Harshal Sareen
Introduction
The issue of independence of party-appointed experts is at the forefront of debate and discussion amongst arbitration enthusiasts and policy drafters. The question of whether or not there is a need for independence in relation to a party-appointed expert is still unclear. However, the opinion seems to be divided regarding the requirement of independence of party-appointed experts in international arbitration. This is because it is believed that tailoring the evidence to support the party is indeed their job. As from the very outset of the appointment of a party-appointed expert, it is clear that such an expert acts at the instruction of the party and therefore it would be inconsistent for a tribunal to consider the independence of such an expert.
Further, it is suggested that the requirement of independence of party-appointed expert witnesses though not entirely but largely a fiction. The use of party-appointed expert witnesses has become widespread in international arbitration. Generally, most arbitration rules and laws, like the UNCITRAL Model Law on International Commercial Arbitration (hereinafter “Model Law”), Indian Arbitration and Conciliation Act, 1996, US Federal Arbitration Act, 1926 and other prominent arbitration laws, are silent regarding the ethical duties concerning the party-appointed experts. However, most of these eminent rules explicitly include the ethical responsibilities and roles concerning tribunal appointed experts. In the current paradigm, where party-appointed experts are left beyond the ambit of legal regulations, this post is an attempt to analyse and discuss the requirement of enacting laws concerning the independence of party-appointed experts. Further, the author attempts to draw the best possible meaning of the undefined term ‘independence’.
Significance of Requirement of Independence
The revised International Bar Association (IBA) Rules on Taking of Evidence (hereinafter ‘IBA Rules’) of 2010, introduced the requirement of independence for a party-appointed expert. The IBA Rules claim to reflect the best international practice regarding the questions of taking of evidence. The revised IBA rules of 2010 request the statement of independence along with the report from the party-appointed expert under Article 5.2. Further, the commentary on IBA Rules explicitly states that the requirement under Article 5.2 emphasises party-appointed experts to be independent while evaluating the case. In this background, the author tries to reflect upon the importance of the condition of independence of party-appointed experts.
The role and effect of expert testimonies have a fundamental impact upon an arbitral tribunal’s decision-making process. However, the role of a party-appointed expert is very often debated, reviewed and scrutinised. Usually, in international arbitrations, no explicit right has been conferred to present expert evidence; such a right has been derived from the right to be heard and thorough, extensive right to submit evidence. The expert, ideally, should assist the tribunal by providing an unbiased opinion regarding the aspect upon which the expert’s opinion has been sought. However, the party-appointed expert is perceived as a hired gun in practical scenarios seeing as they are appointed by a party itself to testify its claim. The fact that the party-appointed expert is instructed and paid by a particular party can give rise to the anticipation of bias that he/she might have loyalty towards the party which has appointed him. Recognising the principle of a ‘hired gun’, it is more likely that such an expert will adduce the evidence to advocate the position of the party, rather than assisting the tribunal in finding a specific aspect of the case. Since the duty to assist the tribunal shall supersede the obligation for the person paying them.
Still, the institutional rules and national laws do not lay down any responsibility and ethical duty attributing those experts. The most common ground to challenge the independence of the expert is any previous relationship with any of the parties. The arbitral tribunal usually faces challenges concerning the independence of such experts. Therefore, IBA reforms of 2010 introduced the requirement of independence of party-appointed experts by mandating the statement of independence under Article 5. The commentary on IBA Rules mentions the requirement under Article 5.2 (c) in which an expert is to assess the relationships with regards to parties, arbitral tribunal and any other legal advisor. It happens to certify that he/she is independent and nothing would hold back such an expert from rendering a neutral and honest opinion. Nevertheless, IBA Rules fail to reflect how such an expert can be independent of the appointing party and what they mean by the term ‘independence’ in terms of party-appointed experts. Therefore, it becomes significant to determine the possible meaning of the term ‘independence’ with regards to Party Appointed experts.
Possible meaning of the term independence concerning party-appointed experts
Generally, in international arbitration, the term ‘independence’ has always been used concerning the arbitrators, and the tribunal appointed experts. However, there still exists a lacuna concerning connotations of the term ‘independence’ of party-appointed experts. The meaning of the term independence with regards to party-appointed experts had not gained much academic and legislative traction. With this background, the author tries to determine the meaning of term independence for party-appointed experts.
