[Harsh Srivastava is a 5th year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore]
For long, India has been seen as a ‘non-arbitration friendly’ jurisdiction owing, inter alia, to the length, costs and inefficiency of the proceedings. Efforts have been made to improve the arbitral framework of the country by incorporating international best practices and procedures. However, to make India the ‘hub of arbitration’, first, we need to ensure that Indian parties do not choose foreign seats, and second, attract foreign arbitrations in the country. A 2016 report of the planning wing of Indian government concluded, inter alia, that India needs to deliver “effective arbitration work at lower costs” and adopt time and cost-effective procedures to achieve that end. The flexible nature of arbitral proceedings allows parties to adopt such procedures. One area where such flexibility can be helpful is the procedure for taking expert-evidence. This post argues that taking expert evidence of party-appointed experts via hot-tubbing can help save cost and time while improving the efficiency of the process, and help make India an arbitration hub.
Owing to the complex and technical nature of issues involved in arbitrations, expert evidence plays a crucial role, and becomes indispensable at times. However, the process is so expensive and time consuming that the International Chamber of Commerce proposes a presumption against taking it. At the same time, not resorting to it could be negligent in some cases. This might especially be true for construction and infrastructure disputes, or disputes pertaining to patent rights, etc, which involve intricate questions of cause and effect, making expert evidence indispensable. Depending on the agreement between the parties and the rules that govern the arbitration, experts can be appointed either by the tribunal or by the parties themselves. The scope of this post is limited to party-appointed experts.
Most rules of institutional arbitration, both Indian and foreign, as well as the Indian Arbitration and Conciliation Act [‘IACA’], allow for party-appointed experts. However, they do not provide much guidance on the procedure that is to be adopted to take their testimony. In India, the procedure adopted in arbitral proceedings is generally the traditional court method of examination-in-chief, followed by cross-examination and re-examination. Examination-in-chief however, is now being taken on affidavit to reduce time.
Drawbacks of the Traditional Procedure of Taking Evidence
Although party appointed experts are extremely common in international arbitration, they do not come without their share of faults. Their criticisms include the possibility of bias in experts, that experts might act as hired-guns of the appointing party, or be like ships passing in the night whose testimonies might not engage with each other, or worse, conflict completely. In fact, at times, the reports of party-appointed experts have been seen to have a different area of specalisation than what the tribunal needs.
Occasionally, the cross-examination of an expert by a legal counsel does not highlight all the weak premises or discrepancies in the expert’s opinion, owing to a lack of in-depth knowledge on the subject under question. Thus, at times, given the highly technical nature of the issues involved, it becomes difficult for the tribunal to fully appreciate the nuances of, or take note of the biases in the opinions being put forth before them via such traditional methods. This becomes all the more relevant in cases where the hearings are weeks apart, making it even more difficult for the tribunal to follow. In such circumstances, they may prefer the opinion which is better presented instead of the more accurate one.
The traditional method of taking expert-evidence is lengthy owing largely to the turn-by-turn cross-examinations of experts on the same technical issues which require multiple sessions. Given that trial is the most expensive and lengthy part of any legal process, it adds to the cost of the proceedings considerably. Such a lengthy and costly nature of procedure for taking expert-evidence has for long deterred parties from resorting to it even where required.
A significant faction of the legal community is also averse to this process owing to its adversarial nature, referring to it as a ‘gladiatorial combat’ between the expert and the cross-examining counsel. This is evident from drafting of the ‘Prague Rules’ which highlight the dissatisfaction, mainly of the civil law countries, with lengthy and adversarial cross-examinations that intend to make the proceedings less hostile.
Alternative Procedures of Taking Expert Evidence
Despite all its faults, party appointed experts are considered the gold standard by the international arbitration community, and innovative practices of taking such evidence have been resorted to frequently. Primary amongst these alternatives, is ‘hot-tubbing’ or ‘witness-conferencing’. The process entails experts of both parties concurrently swearing-in and giving testimony. It affords the tribunal an opportunity to hear the full length of opinions on the subject simultaneously, while allowing the experts of one party to comment upon the testimony of the opposite party’s expert.
