Proceedings Chapter
Reference
Arbitration in air, space and telecommunications law : arbitration and the need for technical or scientifif expertise
KAUFMANN-KOHLER, Gabrielle
KAUFMANN-KOHLER, Gabrielle. Arbitration in air, space and telecommunications law : arbitration and the need for technical or scientifif expertise. In: International Bureau of the Permanent Court of Arbitration.
Arbitration in air, space and telecommunications law : enforcing regulatory measures. The Hague : Kluwer Law International, 2002. p. 285-296
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http://archive-ouverte.unige.ch/unige:44077
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Arbitration and the Need for Technical or Scientific Expertise
Gabrielle Kaufmann-Kohler*
l. HOW TO INJECT TECHNJCAL OR SCIENTIFIC KNOWLEDGE INTO THE ARBITRATION PROCESS
Disputes in air, space and telecommunications law1 are likely to involve facts of a scientific or technical nature.2 How does one ensure that an arbitral tribunal understands these facts in such a rnanner that it can rnake the necessary findings of fac! to resolve the dispute? This is the question which this paper seeks to answer.
I was originally asked to discuss the topic "Composition of arbitral tribunals: the need for experts," which suggests a focus on the arbitrators thernselves as scientific or technical experts. This is certainly one way of ensuring that the arbitral tribunal understands technical and scientific issues.
But it has its drawbacks: what if the scientist-arbitrator does not understand the law he or she is to apply? Are there other alternatives for injecting technical and scientific knowledge into the arbitration process? What are those alternatives, and what are the pros and cons of these different possibilities?
This contribution will address these issues as well.
* Professor, University of Geneva; Attorney, Schellenberg Wittmer, Geneva.
1. On disputes in air and space law, partîcularly in connection with the commercial use of space, see generally Karl-Heinz Bôckstiegel, Streiterledigung bei der kommerziellen Nutzung des Weltraums, in FESTSCHRIFT FÜR ÜTTOARNDT GLOSSNER WM 70 GEBURTSTAG p. 39 (K.-H. Bockstiegel et al. eds., Heidelberg 1994).
2. On arbitratîon and expertise, see Arbitration and Expertise, Proceedings of a Conference held in Paris, November 1993, INST. INT'L Bus. L. & PRAC. (!CC Publication No. 480/7, 1994); FOUCHARD GAILLARD GOLDMAN ON INTERNATIONAL CüMMERClALARBITRATION §§ 129()-1295, pp. 703-706 (Emmanuel Gaillard & John Savage eds., Kluwer Law International, The Hague 1999) [hereinafter GAILLARD &
SAVAGE]; D. Mark Cota. The Expert. in LITIGATION AND ARBITRATION (LLP Professional Publishing, London 1999), in particular Chap. 14; see a/sa, D. Mark Cato, Interlocutory and Trial/Hearing Problems, id. al pp. 855-882.
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The scope of this discussion will, however, not cover procedural matters related to tribunal-appointed experts, such as how to draft terms of reference for an expert, how such an expert should proceed, whether the expert must meet the parties in the presence of each other and whether the expert can review documents not submitted to the other party.3
II. THE ALTERNATIVES
Conceptually, there are three methods for ensuring that the arbitral tribunal has a sufficient understanding of technical and scientific matters:
(1) the arbitrator himself may be a scientist or technician with an education and practice in the relevant field(s) (the "arbitrator-expert");
(2) without being a member of the tribunal, a scientific or technical expert can "sit with" the arbitrators, under a variety of different arrangements (the "assistant-expert");
(3) the expert, not being part of the tribunal nor sitting with it, may provide evidence to the arbitrators, whether he or she:
(a) is appointed by the tribunal (the "tribunal-appointed expert"), or (b) is produced by the parties (the "party-expert").
A. The Arbitrator-Expert
1. Which Arbitrator?
In a three-member tribunal, who should be the arbitrator-expert? Ail three members? Just one or two of them? If so, which one(s)? Without pre-empting the discussion on pros and cons of this alternative, 1 consider that, ifthis option is chosen, it should be limited to the party-appointed arbitrators. The chairman should, however, be a lawyer for reasons on which 1 will elaborate later.4
3. On these issues, see, e.g., Jean-François Poudret, Expertise et droit d'être entendu dans ['arbitrage international, in ETUDES DE DROIT INTERNATIONAL EN L, HONNEUR DE PIERRE LALIVE pp. 607-624 (Helbing & Lichtenhahn, Bâle, Francfort-sur-le-Main 1993).
