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IMS Insights Podcast
The Power of Visuals in International Arbitration
Partner at Quinn Emanuel Mark McNeill and former legal and commercial director at Cairn Energy Duncan Holland join IMS | Z-Axis Global Consultant and Advisor Cindy Buxton to discuss the power of visuals in international arbitration and the importance of effectively communicating with the tribunal.
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IMS has delivered strategic litigation consulting and expert witness services to leading global law firms and Fortune 500 companies for more than 30 years, in more than 45,000 cases. IMS consultants become an extension of your legal team from pre-suit investigation services to discovery and then on to arbitration and trial. Learn more at imslegal.com.
Hello, and welcome to the IMS Insights Podcast. Today’s host is Cindy Buxton from the IMS | Z-Axis European team. Joining Cindy are Mark McNeill, who is a partner at Quinn Emanuel, and Duncan Holland, who is the former legal and commercial director at Cairn Energy.
Today’s discussion will include insights on visual strategies for complex matters, presenting evidence to tribunals in different countries, trends in presentation technology, and our panel will give advice for lawyers and in-house counsel new to international arbitration.
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Cindy Buxton:
Mark and Duncan, before we get into the specifics of the case you won together, I wanted to ask you both, what role does a visual presentation play in your overall strategy for an arbitration? I mean, for instance, what are the factors that you might consider when deciding to use a visual presentation in an arbitration hearing?
Mark McNeill:
So, I'm a big advocate of selective and intelligent use of graphical presentation of data where it's really called for and where really drives home a very important point we want to make in the case. I've always been a fan of Edward Doughty, the Emeritus professor from Yale and the Dean of The Graphical Representation of Data. And his theory is that a really powerful graphic will be very rich with data so that you can sit and look at it and learn things from it, but the message that you're conveying almost hits you in the face. It's actually clear, there's a comparison that you're drawing between one thing and another thing. There's a progression from point A to point B or there's a causal relationship. And so, the underlying message is clear in looking at the data, but it's also very rich with data in its detail. And so, I find that in a case where, for example, it's very hard to convey a causal relationship, for example, just in words or in bullet points on a slide or looking at the original documents, that a very powerful graphic which shows that there is such a close correlation between one factor and the outcome, right, that the tribunal automatically concludes for themselves: there must be a causal relationship. I can give you one example of a trial I had last year which had to do with an oil storage facility, and it was a 10-year lease by the customer and they're trying to back out of it. And they said because their view was that the facility was not in very good order.
And so, we had one graphic that correlated what was going on in the market, looking at the spot rate and the futures rate and how they were using the facility over the course of a five-year period. And it showed that it correlated exactly that they weren't using facility when it wasn't economic to do so. And then when it was, they used the facility almost to 100% capacity. And now this contract then turned into was economically loss-making for them. And that was the real reason. And it was so such a powerful graphic, that it was very hard to maintain the position that there was any other reason besides pure economics for trying to back out of this contract.
Cindy Buxton:
So, Mark, when do you typically start thinking about using graphics? Sort of how early on, sort of, in the process?
Mark McNeill:
Well, if it's let's say it's a graphic that we use at the trial or an arbitration hearing. Generally speaking, eight weeks or more in advance, depending on how complex it is. And I say that because it very often takes longer than you think to perfect a complicated graphic. And there's a process. I think I have a vision of it in the beginning, and then we put it on paper, and we adjust it, we adjust it, we take out information and we learn a lot about the case very often in the process of doing that. And that's something you wouldn't have the advantage of doing if you were just planning on presenting your case orally. You see different connections, different relationships that weren't as clear to you and then become clear in the process of representing the factual situation in some graphical way. So ideally, it's very precious time preparing for hearings, but it can also focus your case, and even potentially save time by focusing your case, by capturing exactly what you want to say in a powerful graphic.
Cindy Buxton:
So, I mean, you're saying to me that you have a fairly clear idea of what you want in the graphics. I mean, have you had situations where you have got a particularly complex issue and you simply have no idea how to get this across visually and would therefore approach Z-Axis? You know, who has been doing this for many, many years, I mean, 40-plus years, you know, who can maybe come up with some initial ideas and see and sort of plant the seed, as it were.
