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Institutional Arbitration: Moving into the future strengthening Institutional Arbitration & ADR in an increasingly virtual world, by Sarah Mutheu*

1 Dec 2020 7:35 AM | Anonymous member (Administrator)

For a cross-border system of dispute resolution that frequently involves participants from different countries, the challenge posed by COVID-19 to international arbitration is grave. However, given that arbitration is a flexible and consensual process, it is well positioned to respond swiftly to these challenges. Indeed, in a short space of time there has been a significant and collaborative response from the international arbitration community, led by the major arbitral institutions, to find ways to maintain access to justice in a timely and efficient manner.

The primary reason for introducing arbitrations into the dispute resolution system was to lessen the burden on courts. International Arbitral Institutions have been established all over the world to aid and assist the parties in resolving their disputes. Especially in the current scenario, arbitration being a private process has an unarguable edge over the traditional litigation in courts. In order to function efficiently, the Arbitral Institutions have brought about certain changes in their operation amidst these trying times. Majority of these interim changes are buttressed by technology and the internet. Institutions have placed a never before reliance on Video Conferencing, e-filings, virtual hearings etc. But the question that arises is, would these changes suffice the need of the hour and most importantly the needs of the parties to the dispute?

Arbitral institutions are at the forefront of the international arbitration community’s response to COVID-19. Commendably, many institutions have largely remained fully operational while implementing remote working practices and virtual hearings. In April 2020, 13 arbitral institutions issued a joint statement “Collaboration is particularly important as each of our institutions looks to ensure that we make the best use of digital technologies for working remotely.” The statement calls for solidarity, cooperation and collaboration in response to COVID-19. The statement emphasized the joint ambition of the institutions to “support international arbitration’s ability to contribute to stability and foreseeability in a highly unstable environment, including by ensuring that pending cases may continue and that parties may have their cases heard without undue delay.”

The ambition to see cases continue has led to a focus on the use of digital technologies, including virtual hearings. Online dispute resolution is not a new phenomenon. However, the global measures taken in response to COVID-19 have meant that the use of digital technologies to facilitate case preparation, management and hearings is no longer optional – particularly where parties are unwilling or unable to wait until the current crisis passes. This reality has prompted a number of institutions to issue specific guidance to parties and tribunals grappling with how to convert physical in-person hearings into a virtual environment.

When to use virtual hearings

A threshold question confronting parties and tribunals is whether a particular case is appropriate for virtual hearing. Clearly, the ability of all participants to access the necessary technology, software and equipment and a reliable high-quality internet connection is a prerequisite to a virtual hearing. Additionally, time zone differences may make it more difficult to convene a full day virtual hearing, so adjustments will need to be made to the hearing timetable.

Where time zone differences cannot be easily accommodated, parties and tribunals may consider an asynchronous virtual hearing as suggested by Michael Hwang S.C. during a recent SIAC webinar. This can be useful for oral openings / closings, or jurisdiction challenges, though unsuitable for cross-examination. For an asynchronous virtual hearing to take place, one party appears before the arbitral tribunal and makes its oral submissions, the recording and transcript of which will be uploaded to a secure online platform for the other party to review. The second party then appears before the tribunal and makes its oral submissions and the recording and transcript of which will be uploaded to the same platform. The parties will then convene with the tribunal for a final virtual hearing during which any outstanding issues are dealt with. This is a possible method of convening a virtual hearing while ensuring that parties have a reasonable opportunity to be heard.

NCIA Virtual Rules

The Nairobi Centre for International Arbitration (NCIA) has published a Guidance Note on Facilities Booking Conditions and Use during the COVID-19 Period. These notes provide guidance to parties, counsel, tribunals and users on possible measures to be considered in mitigating the adverse effects of the COVID-19 pandemic on arbitrations, mediations and meetings held at the NCIA facilities. The guidance note applies in addition to the extra steps the Centre has taken to streamline its internal processes in the wake of the COVID-19 pandemic. NCIA has also adopted the Nairobi Centre for International Arbitration (Virtual Hearings) Rules, 2020. Parties and the Arbitral Tribunal are required to agree in advance on the procedures, schedules and deadlines to be followed during the virtual hearings and also the virtual platform to be used during the hearings. Further, NCIA has adopted a Model Nairobi Centre for International Arbitration, Arbitration Clause (including Virtual Hearing Option) and Model Nairobi Centre or International Arbitration Virtual Hearing Agreement to be signed by parties in order to facilitate virtual hearings.

Conclusion

Prior to COVID-19, certain pre-hearing steps in the arbitral process—such as initial case management conferences and pre-hearing conferences with the tribunal—were often held by teleconference or videoconference, particularly when the parties and their counsel were in different jurisdictions. In addition, it was not unusual, pre-COVID-19, for certain witnesses to appear at hearings via video in instances where physical attendance was not possible due to health or visa issues, or other circumstances

What is new in the post-COVID-19 world is that parties, counsel and arbitrators are now accustomed to, and generally skilled at, using Zoom, Webex and other video platforms to conduct meetings, conferences and even hearings in a virtual format. By necessity, the “barriers to entry” for these technologies in the international arbitration world appear largely to have been overcome. Whereas, before COVID-19, there was often a resistance by some counsel and arbitrators to the use of videoconference technology—due to concerns about whether it would function properly and a general reluctance to spend the time necessary to learn how to use it—counsel and arbitrators have now been forced to adopt and become familiar with these technologies

The pandemic has changed the way in which international arbitrations are conducted in fundamental ways. By necessity, international arbitrations in the age of COVID-19 are being conducted entirely (or almost entirely) virtually. There is obviously no way to know with certainty what the future will bring, but a reflection on the ways in which international arbitration, and the arbitration community, already have changed in the age of COVID-19 permits some predictions.

Arbitrators and practitioners are already used to remote processes, and the Rules of various arbitral institutions give a wide discretion to tribunals as to the conduct of arbitrations. Additionally, most of the major international arbitration institutions have issued Guidelines on the conduct of remote proceedings. As to the future, it seems reasonably certain that more use will be made of virtual hearings, both purely virtual and hybrid.

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*Sarah Mutheu, Senior Communication & Marketing Officer-NCIA





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