4. See Parts IIIA. l & 2 and III.B.2 infra.
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In my view, it is preferable that both party-appointed arbitrators be experts, rather than only one of them. Otherwise, depending on the personalities and the dynamics of the tribunal, there is a risk that the two arbitrators who are not experts, i.e., the chairman and one of the party-appointed arbitrators, will out- number and exclude the third arbitrator. This phenomenon is easily under- standable: the two lawyers speak a common language and thus communicate much more easily with each other. This may be counterproductive, as the parties indeed trust that the entire tribunal will understand the relevant technical issues, whereas this may be true only of one arbitrator, who is then unable to convey his or her knowledge to the two arbitrators who end up deciding the case.
2. Which Expert?
The caveats expressed in the foregoing paragraph do not apply to the rare species of arbitration practitioner who has an education in both law and science. Having corne across this type of arbitrator in intellectual property and construction arbitrations, 1 can say that their contribution can be extremely valuable.
The background of the lawyer/expert-arbitrator will facilitate the understanding and definition of the relevant issues. However, it will not always permit the arbitral tribunal to dispense with the contribution of a tribunal- appointed or party-expert. In fact, if the scientific or technical issues are very complex, it is likely that additional specialized input will become necessary.
In this event, the arbitrator's dual education will facilitate the interaction between the tribunal and such specialist, as well as the understanding of the latter's findings.
3. Which Disputes?
In traditional international commercial arbitration, the general practice is to appoint lawyers5 to the arbitral tribunal and for them to take the evidence of
5. KLAUS PETER BERGER, INTERNATIONAL ECONOMIC ARBITRATION p. 207 (K.Juwer Law International, Deventer 1993 ); ALAN RED FERN & MARTIN HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION §§ 4-39, 4--40 (Sweet & Maxwell, London, 3rd ed. 1999); THE FRESHFIELDS GUIDE TO ARBITRATJON AND ALTERNATNE DISPUTE RESOLUTION pp. 73-75 ( J. Pau Isson et al. eds., Kluwer Law International, The Hague, 2"d ed. 1999). lt should be noted, however, that the recourse to a non-lawyer is
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experts on technical matters, or for the parties to produce such evidence.
Exceptionally, e.g., in maritime6 or commodities arbitration, 7 recourse to non- lawyers is common. These non-lawyers are "commercial men,"8 rather than scientists or technicians.
Why does the practice for these types of disputes differ from other commercial cases? Disputes in these categories often raise issues of fact which involve specific trade lmowledge (such as whether the goods are defective, or whether goods of the contractual specifications were delivered). Also, the customs of the se particular trades, which are often well developed, play a more important role than in other disputes. I doubt that these characteristics, which justify the use of non-lawyers, can be transposed to aviation, space and telecommunications disputes.
Among the different arbitration rules in effect or under consideration for these types of disputes, the European Organization for the Safety of Air Navigation ("EUROCONTROL") draft Arbitration Policy (the "draft Arbitration Policy") deserves special attention. To my knowledge, these are.the only rules which expressly contemplate arbitrator-experts. Article 34 of the 1997 EUROCONTROL Revised Convention9 provides for arbitration under the Permanent Court of Arbitration ("PCA") Optional Arbitration Rules.10 To
not prohibited, subject to certain exceptions: see, e.g., Court of Arbitration for Sport:
Code of Sports-Related Arbitration, art. S 14 (Lausanne 1995).
6. Robert M. Jarvis, Law or Law-Trained Maritime Arbitrators?: Some New Light on an Old Question, 26 J. MAR. L. & COM. p. 601 (1995).
7. See, e.g., The Grain and Free Trade Association ("GAFI'A") Arbitration Ru les, rule 3 :4, according to which an arbitrator must be (i) a member of the Association or (ii) an employee of a member (with the member's consent), and (iii) engaged or formerly engaged in the trade, in DEREK KlRBY JOHNSON, INTERNATIONAL COMMODITY ARBITRATION p. 30 (Lloyds of London Press Ltd, London 1991); G. Perry, Expertise v.
Experts: the Experience of the Commodity Sector, in CAIO, supra note 2, at pp.
845-853.
8. See Jarvis, supra note 6, at p. 602, and citations in note 7 supra.
9. EUROCONTROL Convention Relating to Cooperation for the Safetyof Air Navigation, December 13, 1960, revised in Brussels, June 27, 1997 [hereinafter EUROCONTROL Revised Convention], see Annex I in this volume.
