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The role of experts in international arbitration: regulation and new solutions

Introduction

Of all the individual means of proof in international arbitration, the use of experts is certainly the one which, during the development of procedural practice and usage, has raised the most problems as to the discipline to be applied. First, it should be noted that with the increasing number of disputes relating to highly technical and professional matters, the use of expert witnesses to better understand the nature of the dispute has become increasingly necessary for both arbitrators and parties. In recent years, this tool has been abused, and in international commercial arbitrations one has the impression that an expert is always needed without even considering the possibility of not appointing one. The International Chamber of Commerce itself, in a 2007 report, underlines this increasingly widespread phenomenon, pointing out that: “it is helpful to start with a presumption that expert evidence will not be required. Depart from this presumption only if expert evidence is needed in order to inform the arbitral tribunal on key issues in dispute[1]. For this reason, several sources, and guides[2]  have been developed specifically for the role of technical experts and international centers[3] that provide support services to international tribunals.

The approach of the common law and civil law systems

Regardless of the use of this instrument, the normative discipline for the technical advice of an expert presents various critical points due essentially to the great difference that this instrument assumes in the systems of common law with respect to those of civil law. [4]In the latter, it is normally the court itself that appoints a third party to act as an expert on a given issue, when the judge’s knowledge is not sufficient to fully understand the matter in dispute. Therefore, in civil law systems there is an inquisitorial system [5] where the judge himself appoints the expert, asks the questions, and interrogates him on the matter. In these cases, the expert, appointed by the court, makes his evaluations, responds to the questions posed and concludes with a report on the work done. The judges, after analyzing the report and the work of the expert, may also decide to depart from it, giving reasons for their choice. In this system, therefore, the active role is mainly that of the judges who proceed to appoint an expert who must obviously possess extensive technical knowledge of the subject matter being examined and must also be completely third party, neutral, and impartial. On the contrary, in common law systems the active role is the parties’, who proceed to the appointment of a technical expert who supports their reasons and claims: In fact the main difference with civil law systems is the lack of the obligation of neutrality and impartiality of the expert.[6]  The parties, after appointing an expert and after the expert has completed his or her report on the matter, present him or her and his or her position to the court. In common law systems, party experts are treated as real witnesses, so they might be subjected to cross-examination by lawyers. In these cases, the judges simply listen, leaving the parties with full power to question the expert and ultimately, they decide on the best presentation of the arguments.

The divisions and profound differences between the disciplines of expert advice are visible and easily discernible and have often generated several points of rupture and criticism among experts from one system rather than the other. According to commentators[7] from a civil law system, consultancy as understood in common law systems risks becoming a “war between experts”, where each party “enlists” its own technical expert, sometimes openly biased, who supports the reasons of the party for whom he works. Therefore, the authenticity of the advice is lost. Some commentators have even defined experts, as understood in common law, as “hired guns”[8] available to the party’s attorneys. Another criticism of this system refers to the role of the judges, who limit themselves to listening to the reports of the experts and the interrogation of the lawyers, making decisions no longer based on the “truth” given by a third and impartial report, but influenced by the one who can present the case better or conduct a more efficient and profitable cross-examination.

On the contrary, the criticism that common law commentators make of the civil law expert system is based on the impossibility of controlling the progress of the process, leaving the outcome of the dispute in the hands of the expert without being able to do anything. In addition, appointing only one expert and using his or her report as the only technical analysis available, can lead to making the wrong decision if the appointed expert is in error or commits a mistake in the expert report.[9] According to these commentators, judges become blind and overly reliant on the view of the appointed expert, with generally no opportunity to hear other versions and no opportunity for the parties to ask questions or intervene. Some commentators went so far as to say “the courts often attach the same amount of importance to a [tribunal-appointed expert] as the ancient Greeks attached to the Oracle of Delphi – it determines the substance of the dispute and essentially merely leaves the question of costs determination to the court”[10]. In fact, the view of the court-appointed expert in the civil law system is that of an assistant arbitrator who has the power to enter the merits and decide, influencing the course of the entire process significantly.

In international arbitration practice, if the parties both belong to the same legal tradition and are therefore “accustomed” to one discipline rather than the other, then they will be able to apply the discipline they are most familiar with during the arbitration process. However, it is preferable, especially in large commercial arbitrations, to find an intermediate solution that balances the needs of the parties and still ensures the satisfaction of the interests at stake. Therefore, the arbitration rules, guidelines and practices of the major international courts and tribunals favor a hybrid discipline.

