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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Introduction
It is a truism to state that international arbitration is the safest method of settling disputes relating to industrial or commercial contracts involving parties of different nationalities: this is evidenced by the vitality of the ICC Court of Arbitration.
In practice, in the case of major projects, there is no alternative to arbitration. How can one conceive of a work such as the Channel Tunnel - in which as we know the volume of interests at stake is huge, and the number of parties involved significant - not giving rise to disputes that are subject to arbitration? It is quite impossible.
But beyond its advantages, whose merits are described periodically in this Bulletin by authoritative voices, international arbitration is most often the subject of final decisions; in other words, it is a one-stage justice.
For certain parties, it may be better to have the dispute settled by an award for the first and last time; but many others think that this is dangerous.
In contrast, court judgments are subject to appeal - where they may be reversed - and even in some cases may be referred to the supreme court.
Yet, as Yves Derains has wisely commented, "Many disputes are only the legal projection of difficulties of a technical nature."1 From this springs the idea of submitting a dispute to experts before going to arbitration.
The fact is that the initial problems that arise in international industrial contracts do not fall within the ambit of lawyers, but rather within that of experts, because most often such problems are technical ones. While it is true that they may lead to arbitration, they may also be resolved on the basis of the advice and, where applicable, the recommendations of experts.
This is what Jean-François Bourque calls "a two-level procedure".2
And this is the justification for including a clause in international contracts that provides for recourse to the International Centre for Expertise before resorting to international arbitration.
In this way, a first level of procedure is introduced. While it is true that its application is limited and that it only aims to resolve technical problems, such problems are often vital and accordingly constitute the heart of the dispute.
It is no surprise that, so far, few cases of application of this type of procedure have been encountered. However, feedback from the industry, and particularly from corporate lawyers in this sector, is promising. The existence and the function of the Centre respond to their expectations. Their intention of including the clause - as well as the ICC arbitration clause - is likely to be seen increasingly in the future.
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Moreover, parties without a contractual clause have already resorted to the Centre. Likewise, a party may prefer to have the Centre select an expert witness on its behalf rather than choosing the expert itself, as in this way the independence of the expert in question is much better ensured.
The ICC International Centre For Expertise was created in 1976. Its Rules were last modified as of January 1993.3 Nearly three years have passed since then, and during this period valuable experience has been gained by this body, which seems to have no equivalent in the field of administration of international expertise procedures.
The Centre comprises a Standing Committee and a Secretariat, and thus combines technical and legal skills.
The Standing Committee comprises five members of different nationalities, at present, American, British, French, Japanese and Swiss.
The members of this Committee have been chosen for their skills in the area of expertise. Their cooperation - both with one another and with the Secretariat - generally enables problems submitted to the Centre to be answered within a short space of time.
Such problems may arise before the conclusion of a contract, in the absence of any dispute, during the performance of a contract, or in the context of a dispute, for example an arbitration.
The Centre's fields of activity are numerous. In fact, it may act in all areas liable to expertise, whether in the technical, financial or services sectors. Up to now, the Centre has received 123 requests for the proposal or appointment of experts, involving parties from some 50 nationalities and experts from 16 countries.
The Rules of the Centre provide that it may propose experts or appoint them.
Proposals of experts apply in circumstances where the parties have not agreed to have recourse to ICC expertise. Such proposals may be requested by any person - a party, the arbitral tribunal or a national court. The role of the Centre ends once it has made the proposals that have been asked for.
Appointments of experts are made on the basis of an agreement whereby the parties have decided to resort to ICC expertise. This is most often by reference to the model clause recommended by the ICC: "The parties to this agreement agree to have recourse, if the need arises, to the International Centre for Expertise of the International Chamber of Commerce in accordance with the ICC's Rules for Expertise." Here, the Centre's role does not end with the selection of the expert. It is also concerned with the expert's terms of reference and the costs and the administration of the expertise procedure, as well as notification of the expert's report.
In many cases, the choice of the expert that the Centre has to make is a delicate one, and it therefore deserves to be described (I). The expert's brief may also give rise to problems (II). The growing interest in Dispute Review Boards demonstrates that expertise is likely to develop significantly; how will the Centre be able to assist in this context? Is the International Centre for Expertise capable of responding to other opportunities for diversification (III)? If certain developments were deemed worthy of interest, should the Centre be accorded additional resources for achieving such aims (IV)?
I. The perfect expert: a lasting search
In the course of arbitrations, the Centre may be asked to propose experts in cases where the appointing authority has not succeeded in its search, or prefers to do so through the Centre. A chairman of an arbitral tribunal together with his colleagues may well find an expert in accountancy or a civil engineering expert, but in areas where sophisticated technologies are involved, and constantly changing, the Centre may find itself entrusted with the task of proposing an expert and may come up against obstacles which deserve some attention.
Selections of experts requested by one or more parties, prior to arbitration, are generally easier [Page35:] to cope with, although they often raise problems as to what steps should be taken - particularly with regard to the expert's brief.
