This Article aims to point out some simple but to the point and very useful tips which can be taken into account by the arbitration practitioners and in-house counsels during their preparation for and conduct of the arbitration hearings.
This Article is consisted of three main sections namely (i) Importance of the Hearings in Arbitration Proceedings, (ii) Preparation for the Arbitration Hearings and (iii) Conduct of the Arbitration Hearings.
We hope that these short tips based on our experiences derived from previous arbitration hearings will be helpful for all arbitration practitioners and in-house counsels who will read this Article.
A. Importance of the Hearings in Arbitration Proceedings
Very well-known American arbitration practitioner Mr. Doak Bishop in its book named “The Art of Advocacy in International Arbitration” says: «A good case rarely happens by itself. A case that is thoroughly prepared, sharply focused, supported by concrete evidence, and properly presented is far more likely to be persuasive than one that is not. While the facts and the law form the fundamental matrix, a good case is the product of substantial efforts by good lawyers painstakingly reviewing documents, interviewing witnesses, researching the law, strategizing and focusing the case, and developing compelling written and oral presentations»
Arbitration proceedings generally contain two main phases:
(i) Written Phase: Memorial/Statement of Claim, Counter Memorial/Statement of Defence, Reply, Rejoinder and Post Hearing Briefs (if necessary)
(ii) Oral Phase: Hearings on Jurisdiction, Merits and Damages
International arbitration proceedings contain different procedures and styles of advocacy due to the fact that counsels and arbitrators are from different civil or common law countries.
The mixing of oral advocacy and adversarial traditions of common law countries like the US and the United Kingdom and the written advocacy and inquisitorial traditions of civil law countries result in harmonized procedures of different judicial systems.
In the arbitral proceedings where the hearings take place, oral submissions by the parties and the cross-examination of the fact and the expert witnesses during these hearings are critically important for the arbitral tribunals to form their final views about the case before rendering their awards.
When the hearings are concluded the arbitrators are left with the written presentations and the witness statements which will be reviewed by them for days or months. Therefore, although the counsels should give their messages to the arbitrators clearly and convincingly in these written submissions, the counsels should sharply focus on critical points in their oral submissions during the hearings as well.
For decades, interviews with the arbitrators have indicated that the arbitrators develop their own version of a case story by the end of the hearings. Most of them have started to form the story before the end of the opening statements submitted by the parties’ counsels.
B. Preparation for the Arbitration Hearings
In practice, the parties and the tribunal determine the general rules of the conduct of a hearing at the beginning of the arbitration proceedings with an order named Procedural Order No. 1, which contains provisions about how the witness and expert testimony is realized, timing of submission any additional evidence prior to the hearing and some other procedural matters as to the interpretation and transcription during the hearing. Subsequently, the pre-hearing conference is held by the parties and the tribunal just before the hearings to set the firm and final rules to conduct these hearings.
Chronology of Key Events: In some arbitration cases, especially in wide scope investment arbitration cases, the arbitral tribunals prefer to receive a chronology of key events before the hearings. This helps the tribunals to see the sequence of the events and understand when and how the dispute arose between the parties. The chronology of key events also makes it easier for the tribunals to see the critical points of the case and to understand the factual arguments of both parties.
Hearing Bundles: Hearing bundles are one of the key documents which need to be prepared by the parties before the hearings. Hearing bundles contain the core factual and legal exhibits, fact and expert witness statements previously submitted together with the briefs submitted by the parties during the written phase of the arbitration proceedings. Hearing bundles are submitted to the arbitral tribunal by the parties before the hearing and these bundles are used by the parties and the arbitral tribunal to refer to core and important evidence during the hearing.
Opening Statements: Presentation of each party’s case in the format of an opening statement should not be underestimated for the following reasons:
(i) The opening statement is often the first opportunity for the advocating orally and directly to address the tribunal face to face;
(ii) To clarify the facts and the law by correcting any misunderstandings existing in the written pleadings;
(iii) To answer the questions asked by the tribunal;
(iv) And most importantly to summarize all written pleadings submitted until the hearing to ensure the arbitrators to see the most important facts and the big picture in the case.