 The discipline of the experts in international arbitration

As you can guess, it is complex for international arbitral tribunals to adopt one system over another and for this reason, as we have already seen for other legal issues, a hybrid solution is preferred, suitable to satisfy everyone and to model itself on the needs of the concrete case. Already in 1984, the UNCITRAL Model Law provided for a mixed system, which leaned more towards the civil law system. Article 26 as amended in 2006, provides for the power of the court to decide for the appointment of an expert or delegation to the parties, unless there is a different agreement between the parties themselves: “Unless otherwise agreed by the parties, the arbitral tribunal (a) may appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal; (b) may require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in a hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.” Arbitration practice, too, has conformed to this dictate and has developed, leaving the arbitrators with ample room for choice and frequently providing for the appointment of a court expert, with the possibility for the parties to present expert witnesses for the most controversial issues. In any event, as stated in 1996 UNCITRAL Notes on Organizing Arbitral Proceedings,[11] even if the tribunal decides to appoint an expert, it must first consult the parties both as to the person to be appointed and as to the issue to be analyzed by the expert, in addition to the possibility left to the parties to comment and add observations to the expert’s report. [12]

Over the years and with the increasing development of international arbitral tribunals, further arbitration regulations have confirmed this hybrid approach with a prevailing tendency towards the civil law system.[13] Therefore, international practice foresees this tendency to prefer an expert appointed by the court itself, unless otherwise agreed by the parties or depending on the needs of the case. As it happens in civil law systems, the court-appointed expert must provide, prior to his/her appointment, a certification of his/her technical qualities and must also guarantee his/her impartiality and neutrality with respect to the case and the parties. This phase of verification of the expert is carried out entirely in contradictory way, to encourage a collaboration between arbitrators and parties, ensuring transparency and protecting the right to a fair arbitration process. Should the parties be unconvinced or have objections to the appointment, they may assert them by requesting the replacement or appointment of a new expert. In addition, the latest editions of the arbitration rules provide more detailed rules for the conduct of the expert analysis[14], should the tribunal decide to appoint the expert. The expert must attend all evidentiary hearings and he/she may be questioned both by the court, by the parties and possibly by the parties’ appointed experts, forming a collateral and parallel proceeding concerning the findings of the expert report.[15]

As mentioned above, the parties can agree to appoint one expert each, thus conforming to the classic common law system. Even in these cases, however, arbitration practice and the resulting regulations have sought to temper the discipline by attempting to make the appointment of a party expert as hybrid a solution as possible. The party expert is traditionally seen as an expert litigant who holds the reasons of the party that appoints him/her; on the contrary, thanks to the intervention of new amendments to the arbitration regulations, in the arbitration process the party expert must also be subject to the declaration of impartiality with respect to the subject matter of the case. [16] In fact, with the adoption of 2007 Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration published by the Chartered Institute of Arbitrators (CIArb) there is evidence of these new rules for the party expert. In the preamble it is stated that: “experts should provide assistance to the Arbitral Tribunal and not advocate the position of the Party appointing them”, making clear the intent of this protocol and the need to find a common ground on the discipline of the expert. Sec. 4 of the same protocol is even clearer stating that:  “An expert that gives evidence in the Arbitration shall be independent of the Party which has appointed the expert to give such evidence”, “An expert’s opinion shall be impartial, objective, unbiased and uninfluenced by the pressures of the dispute resolution process or by any Party”, “An expert’s duty, in giving evidence in the Arbitration, is to assist the Arbitral Tribunal to decide the issues in respect of which expert evidence is adduced”, and finally that the expert’s opinion shall contain an Expert Declaration such as could indeed have been signed by a tribunal-appointed expert.[17]

The Iba Rules adopted in 2010 have also conformed to the discipline dictated by this Protocol, making changes to sec. 5 regarding the obligation to declare the impartiality and genuineness of the opinions expressed, as well as 2010 UNICITRAL Arbitration Rules which have provided for the modification of sec. 29 of the previous discipline contained in sec. 27, also providing for the obligation to declare the independence of the expert. In addition to the regulations, the evolution of the role of the party expert is also due to the codes of conduct and ethical rules that have developed thanks to the international judicial system, which was the first to feel the need for this evolution. An example of this is 1993 Ikarian Reefer case[18] where certain guidelines were established for the first time based on the principle that the expert’s duty to the court outweighs the duty to the party.  Other rules derived from what the Court stated in this landmark case: the evidence presented by the expert to the court must be an independent and impartial product of the expert; the expert must cooperate with the court regardless of the position of the party who appointed him/her; the expert must never assume the role of the attorney during the performance of his/her function, and must speak only on the subject matter of his/her expertise; the expert must analyze all material facts in order to complete his/her expertise in the most accurate and genuine way.

