This Dossier XV of the ICC Institute of World Business Law deals with the prevention of disputes and their settlement through two specific institutions largely used by the international business community to reduce the risk of being involved in long and complex factual disputes: Expert Determination and Dispute Boards.

These two institutions are never very far from arbitration. Historically, the difference between the individual in charge of settling a procedural dispute and the one appointed to make a binding assessment of facts was not very clear. In Roman law, arbitration was a dualist institution. On the one hand, the arbiter was resolving a dispute; on the other hand, the arbitrator intervened to fix the price in a contract of sale or the amount of a rent. This distinction has left its impact in many modern legal systems. For instance, article 1592 of the French Civil Code, in its 1804 version, contemplated that the price of a contract of sale could be fixed through the "arbitration" by a third party, which is an obvious reminiscence of the Roman "arbitrator". It is only with the 2016 revision of the French Civil Code that the reference to arbitration was removed from article 1592 and replaced by the concept of assessment by a third party. The Dutch "bindend advies," much more sophisticated and adapted to the needs of modern times, as shown in this Dossier, has the same historical roots. The same applies to the German Schiedsgutachten. Comparative law provides many other examples.

One of the merits of this Dossier is to explain, based on practical experience, how experts may often play a very similar role in international business relations. English law seems to be at the origin of this practice. In England, the parties may traditionally obtain a determination by an expert in charge of fixing the amount of the rent payable by the tenant, the adjustments to the price payable under a share sale agreement or making any other decision that will be contractually binding to them. The ICC 2015 Expert Rules have recognized that fact and their introduction points out that although in principle, experts’ findings are not binding, parties may agree to give such findings the force of a contractually binding expert determination, subject to the applicable law. This type of procedure is of frequent use today in mergers and acquisitions transactions throughout the world, even in civil law countries where it raises difficult and interesting legal issues. This Dossier explores some of them, while clarifying the relationship between expert determination and arbitration is not an easy one. It concerns first the distinction between the two legal institutions, which in some cases may be arduous but has important consequences. The introduction to the ICC 2015 Expert Rules also points out that, in all cases, an expert appointed under the Rules is not an arbitrator and the expert’s findings are not enforceable like an arbitral award. It is thus recommended to precise in any contract clause providing for expert determination that the expert is not an arbitrator in order to avoid a dangerous confusion. However, the difficulties do not stop there. The value that the arbitrators must give to the expert’s determination, if used by one of the parties in the arbitration proceedings, is a debated issue. As the expert’s determination is not an arbitral award, it is not res judicata. Yet, as it is binding for the parties, should it not be binding for the arbitrators as well? The contractual characterization of the expert’s determination cannot provide a complete answer to this question. There is no doubt that if the determination of the expert is tainted by fraud, the arbitrators must disregard it, as they would have to disregard a contract clause obtained by fraud. Nevertheless, the determination may also show manifest errors of assessment or the conduct of the expert proceedings may reveal gross negligence which explains such manifest errors. The arbitrators are not supposed to judge in appeal the procedure followed by experts that they have not appointed and who may have produced their determination years before the beginning of the arbitration. To be on the safe side, the parties must deal with these problems in their contracts and provide that the experts’ determination will be binding for the arbitrators, unless it is established that it was affected by fraud, manifest error, gross negligence and the like. It will not avoid all difficulties but probably the more serious ones.

Dispute boards are the other main topic of this Dossier. It is of particular importance in the construction industry where dispute boards play a very significant role. They have progressively replaced the engineer appointed by the owner in provisionally resolving the disputes that necessarily arise during any construction project. Provisionally, because the decisions of the dispute board are subject to appeal to an arbitral tribunal, but in practice the decision of the board often remains final. The independence and the expertise of the members of the dispute boards, in particular when they act under the rules of serious and experienced institutions such as the ICC, explains this considerable progress. Indeed, with such decision makers, the parties hesitate to embark into arbitration proceedings likely to confirm the dispute board decision.

I cannot conclude this foreword without words of thanks to the two members of the Council of the ICC Institute of World Business Law who organized the 2016 Annual Meeting and the publication of this Dossier. Professor Filip DeLy, at the same time an arbitrator and an eminent comparatist and Maître Paul Gélinas, who combines the experience of arbitration and an active and recognized practice of dispute boards. They have been able to convince the best specialists to participate and share with practitioners and the business community in general their invaluable knowledge.