicable time.

C-17.3 Rules of procedure or ethics generally require that a party requesting an ex parte injunction make full disclosure to the court of all aspects of the situation, including those favorable to the opposing party. Failure to make such disclosure is ground to vacate an injunction and may be a basis of liability for damages against the requesting party.

C-17.4 As indicated in Rule 17.1.2, if the court had declined to issue an injunction ex parte, it may nevertheless issue an injunction upon a hearing. If the court previously issued an injunction ex parte, it may renew or modify its order in light of the matters developed at the hearing. The burden is on the plaintiff to show that the injunction is justified.

C-17.5 Rule 17.1.4 authorizes the court to require a bond or other indemnification, as protection against the disturbance and injury that may result from an injunction. The particulars of such indemnification should be determined by reference to the general law of the forum.

C-17.6 Rule 17.2 permits the court to restrain transferring property located outside the forum state and to require disclosure of the party’s assets. In the law of the United Kingdom this is referred to as a Mareva injunction. The Brussels Convention requires recognition of such an injunction by signatories to that convention because an injunction is a judgment. This subsection also authorizes an injunction requiring disclosure of the identity and location of persons to facilitate enforcement of an eventual judgment.

C-17.7 Rule 34.2 provides for the review of an order granting or denying a preliminary injunction, according to the procedure of the forum. Review by a second-instance tribunal is regulated in different ways in various systems so that only a general principle providing for an immediate review is stated here. The guarantee of a review is particularly necessary when the injunction has been issued ex parte. However, it should also be recognized that such a review may entail a loss of time or procedural abuse.

C-17.8 Rule 17.3 deals with a preliminary injunction that concerns property or assets located in another country. In transnational litigation property or assets may need to be “blocked” or “disclosed” in a country different from the one of the court having jurisdiction of the case. A further problem concerns the enforcement of such an injunction. Whether the injunction should be recognized depends on the rules and principles of the law of the country where the property or assets are located.

C-18.1 It is a universal procedural principle that the court may make determinations of the sufficiency of the pleadings and motions, concerning either substantive law or procedure, that materially affect the rights of a party or the capability of the court to render substantial justice. In the civil-law systems, the court has an obligation to scrutinize the procedural regularity of the proceeding. In the common-law systems, authority to make such determinations ordinarily is exercised only upon initiative of a party made through a motion. However, the court in common-law systems may exercise that authority on its own initiative and in civil-law systems the court may do so in response to a suggestion or motion of a party.

According to Rule 13.5, the objections referred to in this subsection can be made by defendant either by a motion or by answer to the complaint. See Comment C-13.7.

C-18.2 Rule 18.1 expresses a universal principle that the court’s competence over the dispute and its jurisdiction over the parties may be questioned. A valid objection of this kind usually requires termination of the proceeding. A similar objection may be made that the dispute is not within the scope prescribed in Rule 2 and hence is not governed by these Rules. Among factors that may be considered under Rule 18.1.1 is dismissal for forum non conveniens in jurisdictions that recognize that principle. Procedural law varies as to whether there are time limitations or other restrictions on delay in making such an objection, and whether participation in the proceeding without making such an objection results in its waiver or forfeiture. Subject to the provision of Rule 13.5, reference should be made to the forum’s procedural law concerning such issues.

C-18.3 Rule 18.1.2 empowers the court to adjudicate procedural irregularities. Ordinarily amendment should be permitted in order to correct such an irregularity, except when such permission would result in substantial injustice. See Rule 18.2.

C-18.4 Rule 18.1.3 empowers the court to adjudicate the merits of a claim or defense at the preliminary stage. Such an adjudication may be based on matters of law or matters of fact, or both. Judgment is appropriate when the claim or defense in question is legally insufficient as stated. Judgment is also appropriate when, although the statement of claim or defense as stated is legally sufficient, it is demonstrated that evidence to support the claim or defense is lacking. In the latter case, the court should consider whether exchange of evidence may disclose sufficient evidence.

C-18.5 In the civil-law systems, the foregoing powers are exercised by the court as a matter of course. In the common-law systems, the power to determine that a statement of claim or defense is substantively insufficient derives from the old common-law demurrer and is usually exercised on the basis of a motion by a party. Examples of claims that typically may be so adjudicated are claims based on a written contract calling for payment of money, or to ownership of specific property, to which no valid defense is offered. Examples of defenses that typically may be so adjudicated are the defense of elapse of time (statute of limitations or prescription), release, and res judicata. In common-law systems, the power to determine prior to trial that a claim or defense is not supported by evidence is usually exercised on the basis of a motion for summary judgment.

C-18.6 Rule 18.1.5 confers authority on the court to make necessary procedural rulings. In some civil-law systems these powers are specified in detail. In the common-law system they are within the court’s inherent powers.

C-18.7 Under civil-law procedure discovery obligations ordinarily are imposed by order of the court. In common-law systems the procedural rules impose discovery obligations directly on the parties. Under Rule 20 the court has a duty to order exchange of evidence as provided in that Rule.

C-19.1 Rule 19.1 requires that a party attach documents on which that party relies in support of the party’s position. This is a common requirement. A party must also list the witnesses upon whom it intends to rely. If a party later ascertains that there are additional documents or witnesses, it can exercise the opportunity to submit an amended list, as provided in Rule 19.2.

C-19.2 Under the rules of ethics or procedure in some systems, an advocate is not permitted to discuss the matters in dispute with prospective witnesses (other than the advocate’s own client). That rule is designed to protect testimony from improper manipulation, but it also has the effect of limiting the effectiveness of an advocate in investigating and organizing evidence for consideration by the court. Under systems in which discussion is permitted with prospective witnesses, rules of ethics and procedure prohibit a lawyer from suggesting to a witness what the testimony should be, or offering inducements to witnesses. Recognizing that there is some risk of abuse in allowing lawyers to confer with prospective witnesses, these Rules consider that the risk of manipulation is less injurious to fair adjudication than is the risk that relevant and important evidence may remain undisclosed.

C-19.3 The summary of testimony referred to in Rule 19.3 should address all propositions to which the witness will give testimony and should be reasonably specific in detail.

C-20.1 These Rules adopt, as a model of litigation, a system consisting of preliminary hearings followed by a concentrated form of plenary hearing. The essential core of the first stage is preliminary disclosure and clarification of the evidence. The principal consideration in favor of a unitary plenary hearing is that of expeditious justice. To achieve this objective, a concentrated plenary hearing should be used, so that arguments and the taking of evidence are completed in a single hearing or in a few hearings on consecutive judicial days.

C-20.2 Rules 19 and 20 define the roles and the rights of the parties, the duty of voluntary disclosure, the procedure for exchange of evidence, the role of the court, and the devices to ensure that the parties comply with demands for evidence. Proper compliance with these obligations is not only a matter of law for the parties, but also a matter of professional honor and obligation on the part of the advocates involved in the litigation.

