Tejas Karia and Rishab Gupta, Shardul Amarchand Mangaldas & Co
This is an extract from the fourth edition of GAR’s The Guide to Advocacy. The whole publication is available here.
Globalisation and increased investment flows between countries have led to a surge in cross-border disputes. International arbitration has been, and is likely to remain, the preferred method for resolving these disputes. The advocacy style in an international arbitration depends on a variety of factors, including the nationality of the advocates and arbitrators, the seat of the arbitration and the applicable institutional rules. It is likely, therefore, that one would find notable differences in the advocacy style in a London-seated international arbitration before a panel of European arbitrators, as compared to the advocacy style in a Mumbai-seated international arbitration before a panel of retired judges of Indian courts.
That said, there are various factors that have led to the homogenisation of international arbitration. First, the rise of institutional commercial arbitration has meant that, increasingly, arbitrations are conducted within a pre-established framework and that framework influences the advocacy style followed by advocates. Taking the example of India, a Mumbai-seated arbitration under the Arbitration Rules of Singapore International Arbitration Centre (SIAC) is likely to be conducted in a manner that is very different to a Mumbai-seated ad hoc arbitration. Second, the advent of transnational soft law, such as the International Bar Association (IBA) guidelines, have also had an effect on advocacy. For instance, there has been a convergence in the approach regarding document disclosure or challenges to arbitrators because of the IBA’s efforts in these areas. Finally, the surge in investment treaty arbitration has helped. Unlike contractual disputes, which are almost always governed by the laws of a specific jurisdiction, disputes arising under investment treaties are governed by public international law. As a result, investment treaty arbitrations often involve advocates and arbitrators from multiple jurisdictions. The resulting exposure to different advocacy styles has led, over time, to further homogenisation, not just in investment treaty arbitration but also in commercial arbitration.
India is not immune to these factors. Advocacy in India-related international arbitrations has been influenced by global practices. And that trend is likely to continue in the future. However, there are some important differences to be found in India-related arbitrations. This chapter identifies some of those differences.
Arbitrations seated in India
India-seated arbitrations often look like an extension of the Indian court proceedings. That is the case for a variety of reasons. First, India-seated arbitrations usually involve Indian parties on both sides. Second, when the arbitration involves only Indian parties and the seat is India, the arbitration tribunal must decide the dispute in accordance with Indian substantive law. Third, the Indian legal market has not yet been liberalised and foreign law firms and lawyers are not allowed to practise law in India. A judgment of the Supreme Court has created an exception for international arbitrations;however, whether that judgment will result in foreign lawyers regularly appearing in Indian arbitrations has yet to be seen. Fourth, the majority of India-seated arbitrations tend to be ad hoc in nature (i.e., there are no institutional rules applicable to these arbitrations). A study by PwC in 2013 found that 47 per cent of Indian companies that had chosen arbitration as their preferred method of dispute resolution chose ad hoc proceedings. In ad hoc arbitrations, repeated recourse to Indian courts is usually required to determine contested interlocutory issues. Finally, because India does not yet have a deep pool of qualified arbitrators, courts and parties tend to appoint retired judges as arbitrators.
As a result of the foregoing, India-seated arbitrations often exclusively involve Indian parties, Indian advocates, Indian substantive law and retired Indian judges as arbitrators. In the circumstances, it is not difficult to understand why there is a substantial overlap between the procedures followed in Indian court proceedings and arbitrations. Indeed, domestic arbitration in India has become known as a form of ‘after-hours’ litigation, with advocates conducting short hearings (usually two to three hours) in front of retired judges after the court closes. These retired judges, and indeed many of the advocates appearing before them, bring many of their past practices (in respect of procedure and evidence) from the courtroom into the arbitration.
Cultural considerations – some examples
Despite globalisation and standardisation, adjusting for cultural differences remains one of the challenges when practising international arbitration. As an example, whereas German, Austrian and Swiss German arbitration practitioners are used to considering the possibility of having arbitrators assist the parties in reaching a settlement (for instance, by providing their non-binding views), practitioners from the United States and the United Kingdom, as well as India, do not feel comfortable with such an approach. Another example is the appointment of experts by the arbitral tribunal. Arbitration practitioners from civil law countries are used to this practice, whereas arbitration practitioners from common law countries always expect the appointment of experts by the parties as a fundamental right. The wrong approach is to take for granted that our own expectations and practices are universal.– Pierre-Yves Gunter, Bär & Karrer
Not surprisingly, this overlap between court procedure and arbitration procedure has affected the style of advocacy practised in India-seated arbitrations. Take written advocacy, for example.
