The Expert EDGE: A Critical Component Of Construction Arbitration
INTRODUCTION
The complex and technical nature of certain types of arbitration makes testimony of expert witnesses indispensable. This need sufficiently arises especially in construction arbitrations, which are factually intensive and technically complicated. In a construction arbitration, issues such as delay in completion/ execution of the project, disruptions and obstacles in the execution of project, land acquisition, right of way, damages, changes in scope of work, variations, defects costs, negligence, additional works etc. may arise. These issues require a perspective and analysis of an expert and not a lay man. In a world, where the disputes pertaining to construction / infrastructure are arising every day, the need for a smooth functioning and regulation of expert witnesses is now, more than ever.
As far as India is concerned, it recognizes the value and testimony of an expert through its various Legislations and institutional rules. The same are discussed below:
a. Arbitration & Conciliation Act, 1996 – Section 26 of the Act provides for the appointment of an expert in arbitration. It discusses that the Arbitral Tribunal may appoint an expert to report on specific issues to be decided by the Arbitral Tribunal. It lays down in detail what the role of an expert may entail including that the expert witness can be given access to a particular site for inspection and that the expert should be made available with all relevant information and discussion. It also provides for the right of a party to put questions to an expert so that the points in issue can be testified.
b. Sections 39 to Section 45 of the Bhartiya Sakshya Adhiniyam, 2023 (previously Indian Evidence Act, 1872), discusses the importance and relevance of expert opinions. This part of the act, covers the opinion of third persons. Section 39 discusses that if the court wants to form an opinion of any fact which is technical or related to science or any other field, it can seek the opinion of such expert from the concerned field. While Section 40 discusses how facts, not otherwise relevant, would be relevant if they support or are inconsistent with the opinion of experts, when such opinions are relevant.
c. Delhi International Arbitration Centre (Arbitration Proceeding) Rules, 2023- Rule 27 discusses about the discretion of the tribunal to allow witnesses in Arbitral Proceedings. The rule discusses that the tribunal may require parties to give a list of witnesses including expert witnesses whom it intends to examine, the subject matter of testimony as well as its relevance to the issues. Under these rules, the Tribunal has the power to determine the limit of the number of witnesses intended to be examined by the party. It can either allow, refuse or limit the number of witnesses. Furthermore, it can also limit the allocated time for oral testimony of the witnesses. The tribunal also has the power to direct the presentation of testimony in a written form.
d. Rules of domestic commercial Arbitration and Conciliation, 2022 (Indian Council of Arbitration) – Rule 50 provides that the Arbitral Tribunal, may at any time, consult any person having special knowledge relating to a particular field, industry, branch of trade concerned or any expert or a qualified accountant. Further, the tribunal can also consult any solicitors or advocates upon any technical question of law, evidence, practice or procedure. Rule 51 further discusses that the witnesses would submit to the Tribunal for examination on oath/affirmation and would be required to present the tribunal with any evidence, books, accounts, documents, in its possession that it is basing its entire testimony on.
EXPERT EVIDENCE IN CONSTRUCTION ARBITRATION
Expert Opinion/Evidence in arbitrations is not an alien concept. In fact, in arbitrations with a more technical nature such as construction/infrastructure disputes, almost every arbitral tribunal requires the assistance of an expert witness, be it party appointed, or tribunal appointed.
There are various factors that need to be kept in mind while appointing an expert. As held by the Apex Court, an expert witness should be someone who had made the subject upon which they speak a matter of particular study, practice or observation and they must have special knowledge of the particular subject/point of contention. The duty of any expert witness is to furnish the judge with the essential scientific criteria for testing the accuracy of the conclusions to enable the judge to form their independent opinion by application of such criteria to the facts proved by the evidence of the case. The scientific opinion evidence needs to be intelligible, convincing and tested. When the said requirements are fulfilled, such opinion becomes an important factor for consideration along with other evidence in the case. The credibility of any expert witness would depend on the reasons stated in support of the conclusions and data and materials furnished which form the basis of such conclusions.
However, it should be kept in mind that, a court/tribunal is not bound by the evidence of experts which is to a large extent, advisory in nature. The tribunal must derive its own conclusion upon considering the opinion of the experts which may be adduced by both sides, cautiously, and upon taking into consideration the authorities on the point on which the expert deposes. The real function of an expert is to put before the court all the materials, together with reasons which induce them to come to the conclusion, so that the court, although not an expert may form its own judgment by its own observation of the materials.
Broadly, the different types of expertise can be classified into three categories i.e. technical expertise pertaining to the specific facts of a dispute, legal expertise and expertise related to delay, disruption and quantum in a claims dispute. These type of experts commonly sought after in constructions disputes are discussed below;
Quantity Surveyors often play a crucial role in construction disputes. They are well equipped to navigate complexities of construction disputes. In most scenarios, Quantity surveyors are also involved in early stages of the subject matter project, where they work in close proximities with the teams and assess risks, establish budgets and monitor costs throughout the construction process. The surveyors can also take proactive steps to mitigate the sources of dispute, that might arise. As and when a dispute arises, the role of a Quantity Surveyor becomes invaluable. Their understanding of the contractual obligations, issues that are faced by an employer or contractor, and other intricacies involved in a construction arbitration make them perfect for evaluating claims and merits. Quantity Surveyors are also equipped with negotiation and ADR skills, which can be utilized before the onset of the arbitral proceedings as well.