A. Availability of the expert
We are starting with this essential factor, because "good" experts, who are well-known and reputed in their field, are generally overworked, and hence seldom available. And this is detrimental to the smooth running of an expertise procedure, particularly if the expert is required to report back urgently with his findings, and in any case to avoid expertise procedures becoming too long drawn out, a problem that is only too common in both court and arbitration proceedings.
Accordingly, the assistance of an expert who is too overloaded with cases must be avoided. However, one must not lean too far in the other direction, by asking for help from one of those "expertise-chasing" experts, who for their part are only too numerous, and who have the time, but not the other necessary qualifications.
B. The choice of an individual expert and his professionalism
The Rules of the Centre provide that the expert may be an individual or an entity. In practice, the Centre prefers to propose or appoint individuals intuitus personae. This appears safer than choosing major firms of certified accountants, research institutes, or design and consulting firms, unless an expert with the necessary qualifications has been carefully selected from within the firm in question.
Alongside this concept, there should also be ranked the Centre's reluctance to select an assistant to the expert, where one expert has been found who is skilled in the practice of expertise procedures, but who is not suitably grounded in the relevant technical field, and another who is skilled in the particular technique but not in expertise procedures.
In addition to the fact that the team doubles the fees and costs of the expertise, it may lead to excesses, even if it has the advantage of ensuring that the expert who is skilled in the particular technique does not commit procedural errors, for example by being tempted to act as an arbitrator.
One might compare this difficulty with a fairly recent reform of criminal justice in France in the area of expertise procedures. In the past, French magistrates in criminal cases were bound to appoint not one but two experts to carry out an expertise procedure. Often an older experienced expert was appointed along with a younger one with less experience. The latter did all the work and the former simply supervised - and he did not always even do that - but in any case he pocketed a substantial part of the fees. Worse still, in meetings with the accused and witnesses, the experienced expert played a negligeable role, since he had limited knowledge of the case. Such practices were held to be excessive, and now, in France, magistrates in criminal cases no longer appoint more than one expert, except of course in special cases (important cases, where a variety of matters calls for an expertise).
Having already faced this problem in the past, the Centre has preferred to appoint highly skilled technicians and has been prepared to provide them with advice or recommendations to help with the smooth-running of the expertise procedure. In this the Centre has not applied a specific provision of its Rules, but has not considered that it transgressed them in so doing.
C. The expert's independence and impartiality
Independence with its corollary of impartiality is a primordial quality of the good expert. What is one to think of an expertise where one has the feeling that the expert is prejudiced against something or someone, that he lacks objectivity, in a word that he is biased? This is a form of assistance which has a disastrous effect on justice and which may do it more harm than good.
It should be noted that the expert's nationality may sometimes be more important than would appear.
Here the Centre's duty is to guard against disappointments, by studying a prospective expert's curriculum vitae and by asking him to sign a statement of independence. This statement may he analogous to the one required by the ICC Court of Arbitration in relation to the confirmation of arbitrators nominated by the parties and the [Page36:] appointment of the chairman, but a number of nuances - or differences - have to be taken into account. Naturally, the prospective expert must be independent of the parties to the case and must not have had any links with them in the past.
On the other hand, the question becomes much more delicate if the expertise is of vital importance and the parties themselves arrange for experts to assist and advise them.
Should the expert who is proposed or appointed be required to be totally independent of his colleagues? If the technological field concerned is a narrow one, this is totally impossible; all the experts in this field know one another, meet each other (congresses, symposia, etc.). And yet, the selection has to be made from among them. It must be admitted that in this type of case selection is difficult and risky, so much so that in certain cases the Centre has preferred to choose lesser known experts rather than those who dominated the specialist field from the technical standpoint, but were too widely known,
It should also be pointed out that if it comes to the Centre's notice that an expert has shown bias in the past, despite the fact that he is now well-considered and has a creditable reputation, he will not be selected, because it is always possible that a person who has failed to respect the duty of impartiality once, may do the same again on another occasion.
In concluding our remarks on this delicate topic where the Centre's reputation is at stake, let us simply note that the ICC and its Secretariat's knowledge of the past and the experience of the members of the Standing Committee are often sought in order to avoid such stumbling blocks.
D. The expert's qualifications
Technicians and specialists only become experts after they have acquired the necessary skills in their technique, in their field, in fact, after having practised them over a considerable period. Hence, although they will not necessarily be advanced in years, at least they will already be mature in experience.
Strangely enough, in France, one cannot be included on a list of court-appointed experts until one has demonstrated that after a creditable and unblemished career in a given sector, one has already carried out expertise procedures successfully. In other words, in order to be registered on the list, you have to prove that you can get by without being on it ...
The result is that the age of experts included on such lists is often positively venerable.
If their field of expertise is, for example, accountancy, and they continue their day-to-day practice in their firm, there is virtually no problem, because in the course of their professional activities they will have been obliged to keep up to date with developments in their field, especially in relation to financial and tax law.