After the arbitration tribunal is constituted, there will usually be three or four rounds of pleadings: statement of claim, statement of defence and counterclaim (if any), reply to counterclaim and, finally, statement of rejoinder (although many arbitrators take the view that, except in rare circumstances, the latter is not necessary). These pleadings tend to be formal in style and language. Indeed, they read very much like pleadings submitted in court proceedings. Further, unlike in the case of memorials, which have become commonplace in international arbitration, pleadings submitted in domestic arbitration would not be accompanied by any witness statements or expert reports, nor would they set out the parties’ position on law. Rather, the pleadings would simply identify the facts supporting or opposing the claim, the points at issue and the relief or remedy sought, but they would not plead any law, save for making averments in respect of the applicable legal principles.
There would be several advantages if Indian arbitration were to reduce its reliance on court-style pleadings and adopting the memorial procedure. First, it would be likely to reduce the length of the proceedings. Currently, exchange of pleadings is followed by ‘framing of issues’, exchange of witness statements on those issues, cross-examination of the witnesses, then final hearings. It is at the final hearings that the advocates plead law for the first time. In other words, it is only at the final hearing that for the first time law and facts are presented together in support of a party’s position. By contrast, in a memorial procedure, the tribunal would receive the entire package together: the facts, supported by witness statements and documents, as well as the law. There would be no need for a separate phase for exchange of witness statements.
Second, by forcing parties to file witness statements, expert reports and legal submissions up front, the strength of a party’s case becomes evident very early on. That, in turn, can facilitate early settlement as parties are forced to make a realistic assessment of their case. In India, however, parties usually wait until final hearings to commence settlement discussions, if at all.
Finally, a memorial-style procedure would also assist in moving away from one of the least attractive features of Indian arbitration: several short hearings are conducted during the arbitration, as opposed to one continuous hearing.
Hearings and cross-examination of witnesses
Since arbitrations in India usually involve multiple short hearings, they tend to resemble litigation. It is common in Indian litigation to appear before courts on multiple occasions for all kinds of procedural matters. Because of the backlog in the courts, continuous hearings are rare. Unfortunately, the same trend has crept into arbitration as well, where the tribunal will hold multiple ‘sittings’ (a single sitting extending for two to three hours).
The majority of hearing time before an arbitration tribunal is taken up by the examination of witnesses. Direct examination is almost always substituted by witness statements; therefore, witnesses tend to appear before the tribunal solely for the purposes of cross-examination and answering the tribunal’s questions. Cross-examination is an art that is well known in the common law tradition, but there are some notable differences in the way that art is practised in arbitration, as compared to litigation. There are many books and articles written about cross-examination techniques and we will not repeat in this chapter the learnings from those publications. Instead, our focus is on identifying factors that an advocate should consider when conducting a cross-examination in an India-seated arbitration. In doing so, we rely on some of the themes that Philippe Pinsolle and Stephen Jagusch have addressed in Chapters 6 and 7, respectively.
Determining whether to cross-examine a witness
It would be rare in the Indian context not to cross-examine a witness. In the absence of a cross-examination, the witness statement in its entirety would most likely stand admitted and that is a consequence that no party would want to face. That is the case even though a tribunal always has the discretion to determine the probative value of the evidence given in a witness statement.
Further, unlike in international arbitration, which often operates on a ‘chess-clock system’, in India, arbitrators tend to give advocates as much time as they require to conduct their cross-examination. Therefore, availability of time, which is often a key consideration in international arbitration in deciding whether to cross-examine a witness, is a far less relevant factor in Indian arbitration procedure.
In any cross-examination, irrespective of where it is being carried out, preparation is key. A necessary precondition to an effective cross-examination is that the advocate must know the case file inside out. Without that level of preparation, it would not be possible to be flexible in a cross-examination and cross-refer to different sections of the case file depending on the answers given by the witness.
Overall, in our opinion, it is not useful to have a long list of prepared questions. Instead, a list of topics or themes on which the advocate wishes to cross-examine the witness, with citations to key documents, is sufficient. It is also useful to have a separate list of admissions that the advocate would like to draw from the witness. That list in particular helps the advocate to control the length of the cross-examination and know when to quit. If a certain admission has been elicited, the advocate should immediately move to the next topic. Staying on the same topic for too long carries the risk of giving the witness an opportunity to improve on his or her previous answers.
Approach and style
All advocates have their own style of conducting a cross-examination, but there are certain rules of thumb that can help. The most important of these rules is this: always stay in control of the witness. The most obvious – and oft-cited – way of ensuring control is by asking a series of leading questions, which can be answered ‘yes’ or ‘no’. However, for a variety of reasons, that is easier said than done.
