The last GAR Live Stockholm featured a symposium moderated by James Hope of Vinge and Jakob Ragnwald of Mannheimer Swartling. Topics ranged from the pain of Redfern schedules to the danger of arbitrator data projects, discussed by the likes of George Bermann, Patricia Shaughnessy and Hilary Heilbron QC, with only one rule: nobody could begin their comment “it depends …”
The symposium session filled the second slot of the day, at last year’s GAR Live Stockholm – held in April 2017.
Around 25 discussed topics that had been submitted by audience members in advance. The chairs had received too many topics to fit in to the 75-minute session, so made a selection.
The questions they selected included:
- Will explicit mention in the 2017 SCC rules make security for costs orders take off?
- How could one fix document production and reduce the woe associated with Redfern schedules?
- Do arbitrators ever level the ‘ethical’ playing field?
- How can ex-general counsel break into the local arbitrator pool?
- What data about arbitrators is useful (and is some toxic)?
- Is it time to make direct testimony a standard feature?
- Should both sides be given exactly the same amount of time?
The following is an edited transcript of the discussion.
The event took place at the Arbitration Institute of the Stockholm Chamber of Commerce. It was sponsored by Mannheimer Swartling, Vinge, Roschier and MAQS.
James Hope: This is a symposium in the style of what happens at the LCIA’s venue - Tylney Hall. For those of you who haven’t been there, the idea is that you’re the people doing the speaking.
It is frustrating if you really have something to say, but don’t end up saying it because you feel shy. Don’t be shy; we want to hear you! Feel free also to be argumentative. We want a bit of a discussion and a debate; it’s quite possible to say something that you don’t necessarily agree with just to spur on debate. So, feel free, please, to be lively.
We have quite a lot of questions to which you’ve all contributed. We can’t go through all the questions, but we’re going to go through quite a lot of them. We’re going to start with question 3.
The question is this: “Article 38 of the new 2017 SCC rules provides tribunals with authority to order security for costs ‘in exceptional circumstances’, whilst the previous versions of the SCC rules were silent on this matter. Is it obvious that the explicit power to order security for costs set out in Article 38 of the new SVC rules will lead to an increase of security for costs orders?” So, I open this to the floor.
Patricia Shaughnessy: The answer, at least for lawyers from civil law systems, is yes, because lawyers from the civil law system might not have been so sure that there was power to ask for – and power of arbitrators to order – security for costs. Now that it is specifically in the rules, it is going to get more attention. That’s going to result in parties being more willing to seek regress and for arbitrators to be more willing to order, even though the rule does say “exceptional”.
James Hope: Just a point of information. The last speaker is Patricia Shaughnessy of Stockholm University, and she was also on the SCC Rules Committee which produced the new SCC Rules. Patricia, could you disclose a little bit about the thinking behind this rule?
Patricia Shaughnessy: Security for costs in litigation has, of course, been around a long time. Bringing it into arbitration where lots of things are being imported from litigation, particularly procedural features like consolidation; why not security for costs? Are you civil lawyers? Emilia, you’re an experienced judge and arbitrator. Let’s give you the mic.
Emilia Lundberg: You should never be denied the rights of justice and that’s the benefit – but also a problem – with arbitration. There’s the counter-argument: what happens if you cannot provide security for costs? Will you then be deprived your rights of trial, fair trial or a possibility to get your money?
Jakob Ragnwaldh: I chaired the Rules Committee and James was also on it. As Patricia said, there was a discussion within the committee as to whether or not a security for costs order was possible under the SCC rules, irrespective of the seat. Most of us felt that that should be a possibility, or indeed that it was already a possibility, but since it had been debated and there was no clear answer, we felt it was time to put this into the rules. As to the practical application, it remains to be seen.
As Patricia says, I think we’ll see more security for costs applications. To the extent that they will be granted – once again it remains to be seen – it is an exceptional remedy. We have always seen it as an exceptional remedy and that’s expressly provided in the rules. The potential sanction against a party who does not follow a security for costs order, that’s also something for the tribunal to set out. You can set out the obligation to provide security; to the extent that that is not paid, the case will be dismissed. You can set that out in the initial order to the extent that you so wish. But it’s very much at the discretion of the tribunal as the rule has been set out. As far as access to justice is concerned, already in Swedish court proceedings the respondent has a possibility to ask foreign claimants, depending on where they come from, to submit security for costs. And to the extent that it is not paid, the case is automatically dismissed. There is this function already in the Swedish legal system.