C-20.3 The philosophy expressed in Rules 19, 20, 22, and 30 is essentially that of the common-law countries other than the United States. In those countries, the scope of discovery or disclosure is specified and limited, as in Rules 19 and 20. However within those specifications disclosure is generally a matter of right.

C-20.4 Discovery under prevailing United States procedure, exemplified in the Federal Rules of Civil Procedure, is much broader, including the broad right to seek information that “appears reasonably calculated to lead to the discovery of admissible evidence.” This broad discovery is often criticized as responsible for the increasing costs of the administration of justice. However, reasonable disclosure and exchange of evidence facilitates discovery of truth.

C-20.5 Discovery under the civil-law systems is generally much more restricted, or nonexistent. In particular, a much broader immunity is conferred against disclosure of trade-and-business secrets. This Rule should be interpreted as seeking to strike a balance between the restrictive civil-law systems and the broader systems in common-law jurisdictions.

C-20.6 Rule 20.1 requires the parties to make the disclosures required by Rule 19 prior to demanding production of evidence from an opposing party. It also requires the parties to provide summaries of the testimony of the witnesses a party intends to present, according to Rule 19.3.

C-20.7 Rule 20.1 provides that every party is entitled to obtain from any person the disclosure of any relevant evidence, not privileged, in possession of that person. Ideally, full disclosure of relevant evidence should result through dialogue among the parties, whereby the parties voluntarily satisfy each other’s demands without intervention of the court.

C-20.8 According to Rule 20.5, compulsory exchange of evidence is limited to matters directly relevant to the issues in the case as they have been stated in the pleadings. A party is not entitled to disclosure of information that “appears reasonably calculated to lead to the discovery of admissible evidence,” which is the broad scope of discovery under Rule 26 of the Federal Rules of Civil Procedure in the United States. “Relevant” evidence is that which supports or contravenes the allegations of one of the parties. This Rule is aimed at preventing overdiscovery or “fishing expeditions.”

C-20.9 Exchange of evidence may concern documents and any other things (films, pictures, videotapes, recorded tapes, or objects of any kind), including any records of information, such as computerized information (disks, data, printings, or software systems). The demanding party must show the relevance of the information, document, or thing to prove or disprove the facts supporting a claim or a defense, and identify the document or thing to be disclosed, specifically identified, or defined by specific categories. Thus, a document may be identified by date and title or by specific description such as “correspondence concerning the transaction between A and B in the period February 1 through March 31.” A party is not obliged to comply with a demand that does not fulfill these conditions. Disputes concerning whether the conditions of the demand have been satisfied, and whether the demand should be complied with, are resolved by the court on motion by any party. The court may declare the demand invalid or order production of the document or thing, and if necessary specify the time and mode of production.

C-20.10 Exchange of evidence may concern the identity of a potential witness. As used in these Rules, the term “witness” includes a person who can give statements to the court even if the statements are not strictly speaking “evidence,” as is the rule in some civil-law systems concerning statements by parties. Under Rule 19.3 a summary of the expected testimony of a witness whom a party intends to call or nominate to the court must be provided to other parties. A party is not allowed to examine a witness through deposition except when authorized by the court under Rule 20.5.3.

C-20.11 Rule 20.1.3 provides that any party is entitled to discover the identity of a prospective expert that another party intends to designate, and to obtain a written statement of the expert’s opinion concerning the matters in dispute.

C-20.12 Rule 20.2 provides a detailed protocol for demands for exchange of evidence and for compliance with these demands. The time requirements are related to the pleadings, so that parties can make their demands in light of the information and allegations in the pleadings. When the plaintiff’s demand is made in the complaint, the defendant’s demand ordinarily will be made in the answer. If the plaintiff’s demand is made within the period of 60 days, however, the defendant’s demand shall be made within 15 days after receipt of the plaintiff’s demand.

Ordinarily these demands provide sufficient opportunity for exchange of evidence. However, Rule 20.5.3 authorizes the court to order additional exchange upon a showing of justification, unless doing so would unfairly delay the proceeding.

C-20.13 The general principle in the preliminary stage is that the parties bear the burden of obtaining evidence they need in preparation for plenary hearing. However, disclosure obtained by the parties on their own motion may be incomplete, resulting in insufficient evidence or surprise to the court or other parties. To deal with such inconvenience, the court may in its discretion order additional disclosure on its own initiative or on motion of a party. For example, the court may order that a party or a prospective witness submit a written deposition concerning the facts of the case. The court may also subpoena a hostile witness to be orally deposed. See Rule 21.

The court may not order additional disclosure simply because it might reveal relevant evidence. The term “to prevent substantial injustice” is a narrower standard than “relevant to prove the matters in issue.” Moreover, the court cannot order exchange of irrelevant or privileged evidence. See also Rule 27.3.

C-20.14 The right to refuse to answer questions that may incriminate a person is universally recognized. However, this right does not necessarily include the right to refuse to produce documents that may be incriminating, an issue that should be determined according to forum law.

The law in some systems permits a party also to refuse to answer questions or to produce documents that tend to establish the person’s civil liability or to negate or mitigate a civil claim. This Rule does not permit such a refusal based on civil as opposed to criminal liability.

C-20.15 In cases involving voluminous documents or remotely situated witnesses, or in similar circumstances of practical necessity, the court may appoint someone as a special officer to supervise exchange of evidence. This will free the judge from the responsibility for personally supervising such exchange. Such an assistant may be appointed by another court through judicial assistance. A person so appointed should be impartial and independent, and have the same powers and duties as the judge, but decisions by such an officer are reviewable by the appointing court.

C-20.16 If a party fails to comply with a demand for exchange of evidence, Rule 20.9 provides that the court may impose sanctions to make disclosure effective. The determination of sanctions is within the discretion of the court, taking into account relevant features of the parties’ behavior.

The sanctions are:

1) Adverse inferences against the noncomplying party about facts supporting that party’s claims or defenses, including conclusive determination of the facts. See Comment to Rule 29.

2) A monetary penalty, fixed by the court in its discretion, or other means of legal compulsion permitted by forum law, including contempt of court. The court should graduate the penalty or contempt sanction according to the circumstances of the case. When the exchange of evidence concerns a document or other thing, the court may enter orders concerning the document or thing, in accordance with Rules 17, 29, and 30.

3) Dismissal of claims, defenses, or allegations to which the evidence is relevant. This sanction is more severe than the drawing of an adverse inference. The adverse inference does not necessarily imply that the party loses the case on that basis, but dismissal of claims or defenses ordinarily has that result.

4) The most severe sanction against noncompliance with disclosure demands or orders is entry of adverse judgment with respect to one or more of the claims. The court may enter a judgment of dismissal with prejudice against the plaintiff or a judgment by default against the defendant.

