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Introduction

The use of experts in international dispute resolution has grown over the last twenty years in line with the explosive growth in cross-border economic activity and the increasing specialism within many professional fields. Experts can bring specific technical expertise, as well as independence and impartiality, to a wide variety of processes related to dispute resolution and at the various stages of the dispute resolution process.

Among its many activities, the ICC has since 1976 offered a service dedicated to helping parties to disputes find and work effectively with highly-qualified experts. As the ICC launches updated rules1 governing these activities, with effect from 1 February 2015, this article looks at the past activities and current direction of the ICC’s International Centre for ADR and its precursors as they relate to the use of experts in dispute resolution.

Background to the new Rules

In 1976 the ICC created the International Centre for Technical Expertise, which aimed to provide parties with a way of obtaining informed and independent opinions on technical issues at an earlier stage in the dispute resolution process than was previously typically the case. At that time, experts were more commonly appointed at an advanced stage of arbitration or litigation when evidence relevant to the technical issue being considered may no longer have been available, and often when relations between the parties had already deteriorated unnecessarily. Consisting of just seven Articles, the 1976 ICC Rules for Technical Expertise covered the selection, appointment and replacement of experts and the definition and implementation of their terms of reference.

By 1993, the ICC had found that experts were being engaged in financial and other fields as well as technical fields, by counsel and arbitrators in arbitration proceedings as well as directly by parties, and to resolve disputed matters outside of arbitration proceedings (within and outside the framework of a contract). New Rules were implemented in 1993 to address these additional needs, and the additional functions of the renamed International Centre for Expertise under the 1993 Rules were to appoint experts on request by parties and to have some visibility of the expert proceedings that followed an appointment, including performing the formal notification of a final expert opinion to the parties.

At the next update of the ICC Rules for Expertise, in 2003, the Centre was empowered on request to administer the execution of the expert’s assignment. Administration included such tasks as coordinating between the parties and the expert, monitoring deadlines, supervising costs, and reviewing the expert’s report as well as performing the formal notification of a final expert opinion to the parties.

In the twelve years since the last set of Rules came into force, the Centre has recommended or appointed experts, or administered expert proceedings, in some 200 cases, in fields as diverse as construction, engineering, IT, finance, accounting, and on specific legal matters. Under the 2003 Rules, and following agreement with the Internet Corporation for Assigned Names and Numbers (ICANN), the Centre has additionally administered almost 150 disputes relating to legal questions surrounding the introduction of top-level internet domain names.

The new, revised, Rules come into effect on 1 February 2015 and are the result of another thorough revision process undertaken by the ICC Commission on Arbitration and ADR, mindful of the above-mentioned experience of supplying experts to the international business world and administering expertise proceedings under previous versions of the Rules and of current practices and users’ needs.

The new Rules will be administered by the ICC’s International Centre for ADR, which since 2012 has overseen and/or assisted with the application of the ICC’s mediation, dispute board, and documentary credit expertise (DOCDEX) rules. These services are complementary to the [Page7:] well-known and separately-administered arbitration activities of the ICC International Court of Arbitration.

The Centre is supported in its administration of the Expert Rules by a Standing Committee, comprising up to 15 members from outside the ICC, who are typically active in dispute resolution as external or in-house counsel or as experts. The Standing Committee is charged with advising the Centre on all aspects of its services pursuant to the Rules, to help ensure the quality of those services.

What are the services provided by the Centre under the Expert Rules?

Under the revised Rules, the Centre will continue to identify, upon request, experts with particular characteristics for any purpose and, when asked, to administer expertise proceedings.

The Centre can be tasked to:

- propose an expert to the requesting party or parties, which are free to accept or reject the person proposed;

- appoint an expert on behalf of a requesting party or parties, which is binding on the parties by their prior agreement; or

- administer expert proceedings, ensuring that the expert’s mission is well-defined and well-fulfilled.