Iain McKenny: Iain McKenny, from Vannin. We are very familiar in the UK with security for costs. It’s a regular part of due process; we see it an awful lot in arbitration as well. The question I have, though, is one of commercial practicality. One of the reasons why it’s not considered to be an access to justice problem is because of the prevalence and availability of adverse cost insurance, which exists in many common law countries. It allows the impecunious to proceed by having an insurance policy that they can put in place on a deferred basis. That demonstrates to the court and the other side that, in the event the Claimant loses, the insurer will pay the adverse costs.
James Hope: Does that issue get raised in the proceedings, or is it always an issue that’s lurking in the background?
Iain McKenny: This is a good question because when we’re talking about disputes generally, we are looking at the two core elements: the dispensation of justice, which is partially the view from the bench; and the compensation of loss, which is largely the view from the parties. The lawyers’ job is to owe their duty to the bench in order to provide them with clarity and assist the court in the dispensation of justice, but they’re also fighting their client’s corner for the compensation of loss. Does this exist in the back of everyone’s mind? Absolutely. I would say that it has evolved in the UK to an open discussion, actively engaging with the courts or tribunals.
Anna-Maria Tamminen: Anna-Maria Tamminen, Hannes Snellman. What I ask myself – because the SCC rules are a set of rules that applies both on the commercial and the investment side – to what extent did you on the drafting committee anticipate that there would be any divergence in the case law with regard to security for costs in investment cases versus commercial cases?
Jakob Ragnwaldh: Not necessarily, but looking at the investment treaty cases that we have to date on security for costs, there are very few instances where the security for costs application has been granted. Nils and I wrote an article on that topic four or five years ago and, at that time, there had been none we could find. Now there have been a few, but it is very, very restricted and goes very much to the bad faith of the claimant. To the extent that there will be a great difference in practice between investment treaty cases and commercial cases, perhaps not.
James Hope: Jerker Kjellander, could you introduce question number 4 please.
Jerker Kjellander: Jerker Kjellander from Vinge. The use of Redfern Schedules – and lengthy submissions within such schedules – are, according to some, becoming a plague in international arbitration, mainly because of the time spent on document production by parties and arbitrators alike. I’ve heard a few prominent arbitrators at events such as this saying: “I’m going to deny most requests because I’m so annoyed with the style and loads of texts submitted in relation to this.” My question is: “Is it time to make extensive document production requests and proceedings more difficult or, perhaps, more strict, through the introduction of a specific set of guidelines or rules on document production replacing or supplementing Article 3 of the IBA rules?”
Jakob Ragnwaldh: We could start by discussing the premise of the question: is document production a problem today in international arbitration? Do people in the room believe that this indeed is causing a problem; that the costs and time delays of having a document production round are just too great, and don’t benefit the proper assessment of the case? Any comments on that? Alexander?
Alexander Foerster: I still believe that there are – not in this room and not in the usual conferences – a lot of lawyers, particularly in continental Europe jurisdictions, who do not expect any production of document proceedings at all. For them it is a problem; if there is a clash of cultures with respect to this in an arbitration, it becomes a problem which the tribunal has to deal with.
James Hope: Jakob, when we were preparing for this session, one person said they thought that they would answer every question with the wonderful words “it depends” – which makes it difficult to have a very good debate. But this is maybe one of those areas where you might actually answer with the words, “it depends”. Particularly, it depends which side you’re on. Very often there’s one party which may want more production than the other.
Jakob Ragnwaldh: We have a question there.
Audience member: The question, or issue, is twofold: one being do we need document production in the first place; and the second being is the current method of Redfern Schedules and document production as we know it the best one? I am a continental lawyer, French-trained, and I have almost always been happy with the documents I have gotten from document production. There has been a whole bunch of stuff that I really don’t care about, but within the documents that I have received through document production, I have found evidence that I have relied on in the submissions. Based on that, I welcome the possibility of document production despite my continental background.
Jakob Ragnwaldh: I share that view. There have been very few smoking guns in the documents I have received over the years but there have been, on the other hand, many useful documents that you receive during the course of document production. As you say, many never see the light of day in the case, but there have been many instances where the documents produced have been very useful for the case and have been submitted. As I see it, one has to make an assessment at the beginning whether or not this particular case is suited for document production, and to what extent and how that should be done. Not all law cases need document production, but there are many that do. It’s important to have that flexibility at the outset.