The same may apply in the case of expertise procedures required in relation to standard construction work, a fortiori in relation to ancient, historic buildings: the expert's "dated" training will have no impact on the quality of his expertise.
On the other hand, there are cases of expertise procedures where the most modern techniques are involved. How can an expert who left the industry ten years or more earlier claim to give an expert opinion on technologies that were perfected long after he stopped working in the sector concerned?
This question has been pondered again and again, so primordial is the criterion of the expert's skill in the field concerned. Recently, the Centre identified, at the request of an arbitral tribunal, a man who was undoubtedly skilled in a particular technology, which was less than five years old. He had worked as an engineer in the very narrow field concerned and had retired two years previously. But he only had limited experience in expertise procedures and risked having difficulties in conducting the procedure. What happened? For his part, the chairman of the arbitral tribunal, who had made the request, preferred an expert who had long experience in expertise procedures, but whose knowledge was manifestly inadequate, in that he had left "the field" long before the technology in question had been invented and put into practice. Was this the right choice? Of course, a valiant, experienced expert who has kept his mind [Page37:] alert may - through the use of exhibits, witnesses' statements, etc. - become familiar with and even understand a technology more recent than the ones that he practised himself, but the difference between such understanding and being an "expert" calls for a leap that one might hesitate to take, especially in the case of sophisticated and constantly changing techniques such as computer technology, for example.
E. The Centre's selection of an expert: a delicate task, both for proposals and appointments of experts
It has been stated (but without any reference to the problems of language, mobility, sense of organisation, logistics, etc.) that the four major qualifications that an expert needs - skill, independence, professionalism and availability - are often more difficult to find united in one single person than one might believe.
Various official lists of experts are obvious places in which to go fishing, but not blindly.
The individuals on these lists are generally creditable, hence impartial. As they have applied to be registered on these lists, one may also consider that they have the appropriate professionalism. However, in a given field, their availability may well be questionable when it comes to the "leading lights" of the speciality, who are often too busy.
The question of skill remains. Experts registered on such lists some ten or fifteen years ago were certainly adepts in their speciality at that time. But, what is the position now, if the technology or technologies in question have changed significantly?
To take a simple comparison, can an excellent eye surgeon, who was a very good practitioner in the 1970s, claim that he can now operate on cataracts in the same way as he did twenty years ago? Certainly not. But, in this interval he may have been able to remain in the field, by regularly visiting the hospital where he will have met his colleagues every day, discussed their experiences and his own, witnessed operations done using the latest techniques, etc. Accordingly, his patients may not suffer from this, and will benefit from scientific progress.
Can an expert in other fields, who left the industry long ago, claim that he has kept up to date with modern knowledge, like the doctor or, of course, the certified accountant who is still practising? We do not think so. Even if such an expert familiarises himself with the most recent techniques by reading books and magazines, taking part in seminars, etc., he cannot claim to be an adept in the field, to be an expert in it, as would be the case if he were still working in the field.
In this scenario - disputes involving recent technologies - the skilled expert may be a recently retired person, a person who became independent a few years previously and who, accordingly, in the field in question, has working experience in the industry or sector concerned.
But the problem here is that he is not yet an experienced independent expert and his professionalism is in doubt.
So what should be done?
We have said what we thought about the use of a team (professional expert combined with a technical expert). In our view, it is a hybrid solution that is both costly and somewhat unsatisfactory.4
It is possible that other solutions exist, and we shall explore these below.
II. The expert's brief
As mentioned above, one should bear in mind the distinction made in the ICC Rules for expertise between a proposal (where there is no agreement to refer to an ICC expertise procedure) and an appointment (where the parties have agreed to resolve their differences in accordance with the ICC Rules for Expertise).
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A. Proposals
When an arbitral tribunal or a court asks the Centre to propose experts, the request is usually based on a particular brief, which is generally well drafted. Accordingly, the Centre knows precisely what is expected of it, which - as we have already pointed out - is not always simple, since had this been the case, the court or tribunal would have made its selection itself,
The Centre will endeavour to make the most appropriate proposal, and the tribunal may do what it likes with the proposed name(s) of experts.
The Centre's role ends here (except if experts have to be replaced or other experts have to be proposed in other fields in connection with the same dispute).
But it is the beginning of the role to be played by the expert whom the arbitral tribunal or state court is about to appoint.
Although the expert is a technician with wide knowledge of the issue in dispute, in other words, although he is highly skilled, he may not have all the necessary professional experience of expertise procedures. Is this a real drawback? As we stated earlier, when we spoke of the expert's intuitus personae and of his professionalism, we do not think so.
Doing without the services of the best technical expert may be detrimental to the revelation of the truth.
Making use of an expert actually involves having to remind him of his duties in performing his task (confining himself to his terms of reference, ensuring that parties enjoy equal treatment, refraining from legal pronouncements, etc.), if possible during a hearing in which the parties and their lawyers will hear the advice or recommendations imparted to the expert by the arbitral tribunal and particularly its chairman, and, moreover, may benefit from these.
