Like many other people, I love merit hearings in international arbitration. At a hearing, the case becomes alive and people who only talked on paper before begin to talk with different voices, various expressions, languages and tones. The stories told by the parties for months or even years, all of a sudden, become so real, vivid, touching and, above all, dramatic. I love cross-examination even more. As I’ve told my friends before, cross examination and flirting are perhaps the most intellectual sports in the world. In cross-examination, what is being tested is far more than the witnesses’ integrity. Indeed, it is a human being’s logic, reaction, expression and manner that are being tested. To me, nothing is more exciting than witnessing the throat-cutting competition between two human brains in a merit hearing in international arbitration.
But merit hearings are not an occasion for people to watch a show, even though such performances can very often be so engaging and exciting. Neither are hearings occasions for legal professionals to showcase their cross-examination skills by cornering, trapping, attacking or even crushing the other side’s witnesses and experts, regardless of how justifiable such practices can be. Merit hearings, in my view, should be an opportunity for the arbitrators to find answers to their specific questions about the facts and law. From the counsel’s perspective, a merit hearing should be the occasion where they need to assist the tribunal to find answers to their factual and legal questions. These objectives of a merit hearing should always be borne in mind for all parties attending the hearing. It is also due to these fundamental objectives of a merit hearing that I set forth the following proposal to reform the current practice of merit hearing in international arbitration.
The Conventional Approach and Its Problems
The Conventional Approach
To a great extent, in the mainstream practice of international arbitration, merit hearings remain focused on witness cross examinations. In a typical proceeding, before a merit hearing, the parties would have exchanged one or more rounds of witness statements or expert reports. These written materials would serve as “evidence in chief” on the record and thereby furnish raw materials for counsel to test their integrity at the hearing. In the hearing, normally, after a short opening, factual and expert witnesses will be called to the hearing room and be cross-examined by counsel. Re-direct often follows the main cross-examination. The tribunal may also raise questions during these sessions when they feel the need. But overall, it is the counsel on both sides who is playing the leading role even during the cross-examination. Indeed, as a seasoned cross-examination master sharply pointed out, it is really the counsel who is testifying during the cross-examination. For discussion purposes, I’ll refer to hearings conducted in this manner as the “Conventional Approach”.
Problems of the Conventional Approach
While the Conventional Approach has its beauty and charm, as the industry of international arbitration develops and evolves, both international arbitration users and counsel who have similar backgrounds to me have begun to notice its problems. First and foremost, the Conventional Approach is not always efficient in serving the objectives of the hearing and can, in certain circumstances, be very inefficient. Partly, this is because the techniques of cross-examination very often require a cross-examiner to avoid directly asking the key question he or she really intends to ask the witness or expert. The reason behind such practice is a fear that if such a question is raised directly, without sufficient foundations built by less relevant questions and answers in the foreplay section of the cross-examination, there may come an unexpected answer which may frustrate the cross-examiner’s well-prepared and delicately-structured line of questioning.
For experienced and able cross-examiners, to whom I pay my utmost professional respect and admiration, this problem is less obvious. The fact, however, is that there are not that many experienced and able cross-examiners or, they are too expensive for the parties to use or to busy to take on new instructions. All those who work in the industry know that cross-examination is a skill that needs to be intensively exercised and practiced, even though one can learn a lot by witnessing the masters’ work at hearings. The result is that cross examinations conducted by less experienced cross-examiners can be slow, frequently derailed and not as productive as they should be, if at all.
Second, and more critical to the future of the whole industry of international arbitration, is the fact that the costs incurred in hearings conducted by way of the Conventional Approach are very often too high. For it is not only the crossexaminer that is sitting in the hearing room with his or her clock ticking to record billable hours, but also often a whole army of other fee-charging people of all kinds (e.g. the interpreters, the stenographers, as well as the arbitrators) that are sitting in the same hearing room, going through the whole process. Should there be a way to increase the efficiency of the hearing and particularly the witness cross-examination process, significant costs would have been saved for the client and thus, in turn, international arbitration will be less open to criticism for being overly expensive by its users.
Third, the Conventional Approach may occasionally facilitate an environment where it is too easy for arbitrators to miss the opportunity at the hearing to find out what they want and need to know in determining their judgment of the case. In my humble observations, it is not always the case in international arbitration where the arbitrators are on top of the dispute before they sit in the hearing room to hear the parties’ presentations and cross-examination of witnesses. Even if they are prepared, their attention will be lost if the cross-examination is not well structured and efficiently conducted. But under the Conventional Approach, arbitrators are not required to, nor is it suggested that they, actively participate in the hearing by raising too many questions for the witnesses. The concern for them is that, rather than actively participate in the hearing and cross-examination, which in the extreme case may expose them to challenges on their impartiality, they’d better sit on the safer side by asking less questions and just listen.
