Foreword by Andrew Chilvers
Global commerce is by its nature a complex beast and it is inevitable that sometimes disputes arise between companies doing business across the world.
As more international deals are signed off – often in greater degrees of complexity than will have been done in the past – it has also led to a rise in the number of disputes that end in arbitration.
Indeed, international arbitration was the preferred method of dispute resolution for 97% of respondents in the 2018 International Arbitration Survey, conducted by the School of International Arbitration at the Queen Mary University of London, in association with White & Case LLP.
Moreover, 99% of respondents said they would recommend international arbitration to resolve cross-border disputes in the future – which shows the strength of the system across the world.
An important aspect of the arbitration process is the use of expert witnesses. There are few cases where an expert witness is not called on to give evidence on a range of technical, financial, legal and, on occasion, scientific issues to help the arbitration tribunal to understand the evidence on complex matters and help them form a decision.
Those involved in disputes must be aware of how expert – and also the fact – witnesses are used in different jurisdictions, as this can vary markedly between territories.
The independence of witnesses is a subject that crops up repeatedly – especially around who they serve, their effectiveness and how they are viewed by judges in arbitration tribunal panels.
Another factor that must be considered is the different rules between jurisdictions and the impact that can have on proceedings. Many jurisdictions have their own arbitration rules, and there are also the international ICC and IBA rules to consider, among others. Often, the litigant will try to steer proceedings to use their home rules – and if they are unfamiliar to the other party, they will need to engage experts in the local laws.
How important are cross-cultural issues regarding arbitration rules and witnesses in your jurisdiction?
The US system is more adversarial, especially with regards to expert witnesses. Generally, in our arbitrations, expert witnesses are more like hired hands for each side and they take on a more adversarial role. There are some examples we’ve found where arbitrators go out of their way to make sure that the experts are adversarial and not impartial. I think if you’re dealing with the US you would want to make sure that your arbitrator maybe creates some rules to require witnesses to be more impartial because in the US the attorneys would find experts who would be mouthpieces for their position.
How important is witness independence when attempting to solve complex, transnational disputes? What roles can practitioners play to test for independence?
In the US, of course, it’s in the discovery process. Generally, arbitrations are held according to American arbitration rules, and most US practitioners would try to steer the arbitration to those rules. So where you’d have some limited discovery prior to the arbitration and have set up a discovery deadline, you would depose the other side’s expert and try to figure out by talking to your expert where there are holes in their arguments. The practitioners play the role of questioning the experts, preparing their own expert and preparing for the arbitration, and then presenting up an adversarial arbitration process, and cross-examining the other expert, and trying to find weaknesses in their arguments.
Although IBA rules are not binding internationally, how important are they for arbitration rules in your jurisdiction?
I think the IBA rules are refreshing. You have a third party expert, also the discovery process seems much less cumbersome than the American discovery process, which is just so expensive. It really limits the number of cases that can be arbitrated because you get so bogged down in the States and discovery and unless it’s a really expensive case a lot of clients are forced to mediate rather than arbitrate because the American system and the courts usually allow for more extensive discovery. I think the IBA system would be welcome to smaller businesses that are trying to cut down on the amount of discovery and just get to the case. The experts can be expensive as well. I know the costs weren’t really part of this discussion, but it’s a real factor in whether the parties are going to go through this. In America, depending on which client has leverage in the transaction, they would probably steer towards a choice of US law. And you’re probably more likely to see the AAA commercial arbitration rules apply if the American company has leverage. If Americans look at these a little more closely this system is actually less expensive and probably gets better results since you have that third-party expert.