This article is written by Janani Parvathy J, and it contains a detailed analysis of Section 26 of the Arbitration and Conciliation Act, 1966. The article includes an explanation of individual elements of Section 26, types of experts under Section 26, interrelation with the Indian Evidence Act, and some important judgments on Section 26.

This article has been published by Shashwat Kaushik.

Table of Contents

Introduction

Arbitration is becoming one of the most widely used mechanisms for dispute redressal. Several companies, corporations, and even governments dealing in different areas use arbitration to resolve their disputes. A survey of in-house counsels and corporate executives, by the reputed legal firm Khaitan and Co., revealed that an overwhelming 40% of people preferred arbitration over litigation. Ander Yeah SC and Kelvin Pooh from Global Arbitration Review, also found a significant increase in the use of arbitration in the Asia-Pacific region, with 3 out of the top 5 arbitral seats situated there. Further, in India also several governmental, and non-governmental organisations, like Vodafone, BSNL, Tata, and government PSUs prefer arbitration. But, with the roses, comes the thorns, the arbitrator may not always possess sufficient knowledge of the specific area of dispute. The 21st century is extremely complex and dynamic. The introduction of several technologies, Computer Related Inventions (CRI), legal complexities, new subject matters and novel sub-divisions like Quantum, Artificial Intelligence, and scientific wars, have made it extremely difficult for the arbitral tribunal to adjudicate alone. Additionally, all investigations and analyses require the assistance of several departmental officers at many stages. To deal with such complex situations with efficiency and expertise and in order to minimise the possibilities of error by the tribunals, Section 26 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘Act’) was introduced. Section 26 deals with bringing in experts to assist the tribunal with their expert knowledge.

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Clause-wise explanation of Section 26 of the Arbitration and Conciliation Act

The Arbitration and Conciliation Act, of 1996, was amended two times, first in 2015 and then in 2019. Though several changes were made through these amendments, the core matter of Section 26 remained the same, while the section orders were changed. Section 26 of the Arbitration and Conciliation Act, 1996, contains the provision for appointing experts. The section contains 3 clauses and 2 sub-clauses in total.

Clause 1

1(a) The first clause empowers the arbitral tribunal to appoint an expert to assist them by reporting to them on specific issues that need to be resolved.

1(b) Sub-clause two, mandates the parties to assist the expert by providing any document, information on any relevant document, or by providing any goods needed for inspection.

The parties, in the arbitration, are required to produce all the requested reports and documents within the time duration specified; if not specified, then within a reasonable time. 

Clause 2

Clause 2 permits the participation of experts in the oral hearings of the arbitral proceedings, provided their presence was deemed necessary. This not only gives parties the chance to examine the expert but also helps establish the credibility of the expert statements, along with clarifying any doubts or discrepancies identified in the report.

Clause 3

This clause mandates the expert to provide the parties with the property, documents, and goods in his possession and used by him to prepare the report, for examination by the tribunal or on request of the parties. 

Essential requirements for the applicability of Section 26 

  • It must be agreed upon by both parties to call for expert advice.
  • The expert can only be appointed by the arbitral tribunal.
  • Clauses 2 and 3 of the Section, i.e., oral examination of the witness and production of relevant documents used by the expert, will be applicable only if requested by either party, deemed necessary by the tribunal, and only if accepted by both parties.

Who qualifies as an ‘expert’

The qualifications of an expert have been mentioned in different statutes and precedents. Apart from Section 26 of the Arbitration and Conciliation Act, 1996, the qualifications of an expert in the arbitration proceedings are also mentioned in Article 5.2.c of the International Bar Association rules, Article 29 of the UNCITRAL (United Nations Commission on International Trade Law) model law, Article 55 of the WIPO (World Intellectual Property Organisation) mediation and arbitration rules, Article 25 of the International Chamber of Commerce rules, 2021, and the Ciarb Protocol, 2007.