These sanctions are to be applied according to the principle of proportionality stated in Rule 1.6, according to which procedural sanctions must be applied in reasonable proportion to their purpose. Therefore, unless the court finds that special circumstances justify a different sanction, the preferred sanction is to draw adverse inferences. Dismissal and entry of adverse judgment is a sanction of last resort.

21.3 The deposition shall be taken at such time and place as the parties may agree or as the court orders. All parties and the court shall be given written notice, at least [30 days] in advance, of the time and place of the deposition. The examination shall be conducted as provided in Rule 28 and may be conducted before a judicial officer specially appointed as provided in Rule 3.3. During or prior to the deposition the court may submit supplemental questions to be answered by the person deposed.

C-21.1 A deposition is a form of taking testimony employed in common-law and in some civil-law systems. It consists of sworn testimony of a potential witness, including a party, taken outside of court prior to the plenary hearing. A deposition may be given orally in response to questions by lawyers for the parties or by questions from a judicial officer appointed by the court. A deposition may be conducted by electronic communication, for example by telephone conference. It may also be given through written responses to written questions. Ordinarily, a deposition is given after commencement of litigation but also, in accordance with the law of the forum, may be given de bene esse, i.e., to preserve testimony when the witness is expected to be unavailable after litigation has commenced. Questioning may seek to gather information and to test the witness’s recollection and credibility. The testimony of a witness in a deposition may be presented as evidence, either in lieu of the witness or as direct testimony, but the court may require the presence of a witness who can attend in order to permit supplemental questioning. Under these Rules a deposition may be used in limited circumstances for exchange of evidence before trial. See Rule 20.5.3.

C-21.2 Rule 21.2 provides that deposition testimony be taken on affirmation, as at a hearing before the court. It is to be transcribed verbatim or recorded on audio or video. The parties may agree about the form of transcription or recording, but the court may nevertheless itself determine what form is to be used. The party who requests the deposition must pay the cost of transcription or recording, unless the court orders otherwise.

C-21.3 Rule 21.3 specifies the procedure for a deposition. In general, the procedure should be similar to a presentation of the witness before the court, except that the questioning is conducted by the parties. In some more complex or disputed cases, a deposition may be presided over by a special officer appointed by the court. See Rule 20.8.

C-21.4 The deposition will follow, as far as possible, the procedure for taking testimony before a judge. Thus the party taking the deposition will examine the witness first, and the other parties will ask supplemental questions thereafter. As stated in Rule 21.3, before the deposition the court may specify questions that it requires to be asked of the witness. Time and place of the deposition may be agreed upon by the parties, or may be prescribed by the court. A written notice of the deposition must be given to all the parties at least 30 days in advance to enable any party to be present and participate in the deposition. Notice will also be given to the court.

C-21.5 The general principle governing presentation of evidence is that evidence will be presented orally at the plenary hearing. See Rule 28. However, oral examination of a witness at the plenary hearing may be impossible, burdensome, or impractical. Rule 21.4 permits the transcript of a deposition taken in accordance with Rule 21.3 to be presented to the court as a substitute for reception of testimony of a witness who cannot conveniently be present in court, for example by reason of illness or because the witness is in a remote location or cannot be compelled to attend to give testimony. A deposition may also be convenient for presenting testimony in a language other than that of the court. A deposition in any event may yield a statement against interest that is admissible under Rule 28.3.6.

C-21.6 Since the deposition procedure is an exception to the general rule of direct presentation of evidence at the hearing, a party who wants to present testimony by deposition must obtain agreement from the opposing party or apply to the court for authorization, stating the reasons why a deposition should be preferred. The court has discretion in deciding the request. Any party is entitled to contest the fidelity of the transcription or record. If such an objection is sustained, the court may set aside the deposition and order that the party or the witness be examined directly at the hearing or order a new deposition.

C-21.7 Rule 21.5 permits the presentation of testimony by means of written affidavits containing statements about relevant facts of the case. Such a statement, although upon affirmation, is ex parte in that neither the court nor opposing parties has been permitted to question the witness. The statement may be regarded with corresponding skepticism by the court. However, facts not in serious dispute often may be conveniently proved by this procedure.

The practice of producing written affidavits instead of witnesses for an oral examination is becoming common in several systems. Reasons of efficiency explain this trend: quicker availability of testimony, less trouble and expense for the nonparty, and less time required for the court. These factors may be specially important in transnational litigation, for instance when a witness would be required to travel from a distant country to be examined in court. However, the court may, in its own discretion or on motion by a party, order that the author of an affidavit be examined orally at the hearing. There are also means of taking evidence provided by international law and conventions on judicial assistance: requests by diplomatic channels, rogatory letters, etc. (see, e.g., The Hague Convention on the Taking of Evidence Abroad).

C-22.1 A hearing in camera is one closed to the public and, in various circumstances, closed to others except advocates for the parties. As the court may direct according to the circumstances, such a hearing may be confined to counsel without the parties or it may be ex parte, e.g., confined to a party and that party’s counsel, for example when trade secrets are involved.

23.4 The court may suggest that the parties consider settlement, mediation, or arbitration or any other form of alternative dispute resolution. The court may stay the proceeding and direct the parties to an Alternative Dispute Resolution procedure, such as settlement or mediation.

C-23.1 This Rule determines the role of the court in preparing the case for the plenary hearing, when exchange of evidence has come to an end and the terms of the dispute may be finally defined. The court has wide discretion in deciding how to conclude the preliminary phase, or phases, and in determining how to provide for the following plenary phase of the proceedings.

C-23.2 The court may decide that, in order to clarify the issues and to specify the terms of the dispute at the plenary hearing, one or more conferences may be useful. The court may conduct a conference by any means of communication available such as telephone, videoconference, or the like.

C-23.3 The court fixes the date or dates for such conferences. The parties’ lawyers are required to attend. Participation of advocates for the parties is essential to facilitate orderly progression to resolution of the dispute. Advocates in many systems have some authority to make agreements concerning conduct of the litigation. Parties may have additional authority in some systems. If matters must be discussed that are outside of the scope of the advocates’ authority, the court has authority to require the parties themselves to attend in order to discuss and resolve matters concerning progression to resolution, including discussion of settlement. The rule does not interfere with the possibility of pro se litigants.

C-23.4 In the conference, the court should discuss with the parties’ lawyers, and, as appropriate, with the parties personally the issues of the case; which facts, claims, or defenses are no longer disputed; whether new disputed facts have emerged from disclosure or exchange of evidence; whether new claims or defenses have been presented; and what evidence will be admitted at the plenary hearing. The principal aim of the conference is to exclude issues that are no longer disputed and to identify precisely the facts, claims, defenses, and evidence concerning those issues that will be addressed at the plenary hearing.

The court may decide that a conference is unnecessary, and that the plenary hearing may proceed simply on the basis of the parties’ pleadings and stipulations.

