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Expectations and Practices Concerning Examinations in International Arbitration

Authors: Albert Bates Jr. and R. Zachary Torres-Fowler

1/15/2018
Expectations and Practices Concerning Examinations in International Arbitration

At its core, international arbitration is governed by a combination of common and civil law norms that have evolved over time. Thus, unsurprisingly, international arbitration practice differs in many ways from what an attorney might encounter during court proceedings or domestic arbitrations in the United States.

Reprinted with permission from the January 15, 2018 issue of The Legal Intelligencer. © 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

At its core, international arbitration is governed by a combination of common and civil law norms that have evolved over time. Thus, unsurprisingly, international arbitration practice differs in many ways from what an attorney might encounter during court proceedings or domestic arbitrations in the United States.

While international arbitration practices are not set out in any specific rule or regulation, there are many norms that experienced practitioners commonly adhere to and, therefore, fundamentally shape how tribunals and parties expect an international arbitration to be conducted. Although the number of unspoken norms governing international arbitration proceedings are legion, the norms governing examinations are among the most consequential aspects of international arbitration practice.

This article discusses some common practices concerning examinations in international arbitration. Counsel’s ability to appreciate how different legal traditions may approach examinations will allow counsel to better prepare for and manage potential pitfalls that could arise with the presentation of testimony during an international arbitration hearing.

The Basic Framework

Although often treated as an opportunity for the parties to present and summarize their cases, international arbitration hearings are, by and large, they are evidentiary hearings aimed at enabling opposing counsel and the tribunal to test and assess the credibility of the parties’ witnesses and experts. As a result, examinations are the principal focus of most international arbitration hearings.

The hearing is usually scheduled months, if not years, in advance and will follow a series of written submissions setting out the parties’ positions and evidence. Among the most common forms of evidence presented with the parties’ submissions are “witness statements” and expert reports. Witness statements are effectively signed affidavits setting forth the witness’s direct testimony. Similarly, expert reports, as commonly seen in U.S. litigation, are reports setting out the expert’s opinions and conclusions concerning the specific issues he or she was asked to address. If a party submits a witness statement or expert report, it is expected, if not required, that the witness or expert will appear at the hearing for examination by opposing counsel.

No Depositions

Before the international arbitration hearing, it is rare, particularly in cases involving non-U.S. counsel, for parties to conduct depositions of the witnesses and experts. Indeed, depositions are generally disfavored in international arbitration. Most arbitral tribunals and counsel view depositions as a peculiar U.S.-centric discovery device that rarely assists the tribunal. As a result, the arbitration hearing will be the first, and likely only, time opposing counsel will have the opportunity to assess a witness or expert.

Limited Direct Examinations

The format of examinations in international arbitration hearings is similar to examinations conducted in U.S. courts—direct examination followed by cross-examination followed by redirect examination. In this regard, it is important to differentiate U.S. regulatory proceedings, such as prudency hearings on major regulated power projects, in which written testimony is filed weeks, if not months, before the hearing and in which the focus of the hearing is cross-examination by stakeholders and questioning by the regulatory authority. However, examinations in international arbitrations differ from the United States approach in that direct examinations are exceedingly limited, if permitted at all. Because witnesses and experts have already set out their direct testimony in written witness statements and expert reports, respectively, extensive direct examination is viewed as a waste of valuable hearing time. Direct examinations in international arbitration are typically intended to introduce the witness to the tribunal; allow the witness to confirm the authenticity of, and make any corrections to, his or her witness statement; and, if necessary, respond to any new factual developments in the case that arose after his or her witness statement was submitted. As a result, direct examinations in international arbitration typically last only a few minutes and rarely last more than 30 minutes.

Although extended direct examinations occur on occasion, they are the exception, not the rule. If permitted by the tribunal, extended direct examinations are typically only intended to allow a party to introduce new evidence or nuance that was not clearly articulated in a witness statement or expert report.

