Summary: This article examines the role of expert witnesses in international arbitration, highlighting their potential to clarify complex technical issues and assist tribunals in decision-making. However, it also critiques the challenges posed by party-appointed experts who may lack neutrality, and tribunal-appointed experts who may overstep their roles. The article discusses how expert reports often become overly complex and contradictory, hindering rather than helping the arbitration process. To address these issues, it proposes structured protocols, ethical standards, and innovative practices like “hot tubbing” and “expert teaming” to improve clarity, impartiality, and collaboration, ultimately aiming to make expert involvement a constructive force in arbitration.
Role of Expert Witnesses: Bridging the Gap Between Complexity and Understanding
International arbitrations can be complex and may involve matters beyond the expertise of the arbitral tribunal. Using their domain knowledge and subject matter expertise, expert witnesses assist arbitral tribunals in identifying relevant issues, linking causes to consequences and understanding the monetary impact of such consequences. While rendering their independent opinion, expert witnesses bridge the gap between complexity and understanding — presenting relevant issues for consideration by the arbitral tribunal.
Party Appointed Experts: Impartial Facilitators or Mere Guns for Hire?
Ordinarily, the arbitration agreement, institutional rules[1] and guidelines[2] referenced within it, as well as the law of the seat[3], include provisions related to expert evidence. An expert witness may be appointed by the parties or by the arbitral tribunal. A key criticism of party-appointed expert evidence is that such experts may act as advocates for their instructing party, effectively serving as ‘hired guns’. Numerous judicial decisions have held that expert evidence presented to the court should be, and should appear to be, an independent product of the expert, uninfluenced in its form or content by the exigencies of litigation. To the extent that it is not, the evidence may not only be incorrect, but also self-defeating.[4] An expert who simply reiterates the perspective of their instructing party is often exposed during cross-examination, thereby undermining both their credibility, as well as the strength of their client’s case. Hence, expert neutrality is key.
Tribunal-appointed experts, being appointed by the arbitral tribunal, are neutral, however, they may lack the faith and trust of the parties, primarily because parties may be unable to control the manner in which critical issues of their case is presented.[5] Moreover, often, tribunal appointed experts transgress their mandates — acting as arbiters of the dispute, and not mere facilitators. This raises suspicion among parties, who would rather have control over the arbitral process (party autonomy), than be at the mercy of an arbitrator appointed without their consent.
Expert Evidence Reports: Opening A Can of Worms
While expert witnesses are appointed to simplify complex aspects of a case, they often overcomplicate the matter. The reason behind tendering extensive and complex reports may be to justify the immense cost involved in the production of such reports[6]. In seeking to deliver comprehensive value, expert witnesses go overboard — by producing overly elaborate documentation, thus dithering from the main objective of expert evidence, i.e. simplifying the technical issues and assisting the arbitral tribunal in decision making.
Lack of Common Ground in Expert Reports like ‘Ships Passing in the Night’
In most international arbitrations, party appointed expert reports are submitted concurrently. These reports are poles apart on facts, assumptions, approaches, methodologies and issues. When there exists no convergence on issues and the reports are so fundamentally incompatible, it is extremely difficult for an arbitral tribunal to bridge the gap between the two reports. This lack of coordination thwarts the entire process of producing expert evidence, with no real valuable outcome.
The President of the ICC International Court of Arbitration, Claudia Salomon, during her speech at the GAR Live London 2021, said that: ‘to get to an efficient resolution of the parties’ dispute – standing on the three-legged stool of time, cost and quality, we can take what may seem like basic, but potentially impactful, steps to better align the arbitral process with the parties’ needs and expectations. We need to take steps to avoid the dreaded ships passing in the night and focus on the issues in dispute’[7].
Dealing with Criticisms and Overcoming Weaknesses: Being A Part of the Solution and not the Problem
To address these criticisms and mitigate identified weaknesses, it is imperative to establish a comprehensive regulatory framework, especially for party-appointed expert witnesses. As far as issues pertaining to partisan reports are concerned, the national laws and institutional rules must set out the duties and obligations of party-appointed experts. Article 4 of the CIArb Expert Protocol states that ‘an expert’s opinion shall be impartial, objective, unbiased and uninfluenced’. Article 5.2 of the IBA Rules on Taking of Evidence requires expert reports to include a statement of independence, along with a declaration stating that the opinion’s expressed in the report reflect the expert’s ‘genuine belief’. In relation to the opinions presented in the expert report, an amendment to Practice Direction 35 under the United Kingdom Civil Procedure Rules 1998 introduced an additional concluding sentence, acknowledging that experts who submit false statements in their report may face proceedings for contempt of court. India’s national laws and institutional rules are required to establish codes of conduct and general duties, as well as ethical standards of experts (akin to the Expert Witness Institute’s Code of Professional Conduct or the EuroExpert Code of Practice) to address the criticisms surrounding the ‘hired gun’ problem. An expert witness’s mandate must be clearly defined, and the expert is required to unambiguously identify all documents that contributed to the conclusions presented in the report.
