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Young ICCA, Skills Training Workshop, Factual & Expert Witnesses


Post-Event Report

17 September 2013, Portoroz, Slovenia

FACTUAL & EXPERT WITNESSES

Nhu-Hoàng Tran Thang [1]

Introduction

On 17 September 2013, Young ICCA held its first event in Slovenia, in a seaside resort called Portoroz, located about an hour away from the capital Ljubljana. Young ICCA members as well as local based young practitioners and students gathered to participate in a dynamic discussion on witness and expert evidence, led by a diverse panel representing the standpoints of counsel, experts, academics and arbitral institutions, namely Marko Djinovi? (Secretary General of the Permanent Court of Arbitration attached to the Chamber of Commerce and Industry of Slovenia), Stephen P. Anway (Squire Sanders New York), Christina Cathey Schuetz (Clifford Chance LLP London), Remy Gerbay (Queen Mary, University of London), Santiago Dellepiane (Compass Lexecon New York), Sirshar Qureshi (PricewaterhouseCoopers, Prague) and Rostislav Pekar (Squire Sanders Prague).

The event was preceded by informal drinks in the paradisiac setting of a seaside cocktail club in Portoroz, in the evening of 16 September. The speakers were welcomed by Young ICCA’s Events Team member Perrine Duteil, along with Maja Menard, Sandra Kajtazovic and Blerina Xheraj from the organizing committee for this event. Although the majority of participants and speakers came from Europe, some did not hesitate to make the trip from the US or Ghana.

The workshop proved to be highly practical and participative. In particular, and to the best of my knowledge for the first time, participants were given the opportunity to complete practical exercises. These exercises were highly appreciated by the participants, in particular those who do not practice international arbitration on a regular basis. This also served as an immediate illustration of what had just been discussed in detail by the members of the panel.

The format proved to be very effective. While less experienced lawyers enjoyed a useful recap of the basics of drafting witness statements or cross-examining experts, the speakers were able to maintain a high-level discussion, including some enlightening anecdotes.

I.       Factual witnesses

The first session of the workshop was dedicated to factual witnesses. Mr. Stephen P. Anway, partner at Squire Sanders in New York, introduced the subject, touching upon, amongst others, the divide between common law and civil law traditions. Mr. Anway explained that common law systems put more emphasis on oral evidence. He referred to the example of depositions prior to the witness hearing, which are very rare in international arbitration but commonly used by common law trained lawyers in their home jurisdictions. The typical procedure that is applied in international arbitrations is thus the result of a compromise between these two legal cultures.

Mr. Anway further elaborated on the applicable rules and the role of the IBA Rules on the Taking of Evidence in International Arbitration. He mentioned the importance of the first procedural order issued by the arbitral tribunal in this regard. This decision is in general the primary source of rules applicable to witness evidence in international arbitration. However, other rules may apply. By way of example, Mr. Anway mentioned his own experience of dealing with ethic rules applicable to English solicitors, who are precluded from preparing witnesses in advance of the hearing.

Mrs. Christina Cathey Schuetz, from Clifford Chance LLP London, followed with a fictional example of a dispute in which no documentary evidence of the underlying agreement is available. This situation is the typical example where witness evidence becomes crucial. Indeed, while documents constitute the most persuasive evidence, there can be gaps or questions arising from the documents available. Another value of witness evidence is the human dimension that it brings to the presentation of the case made by a party. In that sense it allows arbitral tribunals to get the "big picture" of the case, and gives a good opportunity to address adverse facts to the Parties.

Mrs. Cathey Schuetz continued with tips for witness selection: one should first determine the case theory, and assess any gaps in it. Witness evidence will be used to fill these blanks, and the witnesses need to be chosen with this idea in mind. The ideal witness has first-hand knowledge of the facts to be proven. However, counsel may face difficulties in the witness selection. Companies vary from one to another as to their organization and communication policy. You may thus find yourself with a CEO who speaks on behalf of the company but has no or very little knowledge of the facts you are trying to establish. In the above fictional example of a contract breach, the ideal witness is likely to be found in the procurement department of the company, amongst people who actually participated in the negotiation of the agreement underlying your arbitration. Mrs. Cathey Schuetz further mentioned the sine qua none condition that the witness be available, and the importance of considering a witness’ temper before putting him on the stand.

As to the drafting of witness statements, Mrs. Cathey Schuetz stressed the importance of structure. In our fictional example, such structure could be as follows: 1) information about the witness; 2) short table of content: 3) background of the (missing) agreement (e.g. history of the negotiations); 4) performance of the agreement; and 5) issues arising thereof. The structure can also be derived from the one used in the opposite party’s witness statements, in order to mirror them. Finally, witness statements should always be dated and signed, and accompanied by an affirmation of truth.

The above speeches were followed by an interactive session during which the panelists shared anecdotes with the participants, mentioning practical issues that arise in relation to witnesses. Amongst them are the pervasive issues of having multiple witnesses testifying on the same facts, and thus repeating the same statements; the logistics of bringing witnesses to the hearings; or the situation in which the adverse party does not call the witnesses you propose for cross-examination.

