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Dr. Alexey Kot
Managing Partner, Antika Law Firm
Partner, Antika Law Firm
The Role of Experts in International Arbitration
The involvement of experts in international arbitration is common practice, whose use is to a significant extent caused by the complexity of cases being considered in international arbitration. A request for special knowledge in a particular field or branch of law arises in many circumstances. The expert is the one of the arbitration participants who is meant to solve those issues which, by their nature, are not within the competence of an arbitrator and demand restricted professional consideration. The qualified expert’s study of factual circumstances or matters of law may be decisive for support or, vice versa, for rejection of the position of the disputing party which are necessarily reflected in the decision. Therefore, the participation of an expert in arbitration often becomes the indispensable factor for ensuring the effectiveness of arbitration proceedings.
The procedural status of an expert and the particularities of his/her involvement in arbitration proceeding are defined preeminently in the arbitration rules of institutional arbitrations. Furthermore, different issues relating to expert activities in arbitration proceeding are also regulated by UNCITRAL Arbitration Rules, which are used primarily in «ad hoc» arbitration.
It is also important to mention some unified regulatory documents which allow to understand the role of experts in international arbitration. For instance, the IBA Rules on the Taking of Evidence in International Arbitration of 2010 (hereinafter — IBA Rules) combine the different approaches to evidence in arbitration specific to various legal systems, while the issues of ensuring the involvement of experts in international arbitration are, to a great extent, also covered in the UNCITRAL Notes on Organizing Arbitral Proceedings of 2016.
There is neither clear definition of the procedural status nor the place of the expert among other participants of arbitration proceeding in the arbitration rules and other documents which define the role and mechanism of expert involvement in international arbitration. It’s only apparent that the expert is not a party to the arbitration proceeding and does not serve as the arbitrator. At the same time, the expert is an active participant in the evidentiary process as an essential component to the arbitral proceeding.
There is a common view about the division of experts into expert witnesses (party-appointed experts) and tribunal-appointed experts in both the theory and practice of international arbitration.
Expert witnesses are presented by the parties to testify to the arbitral tribunal on any issue of fact or expertise. As distinct from witnesses who give evidence on factual circumstances, the findings of an expert witness are based on his professional knowledge in a particular area. Among the disadvantages of involvement of such experts is, above all, the risk of dependence on the parties since the expert receives remuneration from the party which appointed him/her. In addition, often the lack of communication between the party-appointed experts which eventually leads to significant inconsistencies in expert findings may also present a challenge.
The second group of experts (tribunal-appointed experts) are usually appointed by a tribunal after the consultation with the parties to report in writing on specific issues in the arbitration, as identified by the arbitral tribunal. The advantage of such experts is their independence in comparison with expert witnesses. The renumeration of tribunal-appointed experts is paid by an arbitral tribunal. However, the disadvantage of the involvement of this group of experts is the possible risk of factual delegation of the arbitrator’s authority to the expert.
The specificity of the objective of the involvement of experts in arbitration determines the importance of the issue of the requirements which apply to such participants of an arbitration proceeding. Thus, there are requirements of qualification, independence and impartiality which are prescribed by the arbitration rules for the tribunal-appointed experts. In particular, under Article 29 (2) of UNCITRAL Arbitration Rules, the expert shall before accepting an appointment, submit to the arbitral tribunal and to the parties a description of his/her qualifications and a statement of his/her impartiality and independence. Within the time ordered by the arbitral tribunal, the parties shall inform the arbitral tribunal whether they have any objections as to the expert’s qualifications, impartiality or independence. Such objections may be considered by the arbitral tribunal.
A similar rule is set out in Article 21.2 of the LCIA Arbitration Rules, according to which impartiality and independence of the expert is confirmed by the written declaration to such effect, signed by the expert and delivered to the arbitral tribunal and copied to all parties.
The characteristics of the expert’s qualification may be special education, considerable experience in a particular area, membership of professional associations, scientific degree, publications, etc.
It is worth noting that the requirement of independence is also set out for party-appointed experts. For example, the IBA Rules define a statement of expert’s independence from the parties, their legal advisors and the arbitral tribunal among the essential elements of the expert report (Article 5(2) (с) of the IBA Rules).
The main results of the expert’s activity which express his/her procedural role and are considered as separate evidence in an arbitration proceeding are the expert’s testimony and expert reports. That said, the expert’s findings on matters of law are rightly regarded as being within the group of secondary authority, while the expert’s testimony is regarded within the group of personal evidence. The understanding of the evidentiary nature of expert’s testimony and expert reports in arbitration proceeding can also be found in the arbitration rules of the leading arbitration institutes of the world. For instance, by virtue of Article 33 (1) of the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, in advance of any hearing, the Arbitral Tribunal may order the parties to identify each witness or expert they intend to call, and to specify the circumstances intended to be proved by each testimony. The same approach to the understanding of the expert’s testimony and expert reports as the evidence also results from Rule 35 (a) of the Commercial Arbitration Rules of the American Arbitration Association and Article 20.3 of the LCIA Arbitration Rules.
The testimony given by party-appointed experts may be submitted in the form of signed statements, while the tribunal-appointed experts draft the written expert’s report. The report of a tribunal-appointed expert is referred to the arbitral tribunal, and the parties are provided with copies prior to the holding of the hearing. Any questions related to the procedures for the provision and exchange of expert reports fall within the competence of the arbitral tribunal and, consequently, are decided on a case-by-case basis.
The determining procedural form which is intermediate in the participation of experts in an arbitration proceeding, is the evidentiary hearing in which the witness statements and the expert testimonies are heard. As a general rule, the cross examination of experts who have prepared their reports is conducted in this hearing. The essence of this procedure is the examination of the expert by the lawyers of the opposing party regarding his/her evidence (findings), materials studied by him, and other documents relating to the subject matter of the expert’s testimony. The cross examination is aimed to displacing the expert’s testimony and, in the vast majority of cases, is the longest stage of the evidentiary hearing.
If there are significant differences in the reports of party-appointed experts the meeting between experts may be arranged prior to the hearing. The objectives of such a meeting are discussion on disputable matters and consensus-building. In this case the subjective perception of the professional qualification of the expert and his/her experience by the arbitrators becomes a factor of great importance. From the practical point of view, this means that the parties have to foresee such a scenario, and when selecting candidates for the role of expert they need to devote considerable attention to such aspects of expert qualification as the huge experience of highly- specialized expertise in the particular legal field or area, impeccable reputation of the expert, successful participation in high-profile cases, scientific practical background of the expert as well as previous experience of participation in international arbitration.
Consequently, the survey of different aspects of the role of experts in international arbitration gives reasons to recognize the importance of the participation of such a procedural person, most notably for ensuring the effectiveness and completeness of the procedure for the arbitral proceeding. In cases where an equitable decision requires settlement of questions which call for use of detailed professional knowledge, it is an expert that becomes the main participant in the evidentiary process and his/her evidence (findings) may be critical for the arbitrator’s conviction and resolving the dispute.