Prompt Pack Expert Report Arbitration

Expert Report (Arbitration)

When to use this

Use this skill when a party to international arbitration needs to commission and structure an expert report — typically on damages, valuation, accounting, technical matters, or industry practice. Expert evidence is central to most commercial arbitrations; the quality and structure of the expert report often determines the outcome on quantum.

The arbitration expert report differs from a litigation expert report in that:

• It must comply with the applicable arbitral rules (IBA Rules, institutional rules, or specific procedural orders)
• The overriding duty of the expert is to the arbitral tribunal, not to the appointing party
• Expert reports are typically exchanged simultaneously (not sequentially as in many court proceedings)
• Hot-tubbing (expert conferencing before the hearing) is increasingly common in international arbitration

Typical triggers:

• Counsel retaining a financial expert to opine on damages in a construction, M&A, or contract dispute
• Party appointing a technical expert to assess liability in an engineering or IT dispute
• Expert needs to prepare their report structure before data analysis begins
• Tribunal has ordered expert reports by a specific deadline

Required inputs

Optional inputs

• Tribunal procedural order governing expert evidence
• Joint expert or sole tribunal-appointed expert arrangement (uncommon but possible)
• Hot-tubbing expected (affects how opinions are framed)
• Applicable accounting standards (IFRS, US GAAP) for damages or valuation opinions
• Specific methodologies required or prohibited by the parties' agreement

Document structure

Section 1 — Cover page and identity

• Expert's full name and professional title
• Appointing party
• Case name and reference
• Title: "Expert Report on [Subject]"
• Date
• Report number (First Report; Second Report if this is responsive)

Section 2 — Expert qualifications and independence

This section establishes the expert's credibility and duty to the tribunal:

• Full professional biography: education, professional qualifications, current role
• Specific expertise relevant to the issues in this case: "I have [X] years of experience in [subject area] and have provided expert evidence in [X] proceedings."
• Statement of independence: "I confirm that I have been instructed by [Party] but my overriding duty is to the Tribunal. I have given this opinion independently and the views expressed are my own."
• Declaration under applicable rules: IBA Rules Art. 5(2) requires that expert reports contain statements of the expert's independence and overriding duty to the tribunal.
• Prior testimony: list of arbitral and court proceedings in which the expert has previously given evidence (required under some procedural orders)
• Conflicts of interest: disclose any relationship with the parties, witnesses, or counsel

Section 3 — Scope of instructions

Define precisely what the expert was asked to address:

"I have been instructed by counsel for [Party] to provide an independent expert opinion on the following questions:

1. What is the quantum of damages suffered by [Party] as a result of [alleged breach]?
2. Whether the [specific methodology] applied by [opposing party] is consistent with [IFRS / industry practice / applicable standards]?
3. [Additional questions]"

A clearly defined scope of instructions:

• Prevents the opposing party from arguing the expert went outside their remit
• Helps the tribunal assess which questions are answered in the report
• Limits the expert's exposure to cross-examination on matters outside their instructions

Section 4 — Summary of opinions

A plain-language summary of the expert's key conclusions, before the technical analysis. This should be readable by non-technical arbitrators and serves as the executive summary.

Section 5 — Documents and information reviewed

List all materials the expert relied upon:

• Documents provided by instructing counsel (factual exhibits from the case file)
• Documents obtained or independently reviewed (published data, market research, industry standards)
• Interviews conducted (if any; must be documented)

Note any information that was requested but not provided, and state whether that affects the opinions.

Section 6 — Factual background (limited)

A brief, neutral summary of the relevant facts that form the basis of the expert's analysis. The expert should not advocate — state the factual assumptions clearly:

"For the purposes of this report, I have been instructed to assume that [factual assumption]. If this assumption is incorrect, my opinion on [issue X] would change as follows: [sensitivity analysis]."

