Conflicts of Interest 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 participants of arbitration who is meant to solve those issues which, by their nature, do not fall within the remit 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.

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.

Party-appointed experts are presented by the parties to testify to the arbitral tribunal on any issue of fact or expertise. Among the disadvantages of involvement of such experts is, above all else, 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 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 party-appointed experts. The remuneration 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.

General requirements of impartiality and independence are established for tribunal-appointed experts.

Pursuant to Article 21.2 of the Rules of the London Court of International Arbitration (2020), any such expert shall be and will remain impartial and independent of the parties; and he or she shall sign a written declaration to such effect, delivered to the Arbitral Tribunal and copied to all parties. Another example is Article 6.1 of the Rules on the Efficient Conduct of Proceedings in International Arbitration (Prague Rules) (2018) according to which at the request of a party or at its own initiative and after having heard the parties, the arbitral tribunal may appoint one or more independent experts to present a report on disputed matters which require specialised knowledge.

The above-mentioned requirements are also relevant for the party-appointed experts.

For example, according to Article 4.1 of the Chartered Institute of Arbitrators Protocol for the Use Party-appointed Expert Witnesses in International Arbitration (hereinafter – the CIArb Protocol), an expert’s opinion shall be impartial and objective.

Rules on conflicts of interest in international arbitration are directly connected with general requirements of impartiality, independence and disclosure.

It is worth noting that conflicts of interest are described among the General Standards Regarding Impartiality, Independence and Disclosure in the IBA Guidelines on Conflicts of Interest in International Arbitration (2024) (hereinafter – the IBA Guidelines on Conflicts of Interest). Notwithstanding the fact that in the IBA Guidelines on Conflicts of Interest the general standard on conflicts of interest is directly established for the arbitrators, the approach taken may be useful when discovering the duties of experts. As noted in Explanation (b) to General Standard 2 (Conflicts of Interest), the wording ‘impartiality or independence’ in General Standard 2 derives from the widely-adopted Article 12 of the United Nations Commission on International Trade Law (UNCITRAL) Model Law, addressing the disqualification of arbitrators. As provided in Article 12(2) of the UNCITRAL Model Law, the test for disqualification is an objective one (a ‘reasonable third person test’), using an appearance test based on justifiable doubts as to the impartiality or independence of the arbitrator. In deciding whether to decline an appointment or refuse to continue to act, the arbitrator should bear in mind the standard of objectivity when evaluating the relevant facts or circumstances.

In light of rules for the experts, the relevance of such understanding of impartiality or independence addressed to the arbitrators in the IBA Guidelines on Conflicts of Interest, may be confirmed by the reference to some arbitration rules. In particular, in accordance with Article 11.1 of Hong Kong International Arbitration Centre Administered Arbitration Rules (2024) an arbitral tribunal confirmed under these rules shall be and remain at all times impartial and independent of the parties. In turn, Article 25.5 states that the provisions of Article 11 shall apply by analogy to any expert appointed by the arbitral tribunal.

Another important aspect stemming from the IBA Guidelines on Conflicts of Interest is the relationship between arbitrator and expert which may raise concerns on the actual independence of the arbitrator. In most cases, such relations are covered by the Orange List, which is a non-exhaustive list of specific situations that, depending on the facts of a given case, may, in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence.

The following situations described in the Orange List deserve attention: The arbitrator has been associated with an expert, a party, or an affiliate of one of the parties, in a professional capacity, such as a former employee or partner.

A close personal friendship exists between an arbitrator and a manager or director or a member of the supervisory board of: a party; an entity that has a direct economic interest in the award to be rendered in the arbitration; or any person having a controlling influence, such as a controlling shareholder interest, on one of the parties or an affiliate of one of the parties or a witness or expert; enmity exists between an arbitrator and a manager or director or a member of the supervisory board of: a party; an entity that has a direct economic interest in the award; or any person having a controlling influence on one of the parties or an affiliate of one of the parties or a witness or expert; the arbitrator is instructing an expert appearing in the arbitration proceedings for another matter where the arbitrator acts as counsel.

The instrument preventing conflicts of interest is represented by the rules on disclosure. It is notable that such rules constitute another general standard in the IBA Guidelines on Conflicts of Interest. Noteworthy attention to disclosure for experts is also provided in the arbitration rules. In particular, as stated in Rule 39 (3) of the ICSID Arbitration Rules (2022), upon accepting an appointment by the Tribunal, an expert shall provide a signed declaration in the form published by the Centre. At the same time, the current form includes the expert’s declaration that the expert understands his/her requirement to disclose professional, business and other significant relationships, within the past five years with: the parties; the representatives of parties; members of the Tribunal; and any third-party funder disclosed under arbitration rules.

Under Article 140 of the Code of Best Practices in Arbitration of the Spanish Arbitration Club (2019), experts must disclose any circumstance which, in the view of a reasonable and informed person, may give rise to justifiable doubts as to their objectivity and independence.

According to Article 5(2) (a) of the IBA Rules on the Taking of Evidence in International Arbitration (2020), the expert report shall contain a statement regarding the expert’s present and past relationship (if any) with any of the parties, their legal advisors and the Arbitral Tribunal. Similar requirement is established for an expert’s written opinion in Article 4.4 (b) of the CIArb Protocol. An expert’s written opinion should state any past or present relationship with any of the parties, the Arbitral Tribunal, counsel or other representatives of the parties, other witnesses and any other person or entity involved in the Arbitration. At the same time, pursuant to Article 7.4 of the CIArb Protocol, if the Arbitral Tribunal is satisfied that either written opinion or testimony of an expert is not in accordance with the expert declaration contained in Article 8 of the Protocol, the Arbitral Tribunal shall disregard the expert’s written opinion and testimony either in whole or in part, as it considers appropriate in all circumstances. In practice, this means that an expert opinion may be rejected due to the expert violating the rule of disclosure.

Consequently, in cases where the equitable decision requires settlement of questions, which call for use of detailed professional knowledge, it is the expert who becomes the main participant in the evidentiary process and his evidence or findings may be critical for the arbitrator’s conviction and decision-making.

There is no unified or developed approach to the rules on conflicts of interest on the part of experts in international arbitration. This issue is decided on a case-by-case basis.

However, general standards of the IBA Guidelines on Conflicts of Interest as well as requirements made of experts in various arbitration rules and other instruments of international legal institutions, should be taken into account. Parties and arbitral tribunals have to be selective in their choice of experts. In turn, an expert should avoid conflicts of interest for the proper fulfillment of his/her functions and, in some cases, for preventing concerns about the credibility of an arbitrator.