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Creating a Fertile Ground For The Advancement Of Different Forms Of Dispute Resolution – ADR Involving Experts by Andrew Maclay*

12 Dec 2022 1:22 PM | Anonymous

Paper presented at the AfAA 3rd Annual International Arbitration Conference, 3rd - 5th November 2022.  


My paper is a brief introduction to three dispute resolution alternatives to international arbitration. Although AFAA exists to promote international arbitration, I urge you to bear in mind these three alternatives, and to remember them when your client’s interests may be better served by using them than by international arbitration itself.

1. Expert determination

So, first of all, what is expert determination? It is the resolution of a dispute by an expert in the particular subject or industry in dispute. It is not suitable for a dispute involving complex issues of legal interpretation or the use of legal systems from different countries. However, it is ideally suited to technical disputes where the issues involved are really not legal ones and are ones that lawyers may find it hard to understand or to deal with succinctly.

So, three examples are Post M&A disputes, where the purchase price for an acquisition depends on the balance sheet of the company being acquired on the acquisition date; or a Valuation dispute; or Construction disputes. In the UK, the majority of expert determinations are undertaken by chartered accountants or chartered surveyors/members of the Royal Institution of Chartered Surveyors.

The benefits of the process, from the perspective of the client, include:

  • It relies on a knowledgeable expert, and saves the need to educate lawyers into all the issues involved. For example, if the issue in dispute is an accounting issue, these may be readily understood by the client’s accounts department, but less so by the legal team;
  • ·It is generally a lot quicker than arbitration or litigation; and
  • ·It is generally final. Whilst the legal framework may vary from country to country, in the UK an expert determination cannot be challenged, save in the case of fraud or manifest error by the expert.

Typical expert determination process

So, what is the typical expert determination process? One of the advantages of expert determination is that it remains a very flexible process, far less regimented than arbitration, and the expert can determine the process the parties must follow.

However, a typical process is:

  • ·Written opening submissions from each party – these tend to be simultaneous. They may be prepared by an in-house team, or with the assistance of an external professional in the same industry as the expert, or with the assistance of lawyers;
  • ·Written response submissions from each party – maybe 15 working days later;
  • ·Then, a process of questions by the expert to each party or both parties – to improve the expert’s understanding of the issues in dispute, or to request disclosure of a key document, or to ask for the parties’ submissions on a particular issue or point of law. There may be one or more exchanges of questions;
  • ·There is usually a provision for an Oral hearing – but in practice, these are rare – everything is normally done in writing;
  • ·Consideration by the expert of all the submissions; and
  • ·The issue of the determination by the expert. In the UK, this is typically without reasons or with very limited reasons – in order to save cost and to reduce the possibility of appeal. But in other jurisdictions, it may be more in the form of an international arbitration award, although shorter. Lawyers may or may not be involved in drafting the submissions from each side.

Typical areas of dispute in an accounting expert determination

As I am an accountant, I wanted to give a few examples of typical areas of dispute in an accounting dispute. These might include:

  • IFRS / GAAP / OHADA accounting policies disputes;
  • Valuation of assets and liabilities in a Completion Balance Sheet;
  • Recognition of tax liabilities;
  • Recognition of liabilities and contingent liabilities;
  • Estimation of future income; and
  • Discount rates.

So, just to show you how this is relevant to Africa, I have been involved in two expert determinations in Africa, both in relation to Post M&A disputes, the first in 16 African countries and the second in Tanzania.

The first was the sale by an oil major of its downstream assets in 16 African countries nearly ten years ago now. My accountancy firm was involved in negotiating the completion balance sheets for each country, first with accountants on the other side, which was represented by a Big Six accounting firm, and then with the expert determiner, who we selected who was from another Big Six accounting firm.

Examples of two of the issues we had to determine were:

  • The recoverability of receivables. The higher the amount of receivables, the more my client, the purchaser had to pay. We needed to review whether the provision against receivables at the balance sheet date was reasonable, taking account of all the evidence at the time, and particularly of whether the amount had actually ever been paid by the debtor.
  • The recognition of tax liabilities in the balance sheet. The higher the amount of tax liabilities, the less my client had to pay. Some African tax authorities had levied very large tax bills – which we said had to be taken into account in the balance sheet, whilst the seller said they should not be because in practice these tax demands were often negotiated away so the company only paid a small percentage of the original demand. The expert had to take a decision on what was a reasonable provision.

2. Court/Tribunal-appointed experts

The second type of alternative dispute resolution I wanted to highlight is not really an alternative to international arbitration – because it is provided for in all the Rules of the international arbitration bodies, such as the IBA Rules, and so will be known in theory – but it is rarely used in practice – and we may want to discuss why that is.

So what are the principal benefits and complaints about such an alternative to the party appointed expert?

The benefits:

  • A tribunal-appointed expert is likely to be more genuinely independent than a party-appointed expert;
  • They may be able to teach or advise the Tribunal in confidence;
  • They may advise the Tribunal on questions to ask the parties or the party-appointed experts; and
  • They may remove the tendency of party-appointed experts to adopt extreme positions. Whilst party-appointed experts are meant to be independent, they are inevitably part of the adversarial process – and some of my fellow quantum experts put forward extreme numbers in their first reports, only to reduce them as the hearing gets closer.