Many counsels prepare some form of written notes to help them in presentation of their opening statements. This product can be in the form of an outline. In addition to counsel’s written note, another useful approach is to hand out to the tribunal at the beginning of the opening statement a PowerPoint presentation. In fact, this is the most preferred method for the counsels. It allows the tribunal to see the overall structure of the submission. Secondly, an outline or PowerPoint presentation can be very helpful to refer to a specific exhibit, a witness statement or to a legal authority. Thirdly based on its scope and length an outline or PowerPoint presentation may mitigate the need of the tribunal to take extensive notes during the opening statement. Having said these, counsels should refrain from preparing overburden presentations which may lead to lack of concentration of the arbitrators.
Opening statements are often effective when they make reference to documentary exhibits. This may entail cross-references to a main bundle, asking the tribunal to look at the hearing bundles’ relevant parts during the hearing. This may help the tribunal to familiarize with the documentary record as well as encouraging some physical movement by each arbitrator to reduce the possibility of falling asleep while listening to the counsels. While preparing the opening statements, the counsel should put himself/herself in the place of arbitrators and determine the facts, evidence and arguments which would be critically important and helpful to convince the tribunal to his/her case.
Preparing the Fact Witnesses for Cross-Examination: Preparing the fact witnesses for cross-examination is one of the most important tasks for the parties’ counsels. The fact witnesses should be informed by their counsels that more explanation may always contain more contradiction. Hence, the fact witnesses should focus on the direct answers to the questions asked by the counter-party’s counsel and avoid giving information more than requested.
i. Reviewing the witness statements submitted by a fact witness: The witnesses are also human, and they may forget the details written in their witness statements submitted together with the parties’ pleadings to the tribunal during the written phase of the proceedings. Hence, it would be very helpful for the counsels to refresh their and witnesses’ minds by reviewing and re-reading the witness statements together with the fact witnesses.
ii. Determining the statements / the issues which should be corrected before the cross-examination: In some cases, there may be issues or facts which may be contradicting with each other. It does not necessarily mean that the relevant witness is lying. However, if there are some issues such as dates or days or explanations in the witness statements contradicting with each other, in order to reveal the truth and protect the credibility of the witness, these parts should be determined and corrected by a verbal statement just before the cross-examination.
iii. Reviewing the witness statements submitted by the counter-party: It is also very important to read the witness statements submitted by the fact witnesses of the counter-party to analyze the strong and the weak points, also to make the fact witnesses ready for possible cross-examination questions which may derive from the facts and the issues mentioned in the statements of counter-party’s fact witnesses.
iv. Short and clear answers: The fact witnesses should be informed by their counsels that more explanation may always contain more contradiction. Hence, the fact witnesses should focus on the direct answers to the questions asked by the counter-party’s counsel and avoid giving information more than requested.
v. Avoid answering any question that the witness does not have an answer: In practice, the witnesses may feel very stressed and compelled themselves to answer any questions asked by the counter-party’s counsel even if they do not have any idea or an appropriate answer to that question. However, it is very normal for a witness not to be able to answer each and every question during the cross-examination. For instance, if there are very specific questions about days or times in relation with the events or instances occurred many years ago, as long as it is not related with a very critical matter of the case, the witness, with a full confident, may answer this question by stating that he or she does not remember the exact day or date.
vi. Avoid entering into debate with the counter-party’s counsel: In addition to give unnecessary or more detailed answers to the questions asked by the counter-party’s counsel, it is also important for a witness to know that debating with the counter-party’s counsel does not help to give your message to the tribunal. Instead of debating with the counsel, staying calm and giving short and clear answers are always more helpful for the tribunal to understand the facts and the case.
vii. Credibility is of essence: During the cross-examination the main target of the counsels is always to give damage the credibility of the counter-party’s witnesses. Hence, in order to protect this credibility, the witness should only focus on and refer to what actually he/she saw or experienced about the issue subject to cross-examination. It is noteworthy that the ones who have lost their credibility during the cross-examinations in the first place are the professional liars.