However, if an arbitrator is not well prepared for the hearing or has lost his or her attention to the process, how can one make sure that he or she has been actively listening to the questioning of the witnesses and experts? How can counsel assure their client that the arbitrator must have collected all the information he or she needed for an informed decision on the dispute? For me, I like those arbitrators who do ask questions at the hearing, so long as the questions themselves are fair, relevant and unbiased. The list of the potential issues and problems of the Conventional Approach in conducting merit hearings I have set out above is not exhaustive, but the three problems set out above are compelling enough for me to make my proposal to reform the current practice in this regard.
The New Approach and Its Advantages
The New Approach
The New Approach I am about to propose in conducting international arbitration merit hearing is an approach that aims to, on one hand, push counsel to conduct cross-examination in a more productive fashion, and on the other hand, incentivize the arbitrators to play a more active role at the hearing. Without the luxury of conducting further and in-depth legal research on its feasibility, my preliminary idea for the New Approach would consist of the following procedural components:
• List of Tribunal’s Questions before the Hearing.
A list of factual and legal issues the members of the tribunal would want the counsel to focus on and further address. This list should be prepared by each member of the tribunal and be collected by the presiding arbitrator and sent to counsel at a time point sufficiently in advance of the parties’ submission of their opening statements or skeleton arguments.
• Tribunal’s Questioning Session at the Hearing.
At the hearing, before the witnesses are cross-examined by counsel, the tribunal should be allowed to question the witnesses first in a separate session. During this session, the tribunal will take the lead in the hearing and the arbitrators are encouraged, or required (if so agreed by the parties and the tribunal), to ask the witnesses questions directly. Since it is not a cross-examination process, the arbitrators are allowed to ask whatever questions they consider relevant to the case in the manner they think is proper and effective. To ensure fairness and impartiality, counsel should be allowed to object a question from the tribunal that in their view is unfair or biased. The presiding arbitrator shall have the decision-making rights on such objections and all communications will be recorded in writing.
• The Cross-Examination Session.
After the tribunal finishes their questioning session, the counsel will continue with their own cross examination. The difference now is that the tribunal may have already covered many of the issues they were about to examine. As such, the cross-examination may be effectively shortened in terms of time and content without leaving issues that are of interest to the tribunal unaddressed. This of course would raise an even more demanding practice standard for counsel, as they must be fully prepared to react to the likely change of questioning focus. However, with the aid of the List of the Tribunal’s Questions, they should already know what the tribunal is interested in and therefore can tailor their cross-examination in advance.
Advantages of the New Approach
The advantages of the New Approach are three-fold. First, it serves the objectives of the merit hearing better. Taking the List of Tribunal’s Questions as an example, in my view, such a list would help the parties to understand what the arbitrators are unclear about before the hearing and therefore help them prepare their case. On the other hand, by requiring the arbitrator to submit such a list of questions, it will push the arbitrators to better prepare themselves before the hearing. The Tribunal’s Questioning Session helps to serve the objectives of the hearing more directly. This is because the arbitrators will be provided a time-slot dedicated for their use. It is a time for them to ask the witnesses directly about what they want to know. They will no longer need to wait for the counsel to arrive at the questions that they are so anxious to find the answer to. They can also ask the question in their own way instead of letting the witness be harassed by ineffectual questions that would never lead to what they want to know.
Second, the New Approach will help shorten the length of hearings and therefore reduce costs for the parties. Imagine if the tribunal could quickly and directly obtain the information they are seeking from the witnesses. The routine and more time-consuming line of questioning would quickly become unnecessary. Any smart counsel would drop their line of questions if the tribunal had already asked those questions, perhaps in a more effective way. If the hearing could be shortened, then the clients’ money could be saved from numerous angles in the proceedings.
Third, the arbitrators will be under pressure to better prepare themselves for the hearing. Both the List of the Tribunal’s Questions and the Tribunal’s Questioning Session at the hearing will force the tribunal to better prepare itself before hearing the case. Under the New Approach, if at the hearing, an arbitrator did not raise any questions or asked irrelevant or ineffective questions, they would expose themselves to their peers’ criticism and risk their reputation in the industry. There can be more advantages to the New Approach but the above three already warrant a reconsideration of how a merit hearing could be better structured to move the arbitration proceeding in a more efficient, cost-effective and expeditious matter.
I love hearings in international arbitration. I love cross-examination even more. But what I would love most is a professional approach that would help the parties to resolve their dispute at low cost and high speed, and that incentivized each player in an international arbitration to make the best use of the time and money of the client and themselves to reach the award. Such an approach, at the end of the day, would attract more and more users to choose international arbitration to resolve their disputes because of its flexibility and efficiency.
This article may be cited as follows: Arthur Ma, “The Proposal for a Reformed Merit Hearing Approach in International Arbitration”, International Arbitration Asia (4 July 2015) <http://www.internationalarbitrationasia.com/the-proposal-for-a-reformed-merit-hearing-approach-in-international-arbitration/>.