Author: Parth Tyagi*
| Jurisdiction: International |
Topics: Experts Powers of Arbitrators Authority of the Arbitral Tribunal Arbitrators and Arbitral Tribunals |
I. INTRODUCTION
Party-appointed experts play an essential part in the arbitral proceedings, by providing their valuable expertise to the tribunal about topics beyond the tribunal’s specialization. However, in practical terms, their appointment brings out a number of conflicts, which cannot be resolved by attaching lesser weight to the expert’s testimony. For example, a Party may appoint an expert as a hired gun, where the expert favors the party appointing him by presenting a biased view on a contested subject , or the expert could be someone who has a potential conflict with one of the members of the arbitral tribunal and the appointing party only wants to sow seeds for a future challenge to the arbitrator’s appointment in order to delay a time bound arbitration. Can these malicious actions on the part of a party prompt the tribunal to exclude the party-appointed expert from the arbitral proceedings? Before we can answer this, we need to understand whether the arbitral tribunal has the power to exclude an expert or not. At present, there is no direct source of such power to exclude the experts for tribunals operating under different institutional rules, be it the SIAC, the LCIA, the ICC, ICSID or even the UNCITRAL Model Law. The first part, will provide an analysis of two landmark cases which involved a challenge to the party-appointed expert, followed by a discussion on the competing rights and duties at play in the course during such an exclusion. The third part will discuss the various principles from which the tribunals can derive its power to exclude an expert by drawing an analogy with the case of Hrvatska v. Slovenia.[1]
II. UNDERSTANDING THE CHALLENGE TO A PARTY-APPOINTED EXPERT THROUGH CASE LAWS
Challenges to party-appointed experts are rare. Therefore, there exists a dearth of jurisprudence about them in international arbitration. However, in 2014 and 2018, in Flughafen v. Venezuela[2] and Bridgestone v. Panama,[3] respectively, ICSID tribunals did consider challenges to the appointment of an expert.
1. Flughafen v. Venezuela
This case involved a conflict between an expert and a party, wherein the Claimant in this case alleged that the expert on the Respondent’s side had made use of confidential information it had received from the prior relationship it shared with the Claimant.[4] The Claimant demanded the exclusion of the expert from the Respondent’s team.[5] Although the tribunal believed that the Claimant was justified in raising the concern, it nevertheless denied the exclusion of the expert.[6] In its reasoning, the tribunal stated that the Claimant did not specify to the expert the confidential nature of the information it received nor had it made any subsequent reservations about it.[7] Therefore, the Claimant was unable to discharge its burden of proof in this case.
It is important to note that the tribunal acknowledged that it had the power to remove the expert by extending the scope of Article 34(1) of the ICSID rules,[8] which only talks about the admissive value of any evidence.[9] However, the tribunal did not provide any justification for the possible extension of the scope of this article. Moreover, the tribunal accentuated that the challenge to the expert should be based on concrete facts, followed by satisfaction of the burden of proof.[10]
2. Bridgestone v. Panama
This case involved a conflict between an expert and a counsel. The Claimant in this case alleged that the expert appointed by the Respondent had made use of confidential information it had received through a telephonic conversation with the Claimant’s counsel.[11] On the basis of this, the Claimant demanded the exclusion of expert.[12] Following the approach taken by the tribunal in Flughafen, the tribunal in this case also dismissed the Claimant’s request to exclude the expert.[13] The tribunal noted that the counsel failed to mention to the expert about the confidential nature of information.[14] Moreover, on analysis, the tribunal stated that most of the information disclosed in conversation between the counsel and the expert was now in the public domain and that the expert provided its evidence by purely relying upon law and not on the content of the conversation.[15]
However, the tribunal in this case took a completely different stance from Flughafen with respect to its power to exclude an expert since it expressly acknowledged that it lacked the power to exclude an expert.[16]
III. COMPETING RIGHTS AND DUTIES AT PLAY DURING THE EXCLUSION OF A PARTY-APPOINTED EXPERT
Even if we assume that an arbitral tribunal has a direct source of power to exclude a party-appointed expert, it still cannot simply exercise this power in case of a conflict for one simple reason – that is the principle of equal treatment. The principle of equal treatment embodies a party’s right to present its case. The principle finds its place in Art. 18 of the UNCITRAL Model Law.[17] Commentators, including Gary Born[18], Jeffery Waincymer[19] and Peter Sanders,[20] note, that a “party’s right to choose an expert of its choice is covered under the principle of equal treatment, as it forms an integral part of a party’s right to present its case.”[21] Thomas Webster, a renowned UNCITRAL commentator, argues that “where the number of experts in a field is limited, a party’s right to choose the expert of its choice is paramount.”[22]
Just like a party has a right to present its case by choosing its own expert, an arbitral tribunal has a duty to conduct the proceedings in an expeditious manner.[23] Similarly, an arbitral tribunal has a duty to ‘Determine Rules of Procedure’, that are essential for conduct of the proceedings.[24] Thus, in conceptualizing a source of power to exclude a party-appointed expert, the arbitral tribunal must always work towards balancing the competing rights and duties at play.