Mark McNeill:
Yeah, I think it's always important in communicating with Z-Axis, for example, exactly what message we’re trying to convey and what we're trying to accomplish. And then it's a very collaborative process in figuring out what is the most powerful way of doing that. I usually, because I like using graphical representations of data, I usually think I have, in my mind, a vision of what the graphic is going to look like. And then we see it on paper, and it just doesn't do what we intended to do. And so, then it's a collaborative process. What if we change the colors? What if we zoomed in, zoomed out? What if we excluded certain data, included other data? What if we made it a line chart instead of bars? And we play with it several times until it finally does exactly what we intend to do. So, anyone who knows very little about the case could come in and look at the graphic and draw conclusions from it, see the comparison and see the causal relationship. And that's ultimately what we're aiming for. But very often it's an eerier process that takes sometimes several weeks.
Cindy Buxton:
I'd be interested to know what really kind of made the two of you sort of think about the possibility of using visuals and how it would help your case. Duncan, do you want to start?
Duncan Holland:
Sure, well thank you, Cindy, for setting this up. Yeah, so I am the Legal and Commercial Director at the company, Cairn Energy. And we were involved in an arbitration against the Indian government, which fundamentally revolved around retrospective taxation. We had a tax imposed on us many years after the transaction took place. And we had raised arbitration proceedings against the Indian government. And originally, we thought this was quite a straightforward story to tell. It seemed on the face of it to be quite an unjust situation. We carried out a transaction in 2006 and then almost a decade later we got a tax bill for billions of dollars. But when, as the case developed and the Indian government started raising their arguments against us, they really focused on what they felt was, what they described as tax avoidance or tax evasion.
And they focused on how complex our group structure was, how complex the transaction structure was. And they really tried to convey this idea to the tribunal that it's not clear what's happening here, but something untoward was happening. And there was something that said that meant that the company shouldn't get the protections from the treaty. And so, at that point, Mark came to me, and we needed to rethink how we were going to tell the story, because at the time it was just a very textual-based narrative, and we had some very complex, structured charts which didn't lend themselves to telling the story that we wanted to. And then it was Mark that suggested maybe we could get Z-Axis involved to try and tell the story in maybe more of a visual way and really convey some of our messages to the tribunal that way.
Cindy Buxton:
What was in your mind when you realized that India was trying to make this case, you know, probably 100 times more complicated than what it really needed to be?
Mark McNeill:
As Duncan said, our view of this case was it was very straightforward. And this was a straightforward representation of what the reorganization transaction looked like. And so essentially, the company needed to get all of its India-related assets into an Indian Incorporated company for an IPO on the Indian market. And it was some of those preliminary transactions which ended up being taxed. Right. And so, we viewed this as a very straightforward retrospective taxation case. And India came up with, I think, five different theories of tax avoidance. So, this was basically tax avoidance. And because it was illegal, it wasn't entitled to protection under the UK-India Investment Treaty where we're bringing the claim. That was essentially what they were trying to accomplish.
And as Duncan mentioned, the original org charts for the company were, in fact, very complex. So, we had to find some way of breaking this down for the tribunal and showing the tribunal that there were just certain subgroups within this complex structure and that the reorganization was something that was completely ordinary. There was nothing that resulted in any hidden profits being shifted from one company to another company, or all the elaborate theories that that India had come up with. So, the challenge was showing this very complex structure by showing the simplicity of how the group was structured and how it was restructured.
Duncan Holland:
There's a timeline at the bottom, because this was very helpful because and this was a really clever way of walking the tribunal through how the group structure developed, because, as Mark said, the structure was very complex, and we needed to separate it into the Indian business and the non-Indian business. And one of the things we wanted to the tribunal to understand was that the actual way in which we held some of these assets didn't change over time. It was still the Indian assets at the bottom of the group, and that was the UK company at the top and the fundamental structures stayed the same. So, although there was a lot of movement around the edges and there was this subdivision into these two groups, the actual key components of the group's structure remained, remained as they had always been for the previous decade. And as you can see, the way it moves visually on the screen, it just made it a far easier story to tell and to allow us to leave the tribunal with two or three key messages, rather than having to say, talk about a specific company name or specific company number. It was just a very visual way of showing the tribunal just exactly what happened.
And you can see so the actual graphics themselves were just replicated by the tribunal. And even that paragraph in the middle is explaining exactly what happened: how we separated the group and consolidated some of the companies. And like I said, that was really critical in bringing the tribunal up to speed as to exactly what happened. And as Mark said, it really, it really shot down some of these fairly exotic theories of tax avoidance or tax evasion, which to believe those, you had to really think that there was something else going on that, you know, it was just a, you know, an offshoot of the fact the structure was so complex, there must have been something else going on. Whereas this really explained, it was just, it was good reasons for why we were doing what we did.