Experts can act as witnesses in arbitrations, advise tribunals on whether a contract has been properly performed, or provide an opinion on specific technical aspects of a case relevant to liability or damages.

Under the 2015 Rules, these activities have been explicitly extended to cover these services in relation to ‘neutrals’ as well as experts. Neutrals are individuals who, for instance, may act as mediators or dispute board members, or assist parties in relation to a dispute or similar procedure that is not administered by the ICC.

The Centre’s services under the Expert Rules can be provided in isolation (for instance where the parties need expert advice on the application of a specific clause of a contract) or within an existing procedure (for instance, parties involved in arbitration, or members of an arbitral tribunal, may require an independent expert opinion on a question relevant to the merits of a case).

From 2002 to 2013, the Centre made 135 proposals and 48 appointments of experts and neutrals, and administered 17 expert proceedings. In 2013 alone, the Centre made 16 proposals and 7 appointments, and administered 4 expert proceedings. These figures are in addition to the internet generic top-level domain name disputes administered by the Centre in 2013 and 2014, discussed further below.

Since 2002 there has been an increasing trend in the number of requests to the Centre. This is in keeping with the overall increase in the number of disputes referred to the ICC arbitration in the same period, as shown in the chart below, and follows the introduction of the 2003 Rules.

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In the last twelve years, growth in the Centre’s activity has mostly been achieved in line with growth in overall dispute activity – consistent with the fact that a significant proportion of the Centre’s work relates to requests for proposals of experts made by ICC and other tribunals – rather than by increasing the proportion of disputes in which the Centre’s services are used. The number of requests (excluding in relation to disputes arising from top-level internet domain names) was relatively stable at approximately 2% to 3% of the number of ICC arbitration cases filed, although this proportion has varied significantly from year to year.

A request for a proposal or appointment can take between a few days and a few weeks for the Centre to execute, depending on the scarcity of the expertise sought.

The output of an expert engaged in a dispute resolution process is typically a written report summarizing the expert’s conclusions and reasons. This may be supplemented by the giving of evidence before a tribunal or in another setting or, in the case of an expert proposed by the Centre becoming a party-appointed expert, by that expert working with an appointing party to address particular issues.

Who uses these services?

The services of the Centre are available to any party.

On the one hand, these services complement the arbitration services of the ICC, in that arbitrators hearing ICC cases can request the Centre to propose an expert at no cost to the disputing parties. In 2013, such requests made up approximately half of the requests to the Centre.

Requests can also be made – jointly or individually – by the parties involved in, or anticipating, ICC arbitration. In addition to the option of requesting the proposal or appointment of an expert, under the new Rules, parties to an ICC arbitration will collectively be able to request, free of charge by the Centre, the proposal or appointment of a neutral to act as a mediator in relation to those proceedings.

On the other hand, the ICC’s expert services are also more widely available to any entity seeking experts or neutrals in non-ICC dispute proceedings, including court proceedings, or for general business purposes or negotiations such as, for example, setting a price for a share buy-out.

Relatedly, the Centre has also in recent years received and fulfilled requests for the proposal of experts by non-ICC tribunals.

Turning to the skills sought by users of the Centre’s services, over the last five years, some 70% of the experts and neutrals appointed by the Centre have brought technical skills to bear, with the remaining experts split evenly between financial and legal expertise.

In recent years, the sectors generating the greatest demand for the Centre’s services included construction (37% of the requests), energy (16%), industrial equipment (11%), finance (8%), food/agriculture (8%) and transport (6%).

What services are users seeking via the Centre?

The value of an expert or neutral – however identified – to a tribunal or party lies in the expert bringing rare expertise to the relevant question, and/or the individual put forward being independent and neutral with respect to the issues being resolved.

The value of the Centre specifically as a proposing or appointing authority lies in:

- the Centre’s cost-efficiency in finding candidate experts, based on its accumulated experience in searching for experts with uncommon skills, and its unrivalled network through the ICC’s global organization and national committees, supported by the Centre’s Standing Committee; and

- the Centre’s neutrality and independence in relation to disputing parties.

