27 October 2021
Antony Skinner, a Partner in Ashurst's projects team based in the London office, Rob Palmer, a Partner in Ashurst's international arbitration based in Singapore and Lucy McKenzie an associate based in London discuss the importance of evidencing your case.
Antony, Rob and Lucy talk about all things evidence in international arbitration – witnesses, experts and documents. In particular, some of the nuances that apply to the gathering and deployment of such evidence in the course of renewable energy disputes.
Our international arbitration team have written a special report in which they share more of their experiences of arbitrating disputes in the renewables space which is available now on the Globe Law website, or you can contact you usual Ashurst contact if you would like a copy.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Listeners should take legal advice before applying it to specific issues or transactions.
Welcome everyone. My name is Antony Skinner and I'm a partner in Ashurst's projects team based in the London office. I advise developers and lenders in connection with the Greenfield development and financing of renewable projects in the UK, Europe and Africa.
This episode is part of a series of podcasts on the subject of renewable energy disputes. There's a series in which myself and others will hope to elicit from our market leading renewable energy disputes lawyers, the lessons they have learned from acting in renewable energy disputes, and their tips and tricks for avoiding and managing such this disputes.
Today, I'm joined by Rob Palmer, a partner from our international arbitration team based in Singapore, and Lucy McKenzie, an associate from our London office. Rob and Lucy both have considerable experience of arbitrating renewable energy disputes, and will no doubt have plenty to share with us today. Rob, Lucy. Welcome.
Thanks Antony, pleasure to be here.
Thanks Antony, looking forward to chatting as the podcast goes on.
Great. So today we're going to be talking about all things evidence in international arbitration. Witnesses, experts, and documents. In particular, we're going to be talking about some of nuances that apply to the gathering and deployment of such evidence in the course of a renewable energy's dispute.
So Lucy, clients often see witness evidence as something that they need to only be thinking about much later on in the arbitration process. Is that view correct?
Well Antony, in our experience it's best to do the opposite. It's critical that the right people able to give evidence are identified as early as possible. And in fact in our experience, one of the best things that you can do is identify the key people who can speak to the facts that underlie a dispute and undertake the exercise of obtaining their evidence in writing before the arbitration is even commenced.
And the reason for that is that the process of gathering evidence, talking to a witness, and learning about the dispute, can give really important insights into the strengths and weaknesses of a case. And that will usually inform exactly what claims are made and how they are put in the written documents commencing the proceedings. And that process of identifying strengths and weaknesses can also inform and impact settlement discussions, which might potentially avoid the need to commence proceedings altogether, or if they have already been started, to cut them short.
Now that isn't to say that the process of identifying potential witnesses of fact is an easy thing to do. Often it's not. And particularly in the context of a renewable energy dispute, the relevant factual history can cover a significant timeframe. A number of some years, which might mean that the individuals who have key, firsthand knowledge of the relevant events have left the organisation. And people's memories also change over time, so that exercise of working out what has happened in enough detail to support your case can take a long time. So it all requires a lot of thought at the outset.
Interesting. So Rob, is the position any different when it comes to expert evidence?
Look Antony, the short answer is no. We think it's absolutely critical to identify and to engage technical experts early on. And that's true in any technical dispute really, but early engagement is particularly important when we're talking about renewable disputes, and that's because there's a relatively small field of available experts who've got experience of the new and the emerging technologies that are involved here.
And by available expert, I mean not only one who's got the relevant experience to give an opinion, but also one who isn't conflicted. And that can be a real hurdle when we're talking about emerging markets, new technologies, again, with a very limited number of players.
And I should add that the pool of available experts becomes even smaller when you're looking for experts who also have experience in giving evidence in arbitration before tribunals, there you're looking for someone who's not only got the expertise to cover the technical subject matter and isn't conflicted, but one who can also present clearly and convincingly. And they also need to be able to hold up under cross-examination.
That's where we can really add value. If I haven't seen a particular individual in action, one of my colleagues in the arbitration practise elsewhere in the world probably has. So we can advise our clients not only as to who can cover the relevant technical ground, but also how they're likely to perform at the hearing. So typically it's a race at the start of any renewables dispute to secure the best experts in the field.
You want to get them onto your team before your opposition gets them on theirs really as soon as you have a sniff of a dispute.
So Rob, what kind of experts are you typically using in renewables arbitrations?
Well, to give a typical lawyers answer, that depends, and it depends really on the type of the project, the infrastructure or the technology that's involved.
Quantum and delay experts are common to almost all construction disputes, but that's just the start. As an example, we recently finished working on an ICC arbitration about a solar plant. And in that case, we had five different experts, all with different backgrounds, power plant, O & M, turbine design, metallurgy and world fabrication, health and safety, fire control, right through to forensic accounting.