To our mind, when a tribunal calls upon an expert it should also be willing to lend him some support should he come up against obstacles to the performance of his task. And this may lead the said tribunal to put forward opinions, or to make appropriate recommendations at its own discretion on questions such as whether or not the intervention of the parties and their lawyers is necessary to ensure a fair and equal treatment of the parties.
It should not be forgotten that although an important expertise procedure, which may well last for a considerable length of time, will involve the assistance of the parties and their lawyers, it generally takes place out of sight of the tribunal. During this long period, a diligent tribunal will appreciate being kept up to date with the progress of the expertise procedure on a regular basis, especially in relation to any difficulties encountered, with a view to helping to remedy them, where possible. In addition, the expert's request for advance payments will be referred to the tribunal, and in this way it will more easily be able to assess whether such advances are well-founded and order their payment.
In brief, we confirm our belief that a balanced dialogue between the arbitral tribunal and the expert appointed by the tribunal in question can be entirely beneficial to the procedure.
B. Appointments
Before discussing the appointments the Centre is asked to make, we should like to describe the manner in which experts are appointed by the courts - in any case in France - especially by the commercial courts (tribunaux de commerce), which, despite their name, deal not only with commercial cases, but also with industrial matters.
Commercial courts were created in the 16th century with a view to having disputes between merchants decided by merchants. Justice was rendered between peers by their peers. Merchants were elected on the basis of their creditable status and their capability and were responsible for settling any disputes that might arise between fellow merchants. They were not paid for their task.
Nothing has changed since, except that the merchants have become industrialists or traders, [Page39:] and that, in the commercial courts, one now encounters not only judges who are traders, but also corporate representatives of industrial and/or commercial firms as well as company lawyers.
Experts may be appointed by trial judges (whose task is to deal with the merits of the case), who have time for reflection, but most often they are applied for on referral to the President of the Court or his deputy, known as the juge des référés (judge ruling in urgent interlocutory proceedings). This procedure takes place following service of a writ of summons, hence the rules of due process are observed. An interlocutory hearing is presided by a single magistrate who decides everything on his own. He decides quickly: instantly, within 24 hours, within 48 hours, at the latest within a week. Thus he has little time for reflection; moreover, this is, as it were, prohibited: he is the judge of appearances, the judge of the obvious. He cannot interpret a contract, nor can he issue an order for damages; in fact, he must avoid any assessment concerning the merits of the case, for these fall within the exclusive domain of the trial judges. However, he has the duty and jurisdiction to order expertise measures and, accordingly, does so frequently.
How does he operate?
a) First case
The opponent fails to appear in court. The judge verifies that the plaintiff had the writ of summons properly served on the defendant. Barristers, either too hurried or too shrewd, might have had a summons served on 14th August for a hearing on 16th August. Or the bailiff may have found nobody at home at the defendant's address and have served the writ by leaving it at the town hall from where the addressee may not have collected it until after the hearing. In such cases, except where extremely urgent measures are required - a roof collapses, say, or a floor caves in with risks to life and limb - if the case is to comply with the rules of due process, it will have to be postponed to a subsequent hearing.
At this new hearing - let us say, in the example cited, on 15th September - the defendant still does not appear. In this event the judge will have to order the measure requested, provided it does not appear to him to be unreasonable in principle. But, in view of the opponent's default, the judge might well have doubts regarding the tenor of the expert's terms of reference where they are proposed unilaterally. Are the factual reports requested based on exhibits produced to the court (summary examination)? Are they worded objectively? Are they complete? Will not the expert in some sort, or indeed, undoubtedly, be invited to make legal pronouncements?
In short - and in contradiction with what has been stated above - in the case of default, the juge des référés, a judge of appearances, will be obliged to carry out an in-depth examination of the proposed terms of reference and to rectify them insofar as necessary. Fortunately, such cases are few and far between.
b) Second case
This is the most common situation. The defendant appears in court and ... defends itself. If the defendant takes the view that the terms of reference proposed by the plaintiff seem reasonable, this defence is limited to filing a "notice of protest and reservations", hence to not objecting to the fact that the investigatory measure is ordered.
Quite often, too, the defendant criticizes the terms of reference, believing them not to be objective, or accuses them of being incomplete.
The judge will pay close attention to such comments, and hence will often take them into account in the terms of reference he orders.
On his own initiative, the judge may also reword the proposed text so as, for example, to limit it more closely to technical questions, in other words, those where the involvement of the specialist -that is, the expert - is essential.
Whenever possible, the judge will seek to establish a consensus between the parties and himself in relation to the task to be entrusted to the expert.
As in the case of international disputes, the choice of the expert may come up against difficulties, but expertise procedures requested [Page40:] before the commercial courts are seldom as important as those encountered in the international domain (except expertise procedures that involve accountancy and administration in relation to firms in difficulties). Thus, as the expert's terms of reference are more limited, the selection of an expert is often facilitated. Sometimes, too, the parties jointly nominate an expert whom, barring exceptional circumstances, the judge will select.