1 O. Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organizations and States and Permanent Court of Arbitration Optional Rules for Arbitrating Disputes Between Two States, in PERMANENT COURT OF ARBITRATION - BASIC DOCUMENTS (The Secretary General and the International Bureau of the Permanent Court of Arbitration, The Hague, 1998) [hereinafter PCA Optional Rules];
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supplement these rules, and to prevail over them in case of conflict, EUROCONTROL has elaborated a draft Arbitration Policy11 which provides for negotiation, advisory opinions and arbitration. With respect to arbitration, the draft Policy stipulates that arbitrators will be chosen from a mandatory list of "highly qualified jurists and experts in ATM ['Air Traffic Management']
related matters."12 In other words, express provision is made for the appointment of experts on the arbitral tribunal in EUROCONTROL disputes.
B. The Assistant-Expert
In some instances, an arbitral tribunal composed oflawyers may appoint an expert to assist it in the course of the arbitration. The scope of this expert's engagement may vary depending on the specific needs and procedural arrangements of the case.
Thus, for example, in complex technical disputes, the arbitrators may select experts to assist them to (i) prepare for hearings, (ii) attend hearings, including the examination of party-experts, (iii) de fine the terms ofreference of specialist experts on matters which require more specific technical knowledge, (iv) assist in the review and assessment of such expert evidence, and (v) take part in the deliberations. The scope can of course also be more limited and include only some of these tasks.
Though infrequent, this alternative ofutilizing an assistant-expert, who has an overview of the entire dispute (as opposed to a tribunal-appointed expert whose role is limited to much narrower issues), may prove to be highly efficient.13 However, it also has a major drawback, namely its lack of transparency vis-à-vis the parties, who are not in a position to control the assistant-expert's input and influence on the arbitrators' decision-making process.
also available at http://www.pca-cpa.org/BD/#Conventions; Guidelines for Adopting the Permanent Court of Arbitration Rules to Disputes Arising Under Multilateral Agreements and Multiparty Con tracts, id. at p. 217.
11. See EUROCONTROL Arbitration Policy, draft presently under discussion in EUROCONTROL, para 7.1 [hereinafter draft Arbitration Policy), reproduced as Annex II in this volume.
12. See id., para. 8.1.
13. See Part IIIA. infra.
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Among the texts regarding the resolution of disputes in air and space law, the International Law Association ("ILA") Draft of the Revised Convention on the Settlement of Disputes Related to Space Activities of 199814 provides for this system in the following terms:
"In any dispute involving scientific or technical matters, a court or tribunal exercising jurisdiction under this section may, at the request of a party or proprio motu, select in consultation with the parties no fewer than two scientific or technical experts to sit with the court or tribunal but without the right to vote."15
C. The Party-or Tribunal-Appointed Expert16
In international commercial arbitration, the most comrnon system is for the parties to submi t expert evidence, by way of wri tten reports and oral testimony, or for the arbitral tribunal to appoint an expert for the same purpose. Under this alternative, the expert becomes involved in the arbitration process at a later stage than under other alternatives examined. He or she usually does so at a time when the written briefs have already been exchanged and the technical or scientific issues have been identified and discussed.
Among the arbitration rules in air, space and telecommunications law which are in effect or under consideration, several sets of rules expressly provide for tribunal-appointed experts. This applies to the EUROCONTROL draft Arbitration Policy (which refers to the PCA Optional Arbitration Rules), 17 to the Arbitration Rules of the International Air Transport Association
14. Final Draft of the Revised Convention on the Settlem~nt of Disputes Related to Space Activities, as amended at the 68th International Law Association Conference, Taipei, 1998 [hereinafter ILA draft Convention]; see Karl-Heinz Bôckstiegel, Neue weltraumrechtliche Arbeiten der International Law Association, ZLW p. 331 (1998).
See also http://www.uni-koeln.de/jur-fak/instluft/ draft4.html (visited November 1, 2001).
15. ILA draft Convention, supra note 14, art. 8, referring to ail binding settlement procedures provided in the Convention.
16. On expert-witnesses in arbitration, see in particular Interlocutory and Hearing Problems and the Expert Witness in LITIGATION AND ARBITRATION, supra note 2, at pp. 587-753.
17. EUROCONTROL Revised Convention, supra note 9, art. 27.
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("IATA"), 18 and to the ILA Draft Convention on the Settlement of Disputes Related to Space Activities.19 None of these rules expressly contempla te party- experts. This fact does not, however, exclude this possibility.
D. Combination of Alternatives
The altemati ves discussed above are not mutually exclusive and, depending on the circumstances, it may be appropriate to combine them. For instance, an arbitrator-expert may wish to hear evidence from the party-expert or even to appoint his own expert on a specific issue. Similarly, an arbitrator who is aided by an assistant-expert may need additional input from a party- or tribunal- appointed expert.
