- by Respondent, on June 2, 2008;
- by Claimant, on July 7, 2008;
- by Respondent, on July 30, 2008;
- by Claimant, on August 12, 2008;
all submissions being accompanied by experts’ reports, legal opinions, witness statements and legal authorities.
Mr. Katz did not create, possess or control the audio recording before Claimant obtained it from the Financial Times. Claimant is unaware of how the submitted recording was created. It may only speculate about the circumstances of its creation. Ms. Iacob was counsellor to the Prime Minister and involved in NATO and Israeli relations. She may have been of interest for Romanian or foreign intelligence services.
The seriousness of a corruption charge also requires that the utmost care and sense of responsibility be taken to ascertain the truthfulness and genuine character of the evidence that the party intends to offer in support of its claim.
It is the Tribunal’s considered opinion that Claimant failed to adhere to this standard of conduct when requesting the admission of the New Evidence. In the Tribunal’s view, Claimant has failed to sustain its burden of proving to the Tribunal the truthfulness and genuine character of the New Evidence.
Considering that today’s sophisticated technology may permit easy manipulation of audio recordings, proven authenticity is in fact an essential condition for the admissibility of this kind of evidence. As mentioned by Mr. Koenig, Respondent’s expert in conducting forensic examination of audio and video media to authenticate recordings, "[r] ecordings cannot be authenticated without the original medium and sometimes the original recorder" (Reply Report of July 30, 2008, point 3(ii), on page 3).
Respondent requested from the very beginning, in its comments on Claimant’s application, that the original tape be produced "forthwith" (letter of April 28, 2008, page 4), underlining that "Claimant has the obligation to produce the original audio material if it is to be accepted as "evidence"", as provided by ICSID Administrative Regulation 30 and the IBA Rules of Evidence in Article 3 (11) (ibidem, footnote 7). As agreed in the First Session of this proceeding, "for purposes of the ICSID Administrative and Financial Regulation No. 30 authenticity of documents and/or translations provided by the Party would be presumed, unless challenged by the other Party" (item 13). In the presence of Respondent’s challenge there is no presumption of authenticity of the audio recording, with the burden of proving such authenticity thus being Claimant’s responsibility.
- was converted from analog to digital format;
- is an incomplete copy of the original recording since it does not contain the beginning and the end;
- includes 20 "discontinuities";
- includes nine instances of transient sounds and two irregular discontinuities in the 50 Mz electric network frequency signal, both indicative of possible digital edits;
- indicates a number of other possible "undetectable digital manipulations, such as deletions, relocations and additions of segments as well as additions of sounds to cover up such edits";
- "because of the absence of the original recording(s) and recording equipment the presence of such digital manipulations cannot be verified or excluded".
"Mr. Koenig identified two 50Hz events at time 3:53.681 and 4:33.335. The first of these occur fractionally before analogue Event W6 and as this appears to be an [sic] stop and start to the recording it would seem an unlikely spot for any tampering. The feature W6 also makes analysis difficult about this point, and additionally because of the speed variations noted earlier it would be difficult to analyse mains [sic] supply frequency variations. I was not able to reproduce Mr. Koenig's results and would need more specific details covering how the spectral measurements were take [ sic ] including exact timings, sample duration, filtering used, etc."
In the "Comparative Analysis" section Mr. Groninger repeats that no information regarding the original recording machine was received (para. 7.1), and then (in the "Conclusion", on page 10) points to the fact that "My examination has been constrained by the short time scale available and the unavailability of the original machine or the original recording", although he maintains that "in the absence of the original material it is still possible to conduct an analysis". He then draws a number of conclusions in reply to Mr. Koenig’s Report. On the critical question of the digital editing suggested by Mr. Koenig the answer is not straightforward: "the ease of concealment of digital editing depends to a large part on the nature of the recording and the background signal present on this recording would make masking the effects of editing difficult" (para. 8.5). He confirms the removal of the beginning and the end of the recording (para. 8.12).
In his Report of July 6, 2008, Professor French, another expert for Claimant, confirms that the speakers are Marco Katz and Liana Iacob, information already available thanks to these two persons’ direct confirmation. He cites "the coherence and continuity of the questioned conversation" (para. 8).
In other respects, including the reason for the 20 discontinuities and whether Qc1 was originally recorded using an analog or a digital recorder, Mr. Groninger’s conclusions are, in Mr. Koenig’s view, unsupported (Reply Report, para. 4).
Regarding Professor French’s Report, Mr. Koenig remarks that, even accepting the coherence and continuity of the conversation, this "does not mean that the recording has not been audited and is authentic"" (para. 5, end of page 4).