C-23.5 After consultation with all parties, the court may give directives for the plenary hearing as provided in Rule 23.3. The court may sum up the terms of claims and defenses and order corresponding revision of the pleadings. Having defined the issues for the hearing, the court may rule on issues concerning admissibility of evidence, specify the items of admissible evidence, and determine the order of their examination. The court may also resolve disputed claims of privilege. The court should fix the date for plenary hearing and enter other orders to ensure that it will be carried on in a fair and expedited manner.

Rule 23 authorizes various measures by the court to facilitate an efficient hearing. Claims and defenses withdrawn or abandoned by the parties should be excluded. It is often useful to isolate one or more issues for hearing upon one occasion, with other issues reserved for consideration later if necessary. So also, it is often useful that a hearing be consolidated with another case when the same or substantially similar issues are to be considered. As recognized in Rule 23.3.4, it is often convenient for the court to rule on admissibility of evidence prior to its presentation, especially evidence that is complicated, for example voluminous documents.

C-23.6 The court may consider the possibility that the parties may settle the dispute or refer it to a mediator. In such a case the court, before entering the rulings described in Rule 23.3, may fix a hearing calling the parties’ lawyers and the parties personally to explore the possibility of a settlement, if necessary with the mediation of the court itself or a deferral of the dispute to mediation or any other form of alternative dispute resolution. This subsection authorizes the court to encourage discussion between the parties, but not to exercise coercion.

C-23.7 If a settlement is reached, the proceedings are terminated and judgment entered. If the parties agree about a deferral to mediation or arbitration, that agreement should be put into the record of the case and the proceeding suspended.

C-24.1 The language in which the proceeding is conducted should be that in which the court is fluent. Ordinarily this will be the language of the state in which the court is situated. However, if the court and the parties have competence in a foreign language, they may agree upon or the judge may order some other language for all or part of the proceeding, for example the reception of a particular document or the testimony of a specific witness in the witness’s native language.

C-24.2 In transnational litigation, it happens frequently that witnesses and experts are not fluent in the language in which the proceeding is conducted, i.e., that of the country where the case is tried. In such a case translation is required for the court and for other parties. The testimony shall be taken at the hearing with the aid of an interpreter, with the party presenting the evidence paying the cost of the translation unless the court decides otherwise.

C-24.3 A second possibility is examining the witness by way of deposition, as provided in Rule 21.4, under agreement of the parties or by order of the court. See Rule 21.1. The deposition can then be translated and submitted at the hearing. The procedure and cost of the deposition are determined according to Rule 21.

C-25.1 This Rule states principles concerning evidence, defining generally the conditions and limits of what may be properly considered as proof at the hearing. The basic principle is that any factual information, not privileged, that is rationally useful in reaching judgment on the relevant facts of the case should be admissible as evidence. Evidence governed by a privilege is not admitted and the court may refuse to accept evidence that is redundant. Common-law concepts of hearsay and parole evidence as exclusionary rules are inappropriate in a nonjury case, except as they affect the credibility and weight of evidence.

C-25.2 In applying the principle of relevance, the primary consideration is the usefulness of the evidence. In deciding upon admissibility of the evidence, the court makes a hypothetical evaluation connecting the proposed evidence with the issues in the case, i.e., a hypothesis concerning the possible outcome of the presentation of the evidence. If a probative inference may be drawn from the evidence to the facts, then the evidence is logically relevant.

C-25.3 In some legal systems there are rules limiting in various ways the use of circumstantial evidence. However, these rules seem unjustified and are very difficult to apply in practice. More generally, there is no valid reason to restrict the use of circumstantial evidence when it is useful to establish knowledge of a fact in issue. Therefore under the general principle, the court may consider any circumstantial evidence provided it is relevant for the decision on the facts of the case.

C-25.4 Rule 25.2 defines who can properly give evidence or present statements. In some national systems the rules exclude parties or “interested” nonparties as witnesses. However, even in such systems the trend favors admitting all testimony. A general rule of competency also avoids the complex distinctions that exclusionary rules require. The proper standard for the submission of evidence by a witness is the principle of relevancy. This does not mean, however, that subjective or objective connections of the witness with the case must be disregarded, but only that they are not a basis for excluding the testimony. These connections, for example kinship between the witness and a party, may be meaningful in evaluating credibility.

Any person having information about a relevant fact is competent to give evidence. “Any person” includes the parties and any other person having mental capacity. Witnesses are under obligation to tell the truth, as required in every procedural system. In many systems such an obligation is reinforced by an oath by the witness. When a problem arises because of the religious character of the oath, the court has discretion to determine the terms of the oath or to permit the witness merely to affirm the obligation to tell the truth.

C-25.5 Rules 25.3 and 25.4 govern the parties’ right to proof in the form of testimony, documentary evidence, and real or demonstrative evidence. A party may testify in person, whether called by the party, another party, or the court. That procedure is not permitted in some civil-law systems, where the party is regarded as too interested to be a witness on its own behalf. The court may exercise an active role in the taking of testimony or documentary, real, or demonstrative evidence. For example, when the court knows that a relevant document is in possession of a party or of a nonparty, and it was not spontaneously produced, the court may on its own motion order the party or the nonparty to produce it. The procedural device is substantially an order of subpoena. The court in issuing the order may establish the sanctions to be applied in case of noncompliance. See Rule 30.

26.1 The court must appoint a neutral expert or panel of experts whenever required to do so by forum law and may do so when the court determines that expert evidence may be helpful in resolving issues in the case. Expert testimony may address issues of foreign law and international law.

C-26.1 These Rules adopt the basic civil-law system concerning experts, according to which the court appoints a neutral expert or panel of experts. The court decides on its own motion whether an expert is needed in order to evaluate or to establish facts that because of their scientific, legal, or technical nature, the court is unable to evaluate or establish by itself. The court appoints the expert or the experts (if possible using the special lists that exist in many countries) on the basis of the expert’s competence in the relevant field. If the expert’s neutrality is disputed, that issue is for the court to resolve. The court, informed by the parties’ recommendations, should specify the technical or scientific issues on which the expert’s advice is needed and formulate the questions the expert should answer. The court also should determine which techniques and procedures the expert will apply, regulate any other aspect of the tests, inquiries, and research the expert will make, and determine whether the expert will respond orally or by submitting a written report. In making such determinations, the court should consult with the experts as well as the parties in determining the tests, evaluations, and other procedures to be used by the experts.

C-26.2 The court’s expert is neutral and independent from the parties and from other influence. The court is expected to rely on the expert’s advice when it appears sound and credible; if the advice does not appear reasonable, the court may appoint another expert. However, the court is not obliged to follow the expert’s advice. In such a case, the court ordinarily should explain specifically the reasons why the expert’s advice is rejected and the reasons supporting the court’s different conclusion.