Individuals proposed by the Centre might be engaged as party-appointed experts by one or more sides in a dispute, or as a tribunal-appointed expert, or for more general negotiation or other business purposes. Sometimes the conclusion of an expertise proceeding may go to one aspect of a wider dispute between the parties, while on other occasions the output of the expertise may be at the heart of the disputed issues.

Experts or neutrals can be requested, for example, to advise the parties to a contract on technical or financial matters before a contract is [Page9:] signed, intervene during the life of a contract to opine on the applicability of a specific clause or on the way in which it should be interpreted in light of the facts, determine the value of an asset or of shares in case of a transfer of shares or a share issue, appraise the quality of a product or of a building project, or investigate whether the performance of an industrial plant is in conformity with the specifications that have been laid down. A court or arbitral tribunal might be in need of an expert to provide an independent second opinion on a legal, financial or (more frequently) technical matter, potentially relevant to the outcome of the case, and seek a proposal for this purpose. A neutral may additionally act as a mediator or a dispute board member.

Examples of typical questions addressed by experts put forward by the Centre include:

- Is particular equipment operating in conformity with the contractual specifications?

- What costs would be incurred to bring a plant to required standards at the end of a Build-Operate-Transfer contract?

- What caused the failure of a particular piece of equipment?

- What are the causes of the delays to a construction project, and what delay arose from each cause?

- How should a clause in a contract be interpreted under the applicable law?

- What is the fair market value of a parcel of shares?

The opinion of the expert may or may not be binding on the parties in the context of a pre-defined negotiation or dispute resolution process. Even if an opinion is not binding, it may be difficult in practice for a party to question the findings of a neutral expert, and his or her conclusions will often constitute evidence that parties to a dispute and/or a court or tribunal will rely upon.

When the Centre administers expert proceedings, it takes on a role that extends beyond the date of the proposal or appointment of the expert, to include: dealing with any issues arising in relation to the expert’s independence or impartiality, or competence; reviewing whether the expert’s mission meets the requirements laid down in the Rules; ensuring that the expert determines a procedural schedule for the proceeding in a timely way; scrutinizing the expert’s draft report to ensure that the expert gives reasons for his or her findings, potentially requiring modifications to its form, and making any suggestions for the consideration of the expert relating to points of substance that arise during the Centre’s review.

Internet domain name disputes

The majority of the activity of the Centre relates to individual disputes. However, in 2013 and 2014 the Centre saw a large volume of activity in relation to the introduction of new generic top-level domain names (gTLDs) to the internet by ICANN.

By agreement with ICANN, the Centre put in place procedures based on the existing Rules to administer objections relating to potential violations of generally accepted legal norms of morality and public order (Limited Public Interest Objections), and objections based on allegations that there was substantial opposition to the gTLD application from a significant portion of the community to which the gTLD string may be explicitly or implicitly targeted (Community Objections). Objections on two other grounds were handled by other institutions.

The Centre administered such cases under the then-applicable 2003 version of the Rules, supplemented by a practice note on the administering of such cases. Some 137 objections were filed.

The ICANN project illustrates how the Centre’s services can be tailored to specific needs and purposes, and could set an example for other similar initiatives in the future.

How does the Centre identify experts?

The Centre’s first objective in seeking an expert is to meet the criteria set by the party or parties involved in the request, and the requirements of the specific case under consideration. These criteria often go beyond specific training and experience to include language capabilities, nationality restrictions, place of residence, and availability in particular periods of time. Parties often provide long lists of individuals or organizations that would not be acceptable for the particular role due to a prior involvement in the dispute or other potential conflict.