Traditionally, the costs and fees of the expertise procedure have to be advanced by the plaintiff, but it sometimes happens that, if the defendant asks for and obtains additions to the terms of reference, which may one day be a basis for a counterclaim in court proceedings, such costs and fees must be borne by both parties. However, the latter solution should be handled with caution.
In fact, the expert appointed by the judge will only start to carry out his task after the advance on costs and fees determined by the judge has been deposited with the office of the clerk of the court.
If both parties to the case must share the advance, all that is needed for the whole machinery to grind to a halt is for one of them - the defendant, obviously - to refrain from paying its share of the deposit.
But the juge des référés, or, more usually the judge in charge of supervising expertise procedures, may take matters into his own hands and start the procedure up again, for example by limiting the terms of reference, in other words by excluding the additional findings requested by the defendant who has refused to deposit his share of the costs and fees.
Expertise procedures that are well-ordered and carried out properly often ward off litigation. Either, after the expertise, the parties may prefer to settle out of court, or, with the expert's help, there may be rapprochement between the parties in the course of the procedure, and fairly often they may achieve a settlement.
Thus, to summarise, when experts are appointed by the courts, the judge's powers of intervention and decision are important, but what is more - and this must be emphasized - they are necessary at the level of the choice of the expert, the drafting of his terms of reference and the performance of his brief.
Although the Centre in fact has full discretion in the selection of the expert, in the case of a request lodged by one party alone, the choice is based on the elements communicated to the Centre and the terms of reference drafted by that party, unless the opponent, to whom the request will have been communicated by the Centre, replies with its comments.
The latter case is eminently desirable as the parties take the opportunity to present their views. But, if the opponent does not reply, the Centre's decision regarding appointment and the task would be analysed, in French proceedings, as an order on petition - a procedure which does not involve the hearing of both parties, which is only used by the courts in quite exceptional circumstances in expertise cases.
Whenever the Centre is asked to appoint an expert on the basis of a request setting out unilateral terms of reference, any step that might encourage all the parties to participate and ensure that the grounds for ordering the proposed measure take into account the parties' views, is clearly desirable, all the more so since it is in the interest of all the parties to the case, both plaintiff(s) and defendant(s).
A satisfactory expertise procedure involves cooperation between the parties and the expert, both in the communication of the documents and in on-site visits. The same applies in relation to the hearing of witnesses. But, as a preliminary, if the terms of reference could be drafted jointly by the parties with the Centre's support, this would provide the process with far better operating conditions, in other words, with the assistance of all the parties concerned.
Naturally, the Centre, as a mere appointing authority, whose powers are based on the parties' agreement, cannot be endowed with the mandatory powers of a judge. Accordingly, it is essential for it to convince the plaintiff and [Page41:] especially the defendant of the importance of ensuring that the procedure benefit from their full participation, and this is not always easy.
It is our view that in some instances the drafting of the expert's terms of reference could usefully call for the intervention of the Centre and its Secretariat.
Such assistance might very well take the form of an exchange of notes, with no obligation for the parties to appear before the Centre, which moreover would have no power to call them, and less still to chair a meeting.
At the level of the expertise procedure itself, Jean-François Bourque (supra, note 2) has pointedly observed that in a number of cases the Centre has already had to intervene with experts it had appointed to ensure that certain procedures ran more smoothly. In so doing, the Centre was not applying a particular provision of its rules, but nonetheless did not believe that it was infringing them.
In fact, where an expertise is ordered by an arbitral tribunal, or by a court, it remains under the supervision of the judge or the arbitrator. But in the case where one or all of the parties ask the Centre to appoint the expert on the basis of an agreement, as soon as the expert is appointed, the procedure comes under the control of the parties alone.
Experience has shown that left to themselves, the expert and the parties may be faced with problems that may hinder the satisfactory progress of the expertise in the search for the truth.
The fact that the Centre has been asked to make the appointment by one or all of the parties for the purpose of having factual situations - often urgent ones - recorded, for preserving evidence for the future, and that the dispute - in this case usually arbitration - has not yet commenced, makes no difference.
The expert and the parties need a supervisory authority, which may only have to intervene from time to time, but which still must be ready and authorised to do so: this is so in the case of the judge or the arbitrator. It is not - as yet - the role or the responsibility of the Centre.
But, under the pressure of events, the Centre has nonetheless been led to play this role, in other words to exercise a power of interference, which has not been expressly accorded to it by the Rules. As has been stated already, in so doing, it did not believe it was infringing the Rules. The Centre acted in the best interests of the procedures in question, but it would have been better if it had been specifically authorised to do so by the Rules.
Lastly, we have to consider the question of the advance in respect of the expert's costs and fees. The Centre is authorised to determine the advance on costs, but in certain cases this is extremely difficult to quantify at the outset. Next, it has to administer the advance. If it did not do this, the expert would have to settle his financial problems with the parties and, most often, with only one of them - the plaintiff who pays the advance - which would be improper.