Section 7 — Methodology

Explain the analytical framework applied:

For damages quantification:

• Standard: expectation damages (loss of anticipated benefit); or reliance damages (out-of-pocket losses); or disgorgement
• Methodology: DCF (discounted cash flow); comparable company analysis; market approach; cost approach
• Why this methodology was chosen over alternatives
• Key assumptions and their sources

For valuation:

• Valuation date
• Standard of value (market value; fair value; fair market value)
• Methodology: DCF; comparable transactions; precedent transactions; sum-of-parts
• Discount rate rationale (WACC, CAPM — be specific about inputs)

For technical / industry practice reports:

• Standards or codes applied (ISO, industry guidelines, relevant professional standards)
• How the expert applied those standards to the specific facts

Section 8 — Analysis

The detailed technical analysis applying the methodology to the facts. Organized logically by sub-issue. Uses tables, calculations, and exhibits to support opinions.

Best practice:

• Each step of the analysis should be replicable by the opposing expert
• Show working: "Using a discount rate of X% (calculated as shown in Appendix A), the NPV of the expected cash flows is USD Y."
• Acknowledge counterarguments: "I note that the opposing approach would yield Z, but I have rejected it for the following reasons: [reasons]."
• Sensitivity analyses: show how conclusions change under different assumptions

Section 9 — Opinions

Clear, numbered statement of each opinion:

"Opinion 1: [Party A's] damages resulting from [breach] are USD [X million] as of [valuation date], calculated using the [methodology] approach." "Opinion 2: The [opposing expert's] use of [methodology] is inconsistent with [industry standard / IFRS / applicable principle] for the following reasons..."

Each opinion should be expressed with appropriate confidence: "In my opinion..." / "I am of the view that..." / "I cannot determine..." where the evidence is insufficient.

Section 10 — Limitations and caveats

Honest acknowledgment of:

• Information not available or not provided
• Assumptions made and their sensitivity
• Areas of genuine uncertainty in the analysis
• Matters outside the expert's expertise

Appendices

• CV / curriculum vitae of the expert
• List of documents reviewed
• Financial models and calculations (in sufficient detail to be checked by opposing expert)
• List of cases in which the expert has previously given evidence
• Expert's declaration (required under IBA Rules and most institutional rules)

Jurisdictional notes

MENA-specific expert evidence considerations

Civil-law jurisdictions (UAE onshore, KSA, Lebanon, Egypt):

• Court-appointed (tribunal-appointed) experts are the norm in civil-law proceedings
• Party-appointed experts are more common in international arbitration even with a civil-law seat
• Civil-law arbitrators may give more weight to tribunal-appointed experts than party experts; this affects how aggressively party experts should position their opinions

DIFC / ADGM:

• Common-law approach; party-appointed experts are standard
• Expert witness duties are explicit under DIFC Courts rules and ADGM Court rules

IBA Rules on Taking of Evidence (2020 edition):

• Art. 5: Party-appointed experts; duties; contents of expert reports
• Art. 6: Tribunal-appointed experts; process for appointment; parties' right to challenge
• Art. 8: Oral testimony; hot-tubbing process

Common mistakes

• Over-advocacy: An expert who simply adopts the appointing party's entire factual case and reaches conclusions favoring them on every issue loses credibility before the tribunal; acknowledge where the facts support the other side.
• No sensitivity analysis: Real-world analyses have ranges of outcomes; an expert who provides only a single-point estimate without acknowledging key sensitivities is not credible.
• Failing to address the opposing expert's methodology: In most arbitrations, expert reports are exchanged; the second (rebuttal) report must directly engage with the opposing expert's methodology — not ignore it.
• Inadequate qualifications disclosure: Some arbitrators will disqualify or give no weight to an expert whose qualifications for the specific task are not established; front-load the qualifications section.
• Exceeding the scope of instructions: An expert who opines on matters they were not asked to address risks having that section excluded; stay within the defined scope of instructions.

Related skills

• [[prompt-pack-expert-witness-report-outline]]
• [[prompt-pack-document-production-request]]
• [[prompt-pack-emergency-arbitrator-application]]
• [[prompt-pack-enforcement-of-judgment]]