  • Articles 5 and 6 of the International Bar Association, talk in detail about arbitration experts. Article 5(2)(c) mandates the expert to display his independence from the parties, their counsel, and the arbitral tribunal by submitting a statement for the same. Article 6(1) of the same rules also requires ‘independence’ in the expert appointed by the tribunal. Article 6(2) also requires the expert to submit a statement of his qualifications in the subject matter of the dispute. Further, Article 6(4)(c) requires the expert report to be backed by evidence, reasoning and logic. 
  • Section 29 of the UNCITRAL arbitration mandates that an arbitration expert must be an individual who is adequately qualified, impartial and independent.
  • The WIPO Arbitration rules also specify that an expert must be competent and independent.
  • The International Chamber of Commerce(ICC), published a dossier, where it emphasises that an expert must be impartial and independent i.e., not related to any party or the arbitral tribunal.
  • The 2018 Queen Mary University International Arbitration Survey concluded that experts should adhere to the same standards of impartiality and independence as arbitrators. Justice Black, in the Commonwealth Coatings Corp v Continental Casualty Co 393 US 145, observed that arbitrators must resolve all doubts that arise about bias, applying the above logic, even arbitration experts need to abide by the same.
  • An analysis of the Indian Evidence Act and Arbitration laws can point out that expert evidence under both are similar. Therefore, the observance of the Supreme Court in, the State of Himachal Pradesh vs. Jai Lal and Ors. (1999), that,  to qualify as an expert witness, the person must have adequate knowledge of the subject, have done special study in that subject, or must have undergone training for that subject, and must be able to back up his claims with reasoning, shall apply to arbitration experts as well.
  • In Hazi Mohammed Ikramul Hague vs. State of West Bengal (1958), the Appellate court emphasised that the expert appointed under arbitration must be a person able to back up his theory with reasoning and facts.

After analysis of the Arbitration Act and other international rules, the following qualifications of an expert can be inferred: 

  • Impartiality and Independence: The expert must neither be related to the parties nor to the arbitrators in any way. The expert should not have any prior bias towards a single party. The expert must perform his duty in a professional and unbiased manner throughout the period of his assistance. Non-biasness is one of the founding principles of a judicial proceeding according to the principles of natural justice. The 2018 Queen Mary University International Arbitration Survey concluded that experts should adhere to the same standards of impartiality and independence as arbitrators.
  • Knowledgeable on the specific topic: The expert is consulted to help the arbitral proceedings by providing his expertise, knowledge, and skills. Tribunals usually consult experts from fields like law, technology, marketing, science and innovation, and arts and demand persons knowledgeable on all aspects of the subject.
  • Prior experience: Specialisation in the specific field, along with desirable prior work experience and research work, are factors that tribunals and parties look for when in search of an expert. Prior experience can be obtained either by studying in that specific field, or by working in that field.
  • Academic Record: Persons with commendable academic records and graduates from top colleges or educators are mostly appointed as experts.

Need of an expert 

The purpose behind inserting Section 26 of the Arbitration and Conciliation Act highlight the significance of expert advice in arbitral proceedings. Arbitration could involve several complex theories, specific terms, and principles unknown to the arbitrators. The case could involve technical aspects from different fields like arts, science, and business. It becomes highly important to use external help from experts to make decisions in these situations. For example, in international arbitration, help from a foreign legal expert might be necessary to explain the rules of that country, or for a matter related to scientific advancement, the opinion of a scientist may also be necessary. 

Generally, an expert could also be needed to value some necessary assets, perform a site inspection, provide expert opinion on scientific innovations or upcoming technologies, or conduct an expert analysis of the whole situation. The increasing demand for quantum experts highlights this point. An expert may also help in the disclosure of some important documents that can not be accessed due to confidentiality or privilege restrictions. Additionally, even parties are given the opportunity to present expert witnesses who can substantiate their case and favour their theory. Expert evidence can become a crucial factor in influencing the decision of the tribunal. 

The Supreme Court, in State of Himachal Pradesh v. Jai Lal and Ors, observed that “An expert witness needs to provide the Judge with the necessary scientific criteria for testing the accuracy of the conclusions, to enable the judge to form his independent judgment by using this criteria to the facts of the case. The scientific opinion evidence, if intelligible, convincing and tested, often becomes an important factor for consideration along with the other evidence of the case”.