Preparing the Expert Witnesses for the Cross-Examination: The expert witness may be an engineer or an accountant working in the specific sectors such as construction, energy or finance. The expert witness may even be a law professor from a jurisdiction related to the dispute in question. In order to support their factual arguments on technical or scientific matters, the parties need to get expert reports from these expert witnesses to inform the tribunal accurately. Hence, the experts appointed by the parties, should objectively analyze the technical or scientific issues. More objective report means more chance to convince the tribunal on the arguments asserted by the relevant party. In some international arbitration cases, mainly in investment arbitration cases, there may be a need to get a legal expert report on the foreign law especially on the law of the host state. In this case, same as the technical experts, legal experts prepare their expert reports to explain that foreign law to the arbitral tribunal and application of this foreign law to the facts in the case at hand.
i. Reviewing the expert reports submitted by an expert witness: Same as the fact witnesses, it is necessary for the counsels and the experts to review their expert reports which were submitted to the tribunal together with written pleadings of the parties to refresh their minds.
ii. Determining the statements / the issues which should be corrected before the cross-examination: Same as the fact witnesses, there may be issues or facts which may be contradicting with each other in the expert reports. Hence, in order to protect the credibility and reliability of the expert witness and his/her expert reports, these parts should be determined and corrected by a verbal statement just before the cross-examination.
iii. Reviewing the expert reports submitted by the counter-party’s experts: It is very important to read the expert reports submitted by the expert witnesses of the counter-party to analyze the strong and the weak points, also to make the expert witnesses ready for possible cross-examination questions which may derive from the other side’s expert reports.
iv. Preparing the expert witness for witness conferencing: Witness conferencing is another examination method which is used by some arbitral tribunals. In this method, expert witnesses of both parties sit in front of the arbitral tribunal and the tribunal ask the same question to each expert. The answers given by both experts are sometimes more helpful for the tribunal to understand the technical matters and the positions of each party compared to cross-examination of the experts by the other party’s counsel.
Preparing the Cross-examination Questions to be Asked to the Fact and the Expert Witnesses of the Counter-party: Preparing the cross-examination questions which will be asked to the fact and the expert witnesses provided by the counter-party is also a very crucial process to get successful results from the arbitration hearing. Following suggestions can be helpful for the counsels to prepare the right cross-examination questions for the counter-party’s fact and expert witnesses.
i. Determining the weak points or the unconvincing parts of witness statements: Before starting to draft the cross-examination questions, it is very important to determine weak or unconvincing points in the statements of the fact and the expert witnesses. It can be the starting point to attack the credibility or reliability of the witness or the expert.
ii. Determining the contradicting statements of the witnesses or the experts: Similarly determining the contradicting explanations in the statements of the fact and the expert witnesses is crucial to attack the reliability of the witnesses. Hence, it would be very important and helpful to identify these contradicting points well before drafting the cross-examination questions.
iii. Focusing on the position or the role of fact witness: In some cases, it would be also critical to focus on the position or the role of fact witness. Especially, in cases where the witness testifies about the events where he or she was not personally involved in and/or did not individually see what happened, this can be raised by appropriate cross-examination questions to decrease the value of evidence given by this witness in the eyes of the tribunal.
iv. Attacking the relevance and/or experience of an expert witness: It is also important to focus on the education and experiences of the expert witness and the specific field on which the expert has a real expertise. In cases where the expert is not actually expert in the relevant field (for instance an expert who is an engineer having experience in construction of pipelines might give an expert report on the construction of a power plant) there may be good cross questions to be asked to that expert in terms of his capability to write an expert report on the dispute arising from the construction of a power plant on which the expert has no previous experience.
v. Getting assistance from your own expert to determine the right questions to be asked to other party’s expert: Since the expert reports generally contain highly technical or scientific matters or the issues belonging to foreign law, the counsels should get the assistance of their experts to identify the appropriate questions to be asked to other party’s expert during the cross-examination.
vi. Cross-examination questions are not a check list: Cross-examination is generally a spontaneous activity, and the counsels should be prepared and ready to ask follow-up questions based on the answers provided by the witness sitting in the chair.
vii. A counsel should not enter into a debate with a fact or an expert witness to get the answers that he/she wants: Unfortunately, there is no world of wonders in which the counsels get all answers from the counter-party’s witnesses in the way where the counsels expect to receive. At the end of the day, it is up to the tribunal to elaborate the sincerity or the credibility of the response given by the witness during the cross-examination.
viii. Never ask a question that you don’t know the answer: A counsel should never ask a question to a fact or an expert witness that he/she does not know the answer. This may lead the counsel to lose the control of cross-examination.
C. Conduct of the Arbitration Hearings
Most of the arbitration hearings contain three main phases. These are (i) opening statements (ii) examination of fact and expert witnesses by the party’s counsels and the tribunal (i.e. direct examination, cross-examination, re-direct examination) and (iii) closing statements and post hearing briefs (if it is asked by the parties and ordered by the tribunal).