Examination Scope

Given the limited role of direct examinations, cross-examinations take up the majority of the hearing time. However, the scope of cross-examination is subject to differing expectations. In the United States, the common expectation is that cross-examinations should be limited to the subject matter of the witness statements or expert reports. This practice is generally treated as the default rule in international arbitration. However, depending on the legal traditions of counsel and the tribunal members, it is not uncommon for the scope of the examination to include anything within the witnesses’ personal knowledge or experts’ specific expertise. To avoid a potential surprise, parties are well advised to define the scope of cross-examinations in a pre-hearing procedural order issued by the tribunal.

Examination Strategy

Examinations in international arbitration commonly depart from the rule of thumb: never ask a question unless you already know the answer. Instead, examinations in international arbitration require the examiner to carefully balance the need to present circumspect questions aimed at limiting the witness’s or expert’s ability to introduce unfavorable testimony with the desire to probe the witness for potentially helpful admissions.

Witnesses and experts are examined in front of the tribunal, and their testimony is frequently transcribed. As a result, anything the witness/expert states is incorporated into the arbitral record. Examiners are therefore careful not to present the witness with questions they either know or suspect will result in a unfavorable response.

However, because depositions are rarely conducted in international arbitrations, the arbitration hearing is typically the first and only time counsel can assess what helpful information the witness/expert might disclose. As a result, notwithstanding the strategy to limit the introduction of harmful evidence, examiners in international arbitrations commonly solicit open-ended questions to probe the witness’s/expert’s knowledge of a particular subject.

Examination Necessity

Examinations in international arbitration are the product of common law traditions, and, as a result, civil law practitioners are often unfamiliar with the practice of conducting an examination. Thus, it is important for counsel to assess how a civil law-trained counsel or tribunal may view the role of examinations. In cases where opposing counsel is from a civil law tradition, opposing counsel may insist that examinations play a lesser role during the arbitration hearing than might otherwise be the case. Similarly, if the tribunal members are from civil law traditions, they may prefer to spend a significant amount of hearing time conducting their own examinations of the witnesses, instead of allowing counsel to conduct their respective examinations. A savvy practitioner will account for opposing counsel’s and the tribunal’s views towards examination in determining how best to test (or present) witness and expert evidence.

Witness Preparation

In the United States, witness preparation is the norm and is viewed as a critical means of ensuring that friendly witnesses or experts are not surprised during an examination. However, the United States is unique in this respect. For the U.K. and civil law practitioners, extensive witness preparation is viewed with distaste. Indeed, according to the U.K. and civil law practice, witness preparation should be extraordinarily limited, if not prohibited altogether. While witness preparation is generally allowed in international arbitration, experienced examiners frequently inquire into the witness’s pre-hearing preparations and interactions with counsel to impugn the credibility of the witness (without violating the attorney-client privilege). Although most tribunals are sophisticated enough to understand the appropriate limits of witness preparation, their own legal traditions undoubtedly influence their view of whether counsel’s decision to prepare a witness/expert limits the witness’s/expert’s credibility. Thus, if counsel decides to prepare a witness before the hearing, counsel must be aware of how extensive witness preparation could impact the effectiveness of their witness’s/expert’s testimony.

Limited Objections

Lastly, international arbitration does not maintain or follow an analogue to the Federal Rules of Evidence. As a result, most evidence (except privileged materials), including hearsay, can be submitted to the tribunal, and it is the tribunal’s duty to assess the veracity of the witnesses’ and experts’ assertions. Most practices, in this regard, are governed by established norms in the international arbitration community. Furthermore, given the extremely limited rules of evidence, objections during the course of witness or expert testimony are far more restricted than what might be seen in U.S. litigation. While objections are generally permitted to protect a witness from unfair or abusive questioning, they should be raised with caution, as numerous objections during an examination will distract and frustrate the tribunal, and may cause the tribunal to ponder what counsel may be trying to hide.

Conclusion

Although this article only scratches the surface of the various nuances of examination practice in international arbitration, the broader point is this: Counsel must be aware of the norms and varying expectations concerning examinations when participating in an international arbitration. The failure to do so may ultimately place counsel at a strategic disadvantage and limits his or her ability to successfully present an effective case.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.