These guidelines were then translated and became the basis for the rules contained in codes of conduct like the ones contained in the Code of Practice for Experts issued jointly in 2005 by the Academy of Experts and the Expert Witness Institute [19] and endorsed by EuroExpert, the Organization of European Expert Associations or  the ones drawn up by ICC International Centre for Expertise[20] (which provides expert witness management services for those who decide to initiate an arbitration process administered by the ICC) or even like the one drafted in 2008 by the American Institute of Certified Public Accountants (AICPA). All these and other codes of ethics [21] share the obligation of impartiality that must be maintained throughout the process by the expert witness.

New instruments and new solutions adopted by the arbitral tribunals

It is now opportune to consider the regulation of new instruments used by the courts to improve and make more efficient the collection of this evidence. The first tool, which has been very successful in recent years, is the expert witness conference[22]. International arbitral tribunals prefer to let the parties appoint their own experts and have all of them heard in one hearing simultaneously. During this expert conference, therefore, the experts will no longer be questioned one after the other, but each one will answer the specific question and present their theory simultaneously with the other experts.[23] This is to ensure a fair discussion before the court, guaranteeing full knowledge to the arbitrators and developing a professional space in which the experts will be forced to motivate any discrepancies between their opinions, explaining their reasons in front of expert colleagues instead of stating them in an assertive way in front of non-expert lawyers and judges.[24]

Another tool with the same purpose is the single final report. In this case the arbitral tribunal authorizes the appointment of more than one expert for the party, but they are obliged to cooperate from the beginning, exchanging professional opinions, information and confronting each other. In this case, each expert will complete his/her assessment and write the report which, before being presented before the court, will be combined with the reports of the other experts. Any discrepancies that may emerge from the union of the reports must then be resolved by the experts themselves, during a phase of discussion of their arguments, and then present the final report to the arbitrators. All discrepancies and any change of opinion from an expert, will however be reported to the arbitrators and the parties and may then be the subject of questioning during the hearing of the experts. This tool has its origin in the arbitration case law of 2001 S.D. Myers, Inc. v. Government of Canada [25].It has become a very common arbitration practice. These tools are now customary in international practice, as you can well imagine, and they allow to have a more complete point of view, ensuring a moment of discussion and the fact that the expert evidence is the most genuine, impartial, and complete, overcoming the difficulties and criticisms made to the different national judicial systems.

Conclusion

In conclusion, it should be emphasized that the parties may, through their agreement, decide as they see fit which discipline to apply and which instruments to use. Only in the event of gaps on their part will the arbitrators themselves have to decide to best ensure the needs of the parties. The decision as I have pointed out in this article generally tends to be a meeting point between the different influences coming from these legal traditions. However, the principle that arbitrators must base their choice on is the principle of flexibility. Indeed, these instruments must be able to adapt to the concrete and real needs of the parties and must be suitable as far as possible to ensure the full functionality of the process. Only in this way will the arbitration process be able to resolve the dispute.

[1] ICC Arbitration Commission Report on Techniques for Controlling Time and Costs in Arbitration, 2007, on https://iccwbo.org/

[2] ICC, Guide to expertise, 2005 on https://library.iccwbo.org/

[3] See for an example the ICC International Centre for Expertise or the Tokyo Maritime Arbitration Commission

[4] A. W. Shilston, Some Reflection on the Role of the Expert Witness, Arbitration IV,1992, 251–258.

[5] Taruffo M., Aspetti fondamentali del processo civile di Civil Law e di Common Law, Revista da Faculdade de Direito da UFPR, vol. 36, 2001.

[6] A. Unachukwu, Expert Witness: How Safe is Safety in Numbers?,2009, on http://papers.ssrn.com

[7] G. De Berti, Experts and Expert Witnesses in International Arbitration: Adviser, Advocate or Adjudicator?, on https://www.dejalex.com/

[8] Lord H.Woolf , Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales,1996.

[9] W. L.Craig, W. W. Park, J.Paulsson, International Chamber of Commerce Arbitration, Oxford University Press, 2001, p. 404.

