Arbitration in a Pandemic: Thriving in a Time of Uncertainty

COVID-19 has changed our lives, and undoubtedly, the way we work. Fortunately for those familiar with the practice of international arbitration, the pandemic has merely accelerated certain trends that had already begun before it hit.

In particular, the usage of technology had long been deemed necessary to facilitate the arbitral process. 

From as early as 2007, the International Chamber of Commerce had already provided for techniques incorporating technology to be used to safeguard parties’ interests of time and costs. [1]

Now, an unprecedented global experiment on the use of virtual platforms to replace face-to-face meetings is underway. Capitalising on this, arbitral institutions have rose to the challenge.

Many institutions have digitalised their internal operations and formalised guidelines to help arbitrators, counsel and parties adapt to changes.

However, the circumstance of the pandemic is constantly in flux. With the pending proliferation of vaccinations and the unpredictable nature of COVID-19, it is difficult to pinpoint what the post-COVID future of international arbitration will be.

As such, this article aims to build on the discussion about the future of these tools and how they are to be internalised into the arbitral process.

The Increased Comfortability and Experience with Digital Tools for Appropriate Stages in the Arbitral Process

The practice of arbitration is notoriously not for the faint-hearted – it is commonplace for the dispute to be both factually and technically complex, surrounded by voluminous evidence.

Digital tools were previously not used extensively to alleviate such challenges, purportedly due to assumed legal obstacles of a procedural nature.

This changed since the pandemic hit. Prior obstacles seemed to have disappeared and guidelines to alleviate potential and current shortcomings were swiftly implemented.

However, while there must be procedural tools to aid the arbitral process, there should also be an awareness of the appropriate time to utilize such tools.

It is thus pertinent to understand the concerns and interests that parties have at each arbitral stage.

Even before the pandemic, It has been acknowledged that video technology tools are suitable for the Case Management Conference and Pre-Hearing stages of arbitration.

The main concern of these stages is balancing between creating certainty (as to the length of the proceedings) and affording some flexibility (to respond to unfolding issues as the arbitration progresses). [2]

Other than providing for these conferences to be held via video or telephone platforms to address time and cost efficiency concerns, [3] another avenue for digital adoption would be document management.

To accommodate the extensive evidence typically adduced for arbitration, several arbitral institutions have attempted to develop a single platform for sending, storing, and retrieving communications and exhibits.

The benefits of a single platform are boundless. [4] The platform would streamline the process for the collation of documents and correspondence.

Having these exhibited chronologically would also provide a bird’s eye view of the history of the arbitration.

Further, the platform could also provide instant remote updates for the requisite deadlines for parties.

Ultimately, the use of a single platform would provide much-needed clarity and efficiency to this tedious and primarily procedural stage of arbitration.

Such benefits not only facilitate case management, but also facilitate subsequent proceedings. For example, the use of hyperlinks could be used as a reference point for a document uploaded onto the platform.

This would allow for arbitrators to focus on the arguments made, instead of interrupting their stream of thought to pull out the relevant document from a slew of hard copies.

Naturally, changes of such magnitude necessitate the involvement of arbitral institutions. The Arbitration Institute of the Stockholm Chamber of Commerce took the lead when it introduced the SCC Platform in late 2019.

The SCC Platform had all the above-mentioned features, as well as a ‘notice board’ for the tribunal to communicate information to the parties instantly [5] 

Further, a similar service in the form of the Ad Hoc Platform has been extended to ad-hoc arbitrations, and its use has been made free of charge during the pandemic. [6]

The digitalisation of various arbitral processes demonstrates the industry’s openness to innovation and evolution.

The involvement and support of arbitral institutions are welcomed, and all parties involved – the arbitral tribunal, counsel and clients – stand to benefit.

The Formalisation of Guidelines for Virtual Conduct of Proceedings by Arbitral Institutions

With current travel restrictions and physical distancing measures, gone is the practice of parties camping in one room for the duration of the hearing.

Gone also is the practice of anticipating lengthy hearings stretching out across the day. More than ever, parties have to consider the option of virtual proceedings.

It is important to note that the practice of online hearings is neither new nor novel. Arbitral institutions such as Singapore International Arbitration Centre (SIAC) has robust systems to conduct virtual hearings since the pre-pandemic period.

What has changed is the underlying concerns of parties. Instead of asking whether an online hearing is appropriate, the question now is whether there are justifiable reasons to conduct an in-person hearing.

Capitalising on the changes brought on by the pandemic, arbitral institutions have refined guidelines to assist parties and tribunals in the management of virtual proceedings.

