Mr. Sheth, welcome to the Arbitration Workshop! Firstly, we are extremely honoured that you agreed to give us an interview and to share your perspective with our readers.
Q. Before we delve in, may we request you to kindly introduce yourself and tell us about your professional background?
A. I am the Founder and Director at Konverj-Zeus Consulting Pvt. Ltd. I am a Risk, Forensics and Dispute Advisory professional with 14+ years of post-qualification experience. I am a Chartered Accountant, a Certified Fraud Examiner and a Valuer of Securities & Financial Assets.
I am a member of –
Steering Committee of Young MCIA (Mumbai Centre for International Arbitration) for 2021-23
Chartered Institute of Arbitrators
Institute of Chartered Accountants of India
Association of Certified Fraud Examiners
Q. How did you come to be associated with the field of Arbitration?
A. I started my professional career in Risk and Corporate Governance with some of the larger accounting firms in India. Later, I started conducting Forensic Investigations for banks and non-banking corporates. While conducting forensic investigations, I then supported few arbitration matters, both in India and internationally. Post these experiences, I started serving dispute matters for some of the larger law firms. This is how I got into the entire Arbitration field.
Q. How is your expertise utilised by prospective clients in arbitrations? How would you explain your role in the entire arbitration mechanism of today.?
A. Currently, for domestic and international arbitration, my role is primarily that of a Commercial Damage Quantification Expert. I also testify as an Expert Witness. My role also sometimes extends to rebutting the other Expert’s report or value and submitting a Rebuttal report. I have supported Arbitrations in India and internationally under the Rules of SIAC, LCIA, AAA and ICC. The disputes that I currently support are interestingly of varied nature. They include Contractual disputes, Shareholder disputes, Construction disputes, Valuation disputes, IP disputes and Anti-Trust disputes. Some disputes also include supporting the counsels to cross examine the other Expert. Another area of support is Economic Consulting in matters of Investment arbitrations or matters involving Competition Acts. Today, in few cases, I also get approached to be a Consultant, obviously not independent role, to help the client to ascertain the extent of damage or value of the claim.
Arbitration for me also includes supporting on Managed Document Review, where there are tonnes of documents to be reviewed, which is where I support law firms. These more often conducted using technological platforms, which save a lot of time and cost. Then there are calculation of damages in Business Interruption disputes that I have supported the clients in quantifying the Lost Profits due to, say for example, catastrophic events like earthquakes or hurricanes. A few dispute matters have also involved fact finding exercise for me, where our Forensic Accounting skill set comes into play. In these cases, I review a lot of financial records and un-earth the facts of the case, which then become very important for the law firms to strategize their case. And lately, I also play a new role in supporting Litigation Funding and Litigation Management.
So, my role in disputes, especially in arbitrations is spread across.
Q. At what stage of the arbitration proceedings do you find your expertise the most valuable? How does your expertise assist the Claimant or Respondent in representing their case before the arbitral tribunal ?
A. As mentioned, most of the cases I am involved in require my expertise as an Expert for the independent report and testify as an expert witness. This is the stage where in most cases the SOC and SOD are filed and then my role as an expert comes up. My support here is more of an independent evaluator of the claim or counter-claim values. Another role is where I am a consultant to the client, helping them ascertain the value of damage or claim. This is the stage of pre submission and filing of claim or counter claim statements. When we talk about litigation funding and litigation management, the role is spread right throughout the case and may start from when the dispute arises and ending post the dispute is over or settled.
Q. In our experience, we have seen arbitral tribunal’s being skeptical about damages expert engaged by the parties, what has been your experience while providing expert evidence on behalf of a party. Alternatively, do arbitral tribunals engage you or other damages expert as an independent witness? What if any is the difference in your role when engaged by the arbitral tribunal as compared to when engaged by a party in an arbitration?
A. Yes, the Tribunal may appoint an independent expert on their own, irrespective of whether the parties have or have not appointed an expert, more so in cases where they have not. The expert’s role in terms of duties and independence is same whether appointed by the client or the Tribunal. However, matters such as a list of issues on which the expert is requested to express an opinion, information, data, timeframe, communication protocols, method of exchange of expert reports and instructions concerning examinations, tests, experiments and site visits, if any that the expert receives is given by the Tribunal. So, in that sense the role and results differ if I get appointed by the Tribunal. In certain cases, the Tribunal may appoint an expert to report to it on specific issues to be determined by the arbitral tribunal. The parties usually participate in selection of an expert and also agree upon the selection by the Tribunal.
Q. Could your broadly throw light on the different mechanism or methods of valuations which are utilised by experts like you in determining the damages or valuation of a transaction or the value of a shareholding which may be relevant in an arbitration proceeding.
A. I believe it depends upon what one is valuing. If it is a company or share valuation, then one has three basic approaches – Income approach, Market approach and Asset approach. If one is valuing Intellectual Property, then one can select the most appropriate one of the methods – Cost method or Income method or Market method. If one is calculating the lost profits, then usually either of Before and After approach, Yardstick (comparable) approach and Sales Projections (But For) approach is used.
Q. Could you guide our readers towards certain literature that arbitration practitioners and Chartered Accountants could read to know more about valuation and damages expert in arbitration practice.
A. I think for my fellow Chartered Accountant friends, as many would know, Aswath Damodaran has authored numerous books and are the best reference material. But equally important are publications like International Valuation Standards by International Valuation Standards Council and for valuations in India, it is always useful to refer to ICAI Valuation Standards by Valuation Standards Board. For lost profits, I think Lost Profits Damages: Principles, Methods, and Applications by Everett P Harry III and Jeffrey H. Kinrich is very useful.
But there are various books depending on the topic one wants to refer.
Q. What advice could you provide to budding Chartered Accountants who might want to develop an expertise and a practice as damages and valuation experts in Arbitrations?
A. I think I would recommend my fellow budding Chartered Accountants to take up this area as early as possible to gain a lot of experience. I would suggest one should start working with some of the top Economic Consulting firms globally, which will give them immense exposure to the more complex projects. Attending events or webinars and just interacting or listening to speakers in this zone also adds up to a lot of knowledge. Academically and professionally, I think a degree or a specialised course in Valuation or Economics would definitely be very useful. I would welcome interested professionals to this service line of consulting, which is only here to grow in future.
The Editorial Team at the Arbitration Workshop would like to thank Mr. Keval Sheth for taking out time from his busy schedule and for sharing his perspectives with us!