There is no general rule about the proper combination; all depends on the variety and nature of the technical or scientific matters in dispute.
III. THE PROS AND CONS OF THE DIFFERENT ALTERNATIVES
To assess the pros and cons of the different alternatives, it may be helpful to focus on the quality and efficiency of the arbitration. In arbitration, quality and efficiency can be reviewed from two main perspectives: first, the process and, second, the result or outcome. For each perspective, there are different relevant factors to be considered. With respect to the quality and efficiency of the arbitration process, the primary factors are case management, due process, costs and speed. With respect to the quality of the outcome, the relevant factors are the arbitral tribunal' s understanding of the technical/scientific facts and the manner in which it applies the rules of law at issue.
18. Arbitration Ru les of the International Air Transport Association ("IATA"), as approved by BG/169 (May 1999), art. 17. 7.
19. ILA draft Convention, supra note 14. In art. 29(lb} dealing with the duties of the parties, the ILA draft Convention provides that the parties shall "enable [the arbitral tribunal] to call ... experts and receive their evidence."
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A. Quality and Efficiency of the Arbitration Process 1. Case Management
Managing an arbitration is a skill. lt has to be learned - by doing or otherwise; it cannot be improvized. Lawyer-arbitrators do not have these skills simply by virtue of the fact that they have a le gal education. In addition to a legal background, adequate experience in dispute resolution techniques, especially in arbitration, is needed.
Under the first alternative, there is a risk that an arbitrator-expert, who is chosen for his technical or scientific skills, lacks the necessary know-how to efficiently manage the arbitration. This risk will be avoided if at least one (and preferably both) of the party-appointed arbitrators is an expert, and if the chairman is an experienced lawyer-arbitrator. The risk will also be reduced if the chairman is both a lawyer and a technical person, provided he or she is familiar with arbitration practice.
2. Due Process
Under terms which differ depending on the applicable /ex arbitri, due process essentially requires (i) that arbitrators and tribunal-appointed experts are independent from the parties20 and (ii) that the parties are entitled to produce their own evidence, to rebut adverse evidence, and to review and address reports presented by tribunal-appointed experts.
Generally, the same level of independence is required from arbitrators and from experts, whether assistant-experts or tribunal-appointed.21 Hence, the requirement for independence applies equally to ail of our alternatives except party-experts. In technical and scientific fields with a limited number of specialists worldwide, it is sometimes difficult to identify an expert who is not
20. For recent case law affinning the independence of the expert, see, e.g., Swiss Federal Court, Egemetal v. Fuchs Systemtechnik GmbH, Official Reporter RO 126 Ill 246, ASA BULL. p. 558 (2000) (Comment Brunet at p. 566).
21. Jean-François Poudret, Conclusions, in Arbitration and Expertise, supra note 2: "the grounds for challenging an expert [ appointed by the arbitral tribunal] are the same as those for challenging a judge, i.e. any circumstance of a nature to cast doubt on his independence or Jack of bias" pp. 141-143; GAILLARD & SAVAGE, supra note 2, §
1294.
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linked to a party. In such a case, one possible solution is for the tribunal to hear two or more experts, then to narrow down the areas of disagreement ( with the help of the experts whenever possible), e.g., through expert meetings,22 and finally to choose between the different positions on the remaining disagreements.
Given that independence is a necessary factor under all of the alternatives (except party-experts), it has no effect on the choice between the available alternatives. However, the same is not true with respect to the parties' rights in connection with expert evidence. Those rights apply only in the case of tribunal-appointed or party-appointed experts. With respect to the former, the parties should be given the opportunity to participate in drafting the terrns of reference for the expert, to comment on his report, to ask questions at the hearing, and to attempt to rebut his evidence with their own expert. With respect to the latter, a party can cross-examine the opponent's expert, possibly file written comments on his or ber evidence, and try to refute that evidence with its own expert evidence.
However, where arbitrator-experts and assistant-experts are used, the parties have accepted reduced control over the technical/scientific input. The arbitrator-expert would have either been appointed by the parties, or they would have accepted arbitration rules providing for such appointmènt. The arbitrator would usually seek the parties' consent prior to appointing an assistant-expert, unless the rules provide otherwise, in which case the parties would have consented to the appointment by submitting to the rules.
In sum, none of these alternatives raise concems in terms of due process.
However, parties should be aware that by choosing to use either an arbitrator- expert or an assistant-expert, they accept that their control over the technical or scientific facts - which may significantly influence the outcome of the proceedings - will be reduced.
3. Costs
From the perspective of costs, a comparison of the different alternatives calls for the following observations.