Mr. Stephen Bond, a renowned law professional from Covington & Burling LLP, while discussing the importance of expert evidence said that: 

“The importance of competent and professional expertise cannot be overstated. Experienced experts are expensive, especially in cases requiring complex questions of delay analysis and damage quantification.”

In, M.S. Commercial v. Calicut Engg. Works Ltd. (2004), the Supreme Court completely relied on the evidence presented by the handwriting expert to provide a verdict that an arbitration agreement existed. Based on some judgments and examples we can classify that experts are needed for:

  • Expertise: On many technical matters, like science, technology, geography etc, the tribunal may require persons with expertise and knowledge on that subject. They could be needed to explain some concepts or provide their opinion on issues.
  • Legal Assistance: The laws of two different countries are mostly always different, and in some cases even contradicting. During such cases, legal experts are hired to clarify to the court the same.
  • Witness: Parties are also allowed to produce their own experts before the tribunal, to support their case. Such experts are needed by the parties to help establish their point and to convince the judge, of their story. 
  • Make reports: Experts may also be asked to study the particular issue at hand and prepare reports for assisting the court.
  • Other assistance: Experts are also needed to assist the court with small activities needed during the course of the trial. For example, an accountant might be needed to audit the firm, or a handwriting expert would be needed to establish an identity.

Who appoints the expert

Experts under Section 26 can be appointed both by the parties and by the tribunal. While the tribunal may appoint experts for their expert opinion and knowledge, parties may appoint them as witnesses. Section 26 allows parties to “present expert witnesses in order to testify on the points at issue.” Along with Section 26, Section 20(3) and Section 27 of the Arbitration Act also specify that parties can individually appoint experts to help establish their case or resolve discrepancies.

When does an expert participate in the oral hearing

According to Section 26(1), experts may participate in an oral hearing if requested by parties or if deemed necessary. The section also provides that an expert can be posed questions and examined by both parties before the tribunal. However, the Act does not specify any procedure or method to be followed for oral hearings and examinations of the expert. For the admissibility of the expert evidence, it is necessary for him or her to participate in oral proceedings. Section 26 is bound by principles of natural justice i.e., opportunity must be given to both parties to examine witnesses to establish or disprove the expert’s credibility and for an unbiased judicial proceeding. 

The Supreme Court, in Ramesh Chandra Agrawal v. Regency Hospital Ltd. & Ors. (2009), noted that “the first and foremost requirement for expert evidence to be admissible is that it is necessary to hear the expert evidence.” 

The Supreme Court in Hazi Mohammed Ikramul Hague v. State of West Bengal (1958) upheld the Calcutta High Court decision and held the expert evidence unreliable because the expert was not examined in the oral hearings. 

These precedents help us conclude that, indirectly, the participation of an expert in an oral hearing is necessary. Non-participation of the expert in the oral hearings could lead to an adverse inference by the tribunal and vitiate the entire purpose of using a witness. Though 

What are the obligations of the expert according to Section 26 of Arbitration and Conciliation Act, 1966

  • To provide expert opinion and analysis, and address concerns of the court.
  • To participate in the oral hearing if needed and answer questions posed by the court and the parties with sound logic, evidence, and proper reasons.
  • To provide to the parties all the documents, reports, books, facts, and goods the expert relied on to form his opinion. 

What are the obligations of the parties according to Section 26 of Arbitration and Conciliation Act, 1966

  • Parties need to provide the expert with any necessary documents, facts, reports, goods, and property related to the case for analysis by the expert.
  • Parties also need to request an oral examination of the expert if they require it.
  • Documents, goods, and property used by the expert to prepare his report can be obtained only if requested by the parties.

