Adverse Inference in International Investment Arbitration

Document Type : Scientific research

Authors

Seyed Mohamad Hassan Razavi ¹

, Saman Mohammadian ²

¹ Assistant Prof., Department of Public Law, Faculty of Law and Political Sciences, University of Tehran, Tehran, Iran.

² LLM In International Commercial and Economic Law, Faculty of Law and Political Sciences, University of Tehran, Tehran, Iran.

https://doi.org/10.22067/economlaw.2026.93077.1450

Abstract

With the development of international trade and disputes, international arbitration has expanded as a method for dispute resolution. One of the main challenges in arbitration is the failure of parties to submit documents and evidence, which can affect the adjudication process. In such cases, arbitral tribunals use the tool of adverse inference to draw conclusions against the non-producing party based on the absence of evidence. This tool allows arbitrators to maintain balance in the arbitration process and prevent potential misuse.
The application of adverse inference is subject to specific criteria, including the existence of prima facie evidence, the non-producing party's access to the documents, the relevance and materiality of the missing evidence, and the party’s awareness of its obligation to disclose the requested documents. However, arbitral tribunals exercise caution in using this tool. Case studies have demonstrated that adverse inference can play a significant role in determining the outcome of a case.
The authority of tribunals to apply adverse inference may have different sources, deriving either from arbitration rules or the inherent powers of arbitrators. This tool is not only effective in the decision-making process but also encourages parties to disclose information, enhancing transparency in international arbitration.

Keywords

Adverse Inference

Discretion of the Arbitrator

ICSID

International Arbitration

Non-Disclosure of Evidence

Subjects

• Foreign Investment Law

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