Accordingly, the Centre has to determine and administer the initial advance and any additional costs. The sum or sums paid to the Secretariat of the Centre will enable it to decide and monitor payments to the expert. What is more, in this way the Centre is "naturally" kept up to date by the expert with the progress of the procedure and, as we have seen, this can be most desirable.
Coming to the end of this section, we note that it has been suggested that the Centre's powers of intervention should be strengthened, both when it appoints the experts and after it has appointed them.
This is not a demonstration of greed for power, as these tasks are comparable to those commonly practised by judges or by arbitrators in many countries.
Nor is this too ambitious a scheme, since the Centre and its Secretariat are perfectly capable of taking charge of additional responsibilities of this kind. The best evidence of this is that, in certain cases, under the pressure of events, in the past, they have successfully achieved this.
In this way, several expertise procedures that had seemed in jeopardy or in a dangerous situation were straightened out.
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The fact remains that the Centre will never possess the authority of a judge or the powers of an arbitrator.
But, if it is granted more freedom of action, the Centre considers that, in many cases, not only will it be able to persuade the parties to the case to fully participate in the process, and, in so doing, it would act as a catalyst, while close supervision of the expertise operations is bound to be of service in the search for truth.
III. Prospects for the International Centre for Expertise
We have described the way in which the Centre functions and have examined how certain delicate problems can be solved. In this, we have limited ourselves to the Centre's current activities. But there is nothing to prevent us from looking into other areas in which the Centre has not yet become involved and envisaging how to respond should this happen.
A. Dispute Review Boards (DRBs)
Dispute Review Boards were first developed in the United States more than twenty years ago. Since then, this contractual undertaking to go to expertise before submitting the case to arbitration (or to the courts), which can have a variety of forms and modalities, has developed significantly, not to say impressively.
Our comments on this subject will accompany two recent publications, one issued by the World Bank,5 and the other by the FIDIC,6 the latter being best known as the Orange Book.
These two documents are basically similar, though they do contain variants. Moreover, the World Bank refers specifically to the FIDIC forms.
Depending on the size of the projects it finances, the World Bank offers contracting parties three alternative possibilities for resort to expertise (and it is obligatory to opt for one of them). Either a DRB comprising three experts in the case of major projects, or a single Dispute Review Expert for lesser projects, or, alternatively, resort to the old clause 67 of the FIDIC General General Conditions, in which, as the World Bank states, "the Engineer acts as arbitrator of first instance in the disputes which may arise between the parties". This wording, which refers not to the DRB but to the Engineer, nonetheless calls for our attention since it really seems to give the Engineer the powers of a judge of the first instance.
It is somewhat in the same spirit that one reads that not only must the members of the DRB be experienced in the type of construction involved, but they must also be experienced "with the interpretation of contractual documents", a task that is generally a prerogative of the judge or arbitrator.
It will also be noted that if the parties fail to select their own member of the DRB or to agree on a third member, the appointing authority must be chosen from among arbitration institutions (for example, the ICC Court of Arbitration), but no mention is made of the International Centre for Expertise. The authority in question will also have to provide for any replacement of defaulting member(s)
Lastly, it will be noted that the DRB makes "Recommendations", and if the parties are dissatisfied with them, these lead - after certain time limits, it is true - straight to arbitration to which the UNCITRAL Rules will apply, unless the application of a different type of international arbitration has been negotiated with the World Bank. The Bank allows reference to other rules of arbitration, such as the ICC's, provided that they are "clear and fair to both parties".
The most important point to be remembered is that, in its document of January I995, the World Bank institutionalises, in any case for major projects, a first stage of expertise, to take place prior to any arbitration.
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In the case of FIDIC (the Fédération Internationale des Ingénieurs-Conseils), we are well aware how extremely useful it has been in the past for international agreements making use of its model contracts. Many huge projects have been constructed on the basis of these texts - often successfully, but sometimes encountering problems that have been settled mainly through ICC arbitrations.
The appointment of an expert or experts in the context of the DRBs stipulated in the new FIDIC Orange Book (Conditions of Contract for Design-Build and Turnkey) now constitutes an extremely important advance in the administration of new international projects.
It reflects the recognition of the fact that, frequently, the difficulties encountered in the course of performance are first of all technical ones, and hence open to expert(s)' advice and even, in the case of FIDIC, to expert(s)' "decisions".
This stage of the DRB will constitute a first procedural phase which may provide a permanent solution to a technical problem. This is of capital importance.
Likewise, the second phase stipulated in the new FIDIC rules - the obligation to hold amicable negotiations before going to arbitration - is also an important advance since, in certain cases, this too may avoid litigation.
Indeed, in the course of such amicable negotiations, the parties will be meeting again after the expert or experts have ruled on the difficulty raised, in other words, after an independent third party has intervened and given his views on how the difficulty in question is to be remedied. This new factor may encourage the parties to start conciliation proceedings, since they will know that the arbitrators will be highly likely to follow the expert's advice - or, in this case, his decision - if this third, last and final stage of the procedure (apart from enforcement proceedings) is reached.
Nonetheless, the appointment of expert(s) to the DRB raises a very serious question as regards its "feasibility".