Types of experts appointed under Section 26 of Arbitration and Conciliation Act, 1966

Section 26 not only empowers the Tribunal to appoint experts but also allows parties to bring their own expert witnesses. Doug Jones AO, a famous arbitrator and a judge at the ICC Singapore, observes that experts can usually be classified into: 

  • Technical Expert: When the dispute involves a special area of knowledge, the opinion or advice of an expert would be needed. Technical experts may be sought to provide expertise in fields like natural sciences, economics, business administration, marketing etc. Tribunal-appointed technical experts are a widely followed practice in civil law countries.
  • Legal experts: Legal experts are often needed to clarify legal aspects and issues beyond the knowledge of the arbitrators. The arbitral tribunal usually appoints legal experts to explain complex legal procedures or rules, give insights into other country regulations, and help decide jurisdiction in international disputes. They are widely appointed in both civil and common law countries. 
  • Delay experts: Delay experts are one of the most widely used experts. They sort out facts and explain to the tribunal how and why something happened. These experts even have the power to influence the verdict delivered by the judges.
  • Quantum experts: They provide the tribunal with a quantum assessment of the loss, or profit, and perform the valuation of assets which are relevant to the case. These kinds of experts are mostly appointed in mergers, acquisitions, bankruptcy, or financial disputes between companies.

Interconnection of expert witness in the Evidence Act and in the Arbitration Act

Though, Section 19(1) of the Arbitration and Conciliation Act, 1996 states that the Indian Evidence Act, 1872, shall not bind the Arbitral proceedings, the concept of an expert witness under Section 26 is very similar to Section 45 and 51 of Indian Evidence Act, 1872, which are the provisions surrounding relevancy and admissibility of the expert witness. Unfortunately, unlike the Indian Evidence Act, no specific procedure or specified evidential value for expert evidence is specified by the Arbitration and Conciliation Act, 1996. However, UNCITRAL law, German, and Singapore Arbitration rules fill the existing lacunae.

Definition of an Expert:

The meaning and qualifications of an expert according to the Indian Evidence Act, and the Arbitration and Conciliation Act are similar.

  • Section 45 of the Indian Evidence Act,1872, clearly defines an expert. According to it, experts are specially skilled people, who assist the court in coming to a conclusion. 
  • However, on the other hand, the Arbitration and Conciliation Act nowhere provides a specific definition for an expert. For the definition part, the international laws pertaining to arbitration fill the gap. Section 26 of the UNCITRAL laws, or  define an expert as a person with specialised knowledge employed to help the tribunal. The IBA rules define a tribunal-appointed expert as a person or an organisation, appointed to report to the tribunal on specific matters.

Role of Experts: 

The role and purpose of an expert under the Evidence Act and Arbitration laws coincide. 

  • According to the Indian Evidence Act, an expert is employed to resolve the questions of the court. Sections 45-50 of the Indian Evidence Act explain that an expert shall supply the court with ballistics information, fingerprint analysis, handwriting analysis, opinion on foreign law, medical analysis, existence of customs, and scientific principles if needed. The Act also mandates the examination of some experts such as medical experts, ballistics experts, and forensic experts on a case-to-case basis. 
  • Though, the Arbitration Act does not lay down the role of an expert, comprehensively, it does specify that experts are supposed to assist the court through their specialised knowledge and skills i.e., provide reports or opinions if asked. 

Evidentiary value of experts:

Non-explicitly, the Evidence Act and arbitration laws award similar value to expert witnesses. 

  • According to the Evidence Act, the value of an expert witness depends upon his facts, reasoning behind the opinion and his competency. Usually, evidence and opinions provided by experts are advisory. Expert opinion may help the court form its conclusion but it cannot be the sole criteria for the decision. The evidence of the expert also cannot override the already existing testimonies of other witnesses. The Supreme Court in S. Gopal Reddy v. State of A.P (1996), interpreted the Indian Evidence Act, where it held that “expert evidence is merely an opinion and not substantive or probative evidence. According to procedural rules, expert opinions lack independent value and must be corroborated with circumstantial evidence.”
  • Though the Arbitration Act does not address the evidentiary value of expert advice, court judgements do. The Supreme Court in Malay Kumar Ganguly vs. Dr. Sukumar Mukherjee (2009), held that expert opinions are only advisory in nature and the court is not forced to accept them.