Anna-Maria Tamminen: If the premise of Jerker’s question is that the arbitrators are annoyed by the fact that it is a lengthy production, there is something arbitrators can do. If an arbitrator – or the arbitrators – take a stance early about what type of reasoning there needs to be to get a request through, and actually go through that first request for production in some detail and give answers that are not just “yes” and “no”, but actually give grounds to “not relevant because of” or “relevant because of this and that” …. I do think that that gives parties a lot of guidance in the sense of, “okay, this was a desperate attempt; we’re not going to repeat this. But if we keep drilling on a point there is probably a reason for it.” Then, in those cases, there’s going to be a far more limited world of documents.
James Hope: Jerker, you had a suggestion as part of your question that maybe we should move away from Article 3 of the IBA rules. Did you have any proposal as to what you think there should be instead?
Jerker Kjellander: There is a problem with Article 3 because it is not so much vague, but certainly open to interpretation. There can be a lot of discussion as to what it really means, and different people have different ideas. I’m not sure if there is an easy way to resolve that though, because every case is going to be different and, most importantly, every constellation of arbitrators is going to approach things differently which is, after all, why we choose different arbitrators.
Jakob Ragnwaldh: One of the good things about the IBA Rules on the Taking of Evidence [is] that it is very much in the eye of the beholder. As Alexander said before, you can have quite a restricted view of document production, but still feel that these are rules that are reasonable and appropriate. If you come from the other perspective, the rules can be equally applied, but in another way. I’m a big fan of these rules; I think they work well. Shall we move on James?
James Hope: Yes, let’s move on to question 8. Pontus, would you introduce your question.
Pontus Ewerlöf: My name is Pontus Ewerlöf, from MAQS in Stockholm. When released in 2013, the IBA Guidelines on Party Representation in International Arbitration resulted in discussions at several arbitration conferences. If you look at the preamble, you read that the IBA Guidelines are inspired by the principle that party representatives should act with integrity and honesty and should not engage in activities designed to produce unnecessary delay or expense, including tactics aimed at obstruction of the arbitrary proceedings. Then, if you go to the more detailed provisions, it states that you should not lie to the tribunal; you should not produce forged documents or present forged documents; and that there are remedies for such misconduct. I have no personal experience of ever applying these rules, either as arbitrator or as counsel, but I have been involved in the Swiss Arbitration Association’s discussions or initiative that you should create a global council to actually impose these remedies on misbehaving party representatives.
Now to the question: “Is there anyone here who has experience of arbitrations where these guidelines have been applied and, if so, in what way have they been applied?”
Jakob Ragnwaldh: I can say that we had this question at the IBA Arbitration Day last year in Shanghai. I was chairing one of the sessions for the LCIA symposium. We had the same question from one of the participants, and an equal silence from the audience.
Daniel Busse: Daniel Busse, Allen & Overy, Frankfurt. There is a full report on that question from the IBA. I don’t know whether you’ve seen it. There is a report that I had the honour to put together with two colleagues and a lot of people from all over the world dealing with all the soft law that’s been issued by the IBA. One of the rules was the one on party representation. So, the answer to the question is: I know there was not very much and, where there was, it wasn’t really something that changed the course of the arbitrations in which the point was made.
James Hope: I was involved in an arbitration about eight years ago where my opponent was a large English law firm. They resigned on the day when they were supposed to give document production, which we thought was quite a coincidence (in fact of course, it was not at all a coincidence). They were replaced by a law firm from Russia. We made strong submissions that we thought there was something untoward going on since they didn’t produce any documents at all, even though we were sure there were documents. The tribunal didn’t act in the way that we would have preferred. I wonder whether, if we had had this tool in our armoury, it might have been easier for us to say: “Well, hang on, there really is a guideline here that you have to follow.”
But it raises a bigger point which is: to what extent does counsel have an obligation in, for example, document production? Those of us from the USA, and also England, feel that as counsel we have an obligation to make sure that our parties comply with document production. Not as much in international arbitration as in English courts where, as counsel, you have to be involved in confirming that document production is done properly. But this raises a question: does counsel have an ethical obligation in relation to document production in arbitration, and what should we do about it? Has anybody else been in a situation where the ethics seem to be different on the two different sides; where one party seems to be more ethical than the other?