Let us take a major project such as a dam, a petrochemicals complex or the like; let us suppose that the technologies implemented are very well-proven; from what specialist field - with the parties' agreement - should the expert or experts be chosen, since logically, at the time this choice is made - i.e. when the agreement comes into force or shortly afterwards - clearly nobody knows where the project's shortcomings will lie? Electrical, mechanical, civil engineering, operating or maintenance problems? Very specific problems regarding the application of a delicate technology, raw materials, supplies, transport, etc.?
The list of problems that may arise is endless. Yet experts who are "all-round" specialists do not exist. Thus, inevitably, "generalists" will be chosen, but with no certainty that - when the moment comes - they will have the appropriate skills.
Naturally, they will be able to arrange to be helped by skilled assistants in the relevant fields - provision is made for this. However, should one not then fear that the role of the original DRB will be restricted in practice to appointing other experts who are skilled in the particular area, and that it is those other experts who will carry out the expertise procedure?
This handicap should be viewed in the general context of DRBs, one of whose very great merits will be to enable DRB members to be kept informed of progress in the completion of a project, from the outset. Consequently, the experts will be witnesses of any difficulties encountered in the course of construction of the project from the very moment they arise, will be able to observe their development and, if they are briefed so to do, to decide how they should be resolved.
These three stages of the procedure will respond to the expectations of industrialists and their customers. The first stage - which, like the two others, is obligatory and consists of an expertise procedure carried out by the DRB - will give the contracting parties a feeling of security, especially to their technicians. They know only too well how often the first difficulties in carrying [Page44:] out a major project are technical ones. Exchanges will be made all the easier with experts who are already well-informed, familiarised with, and experienced in, the project. Indirectly, if one assumes as a certainty the fact that such experts will make their decisions wisely, and if despite this it unfortunately becomes necessary to go to arbitration, this last and final procedure will be simplified and speeded up, since the technical investigations will have been done already.
To our mind, the second stage envisaged by the new FIDIC Rules is particularly noteworthy. Compelling the parties to meet and negotiate on the basis of the factual reports and decisions of independent neutral experts gives the parties a fresh opportunity for rapprochement and to start cooperating again, which will benefit the project and may avoid an arbitration.
If the parties fail to select or replace experts by mutual agreement, FIDIC proposes its services as the appointing authority.
This, too, in our view, is an offer that is much more worthy of acceptance than the World Bank's suggestion that assistance should be sought from an arbitration institution. FIDIC is perfectly qualified to recruit experts who have all the necessary qualifications, especially in the technical field.
Nonetheless, the International Centre for Expertise might perhaps add its contribution to implementing DRBs. To cite only one example, as we have seen (see above II.B.3), there is something improper in neutral experts being remunerated directly by the parties; this is even truer in the case of experts who are members of a DRB which is intended to remain active in a major project for several years. The administering of calls for advances and payments of remuneration is one of the specific services that the Centre could render in this context.
More generally, cooperation between the Centre and FIDIC might be beneficial, in any case to the Centre, which in cases of difficulty in choosing experts, might obtain very competent assistance in the major disciplines in which FIDIC undoubtedly has the necessary expertise. Lastly, it should be noted that these new FIDIC Rules are more liberal than the World Bank Rules, which tend to favour UNCITRAL Arbitration Rules, whereas although FIDIC does not exclude UNCITRAL, it tends rather to note that in practice the vast majority of arbitrations involve the ICC.
In either case, it should also be noted that the World Bank and FIDIC, both of which are prime movers in the field of international trade, do not really seem to wish to encourage ad hoc arbitrations ("provisions clear and fair to both parties", states the World Bank), but we are straying from our subject.
As we leave the subject of Dispute Review Boards, although the Engineering Advancement Association of Japan (ENAA) has not really had recourse to this system, we note with satisfaction that its standard clauses provide that if the parties fail to agree on who should be appointed, the expert is to be appointed by the ICC's International Centre for Expertise.
B. Other prospects
1) In international business, arbitration cannot be considered to be a panacea for resolving every dispute.
In truth, many small or medium-sized international disputes cannot afford an arbitration, even one settled by a sole arbitrator.
The machinery of institutional arbitration - the ICC's particular - should be set in motion and apply all its procedural rules strictly, punctually and conscientiously, etc., only where the case submitted is worth it in the eyes of the parties.
Moreover, since such small or medium-sized disputes involve two - or several - parties of different nationalities, the solution of resorting to the ordinary courts of one of them - a recourse that is facilitated in certain countries by the fact that justice is perceived as cheaper than other means - is not satisfactory either.
Nonetheless, such disputes need to be settled.
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As we have seen above, the solution to be given to disputes arising from major projects could be broken down into various stages or phases, in contrast with state courts where various levels of jurisdiction may be resorted to.
Each of these phases or steps is a means to settle a dispute definitively.
