COVID-19 has tremendously disrupted the global economy, and the dispute resolution process is not left alone. Disputes resolution processes, litigation, and Alternative Dispute Resolution (ADR) including arbitration cannot progress due to safety concerns and public health restrictions imposed to limit or slow the virus’s spread. In other words, physical hearings cannot be held for the foreseeable future. This has given traction to online dispute resolution; and today, the virtual hearing has become a popular means of conducting the dispute resolution process, especially in international arbitration.
Due to the wide scope of party autonomy in international arbitration, international arbitration is quickly adapting to virtual hearing. The parties wishing to hold substantive hearings remotely have options to do so as efficiently and securely as possible. To ensure this, many arbitral institutions have produced guidance on how the relevant institutional rules can be interpreted to permit virtual hearings.[1] Besides, many arbitral institutions and other arbitral bodies have also issued guidance on conducting a virtual hearing.[2]
However, it is noteworthy that transitioning from physical hearing to virtual hearing has many challenges. The challenges are not only limited to the acquaintance of the model but also to the fate of the award. Due process is one of the important grounds for challenging an arbitral award. For example “Spain has for the second time-challenged an ICSID tribunal hearing a renewables claim brought by several German banks – arguing that the arbitrators’ stated reasons for insisting on a virtual hearing are based on misrepresentations about their ability to travel during the coronavirus pandemic.”[3]
In this line, below are the few key considerations for the parties in conducting virtual hearing:
Preliminary Agreement: It is advisable to the parties involved to make change/addition to their dispute resolution clause to ensure the inclusion of virtual hearing. It will eliminate the risk of challenging the result of the hearing on the ground that the hearing was not conducted as per the defined procedure.
Platform Selection: Appropriate videoconferencing platform plays an important role in online hearing. So, the choice of platform for an online hearing should be sincerely considered keeping in mind protections for confidentiality, good quality audio and video, sub-grouping, on-screen document display etc. Currently, there are many video-conferencing platforms in the market such as Skype, WebEx, GoToMeeting, BlueJeans, Microsoft Teams or Zoo. Each platform will have slightly different features and considerations. Besides, some arbitral institutions offer customised online platforms, for example, the Stockholm Chamber of Commerce, the International Arbitration Centre and the International Dispute Resolution Centre.[4] It is therefore advisable to the parties to properly test and explore the available options as per their specific requirement to ensure the best fit to their particular dispute.
Third-Party Operator: The parties should usually agree for a neutral third party to operate the online platform. This will alleviate the risk of parties using technology failures as a basis for allegations of prejudice against another party. Besides, it will also allow parties to focus more on the substance as they do not have to worry about technological problems anymore.
Separate Platform for Team Communication: Parties should consider employing a separate platform for team communications for their respective teams. This ensures that no internal messages are accidentally sent to the other side of the tribunal on the shared platform.
Ensuring Confidentiality: Confidentiality and security are crucial in virtual hearing. It is required that parties should be active to any or all potential cyber-security risks and should take all feasible measures ensuring the confidentiality of the proceeding. Moreover, the parties should also agree on how the liability should be allocated in case if any breach occurs. In this regard, it is prudent to refer cyber-security guidance and protocols such as the ICC’s Note on Information Technology in International Arbitration, the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration, and the IBA Presidential Task Force’s Guidelines on Cyber Security.
Document Sharing and Presentation: Along with agreeing in advance on an efficient means of document sharing and presentation, the parties should consider hiring third-party services for the same considering the size of the case. If during preliminary meeting parties feel and agree that the case size is reasonable then they can manage their document by themselves through an electronic hearing bundle. Besides, parties consider having an online document management system with detailed and organically structured folders.
It is here important to note that irrespective of the method chosen by the parties, parties should try to clearly reference every document to avoid any confusion during the hearing. For example, hyperlinks, subject to the limitation of the platform chosen, could be very useful.
Further, there might be a possibility that additional documents take a relevant place in the hearing but was not included in the electronic bundle originally. To tackle this kind of circumstances, parties should agree in advance on additional file sharing platform – for example by way of a file-sharing website.
Disclosure of Participants: The parties should agree that each party is liable at the outset of the proceeding to identify and disclose all persons present at the party’s location. They have an ongoing obligation and responsibility to alarm the Neutral and other parties if any additional person joins in between the proceeding.
Ensuring Familiarity of the Technology and Rehearsal: The fate of virtual hearing is dependent upon technology, software, and hardware. It is prudent for the parties to ensure that all the participants including the tribunal, have well equipped with hardware and have appropriate training as to the operation of the technology. Thus, will ensure an efficient hearing. The parties may consider a full rehearsal with the tribunal, advocates, witnesses and other participants.
Back-Up: To ensure a fail-safe of the hearing it is vital to have a back-up protocol to cover if something goes wrong during the hearing. The parties should consider agreeing on this in advance. This could be a short adjournment while problems are taken care of or continuing the hearing via teleconference et al. This will ensure the efficiency of hearing and will also take care that the award is not compromised because of that transition to another mode. If it is not agreed and transition happens, the debtor may challenge the award on the ground that the hearing process was not accorded due process. Countries like China interpret the contract literally word by word.
Termination: The parties should consider mandating the neutral to terminate the transitioned proceeding. If the neutral, considering the circumstances and complexity, concludes that the virtual hearing is not appropriate, or is otherwise inadequate, or is prejudicial to any party or to the integrity of the proceeding, the neutral has authority to terminate the proceeding and the same cannot be used as one of the grounds to challenge the award.
Recording of the Proceeding: The parties may choose to prohibit recording any part of the proceeding without the advance, written authorization of the neutral. Further, they can consider whether the neutral has right and authority to record any part or all of the proceeding with notification to the parties in advance.
REFERENCES
[1] See, for example, ICC Guidance Note; SIAC COVID-19 FAQs; and SCC hearings note
[2] See, for example, Seoul Protocol on Video Conferencing in International Arbitration; ACICA Online Arbitration Guidance Note; CIArb Guidance Note on Remote Dispute Resolution Proceedings; HKIAC Guidance for Virtual Hearings; AAA-ICDR Virtual Hearing Guide; Africa Arbitration Academy Protocol on Virtual Hearings in Africa; and ISTAC Online Hearing Rules and Procedures
[3] https://globalarbitrationreview.com/article/1230019/icsid-panel-challenged-over-decision-to-hold-virtual-hearing
[4] ICSID virtual hearings offering; SCC platform to support virtual hearings