James Hope: I think there is also another problem. One thing we may be assuming is that everybody’s being represented by lawyers and, indeed, that the word “lawyer” carries with it that you’re a member of a bar and you have an ethical code to follow. But, even in this country, we have lawyers who are not members of a bar; who don’t follow ethical rules in the same way. And that raises issues in itself. One party has ethical rules; the other party has nothing at all. What do we do there? What about the arbitrators; is there anybody who thinks that an arbitrator can do something in that situation? Do you have an obligation to level the playing field, or is there nothing you can do?
Iain McKenny: I am not an arbitrator but I’m going to give you an answer anyway. It’s a tricky question for most jurisdictions who are contemplating what rules can or can’t be implemented. It’s going to depend on legal backgrounds, obviously. For my part, I would have thought what you need to have are arbitrators who are more willing to draw adverse inferences when they have a strong suspicion. This doesn’t mean that you need to have heavy regulation or additional rules that allow arbitrators to do something about it. But, perhaps, let it be known that, before certain arbitrators, if you are not complying and it is obvious that you are not, negative inferences will be drawn against you, and strongly.
James Hope: Anna-Maria?
Anna-Maria Tamminen: One set-up where I have seen they are useful is not so much unethical behaviour as such, but very inexperienced counsel or counsel who might be representing a party in an international arbitration for the first time. These are the kind of cases that, as a junior arbitrator, you start with. It’s a useful tool to have that discussion with the parties at the outset and say, “look, this is what’s expected of you.” So, we level the playing field on both sides of the table; that we have a joint set of rules and, of course, then we’ve got jurisdictions like the UK where you can’t prep witnesses. The Americans will have a very different take on that. It’s useful to have that discussion early on. If there’s unethical behaviour, it’s going to be unethical behaviour; but at least you can level the playing field for ignorance.
James Hope: Shall we move on?
Mikael Wahlgren: Yes, my name is Mikael Wahlgren, from Linton & Wahlgren in Lund. I have a practical question. Having been in-house counsel and general counsel for a number of multinational companies, I see the point of having someone in the tribunal with a practical background who can ease some of the issues the parties bring up. If you’re going to be appointed as arbitrator or a specialist, you need, of course, to have a good track record and be a renowned person or arbitrator. My question is: if you are not backed up by a law firm, how do you go about getting recommended by the recommending institution or parties as this kind of arbitrator or expert in different arbitrations?
Jakob Ragnwaldh: The question could be broadened a little, if you permit. Of course, there are some young practitioners in the room who may be interested in an answer from their perspective. Anyone who would like to give some recommendations to Mikael or the young practitioners in the room?
James Hope: Can I suggest that there are certain people, including in this room, who have a lot of power in this field. One point to mention is that institutions are often braver than counsel in appointing younger or inexperienced arbitrators, and so the institutions often have a lot of power. So, the takeaway is to speak to Anya or to other people in the room. I know the SCC tries very hard to make sure that you broaden the pool. I know, because I’ve seen the discussions. That’s only to be encouraged.
Anja Håvedal Ipp: Anja Håvedal Ipp from the SCC. Further to James’s comment, I would say that this might be true when it comes to younger arbitrators, being appointed as sole arbitrators in smaller cases, absolutely. As to Mikael’s’s original question, we would not be looking outside the known pool of arbitration practitioners. When we suggest new arbitrators to the board, they are typically people we have seen as counsel in our cases. We wouldn’t have any experience with someone who works as general counsel; someone outside the arbitration circle. I just wanted to qualify the comment.
James Hope: Maybe that suggests that we should try to broaden the pool because, speaking as counsel, I think it can be incredibly advantageous to have an arbitrator who has really good industry experience. That’s the sort of Holy Grail type of arbitrator you want; someone who really understands the case. Shall we go on to the next question. Nika Larkimo?
Nika Larkimo: Nika Larkimo, White & Case. I have a question on the data published by the arbitral institutions: the statistics, data on appointments, names of arbitrators and their nationalities that the ICC publishes. My question is: “Is this data helpful and do practitioners consult that data to make decisions regarding the appointment of arbitrators; and is there some [other] kind of information you’d wish to see from the institutions?”
Anna-Maria Tamminen: A lot of the data is there for a good reason. Especially with challenged cases, you look quite carefully at the data that has been published by the institutions. Some institutions are starting to stand out from others in the sense that they publish more. Where we could still do more as an arbitration community is we all know that some substantive law issues are being decided in arbitration, rather than in the courts.
I come from a small jurisdiction, Finland; a lot of disputes are arbitrated in arbitration and we know, for example, that a lot of corporate law issues are determined therein. We know what those awards say, but it’s not out there. That’s where I think some of the institutions are doing great work already; anonymising decisions and putting it out there because that’s how it becomes case law without having to go through set-aside proceedings.