Mark McNeill:
Duncan mentioned the timeline at the bottom and the timeline moved forward and you see the group restructuring, restructuring, going in, or altered for various reasons. I don't think the tribunal ever understood how the group was restructured and why without doing it this way. I mean, it looks like this was just a fill-in-the-box exercise, perhaps when you look at this, and this took a lot of time for us to organize it in a particular way and really sit with the tribunal exactly how the different groups and subgroups were reorganized and what the reason was for each step.
Cindy Buxton:
What makes you decide whether a case requires any visuals?
Mark McNeill:
I probably use at least some visuals in just about all cases at trial. It depends. And some are quite simple, sometimes it's just a list of the, you know, the main players. But a lot of times there's a very complex visual presentation and it's you're giving up a lot of very precious trial preparation time to work on this graphic, like we did in the Cairn case. And it's done because the tribunal really needs to understand something that they're not going to understand just looking at the documents or just based on oral advocacy or a bullet point on PowerPoint slides. It's something it's a message, it's a relationship, it's a causal relationship, for example, that needs to be explained, and can be better explained through graphical representation. And ideally, it's something that helps the tribunal understand the issue and helps them write their award. For example, I had a trial last year and we represented an oil storage company based in Texas, and it was a very large oil storage contract that then turned into another party lasting ten years. And the other party backed out of the contract, or tried to back out of the contract and they said the facility is not up to standard.
And so, they put before the tribunal all sorts of pictures of rust stains and things to try to convince the tribunal that the facility was not in good order. Our view was it’s purely economic. And so, we did a graphic showing what was going on in the market using the spot rate and the forward rate, that it was simply uneconomic to store oil at this time. And we showed the correlation between the market and what they were doing at the facility, and it correlated perfectly. And it just gave a powerful message about what their incentive was and why they were really trying to back out of this of this storage. And because the correlation was so close, you almost didn't need to argue anything. It just spoke for itself that this really was the underlying motivation. It takes a long time to do that, but it sends such a powerful message. And you can tell the tribunal remembers that close correlation and they have that in their minds for the entire trial, that this is what was motivating them.
Cindy Buxton:
Do you have your own in-house, sort of, graphics team? I mean, you know, for any cases or anything like that. Maybe not such big ones as the one that we worked with you, but do you sit down and decide what it is that you want and then get your own people to do it?
Duncan Holland:
We have a very good in-house team working on things like our corporate presentations and, you know, how we convey messages to the market and to investors. But this, we wanted to use Z-Axis as an external provider for this because it was very much focused on how do we want to convey the story for the purpose of litigation, which really felt like a different in that we were trying to achieve. It wasn't necessarily still images. We wanted even just to share ideas as to what else has been used in other similar cases and really understand what might be the right tools to convince the tribunal. So, we do a lot of similar stuff in-house, but not really focused on legal matters or litigation. It's a lot of still photography and really nice images from some of our operations around the world. But this was trying to convey a very particular message to them, and that's why we used to Z-Axis for this.
Cindy Buxton:
Mark, are there any other cases where you've used graphics where you believe, you know, it really helped to get your main issues across?
Mark McNeill:
We can learn a lot about the case as we develop a particular graphic. And there are a number of cases I can think about where we have used graphics, a central graphic that we want to basically define the case, like the one I mentioned that explains the other side's incentive, their true incentive, right? Or the real reason why the project was, you know, ten years delayed or the actual as built did not conform to the design.
One case that we worked on together that comes to mind was the excavation of a site in Finland for a nuclear power plant. And the other side, because the as-built excavation looked nothing like the designs. Nothing. It looked like it had been a bomb site as opposed to this very detailed structure that they were supposed to carve out of the ground. The other side said it was the poor geology. It was impossible to create the structures that were contemplated. The design and geology certainly just wouldn't support it. And our position was that the company they hired to do the blasting simply went about it in a completely incorrect way. And so, we used one very simple graphic to drive the point home.
This is just one small shape that had to be blasted by the excavator. But the issue that we're trying to explain was something that permeated the entire site. So, we thought we'd just start with one small shape and show exactly how it was supposed to go and then what the blasting company did. So what we have here is the theoretical excavation profile. That's what the shape was supposed to look like after you blasted out the rock, right? And the way you're supposed to do this was using dynamite 29 millimeters, and you're supposed to do it in two steps. So you go down to this first bench, 300 millimeters down with the smaller charges, 29-millimeter charges, and then blast out the first bench and then the brown outline shows roughly the shape you derive by doing that. And then the second run, you would put the drill bits further into the ground with, again, 29-millimeter charges, and carve out that second shape, right? So that's the way this small part of the excavation should have been done.
