“Technical Experts as Arbitrators – The Need of the Hour”
by Dr Saraswat S B
Section 26 of the Arbitration and Conciliation Act, 1996, (“The Act”) provides for the appointment of domain knowledge experts by the arbitration tribunal; this is well appreciated as it meets the specific need of expertise support where certain clarifications are to be obtained. Although this provision to seek expert opinions proves to be beneficial, it is pertinent to note that these opinions cannot be comprehensive and may not be sufficient for disputes pertaining to a particular field/domain such as construction projects, engineering, IP, finance, banking etc. In such arbitrations, the entire process of dispute settlement centres around the technical issues of the particular field which are subsequently converted to commercial and financial issues (in the form of claims for damages, payments etc.). In such situations, an arbitration tribunal that lacks domain knowledge cannot do justice while passing an award. It is also important to note that an arbitration award becomes a decree, which can be enforced like a court order. Therefore, it is important that the award passed by the arbitrators should be based on domain knowledge and relevant legal provisions so that it is just and can withstand scrutiny by the courts if challenged under section 34 of the Act.
In the construction sector, as well as areas such as intellectual property, banking, Information Technology, Research and Development, technology transfer contracts, conflicts usually commence due to technical issues and subsequently get converted to major commercial and financial disputes. Therefore, it is an essential requirement that in these areas an arbitrator appointed should be a technical professional having domain knowledge and experience in that field. In such situations, appointing experts to merely assist arbitrators will not be adequate to fill the gap of expertise requirements. Such arbitration awards are more susceptible of either being set aside as per section 34 or challenged on appeal as per section 37 of the Act.
Considering the above background, the role of construction arbitrators, for example, is being defined so that awards they pass are based on the true merit of technical, contractual and legal issues, which materialise into disputes. This can be achieved only when arbitrators in construction sector disputes have adequate knowledge and experience in construction and are also exposed to legal practices. This means that a construction dispute can be brought into the category of a “techno-commercial-legal” issues. Here it is worth sharing that even though the recent amendments to the Act have no provision regarding the necessity of arbitrators with particular qualifications and domain knowledge, it is advisable that parties should ensure that the arbitration tribunal members consist of a blend of arbitrators from technical, commercial and legal backgrounds.
Disputing parties should nominate arbitrators with domain knowledge and experience in the field pertaining to the dispute. Subsequently, the respective arbitrators can select a presiding arbitrator who has legal knowledge. The constitution of such an arbitral tribunal will result in an easier understanding of the issues concerning the dispute and faster resolution. Institutional arbitration centres, when allowed to nominate arbitrators, should ensure that the domain knowledge of Arbitrator is considered.
– Dr Saraswat S B
Dr Saraswat S B is an empanelled technical arbitrator at BIMACC. He is presently the Managing Director of Danieli Corus India Pvt. Ltd. He holds a PhD and is a Charter Engineer. He holds a PG Diploma in ADR from ILI. He is also the:
– Former Director SCM, Global Steel-Europe
– Former Joint Director (Materials) / SAIL: Steel Authority of India Ltd
– Vice-Chairman / Indian Institution of Plant Engineers-D/H
– Fellow / Institution of Engineers, Indian Institution of Plant Engineers
He is also on the panels of ICA, CIAC, IDAC Ahmedabad, Newton Arbitrations, UK; BIMACC, Bangalore, IIAM, Kochi, AIC ADR, PHD Chamber of Commerce, Delhi, Society of Construction Law, UK.
Dr Saraswat S B can be contacted here:
Mob. : +91 -9971777983 E-mail: saraswat54@hotmail.com
Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of BIMACC, any of the members of the Board, or the empanelled neutrals.