James Hope: We should discuss that. In relation to case law and to decisions by institutions, say, on challenges, there is a big discussion as to whether we should be more transparent, and if so, how are we going to do that. Is there anybody who would like to disagree with the suggestion that we should try to be more transparent, for example, in publishing arbitral awards? Or are we in agreement that we should have more transparency? Should I take it from your silence that everybody thinks we should have more transparency? George?
George Bermann: It all depends upon what you contemplate making known. This discussion wouldn’t be complete without reference to the Arbitrator Intelligence project that’s coming out of the United States under the leadership of Catherine Rogers. It’s making available vastly more information than the names of arbitrators and with whom they sit. There is, as I understand it, going to be information about individual arbitrator’s dispositions on things such as awarding interim relief, document production and on how long proceedings are taking under the chairmanship of individual people. So, if we want a controversial topic, this is one. Thus far the discussion here has contemplated disclosure of information that is largely uncontroversial in the scheme of things. But Arbitrator Intelligence is contemplating disclosures of much more potentially toxic information about individual arbitrators. You can rest assured that there is a lot of pushback about that for a number of reasons, including the fact that how a tribunal operates is not a result of any single arbitrator’s dispositions or habits, unless it’s a sole arbitrator. It’s a collective result. So, I’m on the very sceptical end of the spectrum of those who have been expressing views. But the word “transparency” doesn’t tell us enough. Transparency to what extent; about what?
Tuuli Timonen: Tuuli Timonen from White & Case. When I studied in France I had the privilege of studying under Bernard Audit, who also serves as an arbitrator and who was very well-known in the French arbitration community. He said that he did not want to publish articles setting out his views on certain things because he knows that parties go through those articles when they are making a selection of an arbitrator. He said that, in his view, it was stupid because his view on a certain issue at a general level will not determine how he will decide on a certain case; when he reasons as an academic, his perspective is different from that of an arbitrator. Now, the personal bias is always there when one acts as an arbitrator but, as George said, the decision making of a tribunal is not the result of one individual’s thinking. But in the same manner that same individual’s thinking is influenced by a lot of factors – and putting on a website that this is the position, full stop – is a little dangerous.
Iain McKenny: For me this is very much a quantitative/qualitative issue. You can have a variety of things known about an arbitrator: the language; the languages they speak; their views on a variety of points; the number of times they are appointed. These are things that can be crunched; we live in the era of big data and the temptation is that this is going to reveal the right choice. But it misses a qualitative assessment. It misses something of the gestalt about constituting an arbitral tribunal; that it’s not just individual views. You are going to appoint your guy; they are going to appoint theirs. Somehow, in between, you’re hoping these guys are going to come together in a way that will be favourable to you; and they are trying to find this by crunching data. We’ve got to look at the qualitative issues; what is the respect which these arbitrators have for each other for instance? Things that – to come full circle – are only really known to people in the community. Which is a problem when we are talking about the transparency issue. If transparency means simply revealing the data, and not this knowledge that is gleaned from understanding the community, I don’t think you’re ever going to get the answer you’re looking for.
James Hope: You raise a very important point: that the attempt is to open up everything so that you don’t just have the little community – the mafia or even the godfathers of arbitration – who sit there. But it occurs to me that the community extends itself all the time and, hopefully, every counsel knows other counsel and can speak to people who will help them in choosing the right arbitrators. Hopefully, we all do that, more than looking at straight numbers.
Phillip Capper: Phillip Capper, White & Case and King’s College, London. One caution I would urge. We’ve started to talk about arbitration these days and just use the word. Some people are thinking international commercial arbitration between commercial bodies who have selected it to achieve confidentiality of their business relationships; and a smaller activity, called investor treaty protection arbitrations, whose publicity is enormous by comparison because it is conducted in the public gaze. We need to be cautious that the dynamics are not the same in the two areas.
To give you one simple illustration: as commercial arbitrators, we typically decide cases with governing laws in which we are not trained. In investor protection arbitrations, the arbitrators are making up the law as they go along, if I can put it that way. By which I mean they are the custodians of the very substantive laws which their system is concerned with and, therefore, publicity [about] positions and so on is potentially more meaningful. It’s right to say that many commercial arbitrators, despite all the excellent learning we have to do on our unknown biases – and we all have them – nevertheless believe that they are reasonably agile in their decision making, and that therefore the idea of positions on many things that come up in commercial arbitration is less meaningful than might be true, for example, in investor treaty arbitrations.
