The Requirements 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 one of the participants of arbitration who is meant to solve those issues which, by their nature, do not fall 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 an 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, 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 Party-appointed experts. The renumeration of tribunal-appointed experts is paid by 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 active participation of experts in the evidentiary process as the essential component of arbitral proceeding determines the importance of the issue as to the requirements which apply to such participants of proceedings. There are the requirements of qualification, independence and impartiality, which are prescribed by arbitration rules and soft law instruments for experts.

For instance, under Article 15 (c) (i) of UNCITRAL Notes on Organizing Arbitral Proceedings (2016), before appointing an expert, the arbitral tribunal will normally ensure that the expert has the required qualification and obtain a statement of his or her impartiality and independence. The arbitral tribunal usually gives the parties an opportunity to comment on the expert’s proposed mandate, qualification, impartiality and independence.

In accordance with Article 3 of the ICC Rules for the Appointment of Experts and Neutrals (2015), every expert or neutral must be and remain impartial and independent of the parties involved in the proceedings, if any, unless otherwise agreed in writing by such parties. Before an appointment, a prospective expert or neutral shall sign a statement of acceptance, availability, impartiality and independence. The prospective expert or neutral shall disclose in writing to the ICC International Centre for ADR any facts or circumstances which might be of such nature as to call into question the expert’s or neutral’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the expert’s or neutral’s impartiality. The Centre shall provide such information to the parties in writing and shall fix a time limit for any comments from them.

The similar rule is set forth in Article 21.2 of the Rules of the London Court of International Arbitration, 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.

Rules on the Efficient Conduct of Proceedings in International Arbitration (Prague Rules) (2018) also put emphasis on the independence of experts. Pursuant to Article 6.1 of the Prague Rules at the request of a Party or on 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 specialized knowledge.

The requirement of independence is also set out for any Party-appointed experts. For example, Article 5(2) (с) of the IBA Rules on the Taking of Evidence in International Arbitration (2020) define a statement of the expert’s independence from the Parties, their legal advisors and the arbitral tribunal as being among the essential elements of the expert report.

Considerable attention is paid to such requirements in the Chartered Institute of Arbitrators Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration (2007). Pursuant to Article 4 of the CIArb Protocol, an expert’s opinion shall be impartial, objective, unbiased and uninfluenced by the pressures of the dispute resolution process or by any Party. It also provides that payment by the appointing Party of the expert’s reasonable professional fees for the work done in giving such evidence shall not, of itself, impair the expert’s impartiality. Article 8 of the CIArb Protocol which is devoted to the form of expert declaration stipulates, namely, that the expert should confirm that his/her opinion is his/her own, impartial, objective, unbiased opinion which has not been influenced by the pressures of the dispute resolution process or by any Party to the arbitration.

The understanding of objectivity and independence as duties of experts is given in the Code of Best Practices in Arbitration of the Spanish Arbitration Club (2019). Under Articles 133-135 of the Code experts must be objective and independent. The qualities of objectivity and independence require that experts possess the willingness and capability to perform their role, are guided by the truth and report not only aspects that are favorable to the Party that has appointed them, but also those that are opposed to it, and maintain an objective distance from the appointing Party, the dispute, and other persons involved in the arbitration. The duty of objectivity and independence requires that experts have no financial interest in the outcome of the arbitration. At the same time, significant emphasis in the Code is placed on the duty of disclosure. In particular, under Articles 139-140 of the Code, both in their acceptances and in their reports, all experts must expressly declare that they comply with the requirements of objectivity and independence. At the same time, 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.

Existing concerns about fulfillment of the above-mentioned requirements relate predominantly to the proceedings involving Party-appointed experts. There are few instruments aimed at ensuring the fulfilment of requirements of independence and impartiality by Party-appointed experts.

One of the instruments is the general rule on disclosure of conflicts. For instance, under Article 5(2) (a) of the IBA Rules the expert report shall contain a statement regarding expert’s present and past relationship (if any) with any of the Parties, their legal advisors and the Arbitral Tribunal.

The joint report of the experts may be considered as another way for testing the independence and impartiality of Party-appointed experts. As stated in LCIA Note on Experts in International Arbitration (2018), to bridge the gaps between reports provided by different experts, English courts and some international tribunals ask experts to work together, whether it be by meeting prior to a hearing to identify and narrow down the points on which there is disagreement, or even by producing a joint report for presentation to the tribunal.

There is also expert conferencing (known as “hot-tubbing”) involving tribunals questioning experts on their evidence simultaneously. According to the LCIA Note, hot-tubbing enables tribunals to identify precisely where experts diverge in approach, assumptions, and conclusions. This should, in turn, enables tribunals to attempt to reconcile or at least understand these differences with the help of the experts themselves.

The CIArb Guideline on Party-appointed and Tribunal-appointed Experts which sets out the current best practice in international commercial arbitration on the appointment and use of Party-appointed and tribunal-appointed experts also places attention on the testing of the experts’ opinions. Pursuant to Article 5 of the CIArb Guideline arbitrators should provide directions as to how expert opinions should be tested. Some directions in relation to this are usually given in anticipation of receiving the expert report, but arbitrators may also give further directions as to the testing of an expert’s opinion once the reports have been exchanged. When drafting their final award, arbitrators should provide reasons for relying on and/or preferring an expert’s opinion or specific aspects of it in order to show that they have given proper consideration to any opinions proffered. Directions for testing the opinions of experts include holding meeting prior to any scheduled hearing in order to identify areas of agreement and disagreement (including the reasons for such disagreement), preparation of a joint report, submission of written replies or comments on each other’s reports and “witness conferencing” when the experts are simultaneously examined in relation to the same issue or issues in dispute.

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/her evidence or findings may be critical for the arbitrator’s conviction and deciding. In this regard, it is necessary for the parties and arbitral tribunal to be selective in their choice of experts, who should meet the requirements of qualification, independence and impartiality.