To address the coordination and complexity of expert reports, the arbitral tribunal must establish an expert management protocol at the outset. In the expert management protocol, the arbitral tribunal needs to identify issues requiring expert evidence, as well as determine the experts to be appointed by both the parties. Thereafter, a standardised set of questions must be prepared for both the experts to respond to. This may be achieved by conducting witness conferences, allowing experts to review the proposed questions and establish a final set of questions for expert consideration. After both experts respond to the queries, they must convene to identify the points of agreement and disagreement. Witness conferences help in comparing the views of the two witnesses and enable the arbitral tribunal to identify the narrow grounds on which one witness is challenging the report of the other. During this process, when witnesses meet and brainstorm, the quality of evidence is also likely to improve, as an expert is unlikely to make incorrect statements in front of their peers. Arbitral tribunals may also prescribe a broad format for an expert report, covering issues of contention, methodology, sources relied upon, analysis and conclusion, to ensure that clarity prevails over confusion.
Hot tubbing — a practice where witnesses provide evidence parallelly, and answer questions concurrently — has proven to be beneficial in major arbitration hubs.[8] It makes the points of disagreement apparent, and the arbitral tribunal gets a clearer picture of the relevant issues. However, a framework for hot tubbing needs to be established to make the process more structured and organised. The framework may incorporate requirements such as delivering opening statements, preparing an agenda and enumerating key issues, determining in advance the necessity of cross-examination on certain issues, clarifying if one expert may question another, and ensuring that the process concludes with a formal closing statement.
Combining the benefits of party appointed expert evidence and tribunal appointed expert evidence, Dr. Klaus Sachs, who is one of Germany’s leading experts in domestic and international arbitration proceedings, and the author of various publications on international arbitration,proposed a new approach, i.e. ‘expert teaming’. He proposed that each party must provide a shortlist of independent candidates, and the arbitral tribunal must select an expert from each list to form a ‘team’ of experts. The tribunal, parties, and team of experts will then meet to finalise the team’s terms of reference. The team will then prepare a preliminary report, which will be circulated to the arbitral tribunal and the parties for comments, following which the experts will prepare a final joint report. The experts will present the report at the hearing and can be questioned by the tribunal and the parties[9]. Although this approach may partially address concerns regarding trust deficit in the selection of experts (by parties as opposed to the tribunal) and mitigate issues of bias due to experts holding the designation of tribunal-appointed experts, certain limitations may still persist within this proposal. The primary assumption underlying this proposal is that a team of experts will reach consensus on both the preliminary report and the joint final report; however, such agreement may not invariably be achieved.
Conclusion
Clarity, impartiality, and conciseness are the qualities expected in expert witnesses. However, the involvement of expert witnesses often results in complexity, bias and verbosity. Almost akin to a hydra head, creating more problems than it resolves. While there may be dark clouds, all may not be as gloomy as it appears. Implementing clearer processes and adopting improved methodologies within a structured framework of rules have led to circumstances where expert involvement is demonstrably advantageous to the arbitral process.
For further information, please contact:
Kapil Arora, Partner, Cyril Amarchand Mangaldas
kapil.arora@cyrilshroff.com
[1]Article 20 of LCIA Rules, 1998, 2014 and 2020, Article 27-Article 29 of UNCITRAL Rules 2010 and 2013, Article 25 ICC Rules 2012 and ICC Rules 2017, Article 33 of SCC Arbitration Rules 2017, Article 25 of ICDR Rules 2014, Rule 26 of SIAC Rules, 2016
[2] Article 5 and Article 6 of IBA Rules on the Taking of Evidence in International Arbitration, IBA Guidelines, 2015, Paragraph 70 to 73 of the UNCITRAL Notes on Organising Legal Proceedings, Paragraph 65 to 70 and Appendix IV of ICC Techniques for Controlling Time and Costs in Arbitration, Article 4 and 8 of the Chartered Institute of Arbitrators Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration
[3] In the Indian context, this is Section 26 of the Arbitration and Conciliation Act, 1996
[4] Whitehouse v. Jordan [1981] 1 W.L.R 246, National Justice Compania Naviera SA v. Prudential Assurance Company Limited (the Ikarian Reefer) [1993] F.S.R.563
[5] Hunter, “Expert Conferencing”, pp. 820 to 825
[6] Jones, “Party Appointed Expert Witnesses”, p. 138.
[7] “Avoiding the dreaded ships passing in the night: A focus on the issues to be decided”, November 12, 2021, at Avoiding the dreaded ships passing in the night: A focus on the issues to be decided – ICC – International Chamber of Commerce
[8] Australia; England and Wales; ICC Commission Report on Controlling Time and Costs in Arbitration; Practice Direction 35 to UK Civil Procedure Rules; the Technology and Construction Court Guide.
[9] “Experts: Neutrals or Advocates”, Dr. Klaus Sachs, at https://www.josemigueljudice-arbitration.com/xms/files/02_TEXTOS_ARBITRAGEM/01_Doutrina_ScolarsTexts/evidence/experts_