Such is the case of the first such phase, the expertise procedure. In France, the commercial courts, which indeed have to deal above all with small or medium-sized disputes and which order expertise procedures, have noted this. As we have pointed out, a well-ordered expertise that is carried out successfully often avoids a lawsuit, but in this context it is a result obtained by agreement of the parties during or after the expertise procedure.
2) In the cases that concern us here - small and medium-sized international disputes - to really simplify the procedure, it would be necessary to confine the system to one single phase, the first one - expertise - and to find a means whereby the expert could hand down "decisions" such as those we have seen in the case of FIDIC's DRBs. In addition, such decisions would have to be final and binding on the parties, without any means of appeal.
Is this possible?
We know that mandatory expert decisions exist in certain fields or professions. The expert is then more than an individual who restricts himself to ascertaining facts or making recommendations. Without actually becoming an arbitrator or a judge, he may, for example, have to interpret the contract which links the parties in dispute or more simply the written statement or even the oral agreement which binds them.
One would like to hope that the foregoing is not too risky or too daring. Has it not been pointed out that the World Bank requires members of DRBs to be experienced in "the interpretation of contractual documents"? Is this not, in one way or another, an invitation to see them make use of "their know-how", and hence, in interpreting a contractual document, to make a legal pronouncement?
As we have seen, even in the case of major projects, the dividing line between the expert's and the arbitrator's respective powers is not always easy to trace with certainty.
A fortiori, in the case of small or medium-sized international disputes, this dividing line is difficult to pinpoint.
This is particularly apparent in areas where the documents linking the parties are standard form contracts, such as those that may result from uniform rules drafted by the ICC.
In this connection, it is useful to mention the important contribution made by the ICC Commission on Banking Technique and Practice in the field of documentary credits. In this area, it seems there are numerous international disputes, of relative importance, which do not justify actual arbitration procedures.
And yet, such disputes have to be settled.
The idea, credit for which is due to the above Commission, would then be to create precise and concrete links between that Commission and the Centre with a view to setting up a flexible and effective procedure enabling the settlement of disputes relating to documentary credit by way of an expertise procedure.
This interesting possibility certainly deserves to be explored in the area of documentary credits, but also perhaps in other sectors such as insurance.
IV. Future development of the International Centre for Expertise
At the level of the Standing Committee, cooperation between the Centre and other international bodies should be expanded and strengthened.
One might envisage such bodies becoming "moral entity" members of the Standing Committee, represented of course by an appropriate individual of their choice.
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Also, at the level of the Standing Committee, the creation of a new post of vice-chairman alongside the chairman might be suitable, the idea being that one of them should have a common law, whereas the other should have a civil law background.
Obviously, such extensions or expansions might lead to studying possible modifications to the Rules.
At the level of the Secretariat, which as we know plays a fundamental role in the Centre's operation, significant developments could require a staff increase. Doubtless, it would be necessary to study the possibility of strengthening its resources and forces so that it is able to take on this future smoothly and surely.
It is possible that the Centre's prospective role of having to administer advances intended for the experts might be a material factor in this respect.
Systematic interventions in the context, for example, of disputes relating to documentary credits charged for on a fixed price basis might also help the Centre to achieve this result.
Conclusion
By way of conclusion, we should like to emphasize the fact that the International Centre for Expertise has great potential, and numerous opportunities which have yet to be explored.
There is real potential for interchange between the Centre and professional federations, for example. Why not go further?
The idea would be for the Centre to be recognized as one of the role-playing possibilities on the international scene as soon as an expertise procedure is likely to resolve a problem or to help resolve it, either by avoiding arbitration or by being of service to it at a later stage.
This is an ambitious aim, but since it is of service to international trade, it might be included as one of the ICC's main objectives.
It should be borne in mind that if it is achieved, it might lead to the present Rules of the Centre being modified, for example, in order to increase its powers of intervention, as well as for enabling it to welcome new partners appropriately.
The present task facing the International Centre for Expertise, which is the only organisation of this type in the world with some experience, is to make itself better known. It deserves to be, in view of what it is already doing and in view of what it hopes to achieve in the future.
1 Taken from a presentation in Milan in December 1991 relating to the International Centre for Expertise.
2 See "L'expérience du Centre international d'expertise de la CCI et le développement de l'expertise internationale" (Revue de l'arbitrage, 1995, No. 2), the genesis of the International Centre for Expertise was objectively and relevantly described by Jean-François Bourque, who also analysed the way it operates as a result of its present Rules and envisaged several possibilities for the Centre's development. It may be useful to refer to this study, which is illustrated by numerous case studies and which reports on earlier works in this area.
3 ICC Publication No. 520.
4 French law provides for the possible appointment of assistant experts. But both the expert and his assistant arc assumed to be professionals with experience in expertise procedures. However, the assistant will be called upon to serve with regard to a technical field with which the main expert is not acquainted or of which he has but slight knowledge.
5 Procurement of Works (Standard Bidding Documents). The World Bank, Washington D.C., January 1995.
6 FIDIC, Fédération Internationale des Ingénieurs Conseils, Conditions of Contract for Design-Build and Turnkey. Draft First Edition, 1995.