IBA Guidelines, the Model Law, as well as the UNCITRAL Rules and other prominent arbitration rules, have put to use the term impartial and independent to set out the ethical relationship of arbitrators and tribunal appointed experts with the parties of the concerned case. However, aforesaid arbitral rules and IBA Guidelines are silent upon the requirement of independence and the grounds for challenging the party-appointed expert. The element of independence of party-appointed experts under IBA is not as vigorous as that concerning the tribunal party experts. Further, the opinion concerning the revisions under the IBA is divided. Some authors consider the revision as a step towards aligning the requirement of independence of tribunal appointed experts, as well as party appointed experts. In contrast, others suggest the gap between the demands for independence with reference to both tribunal-appointed as well as party-appointed experts as an intended gap.
The possible connotation of the term ‘independence’ in reference to party-appointed experts can either be drawn through the arbitrators or tribunal-appointed experts. A similar approach has been adopted by specific international arbitral rules, for example, the HKIAC rules pursuant to Article 25.5 draw an analogy between tribunal-appointed experts and arbitrators, thereby allowing the challenges of tribunal-appointed experts on the same grounds as arbitrators. Considering this, one experimental approach to determine the meaning of ‘independence’ with regards to party-appointed experts is by drawing an analogy with arbitrators. It can be done through IBA Guidelines on Conflict of Interest which deals with arbitrator’s impartiality and independence. Nonetheless, the roles of party-appointed expert and the arbitrator are radically different. In the ICSID case of Bridgestone Licensing Services, Inc. and Bridgestone Americas, Inc. v. Republic of Panama, the tribunal supported this notion by rejecting the application of IBA Guidelines upon the party-appointed experts.
To better understand the nuances of the judgment, we must look at the ratio of the judgment. In this case, the claimants sought to draw an analogy between IBA Guidelines and party-appointed experts. The tribunal did not consider it apt, since both of them have different roles altogether. The tribunal substantiated the reasoning by stating that the role of an arbitrator is to reach a just, impartial and neutral decision of the conflict between the parties. Therefore, the arbitrator mustn’t favour one party over the other.
On the other hand, party-appointed experts are appointed by the party to present an opinion as part of the evidence and not to adjudicate upon the issues of the case. Though, such an expert is expected to be independent and to assist the tribunal keeping with their sincere opinion and experience. However, a party will appoint an expert whose opinion supports the party’s case. Therefore, due to different roles, IBA Guidelines cannot satiate the gap of the term independence concerning party-appointed experts.
The second tentative approach is to make an analogous application through the tribunal-appointed expert as both the experts must assist the arbitral tribunal in determining the issue in question that is beyond the understanding of a reasonable person. IBA Rules under Article 6 requests a tribunal appointed expert to submit a statement of independence and states the grounds for potential conflict. Article 5.2 (c) imposes the same requirement concerning party-appointed experts, excluding the grounds for challenging such an expert. Though, it can be argued that unlike the tribunal appointed experts, the need for independence of party-appointed experts are less clear since the IBA Rules do not provide for the objections for such an expert. However, taking into account the careful thinking that preceded the revision of Art. 5, it can be inferred that by introducing the requirement of independence with regards to party-appointed experts, they intended to equate the need for independence with tribunal appointed experts. Therefore the standard for the independence of such an expert can be analogically drawn from the tribunal appointed experts.
Conclusion
IBA Rules through 2010 reforms have not only introduced the statement of independence for party-appointed experts but is also a beginning of a regime where the other international arbitral rules would call for independence for such an expert. Nevertheless, IBA fails to state clear guidelines with regards to the autonomy of party-appointed experts. Clearer guidelines would avoid unreasonable and unnecessary challenges to the independence of such an expert. It could make it easy for experts to walk the road without fearing the challenges to independence by setting specific standards. The fact that such an expert is generally considered loyal towards the party appointing him calls for compliance with professional code.
The author is a student at the Institute of Law, Nirma University, Ahmedabad.
NUALS Law Journal 