Triin Siil: I am Triin Siil, in-house counsel for an ICT company in Estonia. I would argue for more information, especially in arbitration and in relation to arbitrators; we just don’t know how they stand or who does it; who is specialised and competent in what areas. There is very little information available. I think the arbitrators are cutting off their own branch in the sense that, if we had more knowledgeable and experienced clients, you would have more work to do. So, this is definitely an opportunity to expand the market by sharing information about what you do and how you do it.
James Hope: What sort of information do you want? Do you know the Arbitrator Intelligence database, for example? Indeed, GAR has a new database on arbitrators. Is that the sort of thing you want?
Triin Siil: I just read about it at this event. I’m glad I came because now I know.
Niklas Åstenius: Niklas Åstenius from Mannheimer Swartling. A comment about what information should be available. What I’m looking for in an arbitrator is a person who is willing to listen to my arguments and has the time to manage the case as it needs to be managed. Allowing just one hour for an opening statement is not what I consider to be best for all cases. I may instead want to find a person who has, and is willing to listen for, three or more hours. I see a risk if you focus too much on the available positions of the arbitrators, rather than the personal qualities of that person. One piece of information I think would be interesting to see is the average time, or any other relevant measure, taken for an arbitrator to deal with a case.
Jakob Ragnwaldh: What Phillip mentioned about the difference between commercial arbitration and investment treaty arbitration is interesting from another perspective. In investment treaty arbitration we normally hear that some arbitrators are very state-friendly and some are investor-friendly. That may be true for very few, but the fact that they have been sitting on cases where potentially the state had a better case makes them [be] perceived as being state-friendly, whereas the case where they were sitting merited that the state won. This goes to show that transparency is good, but you need to be able to understand the data out there and digest it in a proper way. Data can be good, but it can never replace the understanding that you get from doing arbitrations on a daily basis.
James Hope: Could I just also add a note of caution about the time things take. Quite often it’s not the arbitrators’ fault. I say this as a counsel who has just appeared before arbitrators trying to extend the timetable; it’s not their fault, of course, that one of the parties is asking for that to happen.
I’ve also got something at the moment where we are waiting for an award well over a year after the hearing, and we still haven’t got the award. The problem is that all sorts of rumours circulate at that point. The rumour here is that the chairman is sitting on the award until the wing arbitrators end up agreeing with him. I know nothing about whether that’s true, but the whole story is unfortunate. Those sorts of things are a problem but I think we should be careful about trying to extrapolate from data and saying: “Oh well, this thing took a long time and therefore that arbitrator is not to be trusted.” That isn’t necessarily the proper conclusion to take from the data in every case.
Jakob Ragnwaldh: We’ve talked about opening statements by counsel during the first sessions. There may be other types of openings during the course of a hearing – which are normally referred to as opening presentations – by experts, be it legal experts, financial experts or technical experts. There’s a question from Bastian Gottschling from NERA on this point. That’s question 16.
Bastian Gottschling: Bastian Gottschling from NERA in Frankfurt. We discussed opening presentations by counsel this morning and received a comment from Phillip, who reminded us that a hearing is very much about oral testimony, but through the lens of cross-examination. Sometimes, when giving oral testimony under cross-examination, I have the feeling of being side-tracked from the real issues on which I was meant to testify. Sometimes the questions under cross-examination appear in random order. This is why, in some cases, I have the experience that an opening presentation by an expert just preceding the oral testimony can be useful. One example is a damages case where we have one expert report, a rebuttal report and two experts being cross-examined on the damages calculation. I have found it useful to firstly explain that there is largely agreement between the experts, for example on the methodology and the data used; and then explain there is also disagreement in certain areas, and explain how material these differences are, and what the key issues are. This has helped to focus the subsequent cross-examination on those key issues. I would be very much interested in hearing from others about other cases in which opening presentations by experts were used.
Jakob Ragnwaldh: When you talk about experts giving a presentation that helps to focus cross-examination, were those opening presentations by the expert provided to the parties and tribunal in advance? Or was it done orally at the actual hearing?
Bastian Gottschling: It was a PowerPoint presentation prepared by the expert, and the content of the presentation was agreed beforehand. The idea was to give the expert and the opposing expert the opportunity to present the key issues in their view (subject to the disclaimer that what are really the key issues is, in the end, a legal question). At least, the expert should be given the opportunity to present, in his view, what really matters to the damages amount.
