Paper presented at the AfAA 2nd Annual International Arbitration Conference, 15th - 16th April 2021.
1. Arbitral institutions have adopted new measures so that they can continue to manage arbitration proceedings during the COVID-19 Pandemic. Several leading arbitral institutions have since adopted electronic filings only and encourage the use of video conferencing for all hearings.
2. While these measures have been welcomed as allowing dispute resolution to carry on “business as usual,” arbitrators and parties must ensure that these measures do not negatively affect parties’ rights to due process. If due process is compromised, the finality of arbitration awards could be jeopardised.
B. The Framework
3. The use of technology in international arbitration is not new. As early as 2004 an ICC Task Force was commissioned for an IT Report which was subsequently revisited in April 2017. The latter, ICC Commission Report, outlined that the benefits of IT in international arbitration would outweigh the risks. It highlighted in particular that briefs with embedded electronic links to cited exhibits, testimony and legal authorities could help the tribunal better understand and evaluate cases, but caveated that it may also be time-consuming and expensive for parties to prepare.
4. In general, it suggested that the benefits of greater IT in international arbitration largely outweighed any risks and the report argued that many widely-available IT solutions were not used to save time and costs as effectively as they could be. Videoconferencing, which some tribunals and parties remained reluctant to use even for minor witnesses, was considered as a good example of an IT solution that could easily cut time and costs in international arbitration. It is undeniable that the onset of the COVID 19 Pandemic has fast-forwarded implementation of these recommendations by many years, to the arbitration community’s advantage.
C. The Benefits
5. The advantages of remote arbitration hearings are numerous. While lengthy testimony does not translate as well in an online format, this promotes more time-efficient, focused hearings, which will result in cost reductions for parties. The novelty of an online format also allows for a more flexible dispute resolution process where parties can tailor the proceedings according to their requirements. Arbitration, particularly international arbitration, often involves significant travel and presents scheduling challenges which can delay the expeditious hearing of proceedings.
6. A remote forum allows proceedings to be scheduled in a timelier manner and avoids the costs associated with travel and accommodation. In addition to the cost and time efficiencies that can be realised through a remote forum, some participants may feel that their experience is enhanced as they are able to participate on equal terms with the tribunal and the counsel team, rather than only engaging from the back row of a hearing room.
7. Moreover, the availability of virtual hearings allows for a more diverse and greater array of options where the choice of Adjudicator is concerned. The ‘new’ system can facilitate arbitrators from Africa hearing disputes in Hong Kong, all with a simple internet connection. This will hopefully assist with enhancing the diversity problems which routinely plague the panels of various arbitral institutions from across the globe.
Reduced hearing length
8. In the main one of the perceived advantages of virtual hearings is a more focussed approach to the issues in dispute during oral submissions. This has also been identified in by the ICC in its recent ‘Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic’, where it suggested that parties should identify “whether the entirety of the dispute or discrete issues may be resolved on the basis of documents only, with no evidentiary hearing”. Reliance on written submissions, while not ideal, or even possible in all situations, is consistent with arbitration’s emphasis on efficiency.
Global Legal Teams
9. The implementation of digital trends in arbitration also allows legal teams or clients to have greater scope for constructing a truly global and cohesive legal team to defend their interests. This means that legal teams can harness the benefits and skill sets from different jurisdictions and specialisms from around the worked without the need to be in person or have exorbitant travel expenses.
Costs of the Arbitration
10. It is also undeniable that digital hearings severely reduce the costs of the arbitration. From hearing rooms to arbitrator’s travel expenses, the implementation of digitally administered dispute resolution makes arbitration a more attractive prospect to parties who are looking for a speedy resolution to their dispute.
D. The Challenge
11. That being said, the move to online hearings demonstrates the adaptability of arbitral institutions and the arbitration proceedings themselves. However, these same measures, if abused, could present new challenges for due process and equal treatment between the parties.
12. Under Article V (1) of the New York Convention, an arbitral award may be challenged if “a party against whom the award is invoked . . . was otherwise unable to present his case” or where “the arbitral procedure was not in accordance with the agreement of the parties, or failing such agreement, was not in agreement with the law of the country where the arbitration took place.”
13. The integrity of the arbitral award stems from a fair process based on party autonomy and a party’s reasonable opportunity to present its case. It is therefore unsurprising that emerging guidance such as The Seoul Protocol on Video Conferencing in International Arbitration emphasises that virtual proceedings must be fair to all parties in the dispute.
14. Arbitral institutions have an important role to play in developing practices and protocols to coordinate this digital move. Most institutional rules grant the tribunal the power to direct the procedure as it wishes; and the onus will now likely be on the party raising an objection to a virtual hearing to explain why it would be untenable under pressing circumstances such those we currently face
15. Beyond this, there are a host of refinements and adjustments to be made to tailor traditional procedural safeguards to the virtual hearing setting. How will we address the concern for real-time witness coaching? Will the debate echo traditional discussions of the standards for witness preparation? Will we need to adjust the typical daily hearing schedule now that participants can expect to sit for long periods in front of their monitors? What should be done in the event of technical failures? These are among the practical issues that the international arbitration community will be considering and on which the proactive contributions of arbitral institutions will be welcome.
16. In developing new approaches, a number of existing soft law instruments will assist. Although they do not deal directly with virtual hearings, they offer helpful guidance on examining witnesses by videoconference. For example, the Hague Conference Draft Guide provides an exhaustive discussion of best practice in relation to video-link witness evidence. It considers factors such as time differences and operating outside regular business hours; introducing documentary evidence via video link; a protocol for speaking and interruptions, where there is a delay between the picture and the sound; and advice on room layout, access, acoustics and lighting. The ICC Commission Report provides a sample wording for a pre-hearing order for testimony to be given via videoconference that could be adapted to virtual hearings and issues of technological breakdown.
17. The Covid-19 pandemic has required us all to adapt rapidly and in unprecedented ways to a new reality – one in which has developed virtual hearings as the means for our disputes to continue to be resolved. The genius of arbitration and the international arbitration community is that of innovation. We must all work together to advance the technologies and develop the protocols needed to meet the challenges ahead.
* Barrister & Arbitrator, Five Paper