And we also find it increasingly useful to have experts who can provide specific industry expertise, who can talk about the background to the particular type of technology and how it's evolved over time, or individuals who have actually worked with the equipment or the technology that's in question. Those types of expert can provide really helpful context for the tribunal and can assist with delivering key messages around the broader commercial context and the drivers for the dispute.
Okay, so you've identified and instructed your experts. What's next Lucy? They're the pro's aren't they? It's all straightforward once they're on board.
Oh, I wish that it was that straightforward, Antony. It can be far from straightforward in reality. The main task for an expert, once they've been instructed, is to prepare their expert report. Now in a renewables context, these experts are often covering very, very technical or scientific areas. So for example, they might be talking about metallurgy or forensic failure analysis or water chemistry, and these are things that whilst the expert knows exactly what they are talking about, there is an exercise of getting their opinions down in writing in a manner that can be read and understood and really absorbed by the tribunal. And that exercise is a real art.
One thing we often find, particularly when working with engineering experts, is that they are on a quest for the truth and do not always fully appreciate the legal process and what the role of an expert is in that process.
So that means it's really important for us, the lawyers, to work closely with the expert. Obviously the opinions and the report itself remains the expert's own work, but we can help with how the expert's opinions are best presented and articulated in order to ensure that the key points are conveyed, but also that the way in which those points are expressed is clear and doesn't leave the expert vulnerable when we get to cross-examination.
And another really important point relates to privilege. One thing we see quite often is that the clients have started the ball rolling by speaking to experts before they come to us. And clients are also often keen to pick the brains of their expert, with a view to getting as much information out of them as possible.
Now, whilst that is no doubt helpful to them and to their ongoing operations, it might not always be the best thing for the dispute. What is really important to remember is that any documents and communications with your expert might [falled] to be shown to the other side when the dispute reaches the stage of producing relevant documents. And what we find is that without the lawyer's involvement, clients can create paper trails that are not fully thought through and contain statements that might be taken out of context, or at worse statements that are positively unhelpful to the case.
So taking steps to avoid that happening, or at the very least to ensure that those communications are protected by legal privilege and so they don't have to be handed over to the other side, is critical.
If I could jump in there, Antony, I should add also that one other thing that needs careful consideration at the outset is how the expert will come across before the tribunal. There's a real gulf of difference between the approach to expert evidence in civil law jurisdictions, in those jurisdictions it's commonly accepted that the expert is part of the legal team, that he or she is there to advocate for the party that's appointed them. There's a difference between that and the approach in common law jurisdictions, where the expert is expected to be independent of the parties and is there to assist the tribunal.
So you need to think of the outset, about the background of your tribunal, and what approach it's likely to be familiar with and accepting of. You need to think about your opposing counsel, the approach they're likely to take, so as to void any inequality in terms of how the case is presented. And all of this will inform everything from the words on the page of the experts report to whether the expert sits alongside the legal team at the hearing or in their own breakout room.
Okay. So you've both mentioned documents now and specifically the provision of documents to the opposing party. I think what you're talking about here is the document production process in international arbitration, which I understand, but I'm sure you'll correct me if I'm wrong, is similar to disclosure in discovery and litigation. Is that right?
That's right. Antony. As you say, document production is the arbitration equivalent of disclosure or discovery in litigation, but there are some fairly key differences between the two processes.
In a litigation, the parties will often have to hand over to their opponent all documents that are relevant to any issue in a dispute, whether those documents are helpful or harmful to their case.
But in an arbitration, the process is usually much more discreet. The parties typically only have to produce copies of any documents that they refer to and rely upon in their written submissions. There is however normally a process called document production, in which the parties can make requests of the other for the production of additional specific documents or categories of documents that they reasonably believe the other party has. This process is not really intended to be as all encompassing as a litigation style disclosure process, and the requests that you make for documents have to be for narrow and specific categories of documents. And the documents sort have to be relevant and material to an issue in the dispute.
And document production is not necessarily a given, because arbitration is a consent-based process, it is down to the parties to agree that there should be scope for such a process to happen in the timetable. So in a case that's unlikely to turn one way or the other on the production of documents, the parties might agree not to have a document production process at all.
And Rob, where there is a document production phase, is there anything clients can do to make the process as efficient and effective as possible?
Yes, there is. And actually it's really important that the form and structure of the process be given very careful consideration. It's possible to, right at the start of the process, write into a procedural order, which is the document which sets out how the proceedings will be conducted, certain rules and guidelines to control the document production process with a view to ensuring that it isn't used as a fishing expedition or to cause delay the proceedings.