Jakob Ragnwaldh: If I were cross-examiner and received your presentation two days in advance, I would have prepared the cross-examination a long time ago based on your report. I don’t think my cross-examination would in any way be changed in a material way by what you say during the presentation. There may be a reason for me not to spend time on any of the key issues because I don’t want to spend time on the key issues. I want to spend time on other things for tactical reasons. Does anyone have any other views of this?
Anna-Maria Tamminen: I agree with you, Jakob, that cross-examination often has little to do with what the substance of the report is. You ask the questions where you can do some damage and then, hopefully, you can actually understand what the expert report is about. I fully understand what you’re trying to do by presenting your report because we have good experiences of getting the tribunal to understand the substance of your report better when it is delivered by you, instead of through our lawyer’s translation of what it is that you’re trying to say. It’s useful because it sets the scene for the person deciding, even if it has zero impact on the content of the cross-examination.
James Hope: Can I add that I was involved in a case where there were excellent presentations on both sides, and it was helpful from counsel’s point of view to see the experts live before they were cross-examined. It was helpful because you got a feel for the experts. I wouldn’t suggest it’s a problem for the other side; it’s mostly helpful because you see where they’re focussing, and also where their weak points seem to be.
Anna-Maria Tamminen: I would like to hear the arbitrator’s perspective. Do you like to have the experts present their testimony before the cross-examination begins, or do you find that futile? I imagine it would be an opportunity for the tribunal to ask questions of the expert without interrupting the flow of the cross-examination. I would welcome the arbitrators’ point of view on this.
Olof Rågmark: I will quote James: “it depends”. If it’s a focussed expert report dealing with one issue, why spend the time? We can read. But if it is a broad expert report – take the extreme one of the arbitrations dealing with the European gas market – I think everyone on the tribunal would appreciate a one-day walk-through of these hundreds and hundreds of pages and graphs. So, it depends. But often it is very helpful when the issue in dispute is technically complicated.
James Hope: Emilia.
Emilia Lundberg: I’m a district court judge, but I also sit as an arbitrator. My answer is very short. Yes, I would really like that; very helpful.
Eric Runesson: I’m afraid my colleague, Olof, pre-empted me. It depends. It’s up to the arbitrators to decide. If we think of experts as primarily helpers of the tribunal, an opportunity to put questions to the experts, particularly on methodology, is frequently appreciated.
Jakob Ragnwaldh: Not only is this dependent on the issue and scope, but in retrospect there’s always a question mark: was this useful when it was delivered? When it comes to opening presentations by experts, counsel play a very important role in making sure that the expert understands and focusses on what the tribunal wants to hear. What do we think they are interested in? This needs to be rehashed and trained properly because some experts have never done a presentation, at least not in this particular context, and it can be quite a tense experience. So, there are many factors that go into this. You need to feel that the expert is up to delivering a presentation that serves his purpose. Perhaps, with that, we should move on. James?
James Hope: Yes. Question 20, George Bermann.
George Bermann: As an arbitrator, I have become disillusioned with the use of witness statements. I’m not the only person in the room who would benefit from hearing what the witness has to say in his or her own words; what’s more, the witness statement is not always the witness’s own words. There’s an enormous amount that’s lacking. I think it’s a bad trade-off that we’ve made. The argument for the use of witness statements in lieu of direct examination has been an economic argument – time-saving and money saving. But I don’t think the costs have been adequately gauged. This doesn’t sound like a question, does it?
James Hope: I was particularly interested because, since you’re from the United States where you don’t have witness statements.
George Bermann: You are right. We do not have then in our courts.
James Hope: No, exactly.
George Bermann: But in our arbitral proceedings we certainly do. I’m basing this remark on my own experience. One thing I’d like to report, to my amazement, is that I routinely invite counsel to conduct very very brief direct examination of the witness they’ve called, say for 15 or 20 minutes, if they wish to, because that’s not a heavy cost in time. I am surprised at how regularly the offer is declined. I do not understand why you would not seize the opportunity to take 15 or 20 minutes to enable your witness to emphasise the key item that may have been lost in the written witness statement. I’d love an answer to that question.
James Hope: Is it declined normally by the party which is going to do the direct examination, or is it resisted by the opposite party?
George Bermann: It is declined by the counsel that has been invited to avail himself or herself of that opportunity. It can’t possibly be that we’ve become so reliant on witness statements that counsel has lost the art of direct examination. I refuse to believe that.
