Expert Witnesses in International Commercial Arbitration
Introduction
In international arbitration, a party may submit evidence in different categories. Opinions of expert witnesses forms one of these categories. Expert opinions are mostly relied upon in complex cases that require special knowledge, such as construction, oil and gas, and insurance disputes, or in cases where damages quantum needs to be determined.
Expert witnesses can be appointed both by the parties and the arbitral tribunals. Most of the rules of the institutions allow tribunals to appoint expert witnesses. In practice, it is common for the parties to appoint their own experts and present expert report. In cases where the tribunal chooses to appoint an expert, it should set the boundaries of the expert’s duty, and be careful not to delegate its own responsibilities to the expert. In some cases, the tribunal requests the parties to submit a list of experts over whom they can make a determination - this is most common in damages calculation.
Common and civil law traditions have different views as to expert evidence. Civil law practitioners are more suspicious when it comes to expert witnesses. This arises from the fact that in civil law traditions, the ordinary practice is for the court to appoint an independent expert.
Despite the different approaches in these two traditions, expert witnesses, today, depend on the subject matter of the dispute and specific circumstances, is considered to be a useful tool for both the parties and the tribunals.
Party Appointed Experts
Expert witnesses appointed by the parties in complex cases is one of the most common methods preferred by the parties and the tribunals. Pursuant to Article 5 of the IBA Rules on the Taking of Evidence in International Arbitration (“IBA Rules”), an expert report should contain the name, address of the expert, a declaration stating his or her past or present relationship with the parties, advisors and the tribunal, a statement of qualifications, experience, education and background. It is very important for the tribunal to have a clear understanding with regard to the qualifications of the expert who would affect the tribunal’s impression of the expert.
One of the most important characteristics that an expert should have is credibility. This is primarily created through the expert’s experience and qualifications. Such information is usually exhibited to the expert report as the expert’s curriculum vitae. Another significant aspect of an expert opinion is independence and objectivity. As stated in the above-paragraph, an expert will disclose his or her present and past relationship with the people involved in the proceedings, namely, the parties, tribunal, and advisors, in addition to providing a statement of independence.
An expert’s credibility is directly related to his or her independence. This could not be solely achieved through the disclosures or the statement of independence. It is crucial that the opinion given by the expert with its reasoning clearly portrays such objectivity.
Besides having an impressive resume, the content of the expert report will have the biggest impact on the tribunal. The two important elements of credibility and independence must be evidenced by the report. This will be achieved through the reasoning of the opinion, the supporting documents that are submitted, language and methodology.
The IBA Rules under Art. 5 (d) and (e) also provide that the report should include facts that it is based on, opinions and conclusions, including methods as well as evidence and information that is used to shape the opinion. It is important that the expert does not act as the arbitrator and give an opinion as to how the case should be resolved; his or her task should be to address the questions of the parties in an impartial manner.
Experts Appointed by the Tribunal
In cases where a tribunal deems it necessary to lean on the knowledge of a specific issue over which it has no particular specialty, it may choose to appoint an expert. Art. 26 of the UNCITRAL Model Law on International Commercial Arbitrations (“Model Law”) provides that a tribunal may appoint an expert in relation to specific issues it needs to determine. It is within the tribunal’s discretion to consult the parties when selecting experts, or deciding upon the scope of an experts’ opinion. The tribunal may also request the expert to submit a preliminary report upon which the parties may comment. Such comments should be taken into account by the expert in its final report[1].
Under IBA Rules Art. 6, it is provided that a tribunal must consult with the parties in appointing an independent expert. The tribunal will set out the terms of reference for the expert it has appointed after consulting with the parties. The parties may inform the tribunal if they have any objections to the expert after the expert has submitted his or her qualifications and a statement of independence. Thereafter the tribunal will consider any objections. From this point onward, the parties may only object to any qualifications and statements of independence of the expert if the subject of the parties’ objection comes to light after the expert’s appointment.
IBA Rules Art. (6) (3) further provide that the expert can request the parties to submit documents, goods, samples, etc., that are relevant to the case, and the expert’s authority to request such information and documents will be treated the same as the tribunal’s.
Counsel’s Role and Relation with Experts
The counsel’s role with regard to experts is mainly two-fold. The primary duty of the counsel is to appoint the right expert for the case. This determination will be based upon the subject matter of the dispute, facts and circumstances. It is generally accepted that an effective expert has a solid reputation, significant knowledge of the subject matter, as well as being author of publications in that regard, has broad experience in cases of similar subject matters in disputes, is independent, credible, professional, familiar with the cross-examination process, has solid communication skills, and is talented in explaining complex matters in simple and understandable language[2].
The second duty of the counsel is to prepare the expert. Following the appointment of the expert, the counsel will inform the expert as to the subject matter, and the issues over which his or her opinion is needed. The problem with this task is the counsel’s level of involvement in the process. In practice, due to the fact that the exchange of communication between the counsel and the expert are confidential, there is a risk that the expert report will end up reflecting the counsel’s voice, rather than the expert’s. There is some criticism that experts are “hired guns.” However, many practitioners believe that it is unlikely for the expert to risk his or her reputation and credibility and, therefore, most of the expert reports tend to reflect the experts’ impartial opinions, without solely reflecting the counsel’s strong views.
It is not hard for an experienced tribunal to understand whether an expert opinion is biased or not, especially when during cross-examination an expert who does not defend his or her own findings and opinions, the expert will portray an unreliable image. It is also suggested that witness conferencing or “hot-tubbing” is helpful to obtain unbiased, reliable information. Experts tend to be more accurate when they are challenged, together with another expert.
Legal Experts
Practitioners and arbitrators have differing opinions when legal experts are in question. In this respect, common and civil law traditions have different understandings. In common law practice, foreign law is considered as a fact that needs to be proved; whereas, in civil law traditions, the court is expected to know the law[3]. Whether or not a tribunal will consider a legal expert necessary depends on the applicable law in the case. Generally, when applicable law is international law, or usages of trade, lex mercatoria, etc., it is expected for the tribunal to be familiar with the rules. In such cases, a separate legal opinion from a legal expert is not considered necessary. However, in cases where a particular domestic law is applicable, a report from a legal expert can be useful since the dynamics and rules of domestic laws differ one from the other.
Conclusion
A non-biased and independent expert opinion is considered to be a useful tool in international arbitration. Despite debates with regard to its admissibility, most tribunals prefer the parties to appoint experts for matters that require special knowledge.
[1] Starrett Housing Corp v The Government of the Islamic Republic of Iran (1987) 16 Iran-US CTR 1112, p. 117-118, par. 6.155.
[2] Pierre Bienvenu and Martin Valasek, “Witness statements and experts reports,” in R. Doak Bishop and Edward G. Kehoe, The Art of Advocacy in International Arbitration, Second Edition, Juris (2010), Chapter 10, p. 263 seq.
[3] Bernard Hanotiau, “Civil Law and Common Law Procedural Traditions in International Arbitration: Who Has Crossed the Bridge?” in Arbitral Procedure at the Dawn of the New Millenium: Reports of the International Colloquium of CEPANI, October 15, 2004, p.96.
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