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Expert Witnesses in International Arbitration

(This article first appeared in the inaugural issue of The Wakili, the Law Society of Kenya Nairobi Branch magazine November-December 2019 Vol. 001.)

Kenya signed the International Centre for Settlement of Invest­ment Disputes (ICSID) Convention on 24th May 1966 while entry into force was on 2nd February 1967. It has had three cases there: World Duty Free, Cortec and WalAm. It won the first two hands down, literally. WalAmhas not been decided. This ar­ticle – max 800 words, the editor said and re­peated twice – is on the truly remarkable Ken­yan expert witnesses in Cortec case based on the arbitral award of 22nd October 2018and other public sources.

The case involves a Kenya Government’s conditional special mining license granting Cortec the exclusive rights to remove 130 million tonnes of material, over 21 years, ­from Mrima Hill in Kwale County, Kenya. The hill, or part of it, is a national monument and forest reserve which has great religious signif­icance in the local community. It is believed to be the world’s largest undeveloped niobium and rare earth deposits worth Ksh. 5.5 trillion.

Trouble started when the Ministry of Mining tweeted a message, “CS Balala revokes all Mining licenses issued between 14th Jan and 15th May 2013 due to complaints regarding the process”. Whether the Government sus­pended or revoked the licence was a key is­sue in the case. Cortec is the collective name of three companies, which claimed from Ken­ya about Ksh.200billion in an ICSID arbitration under the UK-Kenya Bilateral Investment Trea­ty of 1999.

The Tribunal president, who was appointed by the co-arbitrators, was Hon. Ian Binnie, C.C., Q.C., who holds an LL.M from Cambridge Uni­versity and an honorary PhD from McGill. He was a Judge of the Supreme Court of Canada for 14 years. He was president in all the eight ICSID cases he has arbitrated. The co-arbitra­tors were Kanaga Dharmananda SC and Prof. Brigitte Stern.

 Expert witness

An expert witness is required to be objec­tive and impartial regardless of which party engaged him or her. Both Cortec and Kenya engaged eminent Kenyan Professors as ex­pert witnesses on Kenyan law.

Professor Justice (Retired) Edward Torgbor­was engaged by Cortec. He is a Chartered Ar­bitrator and a Professor of Law at Oxford. He earned his LL.B and LL.M from Cambridge. He was a judge of the High Court of Kenya when expatriate Judges were engaged on contract. His tenure ended when his contract was not renewed. That was a great plus during those dark ages. He must have found a good thing in Kenya, nevertheless, because he settled here and became a citizen. I dare speculate that Kenya gained more in that transaction, for he flew the Kenyan flag proudly when, in 2019, he graciously accepted the first ever Africa Arbi­trator of the Year Award.

Prof. Albert Mumma obtained his LL.B 1st Class Honours, no less, at the University of Nairobi, LL.M at Yale and PhD at Cambridge. He teaches law at the University of Nairobi and is an Advocate of the High Court of Kenya. He is a specialist, and widely published, in reg­ulatory, environmental and natural resource laws, which the Cortec case was all about.

When such Professors, one of them a for­mer Judge, disagree on matters legal, what can a humble arbitrator, who has no leg to stand on (locus standi) even before a District Magistrate II, say? Being an arbitrator, I have framed the issue as objectively as possible: who of the two Professors did the ICSID arbi­trators believe? Remember that one of the Tri­bunal members was a Professor of Law, and of the gender which possesses the mysterious sixth sense, which can, apparently, smell a male lie a mile away.

The two experts, presumably under oath or affirmation, locked horns on various points of law. For starters, Torgbor easily convinced the Tribunal that a purposeful interpretation of the Kenyan Mining Act “to enable the licence be issued” was necessary. Mumma had sought a broader interpretation considering the entire regulatory regime. He also submitted that the licence had been suspended, not terminated. Torgbor managed to convince the Tribunal that Kenya had revoked the licence.

Torgbor then opined that under Kenyan law, the mining Commissioner had “unfettered discretion”. The Tribunal concluded that the Commissioner must act “consistently with the requirements of other relevant laws and reg­ulations”, throwing back at Torgbor an entire phrase which he had used earlier. It conclud­ed that the subject licence “was a scrap of paper issued by an irresponsible bureaucrat”.

On what an independent feasibility study for a mining project should contain, Torgbor’s considered opinion was that the feasibili­ty study was an amorphous thing which the Commissioner could interpret as he sees fit. Dr. Nael Rigby, Kenya’s mining expert who had worked in about 60 countries and car­ried out feasibility studies for about 40 years, had a different view and was less diplomatic than Mumma. He told the Tribunal that an ac­cepted industry standard existed and that the report which Torgbor was defending fell “far short… appears to be a work in progress draft with many typographical errors, grammatical issues, errors and omissions, unsigned” and the conclusions were left open to be inserted by Torgbor’s client thereby undermining the entire credibility and independence of the re­port.

The Tribunal makes a rather odd remark in a footnote on page 53 of the award: “Justice Torgbor ventured into the facts and opined that EIA approval was given…At this point, Jus­tice Torgbor was no longer providing evidence on Kenyan law and had become an advocate of the facts”. One would need to read the tran­script, which is not readily available, to see why the Tribunal made such a comment.

Dear reader, by now I have probably ex­ceeded my quota of 800 words. I must now try something I have learnt from the best, who because they believe the joke that all Judges and arbitrators cannot read due to blindness or blindfolding, insist on making the much cherished and ever-so-brief oral highlighting of written submissions. They at the end of the time limit promisingly say, “finally”. They then continue speaking for 30 minutes, all the time maintaining perfect eye contact, looking for any sign of exhaustion in order to unleash the next ploy in the bag of tools: “in closing”.

Now, the High Court of Kenya had already found that the subject mining licence “was not in compliance with the law and was void ab initio”, a Ruling which the Court of Appeal up­held but on narrower grounds. Torgbor told the ICSID Tribunal that “I am saying, and I empha­sise it, both courts were entirely wrong, wrong in every way…the judgment is wrong, wrong, wrong…Both courts.” Mumma convinced the Tribunal otherwise.

Torgbor attempted to convince the Tribunal that statutory conditions precedent could be transformed to conditions subsequent. Appar­ently, Mumma did not need to address that, as Torgbor quickly backtracked after being ques­tioned directly by a Tribunal member. On a different point, it is recorded that the “Tribunal rejects the ‘wait and see ‘theory presented by Justice Torgbor.”

In closing. The stellar Tribunal was unan­imous that the licence was void ab initio un­der both Kenyan and international law for Cortec’s failure to comply with the regulatory regime. Cortec lost its case at ICSID with costs. One cannot help wondering what accounts for the irreconcilable divergence in the two experts’ evidence, given that both are hon­ourable men of great learning who should be greatly insulted if offered, let alone granted, the benefit of ignorance on matters legal.

There is a chance, not enough to hope for, of the award being set aside in the on-going ICSID annulment proceedings. In that case, if the reasons are related to the two experts’ ev­idence, the editor will, no doubt, in the greater interest of justice, allow me space to do the needful. For if it happens, I would have a le­gitimate claim on a plot enough for at least 800 words in a future issue of this aaah…aaah­ magazine. Whatever the case, may there be many many more issues of the LSK Nairobi Branch journal, no, magazine!.

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When experts are called by litigants rather than the court, the likelihood of their opinion evidence being inclined to perceptibly being supportive of the case of their calling party no matter how slightly, is an ever present reality. Prof Muma by the way taught me environmental law at the University of Nairobi and I know Justice Togbor as well from my interactions with his Judicial work in court and also in alternative dispute resolution in Kenya.

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