Florian Wettner features in the IR Global Disputes Virtual Series – Fairness & Impartiality: Are witnesses truly independent in your jurisdiction?
Foreword by Andrew Chilvers
Global commerce is by its nature a complex beast and it is inevitable that sometimes disputes arise between companies doing business across the world.
As more international deals are signed off – often in greater degrees of complexity than will have been done in the past – it has also led to a rise in the number of disputes that end in arbitration.
Indeed, international arbitration was the preferred method of dispute resolution for 97% of respondents in the 2018 International Arbitration Survey, conducted by the School of International Arbitration at the Queen Mary University of London, in association with White & Case LLP.
Moreover, 99% of respondents said they would recommend international arbitration to resolve cross-border disputes in the future – which shows the strength of the system across the world.
An important aspect of the arbitration process is the use of expert witnesses. There are few cases where an expert witness is not called on to give evidence on a range of technical, financial, legal and, on occasion, scientific issues to help the arbitration tribunal to understand the evidence on complex matters and help them form a decision.
Those involved in disputes must be aware of how expert – and also the fact – witnesses are used in different jurisdictions, as this can vary markedly between territories.
The independence of witnesses is a subject that crops up repeatedly – especially around who they serve, their effectiveness and how they are viewed by judges in arbitration tribunal panels.
Another factor that must be considered is the different rules between jurisdictions and the impact that can have on proceedings. Many jurisdictions have their own arbitration rules, and there are also the international ICC and IBA rules to consider, among others. Often, the litigant will try to steer proceedings to use their home rules – and if they are unfamiliar to the other party, they will need to engage experts in the local laws.
How important are cross-cultural issues regarding arbitration rules and witnesses in your jurisdiction?
Depending on the matter in dispute, cultural issues might play a role regarding the formation of the arbitration tribunal. When choosing the arbitrators, advisers should have in mind their cultural and, as part of this, legal background and if this fits with the case of the client and its strengths and weaknesses. In particular, as regards the taking of evidence it can make a difference if the arbitrators have a common or civil law background, even if a given set of procedural rules applies.
Cross-cultural issues have been addressed institutionally in the 2018 amendments of the arbitration rules of the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit, or “DIS”), Germany’s most important arbitration institution. The so-called Arbitration Council was created which consists of 15 members from at least five different countries. Since the council is empowered to hear and decide upon various procedural issues, necessarily different views from different jurisdictions will be considered in that regard.
How important is witness independence when attempting to solve complex, transnational disputes? What roles can practitioners play to test for independence?
In German litigation, the main distinction is to be drawn between witnesses in fact on the one side and experts (expert witnesses) on the other and, as regards the latter, between experts appointed by the court and experts appointed by one of the parties.
Witnesses in fact do not have to be independent or impartial by definition. Actually, in many cases, they will be neither the one nor the other. Their testimony just has to be credible. When assessing their credibility the court has to factor in aspects as a possible dependence from one of the parties (economically, on a relationship level, etc.). From a common law perspective, it might be notable that German courts in view of the credibility of witnesses generally do not appreciate if those have been too much prepared by the advisers. Therefore, mock trials are rather unusual, and generally preparatory measures should be applied diligently in order not to disavow the own witnesses.
The independence and impartiality of an expert (witness) are keys in order to be appointed by the court. Such experts can be challenged and dismissed for not being independent and impartial. As regards experts appointed by the parties, however, that’s a different matter. A party will appoint a particular expert just because he is able and willing to support the position of that party which, last but not least, also pays him. But in order for that party-appointed expert to have value, it must be someone reputable in the special field of expertise. Such a reputable expert will not render an opinion contrary to what is professionally arguable. Therefore, experience shows that well-chosen party experts can generally be a useful means of evidence in German litigation.
Although IBA rules are not binding internationally, how important are they for arbitration rules in your jurisdiction?
In mere national cases, parties and tribunals stick to the evidentiary rules they know, i.e. based on the civil, ultimately German, law principles. In transnational disputes, in particular with parties from common law as well as from civil law jurisdiction, the IBA rules are often referred to by arbitral tribunals and parties. The rules are particularly helpful in strengthening the consensual nature of the arbitral tribunals and in enhancing acceptance of procedure and awards by the parties.