Use of experts in international arbitration: LCIA releases note and practice guidance

Experts often play a pivotal part in the resolution of complex disputes. The London Court of International Arbitration (“LCIA“) recently released a note discussing the ways in which experts are involved in international arbitration. The Note serves as a useful reminder that each type of expert participation in the arbitral process presents opportunities for the effective resolution of a dispute. The Note also provides some guidance on how to get the most out of expert involvement. Whilst it is only a short foray into a broad subject matter, the Note is a further example of how international institutions are increasingly seeing their role as offering the parties more insight and practical guidance to encourage the development of an effective and efficient process.

The LCIA’s reflections on the role of experts

Given the variety of parties and subject matter involved in arbitrations, experts are used differently from case to case. The LCIA observes how the traditional role of independent experts, in which they are appointed by the parties, draft expert reports for the tribunal and subsequently testify at a hearing, is being supplemented by a number of different expert roles in order to aid arbitral decision-making and improve the quality of arbitral awards.

The note continues with a brief overview of some of the ways in which experts are being used in LCIA arbitration, together with an explanation of challenges that this can present. These additional expert roles include: advising behind the scenes to the client, legal team or another expert on record (referred to in the report by the colloquial terms “shadow” or “dirty” experts, although the report notes the invaluable role such experts can play); as a tribunal appointed expert; or as an expert tribunal member. While acknowledging that expert determination is an alternative contractual form of dispute resolution to arbitration, the note also touches on expert determination and some of the more complicated drafting points relating to the use of expert determination clauses and arbitration clauses.

The LCIA suggests that, “while each method presents opportunities and unique benefits, it is important to recognise their respective shortcomings“. The note therefore concludes with some ways in which the parties can optimise their use of experts. First, it is suggested that both counsel and arbitrators should develop their familiarity with issues upon which experts are frequently asked to opine, particularly quantum (which features in a vast majority of cases). Second, experts themselves should ensure that they are prepared to facilitate a discussion with the tribunal, as well as other experts involved in the proceedings.

Comment

Experts are an important part of the arbitral process – their evidence is integral in clarifying technical points which will enable the tribunal to deliver a well-reasoned final award. Parties and counsel in particular will get the best out of experts if they:

  • think carefully about whether expert evidence is really needed and whether the tribunal will be best served by party or tribunal appointed experts in all the circumstances of the case;
  • start the appointment process of a party appointed expert early to identify the right candidate;
  • agree a clear list of issues to be considered in expert evidence at an early stage;
  • tailor the approach taken with the expert depending on their previous experience or background and plan ahead for the workstream;
  • make sure the expert is properly and clearly instructed and their duty to assist the tribunal is explained and understood;
  • ensure the expert has all the relevant documents and information;
  • keep in regular communication and provide quick and meaningful responses to the queries which the expert raises throughout the arbitration;
  • act consistently with the expert’s role in the proceedings and avoid the appearance of a “hired gun” expert;
  • work with the expert to advise on whether the report produced can be understood by a non-expert or someone reading it in a second or third language (as appropriate);
  • consider whether agreeing to “hot-tubbing”, an expert “meet and confer” or an expert joint statement may aid the efficient resolution of the dispute; and
  • make good use of the opportunity to test the conclusions the counterparty’s expert has reached in his or report with the party-appointed expert.

 

For further information, contact Chris Parker, Partner, Hannah Ambrose, Professional Support Consultant, Vanessa Naish, Professional Support Consultant, or your usual Herbert Smith Freehills contact.

Chris Parker
Chris Parker
Partner
+44 20 7466 2767
Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112

The LCIA updates its guidance on the use of Tribunal Secretaries

The role of tribunal secretaries in arbitration is an important subject which generates a range of different views, often expressed in strong terms.  On 26 October 2017 the LCIA published its updated Notes for Arbitrators (the Notes). The update (contained within section 8 of the Notes) seeks to provide more detail and clarity on the LCIA’s approach to the role and use of tribunal secretaries. Of particular note is the LCIA’s strengthening of consent requirements, requiring the parties to specifically consent to the permissible tasks, remuneration and identity of a tribunal secretary.