In identifying experts or neutrals for such roles, the Centre makes use of its accumulated experience in identifying experts and its own extensive network of experts and neutrals and universities, professional bodies, and other organizations useful in identifying experts and neutrals. In addition, the Centre taps the networks of the ICC’s National Committees and Groups and [Page10:] the Centre’s Standing Committee. The work of identifying relevant experts for a particular role can involve chasing down several leads, many of which may prove fruitless, in order to identify the most suitable expert.

Under the Rules, the Centre makes significant efforts to guard the confidentiality of the requests it receives and to ensure that any individual who becomes aware of confidential information through the Centre’s fulfilment of a request similarly maintains the confidentiality of that information.

The Centre asks potential experts or neutrals to sign a statement of acceptance, availability, impartiality and independence, in particular asking potential experts or neutrals to disclose any facts or circumstances that might call into question the potential appointee’s independence or impartiality. Depending on the size of the pool of potential appointees, qualifications on any of these dimensions may constitute a reason for the Centre not to put a particular candidate forward or, as per the Rules, would cause the Centre to draw any qualifications to the attention of the requesting party or parties and invite comments from them before confirming a proposal or appointment.

The Centre makes all reasonable efforts to find an expert that meets the relevant criteria. However, this is not always possible. In such cases, the Centre may ask the requesting party or parties whether they would prefer to have more than one expert with complementary skills put forward, or whether the request can be modified.

Under the Rules, the formal proposal or appointment of an expert is made by the president of the Centre’s Standing Committee, or one of the vice-presidents, on advice from the Centre.

Who provides these services and why?

Experts proposed or appointed by the Centre are respected professionals in their field of technical, financial/accounting, legal or other endeavour. Many are engaged primarily in professional services in their respective fields, as consultants or advisers such as consulting engineers, construction specialists, accountants, lawyers or bankers. Although some spend a high proportion of their time on dispute-related matters, others may have only limited experience of disputes.

It is not unusual for investment banks, accounting firms or consulting firms to be appointed in relation to valuation issues. Such issues arise especially in situations relating to buy-out clauses contained in shareholders’ agreements, which often rely on a third party valuation as part of setting the buy-out price.

Although it is paramount that the identity of the parties and the nature of the dispute in which an expert or neutral is involved remain confidential, appointed experts and neutrals would generally be able to tell actual and potential clients that they had accepted an appointment by or through the Centre: the prestige associated with such an appointment represents a significant benefit to an expert or neutral. It is typical for experts to be paid for their time.

How can interested experts or neutrals get involved?

The Centre does not maintain a list of approved experts, and there is no pre-qualifying process for potential experts.

Experts and neutrals interested in being considered for appointment or proposal can send their details to their relevant ICC National Committee or Group, and to the Centre itself. However, the majority of experts and neutrals put forward by the Centre so far have been approached by the Centre through its research, without the expert or neutral having made prior contact with the Centre. [Page11:]

What does the future hold?

The Centre looks constantly at how it can provide an excellent service to its existing users and ensure that parties and arbitrators consider using the Centre’s services at appropriate stages in disputes and negotiations.

The Centre is currently in the process of expanding its network of contacts in order to ensure as far as possible quick and appropriate identification of experts in relation to particular requests, and is looking at ways in which it can support experts with guidelines and checklists they can use when conducting proceedings.

The launch of the revised Expert Rules provides an opportunity for the Centre to raise awareness of the services it provides among potential users. As the global economy becomes ever more complex, it appears likely that the need for experts and neutrals in dispute resolution will continue to increase. During the launch of the new Rules the Centre will be seeking to learn how it can enhance the value its services offer actual and potential users.

1
The ICC’s 2015 Expert Rules comprise three discrete sets of rules: the ICC Rules for the Proposal of Experts and Neutrals, the ICC Rules for the Appointment of Experts and Neutrals, and the ICC Rules for the Administration of Expert Proceedings. They are published together in ICC Publication 869, currently available in English, French and Spanish, downloadable at www.iccadr.org. This publication also contains suggested clauses for use by parties wishing to provide in their contracts for recourse to the ICC as appointing authority or administering institution for expert proceedings.