How Covid-19 might have changed the Arbitration of tomorrow?
By Alison Labille
The Covid-19 pandemic has shaken the entire world. Businesses had to shut down, nations closed their borders, and the judiciary system had to be redefined to guarantee continuing access to justice in safe conditions. International arbitration has been even more impacted due to the cross-borders nature of the disputes. While we already know that this crisis will leave a stain on the global economy, we can’t help but wonder about its mark on the international arbitration system.
As the pandemic has just begun, there are no official researches and studies yet in this field. This blog is based on hypothetical scenarios drawn by experts in the field of arbitration.
During the pandemic:
Due to the global lock-down and the self-isolation policy, parties were no longer able to attend physical hearings and professionals had to work remotely. These conditions have left no other choice than adjourn hearings or conduct them remotely. In this aim, the arbitration system has relied on digital technology and embraced the trend 2.0.
The International Chamber of Commerce has been a pioneer in this matter as it quickly edited the Guidance Note; a set of rules containing provision on remote hearings[1]. These measures allowed hearings to be held by video conference or similar means of communication in a situation where an adjournment would cause an unreasonable and prejudicial delay, and when the complexity of the case is manageable virtually[2].
However, when virtual attendance is the only option to be heard, it raises some issues. On the one hand, technical problems. Parties may not have equal access to the use of technology. Suddenly, individuals must be equipped with the necessary material, have access to sufficient internet supply, and understand the online platforms and other digital tools. This represents an additional condition in order to be heard and may impede access to justice.
Furthermore, the system itself has to be adapted. An effective virtual hearing entails a greater amount of time for preparation and coordination between the parties. Among other things; test sessions must be performed before the hearing, IT support and coaching along the process, technological steps to protect the integrity of witness testimony, and facing unexpected technical issues[3].
On the other hand, the human factor appears. Gary Born, professor, and arbitrator, suggested that stakeholders' concentration decreases throughout virtual hearings[4]. To counter this effect, Mr. Born recommends that tribunals and counsel adapt the duration of the sessions and allow more breaks. Observing body language and facial expressions of the witness testimony became more difficult online. Besides, due to the cross-border dimension, time zones differences nuisance emerges. In this regard, personal inconvenience should be spread equally among the parties, this reflects a perfect example of “the beauty of the flexibility of arbitration!”[5].
Despite these challenges, C. Mark Baker, global co-head of international arbitration at Norton Rose Fulbright, testified that embracing new technologies has given a boost to traditional, sometimes too conventional arbitration systems[6]. C. Mark Baker noticed a real advantage of getting parties together virtually to agree on early procedural issues rather than doing so in writing. This allows the parties to familiarize themselves with the tribunal and how it operates, as well as getting to know the opposing parties and counsel, which eventually makes the final hearing more efficient[7].
After the pandemic:
COVID-19 has promoted the acceptance of virtual hearings in international arbitration. The use of modern technology proved that hearings could be as efficient virtually, and achieves a similar result than in face-to-face. It is expected that hearings will continue to be held through online platform even after the travel restrictions are relaxed. Arbitrators may outweigh whether online dispute resolution will achieve the same effectiveness as a physical presence, if that is the case this practice may be favored. Hence, virtual attendance may become the “new normal” for less complex disputes.
On the verge of a global crisis and months of a health disaster, the pandemic might have nevertheless modernized the way we will work tomorrow. Hearings may not be the same. They will not necessarily include a large number of lawyers, experts, assistants, witnesses from all over the world, gathered all together for a number of days or even weeks in a specific place. We may see a combination of virtual and in-person hearings, while cross-examination of fact witnesses has already generated a heated debate. As a result, the new technologies might help arbitration to become less costly, as travel expenses would be considerably reduced, more sustainable, and accessible to a larger audience. John F Kennedy is quoted as saying: “The Chinese use two brush strokes to write the word ‘crisis’. One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger–but recognize the opportunity”.
[1] ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic, 9 April 2020, para 17.
[2] Ibid, para 2.
[3] Alvaro Galindo, Arbitration Unplugged Series – Virtual hearing: Present or Future?, May 23, 2020.
[4] Ibid
[5] Ibid
[6] International arbitration report, Norton Rose Fulbright, June 2020, p03.
[7] Ibid