This makes it easier for the arbitrator to evaluate claims of both parties, since the experts are made to confront each other issue-by-issue to the satisfaction of the tribunal. This also makes the testimony of the expert more pertinent to the issues at hand. Moreover, such a procedure leads to a more critical determination and can highlight the bias of a ‘hired gun’ which might have coped well under traditional cross-examination. This further helps in weeding out the partial experts.
Given that the process involves experts engaging with each other directly, practice shows that they are more respectful towards their peers. It releases the tensions of the evidence-gathering process, allowing the experts to respond more effectively and perform their role of assisting the tribunal better, releasing more light than heat.
Hot-tubbing could also potentially bridge the gap between the adversarial and inquisitorial procedures by providing a middle ground when it comes to taking expert-evidence. This could make India a preferred choice of seat where parties belong to different legal systems.
Admittedly, the question of expert’s impartiality still looms large, however that questions the soundness of party-appointed experts as a concept which is beyond the scope of this post. In any event, neutrality alone does not guarantee a sound opinion and the efficacy of the process, and accuracy of the testimony also hold great importance. Hot-tubbing offers an efficient method of achieving this end, especially in cases where the parties prefer party-appointed experts.
The process of taking evidence can become even more streamlined and time-efficient when coupled with a pre-hearing conference. This requires the experts of both parties to meet, discuss and crystallise the points of conflict and agreement. The issues agreed upon can be recorded and presented before the tribunal separately, and the agenda for the hearing can be prepared based only on the areas of conflict. This prevents the tribunal from spending its valuable time on the iteration and re-iteration of undisputed issues.
Success Thus Far
In practice, concurrent evidence has been seen to reduce the hearing time and cost of the proceedings considerably. In fact, the method has been largely popularised by Lord Justice Jackson as a means to control costs of proceedings in his report on litigation costs in the United Kingdom (‘UK’).
Jurisdictions such as the UK, Australia, Singapore, inter alia, have also adopted such guidelines, either statutorily, or in recommendatory forms, allowing for concurrent evidence to be taken. For instance, the Singapore International Commercial Court Practice Directions, available on the website of the Supreme Court of Singapore, provide that the court may direct expert-evidence to be taken concurrently. It goes on to specify that in cases where the procedure of taking evidence concurrently is resorted to, “a full cross-examination or re-examination is neither necessary nor appropriate”. Moreover, widely used soft law instruments such as the International Bar Association’s Rules on Taking of Evidence and the CIArb Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration also envisage witness-conferencing.
Hot-tubbing is not completely alien to the Indian legal regime and has been incorporated under Rule 6 of the Delhi High Court Rules for commercial cases. Owing to a lack of guidelines for a swifter procedure of taking expert evidence, Justice Ravindra Bhat specifically stated that disputes that “involve examination of expert evidence should adopt the hot-tubbing procedure”. Hot-tubbing becomes all the more relevant in the Indian context since the proceedings need to be disposed of in a time-bound manner subsequent to the 2015 Amendments to the IACA.
Construction and infrastructure industries are emerging as sectors with the largest number of disputes globally. Consequently, serious thought must be given to retain such arbitrations involving domestic parties, and to attract foreign ones. These disputes invariably involve taking expert evidence on some point or the other, and parties tend to balance the cost and efficiency of the process. In such cases, hot-tubbing strikes a fine balance and has, in fact, been specifically recommended for construction cases in various jurisdictions. It has not only helped in improving the quality of the expert evidence but has proven to be much more expeditious than the traditional methods of evidence taking.
Despite the drawbacks of the traditional process, there seems to be inertia in adopting alternative procedures in India largely due to the fact that the arbitration practitioners and arbitrators, being lawyers and judges, are adept at the traditional procedures of court. With the growing popularity of hot-tubbing globally, there is a need to popularise it in India as well to get India one step closer to its goal of becoming a global arbitration hub. Staying adept at the practice can give considerable advantage to those who have their toes dipped in the hot-tub over those who do not.
– Harsh Srivastava