In introducing the changes regarding tribunal secretaries, the LCIA has emphasised the two key themes of communication and consent.

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Head of Global Arbitration Practice Paula Hodges QC appointed Vice President of the LCIA Court

Herbert Smith Freehills’ Global Arbitration Practice is delighted to announce that Paula Hodges QC has been appointed as Vice President of the Court of the London Court of International Arbitration (the LCIA).

Paula is a member of the LCIA’s Board of Directors and has been a member of the LCIA Court since 2012. The LCIA Court’s members are chosen to provide and maintain a balance of leading practitioners in commercial arbitration, from the major trading areas of the world. 

The LCIA Court has an important role in the governance of the LCIA. The LCIA draws on the expertise and experience of the Court members to safeguard its reputation, support the steering of the institution and make strategic decisions as to its development.  The Court is also the final authority for the proper application of the LCIA Rules and its principal duties under the LCIA Rules 1998 and 2014 are the selection and appointment of tribunals, the control of costs and the determination of challenges to arbitrators. Under the LCIA Rules 2014, the LCIA Court also has an important role in deciding whether an emergency arbitrator can be appointed and determining whether multiple arbitrations can be consolidated into a single proceeding.

Paula comments: “I am delighted to be increasing my involvement with the LCIA, a modern and efficient international institution which remains at the forefront of arbitral practice”.

Also appointed to Vice President is EY Park of Kim & Chang.  Audley Sheppard QC of Clifford Chance, who has served as a Vice President since 2011, was reappointed to serve a further term in the role.  Further information about the selection of the next President, Judith Gill QC, the appointment of new Members of the LCIA Court and changes to the LCIA Board of Directors, can be found here.

Paula Hodges QC
Paula Hodges QC
Partner, head of global arbitration practice
+44 20 7466 2027

 

The new LCIA rules

The London Court of International Arbitration (“LCIA”) Court has unveiled its new arbitration rules (the “2014 Rules”), which come into force on 1 October 2014 and are to apply to any arbitration commenced after that date.  

Overview of the changes

The LCIA has retained the distinctive character of the institution and rules, whilst modernising its provisions to meet user demand.

Like the revisions to the UNCITRAL Arbitration Rules (in 2010), ICC Arbitration Rules (in 2012) and HKIAC Administered Arbitration Rules (in 2013), the most substantial changes to the current LCIA Rules are those intended to make the LCIA arbitration process less costly and more efficient, for example including an emergency arbitrator provision, whilst other revisions are designed to improve the handling of complex multi-party disputes. A key innovation is an annex of general guidelines on the conduct of party representatives and a power for the arbitral tribunal to impose sanctions for breach of those guidelines. There have been some changes to terminology to modernise the rules (for example, the “chairman” of the arbitral tribunal is now called the “presiding arbitrator”).

Further details of the key changes are provided below. We will shortly hold a webinar discussing the implications of the changes to the LCIA Rules on drafting of arbitration clauses.

For further information, please contact Paula Hodges QC, Partner, Vanessa Naish, Professional Support Lawyer, Hannah Ambrose, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

Paula Hodges QC
Paula Hodges QC
Partner, head of global arbitration practice
+44 20 7466 2027
Hannah Ambrose
Hannah Ambrose
Professional Support Lawyer
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Lawyer
+44 20 7466 2112

 

 

 

 

 

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Draft LCIA Rules released for comment

The London Court of International Arbitration (LCIA) has released a “final draft” of its new arbitration rules to the arbitration community in advance of the Tylney Hall Symposium to be held by the LCIA on 9 May 2014. The draft is available here.