Opening Statements: Since the purpose and content of the opening statements are explained in a detailed manner in Section B of this Article, here we will only focus on some strategical points of this process. Total time to be used by each party is generally determined at the beginning of the hearings by the tribunals at the beginning of the hearing and the time allocated to each party are used by the counsels to submit their opening statements, to conduct examination of witnesses and to make their closing statements (if any). Therefore, the counsels should diligently determine the time which can be used for opening statements just before the cross-examination of the counter-party’s fact and expert witnesses.
Direct Examination: Direct examination (also known as «examination in Chief» or as «heating the seat») is the process that a party counsel questions his party’s witness just before the cross-examination of this witness by the counter-party’s counsel. Direct examination can sometimes be excluded, but there are some useful aspects of the direct examination such as confirming the authenticity of the witness statement by witness himself/herself and correction of any minor errors in the witness statement.
Cross-Examination: First of all, it would be helpful to point out the process of selection of the witnesses to be cross-examined during the hearing. As a general practice of international arbitration proceedings, each party should choose the witnesses provided by the counter-party for cross-examination. In principle, the witnesses of a party who were not called by the other party for cross-examination are not entitled to attend the hearing to give oral testimony unless the party who provides this witness requests so and this request is upheld by the tribunal.
While the fear of cross-examination leads some counsels to miss the opportunity to advance their case through cross-examination, contrarily some other counsels feel themselves compelled to cross-examine all witnesses of the counter-party. Both approaches may damage the counsel’s case. Hence, the answers to the following questions can be used as key factors to determine the right witness to cross-examine:
i. Has the witness stated anything meaningful in his/her witness statement which is directly related to or affects the substantive issues in the case at hand?
ii. Has the witness authored and correspondence or other documents that may help your case?
iii. Do the issues mentioned in the witness statement submitted by this witness overlap with the issues covered by the statement submitted by another witness of the same party?
Redirect Examination: Redirect examination, sometimes known as «re-examination» is the process that the party presenting the witness has an opportunity to clarify any harmful testimony given during cross-examination. This may be the last chance for counsel to try and pick up the pieces of any poorly answered cross-examination question. As the redirect examination is limited with the questions asked by the counter-party’s counsel during the cross-examination, the witness may not feel himself/herself comfortable while answering these redirect questions. Therefore, the counsel should consider whether the answer to redirect question really matters to the case before asking the redirect question to the witness.
Questions Asked by the Arbitral Tribunals: The arbitrators are always entitled to interrupt the presentations of case by the counsel and ask questions during the hearing. These questions may either be in the procedural nature and related to any exhibit or another documentary evidence referred by the counsel in his/her opening statement or in the substantive nature and related to a factual or a legal argument asserted by the parties. If these questions are asked by the arbitrators during the opening statements of the parties, the counsels may either directly answer these questions or may ask the arbitrator to complete his/her presentation and then answer the arbitrator’s question. The arbitrators may also ask questions to the fact or to the expert witnesses any time during their direct, cross-examination, redirect examination. Finally, instead of or in addition to cross-examination of expert witnesses, some tribunals may prefer to have a witness conferencing with the experts and may ask the same question at the same time to the expert witnesses of both parties to assess the objectivity and reliability of the answers to be given by each expert.
Closing Arguments/Statements: Although some arbitrators and counsels are in the view that closing arguments are unnecessary or at least overrated, oral or written closing arguments are a common feature of international arbitration. It is increasingly common for experienced tribunals to put questions to the parties at the end of the hearing for counsel to answer them orally. On the other hand, some counsels and arbitrators prefer written closings as it grants the parties more time to ensure that the tribunal received the arguments clearly presented and complete. That may also give comfort to the tribunal to understand both parties’ final positions more clearly. If there will be written closing arguments, the tribunal may dispense with oral answers and suggest written answers to its specific questions.
After some extensive arbitration hearings particularly in investment arbitration cases, upon the request of the parties, the tribunals generally allow the parties to make both verbal closing statements right after the cross-examination and to submit post hearing briefs to answer the specific questions raised by the arbitral tribunal.
As a final remark, in principle, no new evidence or authorities are allowed by the tribunals to put into the arbitration record. On the other hand, if new evidence or authorities came to light after the hearing but before the submission of the post hearing briefs, although the tribunals may be reluctant to accept this new evidence or authority, it should be the duty of the counsel to try to adduce this evidence or legal authority into the record of arbitration which may change the fate of the case.