[10] O. Bondo Svane, as cited in J. C. Jørgensen, Expert Witnesses in Danish Arbitration, ASA Bull., vol. 26 n.3, 2008, p. 488.

[11]  See UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW (UNCITRAL), UNCITRAL Notes on Organizing Arbitral Proceedings of 1996 on http://www.camera-arbitrale.it/

[12] in particular, for the purposes of the discussion we are interested in, we underline the note § 69: “Many arbitration rules and laws on arbitral procedure address the participation of experts in arbitral proceedings. A frequent solution is that the arbitral tribunal has the power to appoint an expert to report on issues determined by the tribunal; in addition, the parties may be permitted to present expert witnesses on points at issue. In other cases, it is for the parties to present expert testimony, and it is not expected that the arbitral tribunal will appoint an expert.” The note § 70: “If the arbitral tribunal is empowered to appoint an expert, one possible approach is for the tribunal to proceed directly to selecting the expert. Another possibility is to consult the parties as to who should be the expert; this may be done, for example, without mentioning a candidate, by presenting to the parties a list of candidates, soliciting proposals from the parties, or by discussing with the parties the “profile” of the expert the arbitral tribunal intends to appoint, i.e., the qualifications, experience and abilities of the expert.” The note § 71: “. The purpose of the expert’s terms of reference is to indicate the questions on which the expert is to provide clarification, to avoid opinions on points that are not for the expert to assess and to commit the expert to a time schedule. While the discretion to appoint an expert normally includes the determination of the expert’s terms of reference, the arbitral tribunal may decide to consult the parties before finalizing the terms. It might also be useful to determine details about how the expert will receive from the parties any relevant information or have access to any relevant documents, goods, or other property, so as to enable the expert to prepare the report. To facilitate the evaluation of the expert’s report, it is advisable to require the expert to include in the report information on the method used in arriving at the conclusions and the evidence and information used in preparing the report.” The note § 72: “Arbitration rules that contain provisions on experts usually also have provisions on the right of a party to comment on the report of the expert appointed by the arbitral tribunal. If no such provisions apply or more specific procedures than those prescribed are deemed necessary, the arbitral tribunal may, in light of those provisions, consider it opportune to determine, for example, the time period for presenting written comments of the parties, or, if hearings are to be held for the purpose of hearing the expert, the procedures for interrogating the expert by the parties or for the participation of any expert witnesses presented by the parties.”

[13] Similar provisions were introduced in Art 20 of the ICC Rules of Arbitration, in force since 1998 (ICC Rules), and in Art 54 and 55 of the Arbitration Rules of the World Intellectual Property Organization (WIPO) of 2002

[14] To understand the point and get an overview of the major arbitration regulations see Art. 23 of SIAC Arbitration rules: “Unless the parties have agreed otherwise, the Tribunal: (a) may following consultation with the parties, appoint an expert to report on specific issues; and (b) may require a party to give such expert any relevant information, or to produce or provide access to any relevant documents, goods or property for inspection. 2. Any expert so appointed shall submit a report in writing to the Tribunal. Upon receipt of such a written report, the Tribunal shall deliver a copy of the report to the parties and invite the parties to submit written comments on the report. 3. Unless the parties have agreed otherwise, if the Tribunal considers it necessary, any such expert shall, after delivery of his written report, participate in a hearing. At the hearing, the parties shall have the opportunity to question him.” On https://www.siac.org.sg/.  in the same line also Art 22 of the ICDR Arbitration rules (2009) and Art. 6 Iba Rules.