C-26.3 Rule 26 recognizes that the status of an expert is somewhat different from that of a percipient witness and that experts have somewhat different status in various legal systems. In common-law systems an expert is presented by the parties on the same basis as other witnesses, recognizing that the role is one of interpretation rather than recounting first-hand observations. In civil-law systems the parties may present experts but ordinarily do so only to supplement or dispute testimony of a court-appointed expert.

This Rule adopts an intermediate position. The court may appoint experts but the parties may also present experts whether or not the court has done so. The court-appointed expert provides the court with technical, legal, or scientific information and analysis. Such an expert is obliged to perform this task in good faith and according to the standards of the expert’s profession. A party’s expert is subject to cross-examination.

C-26.4 In cases in which the court has appointed neutral assessors according to Rule 8, it may not be necessary to appoint a neutral expert. In more complex cases, however, especially when a formal investigation is needed, it may be necessary to have both. The judge has discretion to decide which device to use in light of the circumstances of the case.

C-26.5 Rule 26.3 provides that the parties are entitled to appoint their own experts, but party experts participate under supervision by the court. The role of a party expert may be limited to advising the party about the technical and scientific matters involved and commenting on the activity of the court’s expert. The parties’ experts are entitled to be informed about any test, experiment, or inquiry carried on by the court’s expert. They may raise problems, ask questions, and submit comments, data, and information to the court’s expert.

However, when the court receives oral testimony from the court’s expert, the parties’ experts should be similarly heard. When the court’s expert submits a written report, the parties’ experts should also be allowed to do so. The court may order all the experts to confer with each other in order to clarify the issues and to focus their opinions. The advice of the parties’ experts may be taken into account by the court and the court may adopt a party’s expert advice instead of that of the court’s expert.

When an expert is examined orally, the provisions in Rule 28 generally apply. However, under Rule 26.2 the court may require a written report from the expert and oral examination of the expert after the report has been submitted.

C-27.1 Privileges exclude relevant evidence. They evolve over time and reflect various social interests. Organized professions (e.g., doctors, psychiatrists, accountants, lawyers) are interested in protecting their members’ professional activities by means of the privilege not to disclose information acquired during such an activity. Statutory law and case law have extended the list of professional privileges. However, the protection of such privileges has significant cost in the quality of proof and discovery of truth.

C-27.2 Rule 27.1.1 gives full effect to a “legal profession” privilege. The concept of this privilege is different in the common-law and civil-law systems but this Rule includes both concepts. The common law recognizes an “attorney-client privilege,” which enables the client to object to inquiry into confidential communications between client and lawyer that were made in connection with the provision of legal advice or assistance. Under United States law a similar protection, called the “lawyer work product” immunity, additionally shields materials developed by a lawyer to assist a client in litigation. The civil law recognizes the same protections but under the concept of a professional right or privilege of the lawyer.

C-27.3 Rule 27.1.2 reflects the universal principle that confidentiality should be observed with regard to communications in the course of settlement negotiations in litigation. Some systems presume that only correspondence between advocates is confidential, whereas many other systems extend this privilege to party communications concerning settlement. The precise scope of confidentiality of communications concerning settlement is determined by the law governing the communications, but the general principle stated above should be considered in determining the matter. See also Rule 22.

C-27.4 Rule 27.2 accords protection to other privileges, such as those involving financial advisers or other professionals. In general, the civil-law systems accord privacy to the communications of many professionals. Many legal systems recognize additional privileges, usually in qualified form. Thus, the European Court of Human Rights has recognized various professional privileges, e.g., for bankers, accountants, and journalists, and many countries also recognize a privilege for communications between family members. Many state jurisdictions in the United States recognize an accountant privilege and some recognize a “self-evaluation privilege” on the part of hospitals and some other organizations. However, in some civil-law systems the court may examine such confidences if they appear highly relevant to the matter in dispute. Such an approach is known in the common law as a conditional privilege. However, if the court permits receipt of such evidence, it should protect the confidential information from disclosure except as required for consideration in the dispute itself.

C-27.5 The court may make a determination whether to receive conditionally privileged information through an in camera hearing, in which the participants are limited to the court itself, the parties, and the parties’ lawyers. See Rule 22.3. The same device may be used concerning nonprivileged information when the court finds that publication could impair some important private or public interests, such as a trade secret. The taking of evidence in a closed hearing should be exceptional, having regard for the fundamental principle of the public nature of hearings.

C-27.6 Rule 27.3 prescribes a procedure for claims of privilege with respect to documents. The claimant is required to identify the document in sufficient detail to permit an opposing party to make an intelligent disputation of the claim of privilege, for example that the document had been distributed to third persons.

C-27.7 A person who is entitled to a privilege may waive it, in which event evidence in the privileged communication is received without limitation. The privilege may be waived by means of an explicit statement or tacitly; a tacit waiver results when the party does not timely claim the privilege. However, the court may decline to enforce a waiver when necessary in the interest of justice.

C-28.1 Rule 28.2 establishes a general principle concerning the structure of the plenary proceeding. It is consistent with the common-law “trial” model, according to which the taking of evidence should be made in a single hearing; when one day of hearing is insufficient the plenary hearing should continue in consecutive days. In civil-law systems a similar structure is reflected in “concentrated” proceedings. The concentrated hearing is the better method for the presentation of evidence, although several systems still use the older method of separated hearings. Exception to the rule of the concentrated hearing can be made in the court’s discretion when there is good reason, for example when a party needs an extension of time to obtain evidence. In such a case the delay should be as limited as possible. Dilatory behavior of the parties should not be permitted.

C-28.2 In most civil-law systems, a party’s statement is regarded as having lesser standing than testimony of a nonparty witness; in some civil-law systems, a party may not be compelled to give testimony at the instance of another party; and in some systems a party cannot call itself as a witness. The common law treats parties as fully competent witnesses and permits parties to call themselves to the stand and obliges them to testify at the instance of an opposing party, subject to privileges such as that against self-incrimination. This Rule adopts the common-law approach, so that a party has both an obligation to testify if called by the opposing party and a right to testify on its own motion. See Rule 25.2. Failure without explanation or justification to testify may justify the court’s drawing an adverse inference concerning the facts, or, if a party disobeys an order to testify, holding the party in contempt. However, a party’s failure to comply may have some reasonable explanation or justification. Sanctions may be gradually increased until the party decides to comply, according to the model of the French astreintes. See also Rule 1.6.

This procedure entails a departure from the “free examination” of the parties permitted in some continental systems, whereby parties make statements but are not witnesses in the strict sense because they are under no obligation to tell the truth and do not take an oath.

C-28.3 Rule 28.3.2 governs the examination of witnesses. The traditional distinction between common-law systems, which are based upon direct and cross-examination, and civil-law systems, which are based upon examination by the court, is well known and widely discussed in the comparative legal literature. Equally well known are also the limits and defects of both methods. The chief deficiency in the common-law procedure is excessive partisanship in cross-examination, with the danger of abuses and of distorting the truth. In the civil law the chief deficiency is passivity and lack of interest of the court while conducting an examination, with the danger of not reaching relevant information. Both procedures require efficient technique, on the part of the judge in civil-law systems and the advocates in common-law systems. The problem is to devise a method effective for a presentation of oral evidence aimed at the search for truth. The rules provided here seek such a balanced method.