Complaints about Tribunal-appointed experts:

  • Counsel for the parties complain that they lose control of the expert witness and the arbitration process;
  • The Tribunal-appointed expert may effectively become a fourth member of the Tribunal, who the Tribunal feels obligated to follow; and
  • They may add cost to the process – particularly if the parties also have their own party-appointed experts.

The ICJ case of DR Congo v Uganda

However, I want to bring to your attention what I personally consider to be an effective use of Court appointed experts in Africa – by the International Court of Justice in the case of DR Congo v Uganda, in relation to the war between 1998 and 1993, on which judgment was given in February 2022.

The ICJ had made an award on liability, in favour of the DR Congo, in 2005, but by 2020 the parties had still not been able to agree on the monetary amount of any award, so the Court took back the quantum issue and appointed four Court-appointed experts on the subjects of:

  • The number of deaths and injuries;
  • The numbers of excess deaths;
  • The value of deaths and injuries and of property damage; and
  • The value of natural resources unlawfully exploited by Uganda.

The four experts prepared an initial report; both parties commented on that report; the four experts produced a supplementary report; and then the Court held a hearing and the experts were cross-examined.  The entire process was completed in just over six months.

There are four comments I want to make on the process:

1. The Court relied on the experts’ detailed calculations. For example, the Court said “The Court is of the view that the methodological approach taken by the expert report is convincing overall. The Court notes that the methodology adopted by the expert appropriately differs slightly depending on the resource in question and on the respective degree of reliability of the data on which he bases his estimates. The expert report is also transparent about its own limitations.” [Judgment, para 277]

2. The Court did not accept all the conclusions of the experts without weighing them up. It also relied on all the other evidence on the Court file. For example, it said “one of the Court-appointed experts, [  ], did not analyse the prevailing practice of Congolese courts, as stipulated in the Court’s terms of reference” [Judgment, para 139] and “The Court does not consider that the expert has sufficiently substantiated the variable “evidentiary discount factors” he proposes to apply” [Judgment, para 248];

3. There were parallels with investment treaty arbitration. However, the calculation of quantum ultimately adopted by the Court was more broad-brush than is common in today’s international arbitration awards and were global sums for each head of loss; and

4.  The process was relatively speedy.

  • The experts were appointed on 12 October 2021;
  • There were then two reports by each expert and comments by both parties;
  • The Oral hearing was held on 20 – 30 April 2021; and
  • The judgment was handed down on 9 February 2022.

3. Independent Panels of experts

Finally, I want to commend to you the use of what I have called Independent Panels of Experts. This is partly because I think these can be highly effective when there are large numbers of similar disputes to be resolved, and again when the legal issues involved are not particularly complicated or have already been resolved. But also because in the ICJ case between DR Congo and Uganda, considerably reference was made to the UNCC/United Nations Compensation Scheme, , and because the idea of a similar scheme has been put forward by some as a mechanism for reparations arising from the current invasion of Ukraine by Russia.

Such panels may be used primarily for compensating individuals who have suffered loss or damage. This is probably why an independent panel was not the appropriate mechanism in the ICJ case of DR Congo v Uganda or in the Eritrea-Ethiopia Claims Commission.

UNCC was set up following the first Gulf War, and dealt with millions of claims by individuals and hundreds of bigger claims by companies for losses arising out of the invasion of Kuwait by Iraq in the early 1990s.

So, briefly, typical mechanics might be:

  • Applicants submit claims in writing;
  • There is a secretariat which deals with administration with the applicants, and makes the payments;
  • Relevant experts (such as forensic accountants, loss adjusters, chartered surveyors or lawyers) prepare the claims for submission to the Panel (usually with a recommendation);
  • There is a 3 person Panel – comprising a leading lawyer, a forensic accountant and a chartered surveyor (in the case of UNCC). The Panel reviews all the evidence, and makes an award – which is then paid by the secretariat, subject to any review or appeals process and to the availability of funds to make the award.

Such Independent Panels may be used for mass claims – so, for example, in the case of UNCC, the Panel awarded a set amount for death and injury, with little evidence required and a higher amount where more evidence was provided.

The lawyers on the Panels can work with the Secretariat to determine the legal principles to be followed. For example, many of the precedents of UNCC have been followed in other similar situations of loss - and one of the experts in the ICJ case of DR Congo v Uganda recommended following the UNCC amounts for loss per life, appropriately adjusted for a later time period and different levels of income in the relevant countries.

A key issue is always likely to be how much evidence is required to substantiate a claim. But the Panels can set principles for this, based on how much evidence is available and how much is reasonable – for example, one would expect more evidence to support a claim for the destruction of a house in Ukraine today than one twenty years ago in DR Congo.

The respondent should normally have the opportunity to present a defence, in accordance with the rules of natural justice.

Finally, and very importantly in the case of Russia and Ukraine, there is the need for a fund which can pay successful awards to the applicant.


This is an introduction to three alternative forms of dispute resolution, each of which may be relevant for your clients in Africa in particular circumstances, and which should be considered in situations where international arbitration may not be the most appropriate or cost-effective form of dispute resolution.


*Andrew Maclay

African Arbitration Association, P.O. Box 695, Nyarutarama, KG 9 Av. No. 66, Kigali, Rwanda

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