In their current form, the draft rules contain some expected modernisations to improve the handling of complex disputes, such as limited provision for consolidation. In line with other arbitral institutions, the drafting committee has sought to promote procedural efficiency. Of particular note is the requirement that an arbitrator expressly states before appointment that he or she is “ready, willing and able to devote time, diligence and industry to ensure the expeditious conduct of the arbitration” and that the tribunal set a timetable for the production of a final award.  Again, following the trend of the most recent revisions of arbitral rules, the  current draft indicates that the LCIA is considering introducing an emergency arbitrator provision.

The most talked about aspect of the current draft will be the introduction of a new Annex of general conduct guidelines which would apply to all legal representatives appearing by name before a tribunal under the LCIA rules. The guidelines themselves are relatively short and limited in scale compared to the IBA Guidelines on Party Representation, but the current draft proposes to allow a Tribunal to sanction legal representatives for their conduct where they fail to comply with them.

How soon the draft will be finalised will depend on its reception and the speed with which the LCIA Court can then move to adopt (or revise) the draft. We will cover the release of the new LCIA Rules once finalised and will hold a Webinar for clients to assess key changes. Please contact Prudence Heidemans if you would like to attend.

For further information, please contact Vanessa Naish, Professional Support Lawyer, Hannah Ambrose, Professional Support Lawyer or your usual Herbert Smith Freehills contact.

Vanessa Naish
Vanessa Naish
Professional Support Lawyer
+44 20 7466 2112
Hannah Ambrose
Hannah Ambrose
Professional Support Lawyer
+44 20 7466 7585

New Seoul International Dispute Resolution Centre opens in Korea

The new Seoul International Dispute Resolution Centre (IDRC) opened its doors in Korea last month, signalling the rising trend in international arbitration in Asia.

Attending the official launch were Herbert Smith Freehills’ disputes partners Tony Dymond, based in Seoul, and Justin D’Agostino, based in Hong Kong and Greater China, both of whom have specialist experience in international arbitration.

The Seoul IDRC offers a neutral facility, designed to host hearings for arbitrations seated around the region, as well as conferences and seminars on international arbitration. It was established by the Korean Bar Association and the Korean Commercial Arbitration Board, with support and funding from the Seoul Metropolitan Government and the Korean Ministry of Justice.

The Seoul IDRC operates on a similar model to Singapore’s Maxwell Chambers, and is expecting to host several international arbitral institutions at its premises. These include the HKIAC – which celebrated the launch of its first overseas office in Seoul on 27 May 2013 – as well as SIAC, LCIA, ICC and AAA/ICDR.

The Centre is equipped with state-of-the-art technology and equipment and is centrally located in the prestigious Seoul Global Tower Building. The aim of the facility is to position Seoul as another international arbitration “hub” in Asia, with particular focus on disputes involving Korean and Japanese parties.

The proliferation of arbitration in Korea is also important to the Seoul IDRC’s success, a topic which we covered in a previous blog. The latest signs indicate that arbitration is increasing in the region and, in fact, the Centre has already hosted its first case.

Herbert Smith Freehills was one of the first foreign law firms to receive approval from the Korean Ministry of Justice to open an office in Seoul, following the liberalisation of Korea’s legal market to foreign entrants.

LCIA India: the dawn of a new era for arbitration in India?

In April 2009, the London Court of International Arbitration (LCIA) announced plans to set up an LCIA centre in India (LCIA India). Following the establishment of its joint venture with the Dubai International Financial Centre (DIFC) in 2008, LCIA India will be only the second LCIA centre to be set up outside London in the institution’s 116 year history.

As the Indian economy continues to grow and as India plays an increasingly prominent role in the world economy, it is inevitable that the number of commercial disputes involving Indian parties will increase. However, due mainly to the delays that exist in the Indian court system (which is estimated to have a backlog of 30 million cases) and the absence of a truly international arbitral institution based in India, foreign investors have traditionally insisted on offshore arbitration to resolve disputes with Indian counterparties.

It is hoped that the establishment of LCIA India will provide an important dispute resolution alternative for parties to India-related commercial transactions, as well as for parties to wholly domestic transactions, and will help to raise India’s standing as a venue for international arbitration.

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