C-28.4 For a witness called by a party, the common-law system of direct and supplemental examination by the parties is the most suitable for a thorough examination. The witness is first questioned by the lawyer of the party who called him or her, and then questioned by the lawyers for the adverse parties. Further questioning may be permitted by the court when useful. To prevent abuses by the lawyers, the court should exclude, on the other party’s objection or ex officio, questions that are irrelevant or improper or which subject the witness to embarrassment or harassment. If the court is too passive, it will be ineffective in preventing improper behavior by the lawyers. On the other hand, lawyers unaccustomed to questioning may have difficulty conducting an effective interrogation.

C-28.5 The civil-law method, in which the court examines the witness, has advantages in terms of the neutral search for the truth and of eliciting facts that the court considers especially relevant. The court therefore is afforded an active role in the examination of witnesses, an authority that is also recognized in common-law systems. The court may play such a role to clarify testimony during the questioning by the parties or may independently examine the witness after the parties’ examinations when it seems useful to elicit or clarify facts or circumstances that have not emerged sufficiently.

C-28.6 A witness called ex officio by the court is examined first by the court and then by the parties. This is the equivalent of a direct examination of a witness called by a party. After that, the parties have the right to question the witness. The court may therefore conduct a further examination of the witness when it seems necessary to clarify, control, or further develop the testimony given.

C-28.7 If a party, during questioning as a witness, makes a statement, the content of which is contrary to the party’s own interest, the statement is to be treated as ordinary evidence and does not have any special probative weight. Such a statement is not to be treated as a “confession” having binding effect. Also, under Rule 28.3.6 a statement by a party outside court, for example in a deposition, that is contrary to his or her interest is admissible as evidence if duly proved at the hearing. Such a statement is also to be treated as ordinary evidence to be freely evaluated by the trier of fact.

C-28.8 The opinion of a witness may be admitted when it will clarify the witness’s testimony. In the recollection of facts, knowledge and memory are often inextricably mixed with judgments, evaluations, and opinions, often elaborated unconsciously. Sometimes a “fact” implies an opinion of the witness, as for instance when the witness interprets the reasons for another person’s behavior. Therefore the rule excluding the opinions of witnesses is properly understood as prohibiting comments that do not aid in the reconstruction of the facts at issue.

C-28.9 Rule 28.3.7 permits disputation of the credibility of any witness, including experts and parties when examined as witnesses. The best opportunity to cast doubt upon the credibility of a witness is through examination in court. The credibility of any witness can be disputed on any relevant basis, including adverse questioning, prior inconsistent statements, or any other circumstance that may affect the credibility of the witness, such as interest, personal connections, employment or other relationships, incapacity to perceive and recollect facts, and inherent implausibility of the testimony. Such prior statements may have been made in earlier stages of the same proceedings (for instance, during deposition) or made out of the judicial context, for instance before the beginning of the litigation.

However, the right to challenge the credibility of an adverse witness may be abused by harassment of the witness or distortion of the testimony. The court should prevent such conduct. The challenge of the credibility of a witness should be allowed only when there are serious reasons for doing so.

C-28.10 The authenticity or the reliability of other items of evidence, either documentary or real and demonstrative, may also be disputed by any party. Special subproceedings to determine the authenticity of public or private documents exist in many national systems. They should be used when the authenticity of a document is doubtful or contested. Scientific and technical evidence may also be scrutinized if its reliability is doubtful or disputed.

C-29.1 Rule 29 specifies various aspects of the authority of the court with reference to evidence. The court may exercise such powers on its own motion or on a motion of a party.

Rule 29.2 gives the court the power to exclude evidence on various grounds. The first is irrelevancy of the evidence or its redundant or cumulative character. Redundant or cumulative evidence is theoretically relevant if considered by itself but not when considered in the context of the other evidence adduced. The court may in the course of a plenary hearing admit evidence that was preliminarily excluded because it had appeared irrelevant, redundant, or cumulative. The standard of exclusion by reason of “unfair prejudice, excessive cost, burden, confusion, or delay” should be applied very cautiously. This power should be used by the court primarily when a party adduces evidence with the apparent aim of delaying or confusing the proceedings.

C-29.2 Rule 29.3 and 29.4 provide for various other sanctions, including astreintes. The court may draw adverse inference from the behavior of a party such as failing to give testimony or present a witness or produce a document or other item of evidence that the party could present. Drawing adverse inference means that the court will interpret the party’s conduct as circumstantial evidence contrary to the party.

Drawing adverse inference is obviously a sanction appropriate only against a party. Sanctions applied to nonparties include contempt of court and imposing a fine, subject to the limitation in Rule 38.2.4. The conduct that may be sanctioned includes failing to attend as a witness or answer proper questions and failing without justification to produce documents or other items of evidence.

C-29.3 While failure to comply with rules and orders concerning evidence is always subject to sanction, the court has discretion concerning the importance and the nature of the noncompliance and the kind and measure of the sanction that will be imposed. Rule 29.5 provides that the court may excuse a party’s failure to comply with the rules concerning evidence or with court orders applying the rules, according to the discretion of the court. The court’s authority should be exercised reasonably and with regard to the principle of proportionality. See Rule 1.6.

C-30.1 The court has broad authority to order nonparties as well as parties to act or to refrain from acting during pendency of the litigation, to preserve the status quo, and to prevent irreparable injury. In various situations a person may be involved in a suit without being a party, but should be subject to orders in the interest of justice in the proceeding. The right of contradiction stated in Principle 5 should be respected at all times. Therefore, interested persons should be notified and afforded a reasonable opportunity to respond.

C-30.2 A preliminary injunction issued in accordance with Rule 17.1 may involve nonparties insofar as their cooperation is needed in order to carry the injunction into effect, particularly to maintain the status quo, to prevent irreparable injury, and to assure an effective remedy. The court should determine the kind of cooperation required by nonparties and provide orders accordingly.

C-30.3 When funds or other property is involved, the court may require that they be preserved against dissipation until the case is finally decided. The court may order the person in possession of the property to retain it until a further order of the court.

C-30.4 When a nonparty’s testimony is required, on a party’s motion or on the court’s own motion, the court may direct the witness to give testimony in the hearing or through deposition.

C-30.5 When a document or any other relevant thing is in possession of a nonparty, the court may order its production at the preliminary stage or at the plenary hearing.

C-30.6 An order directed to the third party is enforced by sanctions for noncompliance authorized by forum law. These sanctions include a monetary penalty or other legal compulsion, including contempt of court. When it is necessary to obtain evidentiary materials or other things, the court may order a direct seizure of such materials or things, and define the manner of doing it. See Rule 1.6.

