How to challenge a party-appointed Expert in International Arbitration.

The role of party-appointed experts is to assist the arbitral tribunal in its reasoning and ultimately its decision-making process. Although one could assume that on technical issues there could hardly be any room for interpretation, in practice each party appoints an expert able to reach a different conclusion than the expert of the other party.

Parties have an opportunity to test the other party’s expert during the cross-examination at the hearing, but the arbitral tribunal is left with the delicate and often challenging task of assessing the value of two wildly different professional opinions on the same nucleus of operative facts.

If a party intends to formally challenge an expert appointed by the other party, in the absence of any specific duties and obligations, the grounds upon which it may mount a successful challenge are unclear; it is ultimately left to the arbitral tribunal to assess the evidence brought by the parties and decide if a disqualification measure is appropriate.

As a matter of fact, and to the best knowledge of the authors, there are no successful disqualifications of expert witnesses in the public record.

Among the grounds invoked by the parties in their requests are the following:

access to confidential and privileged information (Bridgestone v. Panama, para. 8; Flughafen v. Venezuela, para. 13),

and failure to disclose such access (Bridgestone v. Panama, para. 9),

failure to disclose professional relationships (Italba v. Uruguay, para. 135, Bridgestone v. Panama, para. 6), bias (Luxtona Limited v. Russia (PCA), para. 14),

lack of qualifications (Luxtona Limited v. Russia (PCA), para. 15; von Pezold v. Zimbabwe, para. 804),

lack of independence (von Pezold v. Zimbabwe, paras. 804, 806; Mobil Exploration v. Argentina, para. 2),

impartiality (Mobil Exploration v. Argentina, para. 2).

The threshold of breach for each of these grounds is not yet clear, although in the case of challenges of bias, actual bias as opposed to apparent bias is required (Luxtona Limited v. Russia (PCA), para. 26).

Parties and tribunals found guidance in soft law instruments such as the IBA Rules Article 5(2)(a) and (c) (Italba v. Uruguay, paras. 135 and 156; Bridgestone v. Panama, para. 19) or reports – the claimant in Flughafen v Venezuela referred for example to the 2015 ICC report on Issues for Arbitrators to Consider Regarding Experts 2015 (Flughafen v. Venezuela, para. 18).

In practice, arbitral tribunals either acknowledge their competence to decide on disqualification requests (often on general provisions such as ICSID Convention Article 44) or decide to tackle this issue as part of the assessment of evidence presented by the parties. Tribunals have based their competence to decide on requests for disqualification of expert witnesses under Rules 19 and 34(1) of the ICSID Arbitration Rules (Flughafen v. Venezuela, paras. 22 and 34, see also Bridgestone v. Panama, endorsing the approach adopted by the tribunal in Flughafen v Venezuela, para. 13). However, one tribunal considered the disqualification of an expert witness to be a disproportionate measure (Mobil Exploration v. Argentina, para. 39).

Most tribunals have opted to consider any parties’ arguments related to party-appointed experts at the stage of? assessing the evidentiary value of? the experts’ reports (Bridgestone v. Panama, para. 16; von Pezold v. Zimbabwe, para. 807; Flughafen v. Venezuela, paras. 34 and 40). It is worth mentioning, at a different level, an interesting decision rendered by an ICSID Annulment Committee which annulled for the first time an award on grounds of improper constitution of the tribunal, finding that one of the arbitrators failed to disclose a relationship with the claimant’s damages expert, creating a manifest appearance of bias (Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36, paras. 225, 228, 256). Importantly, the Committee abstained from expressing any view on whether the expert owed a concurrent duty of disclosure since even if the expert had done so, this would not have relieved the arbitrator from his disclosure obligations as an arbitrator (para. 228). A similar application for annulment was made in the case of TECO Guatemala Holdings, LLC v. Republic of Guatemala, ICSID Case No. ARB/10/23, for which however the Annulment Committee’s decision has not yet been made public.

-courtesy Kluwer Arbitration Blog