One of the most consequential differences between arbitration and court litigation is the scope of discovery. In federal and most state courts, discovery is an extensive, structured process governed by detailed procedural rules that give each party broad rights to obtain information from the other. Commercial litigation routinely involves the exchange of thousands or even millions of documents, multiple depositions, detailed written interrogatories, and various other mechanisms for gathering evidence before trial. Arbitration, by design, is much more limited. Understanding how discovery works in arbitration and what you give up compared to litigation is essential before you agree to an arbitration clause in any significant commercial contract.
The limited nature of arbitration discovery is simultaneously one of its most attractive features and one of its greatest limitations, depending on your position in a given dispute. For businesses that expect to be defendants, limited discovery can substantially reduce the cost and burden of litigation. For businesses that rely on obtaining internal documents from their counterparty to prove their case, limited discovery can make it harder to win even legitimate claims. There is no universally correct answer to whether limited discovery favors your business; the answer depends on the nature of your contracts, the types of disputes most likely to arise, and whether you expect to be the party bringing claims or defending against them.
The Baseline: What Discovery Looks Like in Court
To appreciate how arbitration discovery differs, it helps to understand what discovery looks like in federal court under the Federal Rules of Civil Procedure. Federal court discovery begins with mandatory initial disclosures, where each party must automatically provide the other with basic information about witnesses and documents without waiting to be asked. From there, the parties engage in various formal discovery mechanisms: document requests that can require production of any document remotely relevant to the claims, written interrogatories seeking factual information under oath, requests for admission to narrow disputed facts, and depositions during which witnesses testify under oath before a court reporter.
The scope of federal court discovery is deliberately broad. Parties can seek information that is not directly admissible as evidence at trial, as long as it is reasonably likely to lead to the discovery of admissible evidence. Courts apply this standard liberally, which means that in a complex commercial dispute, the discovery process can consume years and millions of dollars. Large-scale commercial litigation often involves document productions measured in gigabytes or terabytes of data, with teams of lawyers reviewing hundreds of thousands of documents for privilege and responsiveness. Electronic discovery, sometimes called e-discovery, has dramatically increased both the volume and cost of modern litigation.
State court discovery rules vary but are generally similar in structure to the federal rules, though some states have narrower default discovery rights or different procedural mechanisms. The point is that court litigation in the United States presumes a robust, expensive, and time-consuming discovery process. When you choose arbitration, you are opting out of this framework in exchange for a more streamlined process, but the streamlining comes at the cost of access to information.
How Discovery Works in Commercial Arbitration
Arbitration discovery is governed by the rules of the arbitral institution and the directions of the arbitral tribunal, not by court rules. The default under most institutional rules is that discovery is significantly more limited than in court. The AAA’s Commercial Arbitration Rules, for example, give the arbitrator broad discretion to determine the scope of discovery and explicitly contemplate that discovery will be narrower than in litigation. The arbitrator can order document production, but the presumption is targeted production of specifically identified documents or categories of documents, not the sweeping productions typical of court litigation.
Document production in arbitration generally follows one of two models. The American model, which is more familiar to US litigants, permits document requests and requires the other party to produce responsive documents. However, the arbitrator typically limits requests to materials that are genuinely important to the resolution of the dispute and denies overly broad requests designed to impose burden or conduct a fishing expedition. The civil law model, used in many international arbitrations, is more conservative still. Under this model, document production is very limited, and parties are generally required to identify specific documents they know to exist and ask for those, rather than submitting broad requests across entire categories.
JAMS and AAA rules both permit document production in their default commercial proceedings, and in practice, US-style arbitrations often involve fairly extensive document exchange, though still less than court litigation. The ICDR’s international rules, by contrast, are more restrictive on discovery and explicitly contemplate that production will be limited to documents the requesting party specifically identifies as relevant and material. When drafting international arbitration clauses, parties should understand that their foreign counterparties may have very different expectations about how much discovery is appropriate.
Depositions and Witness Testimony in Arbitration
Depositions are a cornerstone of American civil litigation. Before trial, each side can depose witnesses, locking them into testimony under oath that can be used to impeach them if they tell a different story at trial. Depositions are invaluable tools for discovery because they reveal not just what a witness knows but how they will present that knowledge and what vulnerabilities exist in their account. In court litigation, the deposition of key witnesses is standard practice.
