Late Appointment of Tribunal Experts and Reopening of Closed Arbitral Proceedings

In a recent construction dispute under a DIAC arbitration, between a main contractor (represented by our firm) and an employer, a tribunal decided to appoint a tribunal expert, after closure of proceedings and only a few weeks before the deadline for issuing the final award, without any other event occurring in the interim.

The dispute arose out of a construction contract where the contractor claimed against the employer its prolongation costs for extensions of time already awarded by the engineer, as well as for its profit on variations carried out.

The contractor produced quantum expert evidence in support of its claim which was unopposed by any corresponding quantum expert evidence by the employer.

At the hearing, the employer argued that during the extensions of time already granted, concurrent delays (i.e. delays attributable to both the employer and the contractor) had taken place.

The argument produced by the employer was that, since the delays were concurrent, no entitlement by the contractor for prolongation costs could arise.

There was no delay expert appointed by it to analyse the cause of any delay, be it concurrent or otherwise.

Following the hearing, closing submissions were filed and proceedings were formally closed.

The final award was due for issuance within five months’ time thereafter.

However, just three weeks before the deadline for the issuance of the final award, and without any event occurring in the interim, the tribunal, on its own motion reopened the proceedings to appoint a tribunal expert.

His mission was to opine on all aspects in dispute, including the quantification of the contractor’s prolongation costs and the employer’s allegations on concurrent delays.

The tribunal’s decision was based on Article 34.2of the DIAC Rules which states that:

“The Tribunal may, if it considers it necessary owing to exceptional circumstances, decide, on its own motion or upon application of a party, to re-open the proceedings it declared to be closed at any time before the award is made”.

The exceptional circumstances’ referred to in this provision were argued by the tribunal to be the lack of sufficient evidence upon which the law and the facts can be properly considered.

The practical effect of the tribunal’s decision was that the issuance of the final award was delayed by another year at significant additional cost.

Whilst perfectly within the tribunal’s powers and jurisdiction, this was an unusual and rare instance of a case being re-opened through the application of Article 34.2 of the DIAC Rules.

In addition, it is uncommon (although again within a tribunal’s discretion) for a tribunal expert to be appointed after closure of proceedings or, in any event, at a very advanced stage of the arbitral process.

The normal stage of a tribunal expert’s appointment would be as soon as the need to determine technical issues arises, i.e. at a much earlier stage of proceedings.

Furthermore, it is also unusual for a tribunal to seek the assistance of a tribunal expert, in circumstances where there was no conflicting party-appointed expert evidence adduced.

The only party-appointed quantum expert evidence available was submitted by the contractor.

The concurrent delay allegations were not supported by any independent delay expert evidence produced by the employer, who had the burden of proving such concurrency.

This case was an example of how the arbitral process can vary significantly from one matter to the next, even when similar issues are to be decided under the same procedural rules.

All three tribunal members were lawyers from both civil and common law jurisdictions with no formal technical qualifications in construction programme delay analysis or quantum surveying.

Therefore, it can be argued that, rather than the applicable law or rules, what ultimately determines the way arbitral process develops and evidence is weighed, is the individual tribunal members’ professional and jurisdictional background, which inevitably influences their decision-making process.