22. See, e.g .. Sir Laurence Street, Standard Direction and Cato, Standard Agenda Item in Arbitration, in LITIGATION AND ARBITRATION, supra note 2, at pp. 1005 and 1007, respectively.
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The use of an arbitrator-expert is the most cost-effective option, because one persan sirnultaneously fulfills two roi es as arbitrator and expert. 23
At first glance, the use of an assistant-expert may appear to be rather expensive. Jndeed, to properly fulfil his or her fonction, the assistant-expert must spend significant lime considering ail aspects of the dispute. Though this may reduce the lime devoted by the arbitra tors, it is doubtful that the reduction will be significant and, where the arbitrators' compensation is primarily computed on the basis of the amount at stake, these "savings" will have little effect on the final bill. Upon closer examination, however, this alternative may ultimately reduce overall costs by rninirnizing the extent to which arbitrators engage in potentially irrelevant, excessive or redundant fact findings.
The cost of tribunal-appointed experts or party-experts will very rnuch depend upon the scope and cornplexity of the matters subrnitted to the expert.
The involvement of the expert will be more limited than that of an assistant- expert. However, il rnay also entai! more thorough investigations.
4. Speed
ln general, the lime required for expert findings will cause some delay in an arbitration. This is certainly so in the case of a tribunal-appointed expert. By contras!, the arbitrator-expert and assistant-expert rnay minirnize delays, as there will be no Joss of lime caused by comrnissioning an expert or by not focusing on the relevant issues in the right order.
Party-experts are an intermediary solution for efficiency purposes: if the expert evidence can be combined with evidence given by fact witnesses, and there is no aftermath of expert battles in the form of protracted written submissions, then this solution may be quite efficient.
If speed is a prirnary concem, then - unlike in the draft Arbitration Policy24 one should not dispense with an oral hearing. Oral hearings, if well conducted, provide an excellent opportunity for clarifying nurnerous issues expeditiously, as they bring together ail the participants as well as the fact
23. Assuming that, as a result of the arbitrator's expertise, it is not necessary to involve another expert.
24. See EUROCONTROL draft Arbitration Policy, supra note Il, art. 9 on expedited arbitration.
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witnesses and experts. This process can prove very time-consuming if it is dealt with in writing.25
B. Quality of the Outcome
l. Understanding the Technical/Scientific Facts
In order to render a decision which provides an adequate resolution of the parties' genuine concerns, the arbitral tribunal must understand the technical and scientific facts underlying the dispute. Obviously, the tribunal can best do this if it is composed of members who are themselves experts. Having the benefit of experts sitting with it may be a second-best solution. A Jess certain alternative appears to be the use of a tribunal-appointed expert or a party- expert, whereby non-scientists and non-technicians are left to assess scientific and technical findings.
2. Applying the Law
Any dispute, even a very technical one, raises legal issues. It goes without saying that lawyers are better equipped to resolve these issues !han technicians - a consideration which speaks strongly against the use of an arbitrator-expert.
One should emphasize that this aspect has far-reaching implications. It is one of the important tasks of an arbitrator to manage the arbitration in such a manner that factual investigations focus on relevant facts without wasting time and money on findings which have no bearing on the outcome of the case. But what are the relevant facts for which expert input is needed? This will depend on the applicable legal rules, and therefore a persan with legal training will be required to identify, interpret and apply the proper legal rules.
IV. THE ANSWER
How, then, is it best to inject technical or scientific knowledge into the arbitration process? In my view, there is no one right answer. However, based on my analysis of the pros and cons, I would like to highlight three points:
25. In sports law, where arhitrations at the Olympie Garnes are completed in 24 hours, oral hearings are an indispensable tool for efficient dispute resolution.
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(1) the use of an expert-arbitrator as chairrnan of the tribunal or sole arbitrator should be avoided, because of the risks with respect to case management and enforceability of the award;
(2) the use of expert-arbitrators as co-arbitrators, and of assistant-experts, may be quite efficient, but parties should be aware that they surrender control over the input of the expert;
(3) in general, the most appropriate form of expert input depends upon:
(a) the type of claim, particularly the amount at issue;
(b) the resources available for settlement of the dispute, which is obviously linked to the first factor;
(c) the likely complexity of the technical/scientific issues; and (d) the necessity for a speedy resolution.
For certain categories of disputes, these factors are determined in advance and the drafters of arbitration rules covering such disputes can make the relevant choices as a matter of general policy. For other disputes, however, the characteristics of the dispute will not be clear in advance and the rules should therefore be flexible enough to allow for several fonns of expert input, so that the proper choice can be made for each specific case.
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