So, we looked at the blasting records. You see the reference to blasting record number 332. We matched up the blasting records to the different parts of the site. And you can see how they went about doing just this part of the site. They use 43-millimeter dynamite, so much larger charges. They did the drills all the way to the bottom of the bench. And in one go, instead of two goes, they set off the charges. And then there you show, in brown, that is the as-built, right? And that’s taken directly from the as-built diagrams. So, this is now taken from the actual, you know, design and then the actual as built, which shows the brown. So, you can see we've taken it directly from the designs and it shows how we ended up with the excavation site being dreadfully over-excavated across the entire site. So, we started with this one example and then the whole point to the tribunal was: this is what they did across the entire site. They didn't follow the protocol they should have to derive these designs. It had nothing to do with geology and everything to do with the poor method of excavation.
Cindy Buxton:
It certainly shows very clearly. Presumably they were trying to, I don't know, do things more quickly or cheaper or whatever.
Mark McNeill:
Well, yes, it was simply a cost-saving measure and then they were going to blame it on the rock, which was not suitable for this kind of detailed excavation. But it turned out that the reason for being over-excavated was entirely different.
Cindy Buxton:
And are there, sort of, specific type of cases where you would consider using graphics, or do you believe that most cases, even if it's really something simple, you know, or maybe, you know, just a timeline or something, I mean, is it a particular type of case?
Mark McNeill:
I'd say the cases that more often call for graphical representations tend to be complex construction cases, cases involving engineering issues, the construction of a bridge. I had a case with the construction of a railway a couple of years ago. And there, clearly, I think the tribunal wants to understand, you know, what are we looking at? They at least want to have some concrete feel for what the project was about. But in the process of educating them, this is what the sites look like, you also want to, of course, be thinking about what is our message and what issue are we driving home. We're not just showing them beautiful pictures, we're also pleading our case, either subtly or overtly, in our selection of what graphics we're showing them and how we present those graphics.
Cindy Buxton:
Is there any, you know, difference when you do an arbitration hearing in different countries, say like in France or other European countries or maybe in the Middle East or something like that?
Mark McNeill:
Well, international arbitration is inherently very multicultural and wherever the hearing happens to be seated, all or very often have three tribunal members from completely different legal cultures and parts of the world. I find, and I don't see so much of a cultural adaptation, as it is knowing the particular arbitrators. And some arbitrators are known to be able to grasp very complex engineering concepts, for example. And someone like that in particular, if you're showing them, you know, using the engineering diagrams, exactly how the piping was connected to the equipment and where the welds were done, and you know they can follow that, and they have a greater appetite for that. So, it's more of a customization for your audience itself, and what kind of graphical presentation will be convincing to this particular audience.
Cindy Buxton:
And do you have to also consider, Mark, you know, whether you are presenting to a judge or whether it's an international arbitration, or even, you know, working with barristers? I mean, if any of those say, oh my goodness, you know, I don't want any graphics, what do you do to try and persuade them that it's actually going to be really helpful?
Mark McNeill:
Right. I think there may be a different approach depending upon whether you're pleading before an arbitral tribunal or a judge. I think there tends to be more flexibility before an arbitral tribunal. They're more accustomed to more elaborate opening presentations, which are done in perhaps a more flexible style. Whereas a judge has a very, you know, busy docket and there's sometimes less scope for, at least in opening presentations, for using more, more elaborate graphics. It depends. I think it really comes down to customizing to your audience and knowing your judge or knowing your tribunal members and how much appetite do they have for complex data and how much will they be helped by showing, in graphical terms, the relationship between A and B or how the site was supposed to look like and how it ended up looking like that way, and what happens in the process.
Cindy Buxton:
Do you find, Mark, that, sort of, post-pandemic, because of the sort of two years during the pandemic and everything was done virtually, that you and end clients now almost prefer doing virtual hearings and using visuals to help get your points across? Or are you going back to face-to-face court hearings and arbitration hearings?
Mark McNeill:
We are back almost entirely to face-to-face arbitration hearings, at least for major hearings. I think there's a much greater appetite now. Now that I'm practicing in the US, you know, we have more depositions. Those may never go back to face-to-face, except for very important depositions. I think everyone became very accustomed to doing it online, shorter hearings as well. I think it's going to be more rare that someone gets on a plane to Paris for a half day procedural hearing. I think that people have become much more comfortable with the technology and are accustomed to pleadings, smaller issues online, but bigger, complex cases, especially construction cases involving complex engineering and blueprints and designs and so forth, that’s something that is harder to do online, it's harder to do, you know, virtually. So, I find that, and it's very hard, frankly, to focus for seven hours looking at the screen to capture the tribunal's attention and so forth. It requires a different approach.
