Judicial review of expert determination
To What Extent Can a Court Review An Expert's Determination of a Dispute?
Expert Determination is seen as an alternative to any quintessential adjudicatory process, is gaining popularity due to its informality, use of expertise and assurance of confidentiality that provide an effective and expeditious mechanism for disposal of disputes. Being a creature of a contract, its elements are governed by the terms enshrined in the same, including finality and bindingness of the determination. In most of the cases, Courts are wary of intervening in issues where the parties, by way of an agreement between them, voluntarily waive their right to resort to established statutory procedures.
Unlike arbitration, expert determination is a concept which does not emanate from a statute and therefore has no set framework for appeals. SC in KK Modi’s case emphatically stated that despite the presence of overlapping elements, there were fundamental differences between arbitration and expert determination. Hence, the provisions and rules for appeal present in arbitration will not apply to expert determination. In the absence of any clear provision regarding the mechanism for appeals, the intention of the parties to a contract becomes crucial.
For example: Consider the expert determination clause of a contract: ‘The expert shall endeavour to resolve the issues as soon as it is practically possible and his finding shall be final and binding upon the parties to the dispute’. The Courts, in such cases, will avoid any intervention as it may frustrate the intention of the parties to remit the issue to a technical expert. In case the determination is fraught with fraud, actual bias, collusion, judicial intervention will be allowed. Hence, the decision made by an expert will be final and binding only if it is in consonance with the terms of the contract; beyond which it will be open to judicial review. Thus, the grounds which leave a provision for Court’s intervention, albeit limited, are as follows:
Although the contractual negotiations of the parties are not susceptible to circumvention, issues of fraud allow judicial intervention into the determination of a dispute by an Expert.
- COLLUSION AND IMPARTIALITY
Elements such as independence and impartiality are of paramount importance in an expert determination. Any form of collusion with the parties, conflict of interest or actual bias will vitiate the decision as such influence of either of the parties may affect the evidentiary value.
Although an expert’s determination is ostensibly impervious to judicial review, an
appeal to set aside the determination may be considered in case it can be reasonable perceived that the expert has dealt with issues beyond his jurisdiction. The powers and functions delineated in the contract marks the jurisdiction of the expert and any action taken beyond that may be susceptible to challenge.
For Example: The clause reads: ‘An expert will:
- Act as an expert and not an adjudicator
- The expert shall endeavour to determine the fair market value of the goods,
mentioned in Annexure ‘A’, in any manner as he/she thinks fit.’
Thus, determination of the dispute beyond the specified issue will be characterised as ultra vires. However, an analysis of those issues tangentially related to the main issue, which in this case may be quantification, quality specification, etc., will not make the determination susceptible to challenge.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.