Examination of experts:

  • The Indian Evidence Act and all the arbitration laws allow the examination of the expert. The purpose behind such an examination is to provide parties with a chance to establish or destroy the rationale and persuasiveness behind the making of the expert opinion. According to both laws, examination of the expert is necessary for the court to rely on their opinion. Non-examination may lead the court to make an adverse inference.
  • Experts may be chief and cross-examined according to the Indian Evidence Act, and Arbitration Act. The examination of the expert under both laws follows the principles of natural justice, i.e., under both laws, both parties are allowed to pose questions to the expert. They are also allowed to inspect the sources used by the expert to come to his opinion.

Case laws on Section 26 of Arbitration and Conciliation Act, 1966

Mahavirchand S/O Suganchand Deoda v. Ashaykumar s/O Bhavarsing Parakh (2011)

Mahavirchand v. Ashaykumar Bhavarsing Parakh, explains the necessity and circumstances under which an expert arbitrator can be appointed. It also specifies some duties of the expert. It also discusses the difference between Section 17 and Section 26 of the Arbitration and Conciliation Act, 1996. The court, in this case, held that expert evidence was a step-in-aid to the tribunal process.

Facts of the case

  • Appellant, i.e., Mahavirchand s/ Suganchand and Respondents i.e. Ashaykumar S/O Bhavarsing are partners of the partnership firm M/S Paras in Bombay. They are retailers who deal with the sale of clothes, manufactured by Raymond Mills. One day, disputes arose between both the partners and Respondent 1 i.e., Ashaykumar approached the Bombay High Court asking for the appointment of an arbitration tribunal to resolve them.
  • The Bombay High Court noted that since the partnership deed already mentions arbitration for dispute resolution, the appointment of an arbitral tribunal was possible. The arbitration tribunal was appointed and it consisted of two chartered accountants and one presiding officer. 
  • Both the parties appointed a chartered accountant each, and the court-appointed Retired High Court judge Shri Justice N.P.Chapalgaonkar as the presiding officer.

Arguments of claimants before the Arbitral Tribunal

  • The party which requested arbitration prayed before the tribunal that:
  1. The partnership firm is dissolved and all assets, and properties of the firm are divided among the partners based on their share.
  2. The accounts of the firm from the date of incorporation until now are given to the claimants and an independent impartial auditor is appointed to value the firm and perform a detailed audit.
  • Further, the claimant requests before the arbitral tribunal that:
  1. A qualified expert is appointed as an internal auditor to perform the audit of the firm. A specific time period by which the expert submits his report be fixed.
  2. The appointed expert may seek help from technology experts if needed.
  3. The respondents must be directed to share everything i.e., all books of accounts, documents, CD files, and others that may be needed by the auditor for audit purposes.
  4. The claimant or his representatives are allowed to be present for the entire time, until the completion of the audit proceedings.

Judgement of the tribunal

  • After hearing arguments from both parties, the tribunal found it necessary to appoint an expert auditor to verify the claim of financial allegations made by the claimants. Therefore, Sir R.B. Chandhak was appointed as the auditor. It was noted that the auditor shall have all the right to call for any documents, reports, or financial statements to be submitted by the respondents for a truthful and complete audit. The audit report must be submitted within one month. For the same purpose the claimant was asked to deposit one lakhs with the arbitrator.
  • The above order was passed under Section 17 of the Arbitration Conciliation Act. 

Issues raised 

  1. Whether there was a necessity in appointing an expert in this case?
  2. Whether the award refers to Section 26 of the Arbitration and Conciliation Act, of 1966?

Arguments raised

Appellant 

  • The appellants i.e., Mahavirchand were represented by learned counsel Shri Soman. They contended that Section 17 of the Arbitration and Conciliation Act,1966 shall not apply in this situation. 
  • The counsel further claimed that the accounts of the firm were audited from 1998 based on mutual agreement by the parties and that there was no necessity to appoint an independent auditor.
  • The counsel also claimed that no evidence to prove fraud being committed was present and also claimed that the tribunal had abruptly decided to appoint an independent auditor without evaluating the claims of the appellants.