I had several very long hearings during COVID, and we really had to think about adapting our approach in terms of advocacy and keeping everyone's attention and particularly using graphics, you know, very often in-person that you will have the graphics specialist there with you and able to manipulate the graphics to run it backwards, forwards, if the tribunal asks to look at it again and so forth. When you're online and you're all remote, it's definitely trickier. And I think the key there for us was doing practice runs, seeing how it looked on the screen, was it conveying the message you wanted to do, and how would we communicate in real time to make sure that we could manipulate the graphics in a way that would explain what we were trying to explain to the tribunal. So there, it was more important things to do trial runs online to see how it panned out.
Cindy Buxton:
So, do you see any new sort of trends, technology that you think will help, you know, international arbitration or even litigation, you know, in the coming years?
Mark McNeill:
You know, in its more complicated forms, I've seen Z-Axis and other outlets take, sort of, the original CAD files, for example, and then manipulate them in a very, very complex way to show how structures were built and that can be extremely powerful in using the actual data and representing it in an incredibly complex way. It takes a long time to do that. I don't, you know, over the course of my 25-year career, I've definitely seen technological changes. Where we're going now in terms of graphical representation of data, it's not clear to me. I mean, we're obviously on the brink of AI permeating our field in a massive way, right? We have ChatGPT which can virtually do a first draft of a brief now and do legal research. Something I'm curious to see is, would you be able to at least start with a starting graphic using AI and say, can you compare the as built, right, to the design? And then it comes up with at least a first take of it, and then the humans come in on top and make sure it's presented in a way that is fit for human consumption.
Cindy Buxton:
How do you share your own experiences and knowledge with less experienced colleagues? What advice do you offer about strategy and the importance of using visuals?
Duncan Holland:
I think it's the old saying, “A picture tells a thousand words”. And actually, when you've got the lived experience and you're very familiar, whether it's with a transaction or a corporate structure or just something that went wrong, it's very easy to try and convey all of that information. Whereas it's the same point that Mark’s been making, really, which is that there's probably some key messages you want to get across to those individuals. So, whether that's arbitrators, judges or just other junior members of the team or other people within the organization, I think being able to show them key graphics which really reiterate those core messages that you want them to focus on. I think that's really powerful and it's probably something that, and that people are more likely to remember than maybe just a lot of textual detail.
And certainly, one of the things we find within our organization, because it's a mixture of engineers, scientists, geologists, a lot of different skill sets that they really learn in different ways. And lawyers maybe, you know, we focus on words a lot and look at words on the page. Whereas actually a lot of people learn through visual images and that's really how they do something. And actually, when we talk to people from different skill sets and backgrounds, and we ask them to explain things to us, they quite often draw pictures on whiteboards and they do things like that. So that's actually how lots of people learn and take in information. And so that's it's a really powerful tool in trying to have those conversations and pass on knowledge to people.
Cindy Buxton:
And Mark, do you have anything to add to that?
Mark McNeill:
Yeah, I think a lot of the junior lawyers come out of law school and they think that what we're doing in litigation or arbitration is lawyering, right? And they’ve read a lot of cases and a lot of theories and contract breach and so forth. And what I try to convey is that we are storytellers, we're persuasive storytellers, and you want to tell your story in the most compelling possible way using any device at your disposal. It's obviously the words you write on the paper and it's your oral advocacy and it's how you engage with the tribunal. It's reading the tribunal. Are they understanding you? Are you watching them? Are they following what you're doing? And then graphical representation is part of that, right. It's very often a very important part of the overall storytelling and the overall persuasion of the tribunal. So again, as part of that, you watch the tribunal. Are they following the graphic? Do they have a quizzical look on their face and want to run it back again and say, “Let me just make sure you understand this, because I think it's essential”. And so that's what we try to teach junior lawyers is that we are essentially storytellers and that we have lots of flexibility and lots of creativity that we can bring to that endeavor.
Cindy Buxton:
Well, thank you both very, very much for your time. And it's been very enjoyable catching up with you both again. And I hope all goes well. And thank you again very much.
Duncan Holland:
Thank you, Cindy.
Mark McNeill:
Thank you. Pleasure.
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Thank you to Cindy, Mark, and Duncan for speaking with us today, and a special thanks to our listeners. Please join us next time and subscribe to the IMS Insights Podcast.
IMS has delivered strategic litigation consulting and expert witness services to leading global law firms and Fortune 500 companies for more than 30 years, in more than 40,000 cases. IMS consultants become an extension of your legal team from pre-suit investigation services to discovery and then on to arbitration and trial. Learn more at expertservices.com.