In this last regard Mr. Koenig confirms his previous explanation that "today's technology can be used to make digital edits that are undetectable in a copy of an edited recording" and that "even a manipulated recording may contain a conversation that sounds completely 'unitary and coherent'"" (para. 57).
In reply to Mr. Koenig, in his Response of August 2008, Mr. Groninger confirms his opinion that the audio recording was made in a voice operated mode using an analog recorder (point 3A), that regarding the nine transients identified by Mr. Koenig he found no evidence "to indicate that any of the nine transients result from digital editing" (point 3F) and that he maintains that "there appears to be no evidence of the manipulation or re-ordering of sound or other digital editing" (point 3G), confirming his original report conclusions. The Tribunal notes that no comment has been offered by Mr. Groninger regarding Mr. Koenig’s statement that digital edits may be undetectable in a copy of an edited recording.
Even leaving aside the many questions left open by the experts’ debate, it is undisputed that both the beginning and the end of the recording have been removed, making the same incomplete. It is also to be noted that while the conversation had about a 90-minute duration according to Mr. Katz (e-mail of October 19, 2001: "Today between 18:30 and 20:00 I met FL in her house", where FL stands for "Fat Lady", i.e., Ms. Liana Iacob, as confirmed by Mr. Katz’s Witness Statement of July 2, 2007, point 33), the recording is only 26 minutes, 41 seconds and 151 milliseconds in length (Koenig Report, para. 23). Thus, more than two-thirds of the conversation has either not been recorded or, if recorded, has been removed from the proffered audio recording.
An obvious condition for the admissibility of evidence is its reliability and authenticity. It would be a waste of time and money to admit evidence that is not and cannot be authenticated.
As mentioned before (at para. 29), Claimant had the burden of satisfying Respondent’s legitimate request for the production of the original audio recording. Having failed to do so, it must bear the consequences.
It has been contended by Respondent, based on the legal opinion of Professor Mateut, that the audio recording should not be accepted since it was obtained unlawfully under Romanian law.
As will be further mentioned (at para. 47), the principles applicable to the admissibility of evidence in international arbitration are to be found in public international law, not in municipal law. The leading case on the subject in international litigation, to which both Parties have made reference, is the Corfu Channel Case between the United Kingdom and Albania. In its judgment of April 9, 1949 (ICJ Reports 1949), the ICJ did not exclude the evidence obtained by the United Kingdom through an act that the Court had characterized as a violation of international law. The violation consisted in the UK’s intervention to secure possession of evidence in the territory of another State in order to submit it to an international tribunal. The Court held that "the action of the British Navy constituted a violation of Albanian sovereignty" (ibid, at 35). There was no discussion by the Court whether the evidence would have been admissible since Albania had not raised an objection in that regard. In its Judgment, the Court did not rely on this evidence1.
The circumstances of the present case are different, Respondent having vigorously objected to the admissibility of the New Evidence by reason also of it having been obtained unlawfully.
In the present case, as convincingly shown by Professor Mateut, the New Evidence was obtained illegally according to Romanian law. Regarding in particular Claimant’s contention that Romanian privacy law does not apply to public officers such as Liana Iacob, no comment has been provided by Claimant in response to Professor Mateut’s reference in that respect to the Constitution of Romania which provides (in Article 53) that all citizens (whether or not public officers) enjoy equal rights and liberties.
Respondent has also referred in the same context to the award of August 3, 2005 in the case Methanex Corp v. United States. The award held that, in the presence of evidence unlawfully obtained by Claimant, "it would be wrong to allow Methamex to introduce this documentation into the proceedings in violation of a general duty of good faith imposed by the UNCITRAL Rules and indeed incumbent on all who participate in international arbitration, without which it cannot operate" (at 54). Claimant has offered no comment on this decision in its two Submissions.
Admitting the evidence represented by the audio recording of the conversation held in Ms. Iacob’s home, without her consent in breach of her right to privacy, would be contrary to the principles of good faith and fair dealing required in international arbitration. In that regard, the Tribunal shares the position of the Methanex award.
On that basis as well, the New Evidence is not admissible in the instant case.
In its application of April 23, 2008 Claimant stated to the Tribunal that it had been contacted that same day by a journalist who informed Claimant that he was in possession of an audio tape of a conversation between Ms. Liana Iacob and Mr. Marco Katz, both witnesses in this arbitration, held (as subsequently specified) on October 19, 2001. The conversation allegedly confirmed the request for a corrupt payment from Mr. Weil by Mr. Tesu and Ms. Iacob.
The journalist was said by Claimant to have provided Claimant with the audio recording and the relevant transcript in the Romanian and English languages.
Having enclosed them with its application, Claimant requested the Tribunal to admit this evidence, stressing its relevance to prove its case.