Often witnesses will try to give long-winded answers, bordering on becoming short speeches. A typical technique used by well-trained witnesses is to answer a leading question with a ‘yes’ and then to follow that up with a long explanation that supports the case of the party that has tendered that witness. In these circumstances, it is best to allow the witness to complete his or her answer and then remind them that the question needed only a simple ‘yes’ or ‘no’ answer. If the witness continues to give unnecessary explanations, it is usually helpful to ask the arbitrators to remind him or her that such answers are not welcome. However, under no circumstances should an advocate be too aggressive with a witness. Indian arbitrators often dislike such conduct and will remind the advocate to be respectful and courteous to witnesses.
Use of technology
Another problem that one faces in ensuring control over a witness in an India-based arbitration is the absence of real-time transcription – that is, stenographers producing a simultaneous record of the hearing that is provided to the parties live, on-screen and as the words are spoken. This service, although expensive, is now common in international arbitration. However, in India, no court or arbitration reporters currently offer real-time transcription services. In high-value cases, parties might agree to pay for stenographers to fly in from Hong Kong or Singapore to provide an instantaneous transcript, but this happens rarely.
Instead, the general practice in India-seated arbitrations is to have a stenographer to whom the advocate dictates the question that he or she wishes to put to the witness. The transcribed text appears on a large screen that is visible to everyone in the hearing room. Next, the witness dictates his or her answer to the stenographer. If there are any errors in the transcription (and there often are substantial errors), the advocate or the witness will make corrections on the spot. If the arbitrators have any follow-up questions, or require any clarifications from the witness, those questions will also be transcribed in the same manner. Indeed, because retired judges are often appointed as arbitrators in India, arbitrator involvement in cross-examination is usually quite high. Retired judges, who are used to the hands-on approach they would have taken in court, tend to adopt the same approach in arbitrations and will often interrupt cross-examinations.
As should be obvious to anyone, the Indian way of creating hearing transcripts is very inefficient. Among other things, it causes substantial delays – often, it will take an hour to ask only 20 to 30 questions. This, coupled with the practice of conducting short hearings lasting two to three hours only, means that cross-examination of the same witness continues over several hearings, often with breaks of several days between them. The lack of continuity makes the job of an advocate substantially tougher. It is harder to remain focused for that length of time and witnesses are afforded several opportunities to recover from a bad day at a hearing.
Making use of witness statements
In India, it is usually assumed that a cross-examination should be restricted to areas covered in the witness statement. These instructions, however, are rarely covered in any procedural order. Therefore, if an advocate wishes to cross-examine a witness on matters not covered by the witness statement, it is often prudent to check with the tribunal members or come to an agreement with the opposing side.
Arbitrations seated outside India
The choice of seat depends on a variety of factors, including neutrality and impartiality of the legal system, national arbitration law, track record of enforcing arbitration agreements and arbitration awards, availability of quality arbitrators and arbitration practitioners, as well as efficiency of the local judicial system. Historically, India has fared badly in respect of all these factors. Therefore, not surprisingly, many cross-border contracts involving Indian parties contain foreign-seated arbitration clauses, with Singapore and London being the most common foreign seats. Arbitrations arising pursuant to such clauses are typically subject to institutional arbitration rules (as opposed to ad hoc arbitration, which is the norm for India-seated arbitrations). Further, while retired judges do receive appointments in foreign-seated arbitrations as well, it is rare to find an entire tribunal composed of retired judges for such arbitrations. Instead, tribunals often have a cosmopolitan composition, with arbitrators from many nationalities. Finally, parties will at times instruct law firms or barristers based in jurisdictions outside India to represent them at such hearings.
The application of institutional rules, as well as the presence of foreign arbitrators and advocates, means that these arbitrations are carried out very differently from a typical India-seated arbitration. Indeed, a Singapore-seated arbitration involving an Indian party would, for all practical purposes, resemble any international arbitration carried out in Singapore. And, in that sense, the advocacy style followed by advocates, and expected by arbitrators, would be similar to what has been discussed by other authors in this book. One note of caution, however: because Indian arbitrators and advocates are used to a different style of arbitration, inevitable differences are likely to arise in the context of a foreign-seated arbitration. These differences could range from minor issues (such as the length of a hearing day) to fundamental issues. An effective advocate would try to get to know the tribunal members, understand any cultural differences and develop an advocacy style that is persuasive to all, or at least a majority of, the tribunal members.
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