Engineers in a construction arbitration mostly include civil engineers that have an in-depth knowledge of the technical issues faced in design or construction in an infrastructure/ construction project. They assist the tribunal in expert testimony, testifying and presenting findings and opinions in arbitration proceedings, identifying key issues, dispute analysis, site inspections, claims evaluations etc. They also provide expertise on specific expertise on specific construction aspects such as structural engineering or mechanical systems.
Architects assist the tribunal in providing expert testimony on design related issues such as building codes, standards, zoning regulations; analyze design related disputes, interpret specifications of drawings and designs. Architects also help evaluate the change of scope orders, determining its impact on the project. They also assist the tribunals as an expert witness in arbitration hearings presenting their findings and opinions.
Experts can present reports, conduct analyses and present findings in tribunals and assist the arbitrators.
These experts can either be appointed by the Arbitral Tribunal or can also be party appointed. However, party-appointed experts are the norm in most construction arbitrations. Both scenarios involve different handling. However, in all cases an expert’s testimony must pass the fetters of cross examination.
There are certain challenges that the Arbitral Tribunal faces, while dealing with party-appointed experts. Firstly, a party-appointed expert is more likely to advocate the case of the party which has appointed such an expert. It is difficult for the expert to have an objective opinion on the dispute/ technical issue concerned. It is a given that the expert would be paid the renumeration by the party which has appointed the expert, which in turn creates a sub-conscious bias. Secondly, while preparing any report or its testimony, an expert is only exposed to one side’s case in detail, again making it difficult for the expert to form an objective opinion. Thirdly, technical experts constitute a small pool, which makes it a possibility that the same technical expert has been appointed by the same party previously as well. Furthermore, there is a possibility of repeat appointment by the party in future. The expert witness has a financial interest in the outcome of the arbitral proceedings which creates bias and limits neutral evaluation. Fourthly, back and forth between the two experts appointed by both sides, may lead to contradictory opinions and further confusion for the tribunal, which further results in the tribunal appointing a third expert, which leads to a delay in proceedings and more expense. Finally, the two different experts may use different methodologies, facts or data for reaching conclusions, which may lead to more confusion for the tribunal. Sometimes, the expert testimonies could be incomparable as they are based on different analogies. Moreover, analysis of delay and disruption causes most confusion as there are different accepted methodologies of analysis. However, such rigors can be overcome with cross-examination of such witnesses by counsels for both parties. A growing concept of ‘hot tubbing’ (also called the concurrent expert evidence) in arbitrations can also help overcome the issues faced by tribunals. Under hot tubbing, the experts simultaneously present their evidence and are put through questions by the other expert, opposite counsels as well as the tribunal. Such a discussion gives more clarity to the tribunal. This concept is also recognized in India.
As opposed to the party-appointed experts, a tribunal appointed expert may provide a more objective truth. Such an approach reduces extreme partisanship and removes the financial incentive between the parties and the experts. Furthermore, the parties always have the right to call their own experts to contradict the tribunal’s experts. However, this method is not free of its complications. The tribunal may become too reliant and delegate its key decision-making responsibilities, making the expert in effect a fourth arbitrator. Also, in case of tribunal appointed expert, the tribunal may only get a limited opinion and perspective, which is that of the only one expert witness. The tribunal may blindly accept its conclusion as it is the only conclusion in front of the tribunal.
CONCLUSION
There is no debate as to the importance of an expert witness in a construction arbitration. Due to its indispensable nature, it has now become important to smoothen the process of expert testimony for the tribunal. Setting of procedural rules at the start of the arbitral proceedings, in the first procedural order can set the tone for the entire proceedings. Figuring out the process for obtaining expert testimony at the outset can help streamline the process. Any objections to any experts as proposed by both parties can be discussed in the beginning, as to avoid any delays in the arbitral process. A proactive arbitral tribunal is essential in such arbitrations. The Arbitral Tribunal has procedural flexibility, which if utilized properly, can maximize efficiency. Proper and consistent case management and preparation is required of a proactive arbitral tribunal. Open communication with both sides regarding the intricacies of any technical facts helps in adducing expert evidence.
A qualified, experienced and unbiased expert can essentially help a party in establishing or refuting the claims and significantly reduce the time taken in the adjudication of disputes. Procedures such as Hot Tubbing/ Concurrent Expert Evidence or questioning by the tribunal can help in smooth adjudication of disputes, however, the quality of expert witnesses would always be of crucial importance.
Disclaimer: This article was first published in the S&A Law Offices - 'Indian Legal Impetus' newsletter in August 2024.