IV. SOURCES OF POWER FOR THE TRIBUNAL TO EXCLUDE A PARTY-APPOINTED EXPERT
At present, arbitral tribunals working under different institutional rules lack any direct source of power to exclude a party-appointed expert. However, even in the absence of any direct source of power, the arbitral tribunal can rely upon other general principles of arbitration to justify the exclusion of a party-appointed expert. The author believes that the relevant principle here is the principle of the immutability of a properly constituted arbitral tribunal and its duty to maintain the integrity of the arbitral proceedings.[25]
In a hypothetical situation, what if a party to the arbitral proceedings introduces an expert only to challenge one of the members of the tribunal who has a conflict with the expert and the expert was introduced with the ulterior motive to delay the proceedings? In such a scenario, the arbitral tribunal should rely upon the principle of immutability of a properly constituted arbitral tribunal to exclude the party-appointed expert. The ICSID tribunal in Hrvatska v. Slovenia[26] faced a similar threat. In this case, the Respondent (Slovenia) included a legal representative in its team at the ‘eleventh hour’.[27] Importantly, the legal representative had a conflict with one of the members of the arbitral tribunal.[28] The tribunal noted that the immutability of the tribunal forms one of the cornerstones of arbitration.[29] It held that in order to maintain the tribunal’s immutability and to protect the integrity of the proceedings, the legal representative had to be excluded.[30]
Although in their capacities before an arbitral tribunal, there lies a significant difference between a party-appointed expert and a legal representative, either one’s conflict with an arbitrator to the proceedings affects the independence of the arbitrator in a similar way. This assertion is strongly backed by the IBA Guidelines on Conflicts of Interest in International Arbitration, wherein an arbitrator’s conflict with a counsel and an arbitrator’s conflict with an expert are contained under the same heading under the orange list.[31] Hence, an arbitral tribunal, at an appropriate challenge, may exclude a party-appointed expert from the proceedings if the inclusion of the party-appointed expert serves as a potential threat to the composition of the properly constituted tribunal or to the integrity of the proceedings.
Another source of power for the tribunal to exclude an expert are its general duties to conduct the proceedings fairly and expeditiously. These duties find its place in almost all institutional rules, be it the SIAC[32], ICSID[33], the LCIA[34] or the ICC.[35] The correct approach to follow in cases involving a challenge to a party-appointed expert is the one suggested by ICSID tribunal in Flughafen. As stated before, the tribunal recommended the extension of the rules regarding the admissibility of evidence to the exclusion of experts. However, reliance should be placed upon the principle of expeditious and fair conduct of proceedings as a justification to extend the scope of provision relating to admissibility. The most important point for the arbitral tribunal is that the exercise of these duties with regards to the exclusion of experts has to be done only in exceptional and compelling circumstances where the party challenging the expert has discharged its required burden of proof.
V. CONCLUSION
The challenges to a party-appointed expert must be assessed on the case-to-case basis. Moreover, what should be kept in mind while assessing the challenge are the possible implications of exclusion. Wherever the tribunal finds that the party-appointed expert must be excluded from the proceedings, the party from whose team the expert is removed must be given a chance to appoint an alternative expert in order to protect the party’s right to present its case.
