Do the London Rules of Arbitration Allow for the Exclusion of Party-appointed Experts?

Party-appointed experts occupy a position of growing importance in international arbitration. This is particularly evident in disputes involving a highly technical subject matter. For instance, where contracts deal with complex medical technology and machinery, parties may seek to buttress their respective cases by relying on accomplished, technically adept individuals’ testimony. However, like counsel, these experts may introduce an element of personal or professional conflict that could imperil the integrity of the tribunal. In such a situation, would a tribunal be competent to exclude an expert just as it would counsel?

Broadly, three approaches may be taken to answer this question. First, those international tribunals possess an inherent power to exclude party-appointed experts. Second, that a tribunal could exercise its evidentiary powers to order such an exclusion. Finally, whether or not these experts qualify as “legal representatives” would have its own consequences for the purpose of exclusion. This blog will analyse these three propositions with specific regard to the provisions of the London Court of International Arbitration Rules of Arbitration, 2020 [“LCIA Rules”].

1. Do Tribunals Possess an Inherent Power to Exclude Party-Appointed Experts?

International arbitral tribunals possess certain inherent powers by virtue of their existence. In particular, the exercise of this inherent power to protect the integrity of arbitral proceedings is well recognised.

For instance, in Hrvatska Electroprivreda, d.d. v. Slovenia [ICSID Case No. ARB/05024] [“Hrvatska”], the claimant objected to the respondent hiring counsel who shared chambers with the President of the Tribunal. In determining whether or not it could exclude said counsel, the Tribunal noted that it did not have the express power to do so. However, citing its status as “a judicial formation governed by public international law”, it found that it had the inherent power to protect the integrity of its proceedings. Relying on Article 56(1) of the ICSID Convention, which outlines the “principle of immutability of a properly constituted tribunal”, the Tribunal held that once proceedings had commenced, parties could not hire counsel in a manner that threatened the integrity of a properly constituted tribunal. Thus, the counsel in question was excluded.

A similar problem presented itself in Rompetrol Group N.V. v. Romania [ICSID Case No. ARB/06/3] [“Rompetrol”], with the claimant seeking to appoint counsel who had previously shared a professional relationship with their nominated arbitrator. Though the facts of the case resembled those in Hrvatska, the Tribunal took a slightly different approach. While it found that it possessed the inherent power to exclude counsel, it was noted that this power could only be exercised when there were “extraordinary circumstances” which genuinely touched the integrity of the arbitral process. Considering the facts at hand, the Tribunal concluded that the mere existence of a previous professional relationship was insufficient to warrant exclusion of the counsel in question.

A clear takeaway from these decisions is that there does exist an inherent power, albeit one which must be exercised sparingly, vis-à-vis the exclusion of counsel. However, the question remains: Can this power be extended to party-appointed experts? Both Hrvatska and Rompetrol make it clear that the exercise of inherent power was intrinsically linked to the protection of the tribunal’s integrity. This integrity can be threatened by the appointment of experts in the same manner as it has been in the aforementioned cases concerning counsel. Put differently, experts who have past or present relationships with members of the tribunal could raise grave concerns regarding the tribunal’s independence and impartiality. Therefore, given that the prescribed threshold is met, extending the tribunal’s inherent power to experts is tenable.

2. Can an LCIA Tribunal exercise its Evidentiary Power to Exclude Party-Appointed Experts?

In international arbitration, tribunals are given wide procedural discretion to decide on the weight, admissibility, and relevance of evidence adduced before them. Under the LCIA Rules, Articles 20.4 and 22.1(vi) are relevant when considering the exclusion and admissibility of expert evidence. While the former empowers a tribunal to limit the written or oral testimony of experts, the latter gives the tribunal the discretion to apply strict rules of evidence to the weight, relevance, and admissibility of expert opinions. Whether these can be invoked to exclude experts altogether requires a deeper understanding of their purpose and scope.