In arbitration, depositions are not a matter of right. Some institutional rules permit depositions with the arbitrator’s approval; others are silent; and many international rules do not contemplate depositions at all. In practice, whether depositions happen in a US commercial arbitration depends heavily on the arbitrator. Some arbitrators, particularly former litigators and retired judges who preside over JAMS proceedings, will allow depositions when the case is complex and the testimony of specific witnesses is genuinely contested. Other arbitrators discourage or prohibit depositions in the interest of efficiency and cost control.
When depositions are not available in arbitration, the primary vehicle for testing witness credibility is cross-examination at the hearing itself. This is the standard approach in international arbitration. Witnesses submit written statements in advance of the hearing, and the opposing party can cross-examine them at the hearing. While this process can be effective for experienced advocates, it is a more compressed and less thorough testing mechanism than the combination of deposition plus cross-examination at trial that US litigants are accustomed to.
For businesses deciding whether to include broad or narrow discovery rights in their arbitration clauses, the deposition question is particularly important. If your disputes are likely to turn on the credibility of individual witnesses rather than on documentary evidence, preserving some right to depose key witnesses before the hearing can be critical to obtaining a fair result. This can be accomplished by drafting language into the arbitration clause itself that specifically preserves deposition rights, or by specifying a set of procedural rules, such as the JAMS Comprehensive Rules, that allow depositions more readily.
Expert Discovery and Third-Party Subpoenas
Expert witnesses are frequently important in complex commercial arbitrations. Damages calculations, valuations, industry custom and practice, and technical disputes all commonly require expert testimony. In court litigation, parties exchange expert reports and have the right to depose opposing experts before trial. In arbitration, expert witness procedures vary by institution and tribunal. Most arbitral rules permit parties to present expert testimony, but the procedures for exchanging reports and examining experts may differ from what US litigators expect.
Third-party discovery presents a more significant challenge in arbitration. In court litigation, parties can subpoena documents and testimony from non-parties to the lawsuit. In arbitration, the arbitral tribunal generally has no direct power to compel third parties who are not signatories to the arbitration agreement to produce documents or appear as witnesses. Under Section 7 of the Federal Arbitration Act, arbitrators can summon witnesses and documents to the hearing itself, but courts have split on whether arbitrators can compel pre-hearing discovery from non-parties. Some courts have read Section 7 narrowly to prohibit pre-hearing third-party subpoenas; others have been more permissive.
This limitation can be significant when key evidence resides with non-parties to the arbitration agreement. If a crucial document is in the hands of a bank, a government agency, or a third-party contractor who is not a party to your contract, you may have far less ability to obtain it in arbitration than you would in court. When structuring complex commercial transactions, consider whether any anticipated disputes will require evidence from third parties, and if so, whether an arbitration clause is the right choice or whether a carve-out for certain types of claims would better serve your interests.
Customizing Discovery Rights in Your Arbitration Clause
One of the underappreciated features of commercial arbitration is that the parties have significant freedom to customize the discovery process in their arbitration clause. Because arbitration is fundamentally consensual and because institutional rules typically give the arbitrator discretion rather than imposing hard limits, parties who care about specific discovery rights can negotiate for them in the contract.
Common customizations include specifying the number of depositions each side may take, establishing a page limit for document requests, incorporating specific discovery rules by reference, or specifying that discovery shall be governed by the Federal Rules of Civil Procedure to the extent applicable. Conversely, parties who want to ensure maximum efficiency can draft provisions that expressly limit discovery to document production only, with no depositions, or that cap the number of documents each party may request. These customizations become part of the agreement and are enforceable in the arbitration.
The Chartered Institute of Arbitrators’ Protocol on Disclosure and Related Data Protection Issues and the International Bar Association Rules on the Taking of Evidence in International Arbitration provide another option: many parties in sophisticated commercial arbitrations specify that the IBA Rules on Evidence shall govern discovery in the proceeding. These rules represent an international consensus on reasonable discovery practice and provide a clear, respected framework that both parties and arbitrators find workable. Incorporating the IBA Rules by reference in your arbitration clause can avoid disputes about what discovery is permissible and gives all sides a predictable process.
The key takeaway is that discovery rights in arbitration are not fixed. Within the framework set by applicable law and institutional rules, parties have considerable latitude to shape the discovery process that will apply to their disputes. Taking advantage of that latitude requires thoughtful drafting at the time the contract is negotiated, not after a dispute has arisen. By the time litigation begins, it is too late to renegotiate discovery rights, and you will be left with whatever default rules apply under your chosen institutional rules and the preferences of the arbitrator you draw.