Proper characterisation of the parol evidence rule and its applicability in international arbitration

Abstract

Most arbitral statutes and institutional rules give great latitude to tribunals on the admissibility of evidence, and do not mandate application of domestic rules of evidence. In common law jurisdictions where the parol evidence rule applies, the issue that arises is whether the parol evidence rule is necessarily a procedural rule of evidence which tribunals are not bound to apply, especially in jurisdictions which have codified the rule under domestic evidence legislation. Notwithstanding any codification, this article argues that the parol evidence rule at common law is a substantive rule of contractual interpretation that should be applied as part of the lex contractus in international arbitration proceedings. Faithful application of the parol evidence rule as a substantive rule of contractual interpretation ensures that adjudicators arrive at the same interpretation on the same set of facts, thereby promoting uniformity, predictability, and consistency, regardless of the mode of dispute resolution.