[1] Hrvatska Elektroprivreda d.d. v. Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling regarding the participation of David Mildon QC in further stages of the proceedings (May 6, 2008), http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C69/DC950_En.pdf.
[2] Flughafen Zürich A.G. and Gestión e Ingenería IDC S.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/10/19, Decision on Claimants’ proposal for disqualification of one of Respondent’s expert witnesses, and request for inadmissibility of evidence (Aug. 29, 2012), http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C1181/DC2652_Sp.pdf.
[3] Bridgestone Licensing Servs., Inc. and Bridgestone Americas, Inc. v. Republic of Panama, ICSID Case No. ARB/16/34, Tribunal’s Ruling on Claimants’ Application to Remove the Respondent’s Expert as to Panamanian Law (Dec. 13, 2018), http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C5946/DS11876_En.pdf.
[4] Flughafen at ¶ 11.
[5] Id. at ¶ 13.
[6] Id. at ¶ 38.
[7] Id. at ¶ 37.
[8] Id. at ¶ 34.
[9] ICSID, Rules of Procedure for Arbitration Proceedings (Arbitration Rules), Art. 35(1), https://icsid.worldbank.org/en/Documents/icsiddocs/ICSID%20Convention%20English.pdf.
[10] Flughafen at ¶38.
[11] Bridgestone Licensing Servs., Inc. and Bridgestone Americas, Inc. v. Republic of Panama, ICSID Case No. ARB/16/34, Tribunal’s Ruling on Claimants’ Application to Remove the Respondent’s Expert as to Panamanian Law, ¶ 6 (Dec. 13, 2018), http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C5946/DS11876_En.pdf.
[12] Id. at ¶ 10.
[13] Id. at ¶ 13, ¶ 39.
[14] Id. at ¶ 35.
[15] Id. at ¶ 33.
[16] Id. at ¶ 16 (“An appearance of partiality does not result in the disqualification of an expert witness. It detracts from the weight that the Tribunal will accord to his evidence.”)
[17] UNCITRAL Model Law on International Commercial Arbitration, Art. 18 (1985), https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09955_e_ebook.pdf.
[18] Gary Born, International Commercial Arbitration, Pg. 1861 (2d ed. 2014)
[19] Jeffrey Waincymer, Procedure and Evidence in International Arbitration, Pg. 886 (2012).
[20] Peter Sanders, Commentary On UNCITRAL Arbitration Rules, Pg.452-455 (1977)
[21] Born, supra note 18, at Pg. 556-560.
[22] Thomas H. Webster, Handbook of UNCITRAL Arbitration, Pg. 468 (2d ed. 2010).
[23] UNCITRAL Model Law on International Commercial Arbitration, supra note 17, Art. 14.
[24] UNCITRAL Model Law on International Commercial Arbitration, supra note 17, Art. 19(2).
[25] United Nations Int’l Law Comm’n, Commentary on the Draft Convention on Arbitral Procedure, at Pg. 8 & 26 (1955).
[26] Hrvatska Elektroprivreda d.d. v. Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling regarding the participation of David Mildon QC in further stages of the proceedings (May 6, 2008), http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C69/DC950_En.pdf.
[27] Id. at ¶ 4.
[28] Id. at ¶ 5
[29] Id. at ¶¶ 25-28
[30] Id. at p. 15.
[31] IBA Guidelines on Conflict of Interest in International Arbitration, Orange List , https://www.ibanet.org/Document/Default.aspx?DocumentUid=e2fe5e72-eb14-4bba-b10d-d33dafee8918.
[32] SIAC Rules, Art. 19(1) (2016).
[33] ICSID Convention, Art. 44.
[34] LCIA Arbitration Rules, Art. 14.4 (2014).
[35] ICC Arbitration Rules, Art. 22(1) (2017).
*Parth Tyagi is a Fourth Year student of the B.A. LL.B (Hons.) course at National Law Institute University, Bhopal.