COVID-19 has impacted all aspects of human life over the past few months. It continues to spread globally, with businesses facing significant levels of instability and uncertainty due to weakened financial markets and disruptions in workplace operations and supply chains.
Not only is it massively disrupting the global economy, but it is also generating a new series of disputes or affecting the resolution of disputes, whether in state courts or through arbitration and mediation.
Courts and arbitration institutions have adopted various methods to adapt to these changing circumstances.
This article will focus on arbitration as an alternative dispute resolution mechanism in the age of the pandemic.
Health and safety constraints, as well as travel restrictions, can significantly affect hearings and may even make it impossible to convene in one physical location.
To date, most lawyers in the world of complex litigation and arbitration have responded by postponing hearings. This is a short-term solution that may work for now but certainly delays justice and does not help the business world move forward. For litigants, this solution may prove particularly unwise as already overloaded courts will be overwhelmed upon their reopening. (Gary L. Benton, "It Is Not the Strongest of the Species That Survives but the Most Adaptable: the Case for Online Commercial Arbitration," 2020)
For this reason, some organizations, such as the ICC, have amended their rules or issued guidelines to better align with the changing situation to keep their courts operational. (ICC guidelines, 2020) For example, under Article 25, paragraph 1 of the ICC Rules, tribunals are further obliged to establish the facts of the case as swiftly as possible by all appropriate means. According to the rules and these principles, the parties, counsel, and tribunals have shared obligations to consider procedural measures that may mitigate the effects of delays in the arbitration process, including delays caused by the COVID-19 pandemic.
Similarly, the COVID-19 pandemic should not necessarily delay court deliberations or the preparation of draft awards, as these activities can be conducted remotely. Therefore, tribunals should organize their deliberations if necessary and take steps to advance the preparation of draft awards using all appropriate communication means.
The use of new technologies plays a significant role in this adaptation mentioned above. The use of videoconferencing or audio conferencing via phone or platforms like Zoom, WebEx, BlueJeans, and other internet-based teleconferencing technologies has become a new "normal" today.
Online Dispute Resolution (ODR):
The use of technology in dispute resolution is not a very new phenomenon. The concept of Online Dispute Resolution (ODR) has been in use since 1995. (Pablo Cortés, “Online Dispute Resolution for Consumers in the European Union,” 2011)
ODR is a branch of dispute resolution that uses technology to facilitate the resolution of disputes between parties. By definition, ODR is a dispute resolution method that uses a third party not involved in the dispute to facilitate resolution conversations using technology itself, which has been labeled as the "fourth party" (Bayramoğlu Emir, “Online Dispute Resolution and Direct Enforcement in the Age of Smart Contracts,” 2018).
ODR systems exist in various structures and serve different purposes by using a wide range of online procedures and technical tools. Services are provided by diverse intermediaries such as e-commerce platforms, credit card companies, private ODR providers, and others.
Although some were hesitant about the use of ODR, the experience during the pandemic has shown that online arbitration works well if done properly. It requires training for lawyers and arbitrators in the use of technologies. Protocols have already been published or are in the process of being published that detail procedural and technical requirements to ensure that online procedures are conducted fairly and effectively.
International Arbitration and Virtual Hearings:
Online arbitration and videoconferencing offer benefits, especially in international cases. They save considerable energy, time, and money compared to international travel, with all its visa issues, time zone differences, etc.
During periods when travel is restricted or avoided, such as the COVID-19 pandemic in early 2020, the benefits of videoconferencing are multiplied. (Paul E. Mason, “Videoconferencing in International Arbitration and Mediation Proceedings,” 2020)
Videoconference hearings or arbitration sessions provide parties with a broader geographic range to choose an arbitrator or mediator, which is sometimes necessary in international cases where geographic and cultural expertise as well as substantive knowledge are required.
Although videoconferencing seems to be the best alternative to in-person hearings under the current situation, it presents several main disadvantages, including:
It is not in person, so body language and other non-verbal communication cues are harder to perceive.
It may be more difficult for arbitrators to detect inappropriate witness coaching by someone not shown on the video screen.
Clients and their lawyers may have less coordinated teamwork in video format, and their attention may be more easily diverted to other activities during the videoconference.
Videoconferencing still relies on high-quality, relatively high-speed internet access for all parties. Such access is not available everywhere.
Video use may be more accepted in some cultures than others, i.e., the "social distancing" practiced during COVID-19 has become easier to achieve in some places like the United States, where virtual communications have long replaced face-to-face interactions.
It should be noted that video transmissions can even be censored or monitored in or by certain countries. (Ibid.)
Cybersecurity has also become a key issue, so online arbitration and mediation sessions must also pay close attention to cybersecurity issues by taking measures to protect their transmissions from hacking, etc. Several arbitration and mediation institutions have published protocols and/or best practice summaries in the field of cybersecurity. (Chahat Chawala, “International Arbitration During COVID-19: A Case Counsel’s Perspective,” Kluwer Arbitration Blog, 2020)
Conclusion:
COVID-19 has undoubtedly accelerated the use and acceptance of virtual hearings in international arbitration. Despite its shortcomings, it presents a significant capacity for resolving international disputes during the COVID-19 pandemic.
Perhaps even after the pandemic, these hearings could become a "New Normal" for cross-border disputes, at least for less complex cases that may be better suited to online platforms.
If you wish to obtain more information on this topic, the Valentin Legal Consultation will be delighted to welcome you to our office at 1 Rue du Valentin, 1004 Lausanne, to answer your questions and assist you with your legal matters.
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