One thing we've found useful in a number of renewables disputes is building into the procedural order reference to both the IBA rules on the taking of evidence in international arbitration, and also the Chartered Institute of Arbitrators protocol on [e-disclosure].
Now the reason for that is that these guidelines contain provisions that are particularly helpful where there are large volumes of electronic documents, which might fall to be searched by the parties. And that's something that's often the case in renewables arbitrations.
And as we mentioned, when talking about experts, it's also important to consider the tribunal's legal background and the traditions they are familiar with. Civil law tribunals may be reluctant to order expansive document production, and that's because disclosure often is not a part of civil law proceedings. That's very different to the traditional common law approach. So being alive to what your opponents might have in mind and what your tribunal might be minded to accept can help guide your approach to the process.
There's also a number of more I suppose practical issues that might need to be considered. For example, what documents are needed, who holds them, and in what format are they held? Giving early thought to how these documents might be obtained is obviously important. In a similar vein it's important to take early steps to ring fence potentially relevant and material documents so that they don't fall within the scope of automatic document deletion and overwriting processes.
You don't want to leave yourself open to the tribunal drawing inferences when it becomes clear in due course that potentially relevant documents no longer exist. And it's also important to remember that any new documents you create might be responsive to a document production request down the line. So steps should be taken to tightly control what new documents are created.
For example, minutes of board meetings, where the issues in dispute are discussed, might fall to be produced. So all in all, lots to think about there. But the reality is that if you don't think about all of this, you run the risk that your counterparty does. And they then try to use the process to cause delay, to ratchet up legal bills, and in the worst case, completely undermine your case.
Great, thanks Rob. Now at this point in the podcast, we always ask our speakers for their best renewables dispute war story. My job is to try and avoid disputes. So can either of you share a dispute war story with us?
Sure. I have a story that picks up on something we were talking about earlier, which is communications with your experts. So some time ago now we were involved in a renewables arbitration where we acted for the owner of a power plant who was in dispute with its design and construction contractor after defects were identified in certain of the plant equipment.
During the document production stage of the arbitration, the opposition was ordered to hand over to our client copies of communications between it and the subcontractor that had designed and manufactured the particular piece of faulty equipment. And when we, the lawyers, looked at those communications, it became clear that our counterparty had been pressuring that subcontractor to provide information that would support its defence, and in their words, convince their expert that their case was correct. And the documents also showed that they had sought to prevent that subcontractor from answering our clients requests for assistance.
So when it came to the hearing, we were able to use those documents during cross-examination of our counterparty's expert to undermine his credibility and independence. Now, the emails had been written by an individual whose first language wasn't English, so you could query the extent to which the writer had the same intention by using the word convince, that we were able to attach to that word, but there was clearly room for interpretation.
And ultimately the outcome was that it rendered their expert vulnerable on cross. So I think the lesson there really is to be thinking carefully about the documents you are creating and the language you are using in those documents, and whether they are privileged. And it is really important not to forget that documents can end up the subject of a document production request, because if you do forget about that, you may find that you have unwittingly undermined your own case.
Okay, thanks Lucy. Rob?
Yeah Antony, perhaps I'll share one fairly recent experience, which relates to the issue of expert evidence. And this involves a renewables arbitration with a number of experts involved, and all of the other sides expert reports in this matter bore the hallmarks of being drafted by the lawyers concerned.
There was one particular phrase, strains credulity, and that's something that only a lawyer would write, which turned up in these reports repeatedly. And the high point of cross-examination was when one of the other side's experts, who... A very technically accomplished man, but who didn't have English as his first language, admitted that he had absolutely no idea what those words actually meant.
Now that destroyed any credibility he had with the common lawyers on the tribunal, no matter how convincing the content of his report. So I think there's a moral there about being very conscious how your expert will come across before the particular tribunal that you're dealing with, and being very cautious about directly involving yourself as a lawyer in the preparation or the drafting of the expert reports.
That's all we have have time for today.
Thank you, Rob. Thank you, Lucy.
Thanks for the time, Antony.
Thank you, Antony. Thank you, Rob.
If any of our listeners would like to get in touch with Rob, Lucy or myself, our details are on the Ashurst website. Ashurst.com.
If you'd like to learn more, look out for our next podcast in the series where my partner, Jose Antonio Rodriguez, will be speaking to Matthew Saunders and [Emmanuel Cabrero] about claims against states under investment treaties in their renewable space, a key growth area and something we should all be considering when structuring these projects.
You can also read up on this topic in more detail in the special report we have published called the international arbitration of renewable energy disputes.
Do get in touch with any of us or your usual Ashurst contact if you would like a copy of that. Thanks very much for listening and goodbye for now.
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