C-31.1 With regard to the record of the evidence, two principal methods can be used. One is typical of some common-law jurisdictions and consists of the verbatim transcript of everything said in the presentation of evidence; the other is typical of civil-law systems and consists of a summary of the hearing that is written by the court’s clerk under the direction of the court, including the matters that in the court’s opinion will be relevant for the final decision. In most civil-law systems there is no procedure for making a verbatim transcript. A verbatim transcript is complete and provides a good basis both for the final decision and for the appeal, but in many cases it is exceedingly burdensome and expensive.

C-31.2 These Rules regard the more desirable practice to be a summary record written by the court’s clerk under direction of the court. The court should require the summary record to include all relevant statements made by the parties and the witnesses, and other events that might be useful for the final evaluation concerning the credibility of witnesses and the weight of proofs. The parties are entitled to ask for inclusion of specific statements and the court has discretion to permit their reception.

C-31.3 If a party requests a verbatim transcript or audio or video recording of the plenary hearing, the court should so order. The party or parties requesting the transcript should pay the expense. The court should be provided a copy of the transcript and the other parties are entitled to have a copy upon paying their share of the expense. The court may, on its own initiative, order a verbatim transcript of the hearing. A verbatim transcript does not take the place of the official record that must be kept according to Rule 31.1 unless ordered by the court.

C-32.1 The plenary hearing ends when all the evidence has been presented. At this point the case is almost ready for decision, but the parties may request permission to present oral closing statements, the plaintiff first and then the defendant. In such closing statements the parties will suggest the conclusions to be drawn from the evidence presented, and may restate their “theories of the case” both from the factual and the legal point of view, briefly summing up their contentions and claims and stating their requests. The court may allow the parties to discuss briefly among themselves and the court the main issues of the case. The court may put questions to the parties’ lawyers in order to clarify the contentions and claims.

C-32.2 A party has a right to present a written submission of contentions and the legal rules upon which the contentions are based. The court should fix a date for written submissions and the date of a further hearing in which the closing statements will be presented and the oral discussion will take place.

C-32.3 Rule 32.2 requires the court to publish a written opinion justifying its decision. The publication is made according to the local practice, but a written notice must be sent to the parties. All parties are entitled to obtain a copy of the entire judgment. The date of the judgment, determined according to forum law, is the basis for determining the time for appeal and for enforcement.

The justificatory opinion shall include the findings of fact supported by reference to the relevant proofs and the evaluations of evidence by which the court has found the facts and the principal legal propositions supporting the decision, with reference to the relevant legal rules, principles, and precedents and to the arguments supporting the interpretation adopted by the court.

C-32.4 If the court is composed of more than one judge, in some countries a member of the tribunal may give a dissenting or concurring opinion, orally or in writing. Such opinions, if in writing, are published together with the court’s opinion.

C-32.5 The standard of proof generally applied in civil cases at common law is that of preponderance of the evidence. In civil-law systems the standard is that the judge must be convinced. Many systems impose a higher standard of proof for certain issues in civil cases, notably proof of fraud. These standards contrast with the higher standard, such as “beyond a reasonable doubt,” in criminal cases. Rule 32.2 defers to the standard under forum law.

In addition to the standard of proof is the problem of burden of proof. In general, it is universally recognized that a plaintiff has the burden of proof for all issues essential to his claim and that the defendant correlatively has the burden of proof as to issues of affirmative defense. In civil-law systems the allocation of burden of proof is considered to be a matter of substantive law for purposes of choice of law. The rules of burden of proof applicable to various types of claims are in turn considered to be derived from substantive considerations, such as the nature of the claim and the relative capabilities of parties in transactions of the kind presented in the case. Thus, the forum would look to the law governing the transaction to determine the rules of burden of proof.

In common-law systems the allocation of burden of proof is generally considered to be “procedural” so far as concerns choice of law. The forum therefore applies its own rule of burden of proof. Common-law systems recognize exceptions according to which the claim is based on a statute of another jurisdiction whose law governs the transaction, at least if the statute provides a special allocation of burden of proof. In any event, the rules of burden of proof in common-law systems generally reflect the same kinds of “substantive” policy considerations as underlie the rules of burden of proof in the civil-law systems.

A classically vexing problem is the classification of issues in allocation of burden of proof, i.e., whether a specific issue is part of plaintiff’s case or a matter of affirmative defense. That problem should be resolved according to the applicable law recognized by the forum.

C-33.1 The rule governing allocation of costs and expenses of litigation in ordinary civil proceedings, recognized universally except in the United States, is that the prevailing party is entitled to reimbursement from the losing party. That principle is adopted here, and the prevailing party shall be reimbursed for costs and expenses independently of request. The party need only submit the statement referred to in Rule 33.4.

Under the “American” rule in the United States, each party bears its own costs and expenses, including its attorney’s fees, except as statutes specifically provide otherwise or in case of exceptional abuse of process. The American rule creates incentives for a party to bring litigation or to persist in defense of litigation that would not be maintained under the generally recognized rule.

However, the rules concerning costs in common-law systems and some civil-law systems confer authority on the court to modify the normal allocation of costs to the losing party. Rule 33.5 adopts such a position. This Rule also allows the court to impose penalty costs on a party that has engaged in bad-faith disputation. “Bad faith” includes disputation of factual issues as to which there is no substantial evidentiary dispute and assertion of legal contentions for which no professionally responsible argument can be offered.

C-33.2 The parties are permitted, in accordance with applicable law, to contract with their lawyers concerning their fees. Costs awarded should be reasonable, not necessarily those incurred by the party or the party’s lawyer. If it was reasonably appropriate that a party retained more than one firm of lawyers, those fees and expenses may be recovered. The party seeking recovery of costs has the burden of proving their amount and their reasonableness. The award belongs to the party, not the lawyer, subject to any contractual arrangement between them.

C-33.3 Rule 33.7 recognizes that, if it is authorized by the law of the forum, the court may require posting of security for costs. In several legal systems the security for costs is considered as a violation of the due-process guarantee in connection with the principle of the equal treatment under the law. Security for costs could entail discrimination against parties not having enough money to give such a security, and, correspondingly, constitute preferential treatment for parties having money. On the other hand, in some countries it is considered as a normal means to ensure the recovery of costs.

In the context of transnational litigation such concerns may be less important than in the usual domestic litigation. Moreover, there is a higher risk of being unable to recover costs from a losing party who is not a resident of the forum state. Therefore these Rules leave the imposition of security for costs to the discretion of the court. The court should take care not to impose excessive or unreasonable securities.

