COVID-19 – impact on international arbitration
In this article, we give thought to how the various arbitration fora are dealing with the global pandemic that is COVID-19 and the state of uncertainty it creates. How is the world of arbitration reacting to this challenge?
International arbitration is often hailed as one of the most flexible forms of dispute resolution given the need often to accommodate parties from different jurisdictions across the globe. As a result, the various arbitral centres are well used to providing for hearings taking place without the parties or the arbitrators together in the one place. Even with this flexibility, final hearings are still generally conducted by way of in-person hearings with the lawyers, arbitrators, witnesses and experts gathered in one room.
So what are the various international arbitration centres doing to ensure arbitral proceedings progress in a timely and efficient manner despite the impact of COVID-19?
As with the other fora, both the ICC and the LCIA are continuing to accept requests for arbitration.
The ICC has set up a COVID-19 response group and the ICA encourages all communications to take place via email. All hearings and other meetings scheduled to take place at the ICC Hearing Centre in Paris until 13 April 2020 are being conducted virtually where possible.
The LCIA expects to remain operational and its staff are working from home where possible. They are also asking parties to contact them via email, instead of telephone.
Requests for arbitration were already being filed electronically and cases managed remotely, predominantly through email correspondence. We also have considerable experience of using the LCIA system which permits all documents to be uploaded online and accessed remotely. Online filing is therefore not a new concept for arbitration and to an extent, this is ‘business as usual’ for the arbitral bodies, so that there should be no delay where parties are seeking the resolution of a dispute.
What are the flexible options which international arbitration already affords to its parties and how can these be used to ensure progress is made?
1. Making decisions ‘on-paper’
Arbitrators can conduct proceedings based on the documents alone; this often happens where an interim award is required, where the tribunal or arbitrator is asked to decide on specific issues. Such interim awards are commonplace and can reduce any delays parties may face. Where possible parties may be encouraged to consider using this method, particularly in the context of procedural matters where no evidence of factual witnesses is required.
2. Virtual hearings
Remote hearings are not an unfamiliar concept in arbitration. Due to the international nature of many disputes and the location of the parties, procedural decisions are frequently made via telephone or video hearing, to avoid unnecessary travel costs and delays to proceedings.
This familiarity with remote hearings can be complimented by the range of electronic legal tools which are now readily available, such as e-bundles and hosting platforms, which can provide private channels of communication for parties during hearings.
In order to maximize the potential of virtual hearings, parties should consider:
- Whether virtual hearings may require additional time to deal with, for example, the cross-examination of witnesses. Unlike Courts, the sitting hours for arbitrations are not restricted. Instead, it will fall to the parties and the arbitrator(s) to agree a timetable which takes into account the various times zones that the parties may be in.
- The technology needed to accommodate the number of parties involved, including the arbitrators, counsel, witnesses, experts and legal and technical representatives (such as translators and transcribers). Where there are multiple parties to a claim, the hearing participants should be restricted to only those necessary to ensure the matter can proceed without undue delay.
- The importance of the witness evidence. For example, where there may be an issue as to the credibility of a witness, the parties will want to ensure that an arbitrator(s) will be able to assess the witness via video.
3. Postponing hearings
Parties and arbitrators may agree to adjourn hearings. However, this should really be as a last resort given it is unclear as to when the status quo will return and more importantly, given that arbitrators are often booked up well in advance any rescheduling may prove complicated and cause significant delay.
Whilst the current situation will require parties to work together to ensure the technology is in place to support hearings, this is not a new challenge for arbitration, and we’ve been involved in a number of successful remote hearings. All of the arbitration centres’ experience with the use of technology will assist parties in making progress, and from our own practice we know the flexibility of their procedures is well designed to accommodate virtual hearings or ‘paper-only’ decisions. Despite the current challenges, arbitration will remain a convenient, practical and accessible method of dispute resolution, for both national and international disputes, and we are working on various disputes where technology is being used successfully to keep the proceedings moving forward.