For example, SIAC issued a Guide to Remote Arbitration Hearings [7] to address the appropriateness of remote hearings for certain cases and provided procedural checklists to fulfil in various aspects of the remote proceeding.

Such guidelines are welcomed to address parties’ concerns on remote proceedings.

These concerns include deciding on the best practices for the conduct of a remote hearing, conducting a dry run of the proceedings, choosing between a self-managed or institutionally managed platform, utilizing reliable technology, and addressing protocols for technical failures etc.

However, the outcome of a legal challenge to hold remote hearings has yet to be explored. Granted, such outcome will vary in different jurisdictions. For most jurisdictions, the answer may be found on first principles.

In Singapore, where the UNCITRAL Model Law on International Commercial Arbitration was adopted in the Singapore International Arbitration Act 1994, the applicable principle was found in Article 18 – where parties have the right to a full opportunity to present one’s case subject to considerations of reasonableness and fairness.

This was held by Chief Justice Sundaresh Menon in the Singapore Court of Appeal case of China Machine New Energy Corp v. Jaguar Energy Guatemala LLC and another [2020] SGCA 12.

Hence, in a challenge to a tribunal’s decision to hold a remote hearing, the court is likely to rely on the principle of reasonableness to decide if a remote hearing has caused any injustice or unfairness to the parties.

Some factors the court might consider include the inability of a party to present his case if the party lacks access to technology or facilities suitable for a remote hearing. However, this issue in particular is noted to be rare in this time and age.

Further, a party concerned about uneven access to technology should voice these concerns first. This would ensure that the arbitration can proceed fairly and is in the interest of all parties.

Inevitably, the conduct of remote hearings has its limitations. For one, it is arguable that in-person cross-examinations are irreplaceable by virtual hearings.

The essence of examining the witness requires seeing the witness’ facial expressions, body language and manner of speech first-hand to ascertain credibility. [8] Therefore, there is still some evidentiary value in face-to-face witness testimony.

With vaccinations being made available, it is likely that there might be a return to in-person evidentiary hearings in cases where there is extensive reliance on oral testimonies.

However, these protocols are undoubtedly here to stay. Even if borders open and travelling becomes more commonplace in the future, it is expected that the preference for remote hearings would prevail.

In the end, the clients are the ultimate recipients of these formalised guidelines for remote hearings.

This is because there is enhanced flexibility in choosing the manner of hearing that is catered to the clients’ case.

Such flexibility allows for more timely and cost-efficient adjudication of the clients’ matters.

The Show Must Go On

The arbitration community has proven itself to be open to these developments and to share innovative ideas for the future.

As early as mid-summer of 2020, Kluwer Law International published a book on International Arbitration and the Covid-19 Revolution, covering essential hot-issues ranging from the legal framework of remote hearings to practical tips on remote advocacy.

Other key arbitration events such as the Paris Arbitration Week, despite being held online, have facilitated necessary discussion on recent challenges and possible solutions.

In essence, the pandemic has created the perfect storm for the revolution of arbitration.

This is an ideal time to build on the support from arbitral institutions and the prevalent acceptance of such digital tools.

Ultimately, the benefits of these digital tools in arbitration trickle down to the clients.

With these tools, the resolution of disputes will be less distracted by the copious amounts of evidence and confusing timelines.

Now, arbitral tribunals and counsels can devote the majority of their time to key factual and legal issues, allowing for a more timely and cost-efficient administration of justice.

This article is also published on Asian Legal Business.

References

[1]  ICC Commission Report, Controlling Time and Costs in Arbitration, Page 14.
[2] Keynote address “Quo Vadis International Construction Arbitration” as delivered by Professor Doug Jones at the Paris Arbitration Week on 9 July 2020.
[3] An example of guidelines for CMCs to be conducted through video conferencing or by telephone can be found in International Chamber of Commerce Rules at Appendix IV.
[4]A similar discussion on the benefits of digital case management can be found in Sven Lange, Irina Samodelkina, “Digital Case Management in International Arbitration” (13 August 2019, Kluwer Arbitration Blog) (accessed on 18 March 2021). 
[5] Arbitration Institute of the Stockholm Chamber of Commerce Website, “SCC Platform” (accessed on 15 March 2021).
[6] Arbitration Institute of the Stockholm Chamber of Commerce Website, “Ad Hoc Platform” (accessed on 15 March 2021).
[7] SIAC Secretariat, “Taking Your Arbitration Remote”, SIAC Guide published on 31 August 2020.
[8] As also highlighted in John V.H. Pierce, Predicting the Future: International Arbitration in the Wake of Covid-19 (Summer 2020, NYSBA Vol.13, No.2).