James Hope: I’d like to suggest that – and this is an invitation to the Swedish members of the audience – that in this country we’d have no problems and that Swedish practitioners are experts in the art of direct examination. Does anyone have any views?
Pontus Ewerlöf: Pontus Ewerlöf, from MAQS. I’m trying to be provocative now. It may be that witness statements are so well prepared by counsel that you don’t want to have the witness ruin them.
Audience member: I think that it is, in fact, resisted by the tribunal. I’ve often had the experience that, as Swedish counsel used to the Swedish proceedings, you would like at least 30 minutes to summarise. But that is viewed by international arbitrators as unnecessary because we already have the witness statement. What else should he say? On that basis, you are only entitled to short, warm-up questions confirming the statement, and so forth. I agree that you should be allowed to have those 30 minutes, depending on the length of the statement. The hazard, of course, is that you should not add something to what has already been included in the witness statement, unless there is reason for that. By allowing direct examination, there is an imminent threat of introducing new evidence at a late stage. That is part of the explanation of the hesitation that arbitrators give to direct examination.
James Hope: In English courts there is now a suggestion that we should have witness summaries, instead of witness statements. At least that’s been included in the rules. An interesting question is how much it’s actually adopted and whether that leads to its own problems. Even some states in Australia have gone down that road so this is possibly a moving target. To the next question.
Jakob Ragnwaldh: Which, given the time, will be the last. Hilary Heilbron, can you introduce question 18?
Hilary Heilbron: Hilary Heilbron, barrister and arbitrator from London. My question raises the tension between the equality of time at a hearing, and the need for each party to have an opportunity to present its case fully and fairly. As we all know, some arbitrators use a chess clock; this works in longer and more complex arbitrations. But particularly in shorter arbitrations where one side produces eight witnesses who need to be cross-examined, and the other side produces one, I raise the question whether it’s always fair for tribunals to insist – unless the parties agree otherwise – that hearing time should be divided equally. I know that the assumption is always that there should be equality of time and parties should use it as they want. I’m not convinced that this necessarily brings about fairness in every case and I’d welcome the view of what the practice is. As I say, there are various views; if you talk to some arbitrators, they don’t use equality of time as such. They discuss it with the parties and work out what is fair. Others divide it literally to the minute; others divide it with some flexibility. So, there are various options.
Jakob Ragnwaldh: Views and comments on that. How do you act in your own arbitrations and how do you see the balance between the two issues that Hilary brought up?
James Hope: I had this issue last year. When I was sitting as arbitrator, one side thought equality was hugely important. But that side also happened to be the side which had vastly more experienced counsel. The other counsel was less experienced, and I felt it would be good to give him more time. It was probably my fault for not being clearer at the very beginning that we weren’t going to be strict on time, but I felt it was important to have some flexibility so I tried to make sure that there was flexibility. We had a discussion half-way through about whether there was going to be an issue about this. Both counsel, happily for me, then agreed that they would not make an issue about it. I certainly feel uncomfortable, as arbitrator, [in] a situation where you are shutting somebody off simply because of time if, in fact, there is more to be said. Unless there’s a great concern about it being an inequality of arms. I think that’s really what we’re talking about.
Jakob Ragnwaldh: In my experience what normally happens is that the tribunal says that as a matter of principle the parties should have equal time, but the tribunal will apply that rule with flexibility. That means that, as the hearing goes on, whoever needs more time will get more time within the framework of the available hearing days. Hilary, you had a last question.
Hilary Heilbron: This is somewhat tongue-in-cheek. My question is: Where else should GAR hold its conferences in future because, when one looks at its expansion over the recent years, there are still a lot of countries where there haven’t been GAR events. A good starting point would be to look at the list of countries participating at the Olympics. What is the criterion to have a GAR event?
Alexi Whitehouse: Maybe, as director of events, I should reply to that. If anybody would like us to hold an event in their home country, please come and speak to me.
James Hope: I’d like to put in a plug for the Maldives, but that’s purely self-interest.
Jakob Ragnwaldh: On that note we should terminate this session. Thank you very much for your questions and contributions.
GAR Live Stockholm was held on 27th April 2017 at the Stockholm Chamber of Commerce. It was sponsored by Mannheimer Swartling, Vinge, Roschier and MAQS.
The next GAR Live Stockholm will take place in London on 10th May 2018. Registration is now open and is complementary for in house counsel.