By the same Submission Claimant produced a witness statement by Mr. Marco Katz in which the latter, having listened to the audio and the transcript, states: "I am unaware of how this recording was created. I did not make this recording nor did I provide it to anybody, including EDF" (Witness Statement of July 7, 2008, point 3).
Based on this testimony, but going even beyond its literal tenor, Claimant avers straightforwardly: "Mr. Katz did not create, possess or otherwise control the audio recording"(Submission of July 7, 2008, para. 57).
According to Mr. Groninger, Claimant’s expert in the authentication of audio and video recording, "this recording was made using a microcassette recorder with a microphone placed in contact with clothing, probably around the chest area"" (Report of July 2008, para 8.9) and "it appears that the microphone at least must have been fixed to the person of the male"" (ibidem, para. 5.6.).
According to the other expert for Claimant, Professor French, "the voice and speech patterns of the questioned speaker are consistent with those of Mr. Katz in all significant phonetic, acoustic and linguistic respects" (Report of July 6, 2008, point 5, end of page 6).
In his turn, Mr. Katz himself, in his Supplemental Witness Statement of July 7, 2008, states: "I confirmed to EDF that the male voice on the recording was in fact mine" (point 2).
At 18.30 hrs. on October 19, 2001, Mr. Katz arrives at Ms. Liana Iacob’s home in Bucharest. He wears on his body a microcassette recorder with a microphone located around the chest area. The intent is to record the conversation that would follow, during which, either on his own initiative or on the initiative of Ms. Iacob, the subject of the bribe allegedly requested from Mr. Weil might have been discussed. The recording of the conversation would have served as evidence of the corrupt payment request for any future useful purpose.
As shown by Respondent (Submissions of June 2, 2008, para 19, and of July 30, 2008, paras. 21-23), Mr. Katz’s relations with EDF, and personally with Mr. Weil, were much closer than those normally resulting from an employment contract.
Claimant has not commented in its two Submissions on these relations as described by Respondent, except questioning Respondent’s characterization of Mr. Marco Katz as EDF’s "agent". Whether Mr. Katz was EDF’s agent, as contended by Respondent in order to impute his actions directly to EDF (Reply of July 30, 2008, para. 39), is in the Tribunal’s view of minor importance. It defies common sense to think that Mr. Katz’s initiative in recording his conversation with Ms. Iacob had been taken without the knowledge and consent of EDF. Mr. Katz had no interest of his own, not being involved in the corrupt payment request alleged by Claimant, in creating evidentiary material on this issue at the risk that his recording of the conversation with Ms. Iacob might be detected by the latter, with all the ensuing possible consequences.
a) Mr. Katz was the source of the audio recording of the conversation he held with Ms. Iacob on October 19, 2001. His statements that he did not know of the existence of the audio until he heard the recording on April 23, 2008, (Supplemental Witness Statement, point 3) and that he did not know how it was created are not credible, being contradicted by the evidence offered by Claimant itself;
b) Likewise, EDF’s assertion that "Mr. Katz did not create, possess or otherwise control the audio recording" (supra, para. 40) is not credible, being contradicted by the evidence offered by Claimant itself;
c) EDF, through its Chairman Mr. Weil, was aware from the time the audio recording was created of its existence, considering EDF’s direct interest in collecting evidence regarding the corrupt payment request and its close relations with Mr. Katz, as confirmed by the e-mail sent by Mr. Katz to Mr. Weil immediately after the meeting with Ms. Iacob on October 19, 2001 (C-69), so that Claimant’s statement that it "did not possess or control this evidence beforehand" (Submission of July 7, 2008, para. 52) is not credible, being contradicted by its own evidence.
Under the system of the Convention, specifically ICSID Arbitration Rule 34 (7), the Tribunal is "the judge of the admissibility of any evidence adduced...".
The Parties agree that under this provision the Tribunal has discretion to decide questions concerning the admissibility of evidence.
Generally, international tribunals take a liberal approach to the admissibility of evidence. The Tribunal is of the view, however, that such discretion is not absolute. In the Tribunal’s judgment, there are limits to its discretion derived from principles of general application in international arbitration, whether pursuant to the Washington Convention or under other forms of international arbitration. Good faith and procedural fairness being among such principles, the Tribunal should refuse to admit evidence into the proceedings if, depending on the circumstances under which it was obtained and tendered to the other Party and the Tribunal, there are good reasons to believe that those principles of good faith and procedural fairness have not been respected.
The foregoing finds confirmation in the IBA Rules on the Taking of Evidence, to which reference may be made as guidelines. Article 9(2)(g) of the Rules provides that evidence may be excluded in the presence of "considerations of fairness or equality of the Parties that the Arbitral Tribunal determines to be compelling".
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