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Expert evidence & Partial or Interim Awards

von Holger Langer, LL.M.

  • Some issues of fact can only be determined by the arbitral tribunal becoming involved in the evaluation of elements that are essentially matters of opinion
    • In construction e.g.: documents and witness reports may enable the tribunal to determine what actually happened, but expert opinion may be needed to determine if what actually happened was the result of a design error or a defective construction or to investigate the quantification of a claim
  • Two methods of presentation:
    1. experts appointed by the arbitral tribunal
    • power to appoint experts
      • express term in the arbitration agreement
      • incorporation of international or institutional arbitration rules by the arbitration agreement (e.g. Art. 27 UNCITRAL Arbitration Rules; Art. 20 (4) ICC Rules; Art. 21 LCIA Arbitration Rules)
      • in the absence of express terms, implied power?
      • General principle that someone to whom a duty has been delegated ( - arbitral tribunal to decide the case) can delegate that duty to somebody else
      • Implied power as far as the tribunal is taking merely advice and is not delegating its duty to the expert
      • As a corollary, the tribunal must give the parties the opportunity to comment on any such expertise
    • Appointment of expert in coordination with the parties, i.e. opportunity to agree upon an expert between the parties, if not possible, then provision of a list of tribunal chosen individuals or institutions, if still unable to agree, choice by tribunal
    1. experts appointed by the parties
  • Most common method in arbitration agreements
  • Difficulties for tribunal in evaluating two opposed professional opinions on technical matters
  • Expert evidence normally furnished in the form of written reports, as written statements of witnesses of fact well in advance of the hearings
  • IBA Rules of Evidence: provide that party-appointed experts shall appear for testimony at a hearing unless the parties agree otherwise and the tribunal accepts this agreement

Partial or Interim Awards

  • Purpose
    • an effective way of determining matters that are susceptible to determination during the course of the proceedings and which, once determined, may save considerable time and money for both parties
  • Power to issue partial or interim awards
    • derived from the arbitration agreement (e.g. Art. 32.1 UNCITRAL, Art. 23.1 ICC, Art. 26.7 LCIA)
    • derived from the applicable law, e.g. s 47 Arbitration Act 1996
  • Matters susceptible for preliminary determination
    • Jurisdiction
      • an interim award on a question of the tribunals jurisdiction may shorten or at least simplify the proceedings
      • a tribunal would do a bad job if it would spend months hearing a dispute only to rule in its final award that it did not have jurisdiction
    • Applicable law
      • if a dispute between the parties as to the law applicable to the merits of a case is not resolved at an early stage, the parties must argue their cases with reference to different systems of law which would considerably increase e.g. the costs
    • Separation of quantum and liability
      • the determination of a particular issue of liability in favour of the respondent may make it unnecessary for the tribunal to investigate questions of quantum
      • may also encourage the parties to reach a settlement, since the parties are usually aware of the high costs likely to be involved if the frequently complicated quantification of a claim has to be done by the tribunal
    • Limitation clauses in a contract
      • a partial award on the meaning and effect of a contractual clause limiting the type or amount of damages payable in the event of a breach (e.g. no loss of profit) may help to limit the amount of the claim and may help the parties to reach a settlement
  • Dangers
    • the nature of the dispute may change during the course of the proceedings, so that savings of time and money will not be achieved by an early determination in an interim award
    • therefore, a tribunal should not normally decide to issue a partial award without the request of the parties
      • request by one party
        • tribunal should reach its decision after receiving submissions of both parties and giving each party a reasonable opportunity to explain its position
      • request by both parties
        • arbitral tribunal must follow the agreement of the parties
  • Form of the award
    • award should state clearly that it is an interim award
    • otherwise a party may have an opportunity to claim that in fact a final award was issued and the tribunal has no further jurisdiction in the matter
  • Main disadvantage
    • an interim award creates a further avenue for judicial review (i.e. application of a party to a national court to set aside or confirm an interim award during the course of arbitration), which will lead to delay and, thus, increases in cost