Respondents

  • Respondents No. 1 and 7 were represented by Shri Ladda and Shri Bhandari. The counsel supported the order passed by the tribunal. They claim that the tribunal in their order nowhere mentioned passing of the award invoking Section 17. 
  • The counsel put before the court the essence of Section 26. Section 26 powers the tribunal to appoint experts to assist the tribunal if found necessary. The counsel claimed that according to Section 26, the tribunal was entitled to appoint experts for special advice. 

Judgment of the case

  • The court noted that although the order passed by the tribunal seems to be related to Section 17 of the Arbitration Act, none of the four provisions enlisted under Section 17 were applicable here. Instead, the order passed by the tribunal shall fit under the scope of Section 26 (1)(a).
  • The court held that the tribunal might have misquoted Section 17. A reading of the entire order made it clear that it was passed with the aid of Section 26. 
  • The court observed that to collect data, elicit information, and effectively pass the final order, the appointment of an independent auditor was necessary. The court noted that this was a step-in-aid to help determine the issues before the tribunal and to understand all the facts related to the financial matters. Therefore, the court dismissed the appeal and approved the appointment of the expert by the tribunal.

Ssangyong Engineering and Construction Co. Ltd. v. National Highways Authority of India (2019)

In Ssangyong Engineering, Section 26 was analysed amongst several others, and it was observed that Section 26 of the Arbitration and Conciliation Act, 1996 is also bound by principles of natural justice i.e., an equitable hearing needs to be given.

Facts of the case

  • The respondent, the National Highway Authority of India (hereafter NHAI), issued a circular inviting tender to construct a four-lane highway on NH 26 (National Highway). The appellant was given the letter of acceptance on 30th December 2005 and the contract for a value of INR 2,19,01,16,805. Since both parties belonged to different countries namely, Korea and India, there was a need to adjust prices for labour, plant and machinery, petroleum, oil and lubricant (POL), and other local materials. Price adjustment for cement, steel, plant and machinery, and other local materials were to be performed according to sub-clause 70.3 of the contract. C1, C0, and Pc were important components of the method to adjust price under subclause 70.3.
  • On 14th April 2010, the NHAI published a new series changing the C1, C0 and Wholesale price index (WPI) indices. The circular also stated that contractors needed to provide an affidavit which stated their acceptance of the new series and also contained the promise not to claim in future and that a linking factor needed to be created between the new and the old series.
  • The Ssangyong Engineering Pvt Limited refused to accept the change and approached the High Court. The High Court conveyed that resolution through the dispute adjudication body and then the arbitral tribunal was the proper procedure. The appellants approached the High Court for an interim order against recovery and deductions sought by the appellant. The High granted a restraint.

Arbitral Proceedings

  • The arbitral tribunal, in majority, favoured NHAI and upheld the legality of the circular, whereas one arbitrator dissented. The arbitral tribunal observed that the arbitral tribunal held that the circular was within contractual terms and was legal.

High Court Judgment

  • The single bench judge of the Hon’ble Delhi High Court held that a majority decision by an arbitral bench cannot be changed. The High Court upheld the tribunal award mainly because of the majority opinion in the tribunal, though personally, it prefers the contrary.

Issues

  • Whether the arbitrator had proper jurisdiction and whether he went out of the scope of the contract submission?
  • Whether the appellants need to use a linking factor for the new series?
  • Whether Section 26 is bound by principles of natural justice?

Arguments

 Appellant

  • Smt Rahmeet Kaur represented the appellants. Their counsel argued that the arbitral award went out of the scope of the submission to arbitration according to Section 34(2)(a)(ⅳ). They claimed that it was a jurisdictional error and that the tribunal never had the scope to issue orders in the first case. The order passed by the tribunal went against public policy according to Section 34(2)(b)(ii). The counsel cited several judgments to show how Section 34(2) would be applicable in the present case.

