India: Recourse Against Expert's Report: Arbitration And Conciliation Act, 1996

Arbitration proceedings can involve disputes that require an expert's opinion to assist the arbitral tribunal in technical, scientific, and financial matters, at times. An expert may be appointed under the Arbitration and Conciliation Act, 1996 (the "Act"), to report on specific issues and thus assists the Arbitral Tribunal. Such experts offer their expertise in various fields including engineering, technology, accountancy and so on. The expert/s so appointed, after delivery of written or oral report, may participate in an oral hearing as well, where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

However, a mechanism or procedure to per se challenge the appointment of an expert, or the report furnished by the expert before the Arbitral Tribunal is not provided under the Act. Even though the Act provides for grounds and procedure of challenge to the Appointment of an Arbitrator¹, however, does not provide for any procedure or mechanism to challenge any report, written or oral furnished by the Expert appointed under the Act. Only the recourse under civil law, i.e., of objections or examination of witness remains, which is also subject to the Arbitral Tribunal's approval in absence of any agreement between the parties.

Despite the Act being silent on regulatory procedure as well as guidelines for expert evidence, the same are addressed by various international instruments, which contain a detailed procedure for Tribunal-appointed experts². Although international arbitral institutions provide guidelines and procedure with regard to expert evidence to some extent³, but a lack of standard procedure and guidelines still remains in ad-hoc proceedings conducted under the Act.

In the absence of a uniform standard and specific remedies, if a party intends to challenge the appointment of an expert, it is for the arbitral tribunal to assess the evidence produced by the parties and decide on the disqualification of the appointed expert. Even otherwise, there are no provisions to determine the grounds to disqualify an expert under the Act.

Some of the grounds often raised to disqualify an expert include lack of independence, not disclosing having had access to this confidential information, failure to disclose professional relationships, bias, lack of qualifications, and impartiality. However, the threshold to be met on each of the aforesaid ground is still unclear. Thus, witness examination remains the primary, legally permissible tool, available to the arbitrating parties to prove their objections and reliance on an expert's report. In practice, challenge to an expert's report has been done through a written communication/affidavit to the tribunal, or during the hearing itself.

Even though the Act expressly excludes the applicability of the Indian Evidence Act,1872⁴, the concept of expert witness is not far from the description made therein⁵. In the absence of guidelines under the Act for raising objection against an expert's opinion during Arbitration, reliance is often placed on decisions of Courts pertaining to the provisions of the Indian Evidence Act.

In State of HP vs. Jailal, (1999) 7 SCC 280, the Hon'ble Supreme Court held "in order to bring the evidence of a witness as that of an expert, it has to be shown that he has made a special study of the subject or acquired special experience there in, in other words that he is skilled and has adequate knowledge in the subject". Moreover, the expert witness also should give his reasoning along with the basis for his opinion, a mere assertion is not sufficient.⁶

The Hon'ble Supreme Court of India has also held that the arbitral tribunal is not bound by the opinion of the expert witnesses since the opinion of experts are advisory in nature⁷. When an expert's report is relied upon by an arbitral tribunal, the said report, and all documents, goods, or other property in the possession of the expert, with which he was provided in order to prepare his report, must first be made available to any party who requests for these things. Secondly, once the report is arrived at, if requested, parties have to be given an opportunity to put questions to him and to present their own expert witnesses in order to testify on the points at issue.⁸ The aforesaid are important pointers to what is contained in the ground of challenge to an Arbitral Award.

Therefore, in practice, despite the examination of an expert witness and/or raising objections, the only remedy available to an aggrieved party is setting aside the Award⁹, which is passed relying on the said opinion/ report of an expert.

Footnotes

1. Section 12 and 13 of the Act.

2. Article 21 (Expert to Arbitral Tribunal) of the 2020 LCIA Arbitration Rules, Article 29 (Experts Appointed by the Arbitral Tribunal) of the 2013 UNCITRAL Arbitration Rules, and UNIDROIT Principles of Transnational Civil Procedure, 2006.

3. IBA Rules on Evidence, and CIArb Practice Guideline and Protocol on Experts provide guidelines governing expert evidence in International Arbitrations. The 2016 UNCITRAL Notes on Organizing Arbitral Proceedings (Note 15 (Experts) also contain guidelines on the use of appointed experts.

4. Section 19(1) of the Act.

5. Section 45 and 51 of Indian Evidence Act, 1872.

6. State of Maharashtra vs. Damus/o Gopinath Shinde and others, (2009)9 SCC 221.

7. Malay Kumar Ganguly vs. Dr. Sukumar Mukherjee, (2006) 6 SCC 269.

8. Ssangyong Engineering and Construction Company Limited vs. NHAI, (2019) 15 SCC 131.

9. Under Section 34 of the Act.

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