As discussed, a tribunal can refuse or limit expert testimony under Article 20.4; instances of a legitimate exercise of this power include situations where the evidence is adduced at the last minute or if it is of limited relevance.[i] This makes two things clear: first, that procedural economy is the purpose behind Article 20.4, and second, that Article 20.4 does not contemplate the kind of circumstance that a tribunal must consider when deciding on the exclusion of an expert. Therefore, Article 20.4 cannot be said to empower a tribunal to exclude party-appointed experts in cases of conflict.

As for Article 22.1(vi), the proposition is made all the more interesting by the holding of the International Centre for Settlement of Investment Disputes [“ICSID”] Tribunal in Flughafen Zürich AG y Gestión e Ingeniería v. Bolivarian Republic of Venezuela [ICSID Case No. ARB/10/19] [“Flughafen”]. Here, the Claimant alleged that the expert retained by the Respondent was in possession of confidential information pertaining to the Claimant and requested his exclusion. In deciding this, the Tribunal did not deliberate too much on whether it had the power to do so. Its conclusion was that Article 34(1) of the ICSID Rules of Arbitration, which empowered the Tribunal to decide on the admissibility and probative value of the evidence, also empowered it to exclude experts. Even though the Tribunal ultimately found against any exclusion, the ICSID Tribunal in Bridgestone Licensing Services, Inc. and Bridgestone Americas, Inc. v. the Republic of Panama [ICSID Case No. ARB/16/34] found that it derived its authority to potentially exclude an expert from a combined reading of Flughafen and Hrvatska. One may be tempted to rely on this to say that an LCIA tribunal would be thus empowered because of the similarity of the scope of Article 22.1(vi).

However, the Flughafen decision has since been criticized, and rightly so. Besides the fact that there exists little to no authority to substantiate its stance, the Tribunal gave no reasoning as to why it made such an extension in the first place. While both Articles 22 of the LCIA Rules and 34 of the ICSID Rules empower tribunals to render expert reports inadmissible, they do not empower them to adjudicate on the expert’s involvement per se, or on the possibility of a conflict of interest. Hence, these evidentiary powers cannot be relied on to exclude party-appointed experts in situations of conflict.

3. Can experts be treated as “legal representatives”?

Article 18 of the LCIA Rules deals with “legal representatives”. Specifically, Article 18.4 empowers a tribunal to withhold approval of any intended change to a party’s legal representation if it threatens its composition. In this regard, it is worth exploring whether this power could be exercised to exclude a party-appointed expert who brought with him such a threat.

In analysing the similarity between the roles played by experts and “legal representatives”, the IBA Guidelines on Party Representation, which evidence arbitral best practice, are a good starting point. Quite emphatically, they define party representatives to explicitly exclude experts.

It must also be kept in mind that experts are witnesses of fact who possess specialized technical knowledge on a particular subject matter, while counsel, or, legal representatives, play a very different role. By interpreting selective facts of a dispute in light of the applicable law, which they possess an intimate knowledge of, counsel mould disputes in a manner that paints a favourable picture for their client. Considering both the definitional limitation and the substantive difference in their roles, it is safe to say that Article 18 cannot be extended to include party-appointed experts.

Conclusion

The exclusion of party-appointed experts from proceedings is still a developing concept in international arbitration. While the most obvious solution to this issue is the prescription of powers for this specific purpose, in the meantime, tribunals must remain vigilant but mindful.

In addition to restrictions in the stipulated procedural rules, the exercise of evidentiary powers to exclude party-appointed experts does not hold water simply because their purpose is so distinct. It only follows that the decision in Flughafen should not be used as a precedent for the future.

Further, the purpose behind Article 18.4 of the LCIA Rules may seem suitable to exclude party-appointed experts, but it brings with it the hurdle of textual impermissibility which cannot be easily overcome. Therefore, invoking tribunals’ highly qualified inherent power to exclude party-appointed experts seems to be the only legally tenable solution. In the absence of any specific powers to this effect, it is international arbitration’s best response to a growing problem.

[i] Simon Nesbitt and Michael Darowski, LCIA Arbitration Rules, 2014, Article 20 [Witness(es)], in Concise International Arbitration (2nd ed.) (Loukas Mistelis ed., 2015).

 

Varun Kasthuri is a fourth-year undergraduate student at the Gujarat National Law University interested in arbitration and public international law.

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