Respondent

  • The respondents were represented by Shri S Nandakumar. They claimed that the new formula would become unworkable without a linking factor. The counsel claimed that the appellants had already started using the new series along with a linking factor. Further, Shri Nandkumar contended that the view of the arbitral tribunal was binding and final and could not be interfered with.

Judgment

Scope of Arbitration under Arbitration and Conciliation Act, 2015

  • The court after analysing several precedents and international regulations, held that the award does not go beyond the scope of submission to arbitration. The subject matter of the arbitration could be comprehended as ‘disputes’ under the Arbitration Act. The court also observed that jurisdiction error shall not apply to international arbitration agreements.

Section 26

  • While analysing whether both parties were provided an equal opportunity to present their case, the court analysed Sections 18, 26 and 24(3). The court analysed Section 26 and observed that:
  1. Section 26 deals with expert evidence. When an expert report is relied upon by the arbitral tribunal, the said report must first be made available to both parties at their request.
  2. Any other documents, goods, evidence, or property relied on or used by the expert for preparing their final report must be made available to the other party.
  3. Once the report is available to both parties, if requested by the parties, they must also be given the opportunity to question the expert.
  4. The parties are also allowed to bring in their own witnesses to establish their case.
  5. The court interpreted that parties also have a right to comment on ‘out-of-court knowledge obtained from an expert. The parties have a right to comment on expert evidence used by the tribunal to deliver their verdict. 
  • Therefore, the court overruled the High Court decision while reiterating that only in exceptional circumstances the award of the arbitral tribunal could be interfered with. 

Analysis of Section 26 of Arbitration and Conciliation Act, 1966

Section 26 of the Arbitration and Conciliation Act, of 1996, paves a path for easy dispute resolution by arbitration. While, Section 26 only deals with tribunal-appointed experts in detail, the arbitration act also permits parties to bring experts. Appointment of experts by the tribunal not only ensures the independence, and impartiality of the expert but also ensures the competency of the experts. These experts indirectly help in delivering justice by assisting the tribunal in the smallest manner. Technical experts, clerks, damage experts and counting experts all assist the tribunal in their own capacity. Had the arbitration act not included such a provision, it would have been a daunting task for arbitrators to find out everything on their own. Further, the time taken to resolve a dispute would also have been unimaginable. Though Section 26 has several advantages, there are some loopholes that need to be addressed. Firstly, some clarity on who can be defined as an arbitration expert is needed. Secondly, a well defined procedure for the appointment of an arbitrator would be helpful, and lastly, proper powers laid down for the expert would be helpful. Tribunal-appointed experts, sometimes, are perceived as a restraint on the liberty of the parties. Section 26 also empowers the expert to request any document, property, or goods of the parties for the purpose of inspection, thus constraining their liberty to some extent. Notwithstanding these, Section 26 is one of the strongest pillars, supporting the development of arbitration.

Conclusion

Section 26 plays a very important role in assisting the court, assisting the parties, simplifying technical data and most importantly delivering justice to the parties. With the world becoming more complex and dynamic, the need for experts to explain concepts to judges to understand the facts properly is increasingly felt. The use of assistance from scientific experts to explain technical terms, and advanced technology is on the rise. The evidentiary value and procedure to be followed for expert evidence in arbitration is very similar to that of the Indian Evidence Act. Though the Arbitration and Conciliation Act was amended several times, no major change happened to this Section. A need for some changes in this Section due to the dynamic nature of the society could be felt.

Frequently Asked Questions (FAQs)

What does Section 26 of the Arbitration and Conciliation Act, 1966 talk about?

Section 26 talks about the use of experts in arbitral proceedings. Experts can either be party-appointed or tribunal-appointed. They help assist the court by explaining several concepts or providing access to important documents.

What is the procedure to be followed according to Section 26?

Section 26 does not explicitly lay down any procedure to be followed. International laws, treaties, and the Indian Evidence Act do.

Can the expert be examined before the court under Section 26?

Yes, Section 26 provides authority to parties to examine i.e., both chief examination and cross-examination experts appointed by the parties and by the tribunal. They can be questioned and asked to back up their opinion with evidence in oral hearings.

References 

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