Also of note is the provision contained in the paragraph §1 of CIArb Guideline 10 on the Use of Tribunal Appointed Experts, Legal Advisers and Assessors (2006): “In all the major arbitration centres covered in this guideline, the arbitral tribunal is entitled to appoint experts to report to it on technical matters outside its own expertise and experience. 1.2 As regards arbitrations in England and Wales, Section 37 of the Arbitration Act 1996 (which is based on Article 26 of the Model Law) provides: “(1) Unless otherwise agreed by the parties – (a) the tribunal may – (i) appoint experts or legal advisers to report to it and the parties, or (ii) appoint assessors to assist it on technical matters, and may allow any such expert, legal adviser or assessor to attend the proceedings; and (b) the parties shall be given a reasonable opportunity to comment on any information, opinion or advice offered by any such person. (2) The fees and expenses of an expert, legal adviser or assessor appointed by the tribunal for which the arbitrators are liable are expenses of the arbitrators for the purposes of this Part.” 1.3 In this Guideline, it is proposed to deal separately with tribunal – appointed experts, legal advisers and assessors. Before doing so, however, three general features of Section 37 need to be mentioned. 1.4 First, Section 37 (which is prefaced by the words “unless otherwise agreed by the parties”) is not mandatory. In common with Section 34, it proceeds on the footing that it is for the tribunal to decide all procedural and evidential matters but that this is subject to the right of the parties to reach agreement on these matters. There is only one mandatory aspect of Section 37. Sub-section (2) is made mandatory to avoid the risk of the parties disabling the tribunal from recovering from the parties expenses properly incurred. 1.5 Second, before appointing an expert, legal adviser or assessor under this Section the tribunal must first consider whether this is consistent with its duty under Section 33(1)(b) to adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined. 1.6 Third, if the tribunal does decide to appoint an expert legal adviser or assessor the procedure to be followed must be closely defined in an order made by the tribunal at or about the stage of the appointment. Section 37 leaves the details of that procedure to the discretion of the tribunal save in one respect, that is, that any information, opinion, or advice offered by any person appointed by the tribunal must be communicated to the parties and the parties must be given a reasonable opportunity to comment on it. A failure to provide such an opportunity is equivalent to a failure by the tribunal to perform its duty under Section 33(1)(a)” On https://www.ciarb.org/

[15] G. De Berti, Experts and Expert Witnesses in International Arbitration: Adviser, Advocate or Adjudicator?, on https://www.dejalex.com/

[16] M. C. Charlton, The Quantity Surveyor as Expert Witness,Asian Dispute Review,2010, pp. 15–18.

[17] G. De Berti, Experts and Expert Witnesses in International Arbitration: Adviser, Advocate or Adjudicator?, on https://www.dejalex.com/

[18] National Justice Compania Naviera S.A. v. Prudential Assurance Co. Ltd. (1993) 2 Lloyd’s Rep. 68, on http://www.uniset.ca/other/cs2/19932LLR68.html

[19] For an example of the substance of the discipline, see art. 1 of the code which states that: “Experts shall not do anything in the course of practicing as an Expert, in any manner which compromises or impairs or is likely to compromise or impair any of the following: a) the Expert’s independence, impartiality, objectivity and integrity; b) the Expert’s duty to the Court or Tribunal; c) the good repute of the Expert or of Experts generally; d) the Expert’s proper standard of work; e) the Expert’s duty to maintain confidentiality.” On https://academyofexperts.org/

[20] See for example the discipline of art 7.3 and 7.4 of ICC Expertise Rules: “7.3 Every expert must be independent of the parties involved in the expertise proceedings, unless otherwise agreed in writing by such parties. 7.4 Before an appointment, a prospective expert shall sign a statement of independence and disclose in writing to the Centre any facts or circumstances which might be of such a nature as to call into question the expert’s independence in the eyes of the parties. The Centre shall provide such information to the parties in writing and fix a time limit for any comments from them.” On https://iccwbo.org/

[21] Another code of ethics for experts is The Uniform Standards of Professional Appraiser Practices (USPAP), as developed by the Appraisal Foundation.

[22] P. Wolfgang, Witness “Conferecing”, Arbitration International, Vol.18 n.1, 2002, pp. 47 – 58.

[23] According to the procedure described in article 8.2 of the 1999 Iba rules: “The Claimant shall ordinarily first present the testimony of its witnesses, followed by the Respondent presenting testimony of its witnesses, and then by the presentation by Claimant of rebuttal witnesses, if any. Following direct testimony, any other Party may question such witness, in an order to be determined by the Arbitral Tribunal. The Party who initially presented the witness shall subsequently have the opportunity to ask additional questions on the matters raised in the other Parties’ questioning. The Arbitral Tribunal, upon request of a Party or on its own motion, may vary this order of proceeding, including the arrangement of testimony by particular issues or in such a manner that witnesses presented by different Parties be questioned at the same time and in confrontation with each other. The Arbitral Tribunal may ask questions to a witness at any time.”

[24] R.Trittmann, B.Kasolowsky, Taking evidence in arbitration proceedings

between common law and civil law traditions – the development of a european hybrid standard for arbitration proceedings, UNSW Law Journal, Vol. 3 n. 1, 2008, p. 339.

[25] S.D. Myers, Inc. v. Government of Canada, Procedural Order No. 19, on https://www.italaw.com/cases/documents/975

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