C-34.1 A right of appeal is a generally recognized procedural norm. It would be impractical to provide in these Rules for the structure of the appellate courts and the procedure to be followed in giving effect to this right. It is therefore provided that appellate review should be through the procedures available in the court system of the forum. “Appeal” includes not only appeal formally designated as such but also other procedures that afford the substantial equivalent, for example, review by extraordinary order (writ) from the appellate court or certification for appeal by the court of first instance.

C-34.2 Rule 34.1 provides for a right of appeal from a final judgment. The only exceptions are those stated in Rules 34.2 and 34.3. Thus, interlocutory appellate review is not permitted from other orders of the first-instance court, even though such review might be available under the law of the forum. In some countries, especially those of common-law tradition, some of the decisions in a proceeding are made by adjuncts, such as magistrate judges. These decisions are normally appealable to the first-instance judge who delegated the issue. This subsection does not interfere with this practice. The restrictions on appeal set forth in this Rule do not apply to the relationships between a court of first instance and its adjuncts. See Rule 20.8.

C-34.3 Rule 34.2 permits pendente lite interlocutory appellate review of orders granting or denying an injunction. See Rule 17. The injunction remains in effect during the pendency of the review, unless the reviewing court orders otherwise. The court may determine that an injunction should expire or be terminated if circumstances warranted.

C-34.4 Rule 34.3 permits interlocutory appeal of orders other than the final judgment at the initiative of either the first-instance court itself or the appellate court. The judges of the first-instance court or the appellate court, as the case may be, must determine that the order is of the importance defined in Rule 34.3. Permission for the interlocutory appeal may be made by motion addressed to the court from which permission is sought.

C-34.5 Rule 34.4 permits appellate review of factual issues on the basis only of evidence previously presented to the court of first instance. This limitation accords with the principle followed in the common-law tradition and is also recognized in some civil-law systems. Within the foregoing limitation the appellate court may determine that evidence should have been received that was excluded by the first-instance court or require that evidence which was received be disregarded, for example, where the first-instance court made an erroneous ruling concerning a claim of evidentiary privilege. When the appellate court has determined that evidence was improperly excluded or received and that the effect was prejudicial, it may direct judgment where justified or order further proceedings in the court of first instance.

The restriction upon presenting additional evidence to the second-instance court reflects the practice in common-law systems. However, that practice is subject to the exception that an appellate court may consider additional evidence under extraordinary circumstances, such as the uncovering of determinative evidence after the appeal was taken and the record had been completed in the first-instance court.

C-35.1 Most modern court systems are organized in a hierarchy of at least three levels. In many systems, after appellate review in a court of second instance has been obtained, further appellate review is available only on a discretionary basis. The discretion may be exercised by the higher appellate court, for example, on the basis of a petition for hearing. In some systems such discretion may be exercised by the second-instance court by certifying the case or an issue or issues within a case to the higher appellate court for consideration.

C-35.2 This Rule adopts by reference the procedure in the courts of the forum concerning the availability and procedure for further appellate review. It is impractical to specify special provisions in these Rules for this purpose.

C-36.1 The rule of finality is recognized in the common-law systems and many civil-law systems. However, procedure in many systems permits reconsideration or correction of a judgment under specified conditions. In some common-law systems a “new trial” may be granted. All systems impose time limits on use of such procedures and generally require that they be invoked before the time to appeal has expired. The forum rules in such matters should govern finality.

C-37.1 As a general rule a final judgment should not be reexamined except in appellate review according to the provisions included in Rules 34 and 35. Only in exceptional circumstances may it be nullified through a new proceeding.

C-37.2 Reexamination of a judgment may be requested in the court that rendered the judgment. In seeking such a reexamination a party must act with due diligence. The grounds for such an application are: (1) the court had no jurisdiction over the party asking for reexamination; (2) the judgment was procured by fraud on the court; (3) there is evidence not previously available that would lead to a different outcome; or (4) there has been a manifest miscarriage of justice.

C.37.3 The challenge under Rule 37.1.1 should be allowed only in case of default judgments. If the party contested the case on the merits without raising this question, the defense is waived and the party should not be allowed to attack the judgment on those grounds.

C-37.4 The court should consider such an application cautiously when Rule 37.1.3 is invoked. The applicant should show that there was no opportunity to present the item of evidence at the plenary hearing and that the evidence is decisive, i.e., that the final decision should be changed.

C-37.5 In interpreting Rule 37.1.4, it should be recognized that the mere violation of a procedural or substantive legal rule, or errors in assessing the weight of the evidence, are not proper grounds for reexamining a final judgment, but are proper grounds for appeal (see Rules 34 and 35). A miscarriage of justice is an extreme situation in which the minimum standards and prerequisites for fair process and a proper judgment have been violated.

C-38.1 Rule 38.1 provides that a final judgment is immediately enforceable. If the judgment has to be enforced in the country of the court in which the judgment was entered, the enforcement will be based on the forum’s law governing the enforcement of final judgments. Otherwise, the international rules including international conventions such as the Brussels and Lugano Conventions on Jurisdiction and Enforcement of Judgments will apply. When a monetary judgment is to be enforced, attachment of property owned by the judgment obligor, or obligations owed to the obligor, may be ordered. Monetary penalties may be imposed by the court for delay in compliance, with discretion concerning the amount of the penalty. See Rule 1.6.

C-38.2 Rule 38.2 authorizes the court, upon request of the judgment holder, to impose monetary penalties upon the judgment obligor in the case of noncompliance with a judgment. These penalties may become effective if the judgment obligor does not pay the obligation within the time specified, or within 30 days after the judgment has become final if no time is specified. The monetary penalties are to be imposed according to the following rules:

1) Application for the enforcement costs and penalties may be made by any party entitled to enforce the judgment.

2) Enforcement costs include the probable fees required for the enforcement, including the attorney’s fees, and including a conditional penalty in case of defiance of the court. A conditional penalty may not exceed twice the amount of the judgment. The court may require the penalty to be paid to the person obtaining the judgment or to the court or otherwise.

3) Additional penalties may be added against an obligor who persists in refusal to pay, considering the amount of the judgment and the economic situation of the parties. Here, too, the court may require the penalty to be paid to the person obtaining the judgment or to the court, or otherwise.

4) No penalty shall be imposed on a person who satisfactorily demonstrates to the court an inability to comply with the judgment. See Rule 1.6.

5) “Third parties” includes any institution which holds an account of the debtor.

C-38.3 Rule 38.3 permits either the first-instance court or the appellate court to grant a stay of enforcement in exceptional cases. Rule 38.4 authorizes the court to require a bond or other security as a condition either to permit or to stay the immediate enforcement.

C-39.1 It is a general principle of private international law that judgments of one state will be recognized and enforced in the courts of other states. This principle is being given expression in The Hague Convention on Jurisdiction and Judgments, now in the drafting process. The same principle has been recognized with respect to interlocutory orders, such as orders directing testimony from third-party witnesses. The extent of such assistance and the procedures by which it may be provided are governed in many respects by the Brussels and Lugano Conventions.