After that, Mr. Rémy Gerbay, academic specializing in international arbitration at Queen Mary University of London, spoke about witness oral evidence, starting with general tips for handling witnesses at the hearings. In this regard, every counsel should care about the reactions of the members of the arbitral tribunal and adapt thereto. For instance, counsel should suspend their questioning when they notice that the arbitrators are taking notes. The general advice is thus to pace oneself and follow the arbitral tribunal’s rhythm of absorption.

Mr. Gerbay then turned to direct examination and established a check-list to prepare for it. The first question that arises is whether direct examination will be permitted. In the affirmative, the direct-examination should consist of the following: 1) a short introduction of the witness and a request that he confirm his witness statement(s); 2) asking the witness whether he wants to change anything in his witness statement(s). Counsel should also keep mindful of anticipating the question "who drafted this witness statement?", and keep documents handy during their questioning.

With regard to cross-examination, Mr. Gerbay stressed that it is crucial to know what you are aiming for when starting it. You should already know the precise words and admissions that you want the witness to speak out when starting to cross examine him. Other tips include phrasing your questions precisely, being brief, having fallback questions prepared; facing the arbitral tribunal while at the same time listening carefully to the witness’ answers, and adapting the style of questioning to the arbitral tribunal.

The ensuing discussion included plenty of practical anecdotes by the panelists. In particular, Mrs. Cathey Schuetz gave a concrete description of the set-up of a hearing, as well as pieces of advice on how to avoid "faux-pas" in the hearing room. By way of example, witnesses should never have documents with them when testifying. This could indeed give the impression that they were heavily coached by counsel. Similarly, if experts wish to fill in questions to counsel, they should do so discreetly. Mr. Anway mentioned the issue of expert sequestration, the panelists agreeing on the fact that this measure is of little consequence since the experts will have access to the transcripts.

The first session ended with a practical exercise involving corruption-related issues, during which both speakers and participants engaged in simulations of cross-examinations.

II.    Expert witnesses

The second session of the workshop was dedicated to expert witnesses. The participants were lucky to hear two of them "testify" about their experience of the stand.

Mr. Santiago Dellepiane, Senior Vice President at Compass Lexecon, introduced the subject (oriented on quantum experts) with the striking example of a recent and unprecedented CRICRA award in which the arbitral tribunal ordered the respondent to pay USD 936.94 million in damages to the claimant, of which USD 900 millions were awarded as compensation for lost profits. Mr. Dellepiane explained that in this case, the Respondent did not submit any expert evidence. He analyzed that the arbitral tribunal was probably convinced by a single expert report on damages. This is the reason why expert evidence is crucial in arguing your case.

As to expert selection, Mr. Dellepiane advised the audience to make sure during the interview process that the expert chosen will have sufficient time to devote to your case. This means that the expert should be the project manager, since this would ensure that he would work primarily on your case. You may also want to opt for an expert who has a certain experience of cross-examination. Mr. Dellepiane mentioned that the appointment of experts can occur very early on, i.e. before the request for arbitration is filed.

Mr. Dellepiane went on with the five "must-have" features of a good expert report on quantum: 1) the basis of the damage calculation, or the client instructions, since the analysis cannot be detached from the case; 2) a discussion of the method of calculation used by the expert, including the corresponding appropriate disclosure; 3) a synthesis of the problem; 4) the solution; and 5) the numbers.

Mr. Dellepiane also spoke about the coordination of work with counsel from the expert’s standpoint. The audience was able to benefit from his advices, including, for example, his advice not to cross-examine an expert without understanding the subject-matter of his report, or to refrain from imposing assumptions on the expert when these assumptions constitute the subject-matter of his report.

In order to comply with their duty of diligence, experts (on quantum) will usually request to review a certain amount of documents before issuing their opinion. These documents will include business planning documents, price history, financial models, letters of intent, third party evaluations etc. It is crucial that counsel provide the experts with all documents available. Surprising your expert by withholding documents might lead to a disastrous confrontation with the other side’s expert at the hearing.

Finally, the role of the expert is sometimes to help counsel make his client client realize what difference there is between the "value" he gives to his business or project, and the actual "valuation" of this business or project.

After a dynamic series of questions and answers, Mr. Sirshar Qureshi, Partner at PricewaterhouseCoopers in Prague, submitted a fictional expert report on quantum to the participants, who were to spot the weaknesses contained therein. Mr. Qureshi entertained active exchanges between the participants and the speakers, who "corrected" together the flawed expert report.

The exercise served as an excuse for further debate on expert evidence, including the use of hot-tubbing, or the conflicts of interest they have to manage.

Conclusion

The workshop ended with a lunch at the same venue (Kempinski Palace), and was followed by a boat cruise to Piran, a charming town near Portoroz. It was a true success in terms of participation and interaction between the "Young ICCAs" and very experienced professionals of international arbitration. The ambience of the workshop was, as always, very casual and relaxed, which allowed participants to approach speakers spontaneously. Once again, Young ICCA managed to open the doors of international arbitration to young lawyers!

 


[1] Nhu-Hoàng Tran Thang is an associate at the office of independent arbitrator Pierre Tercier.