As the COVID-19 pandemic has shut businesses, locked down communities, and closed borders, the international arbitration community is not alone in having to rapidly develop new ways of working. For a cross-border system of dispute resolution that frequently involves participants from different countries, the challenge posed by COVID-19 is acute. However, given that arbitration is a flexible and consensual process, it is well positioned to respond swiftly to these challenges. In a short time, the international arbitration community – led by the major arbitral institutions – has collaborated to find ways to maintain access to justice in a timely and efficient manner.
Arbitral institutions are at the forefront of the international arbitration community's response to COVID-19. Commendably, many institutions have remained fully operational while implementing remote working practices and virtual hearings. In April 2020 13 arbitral institutions issued a joint statement calling for solidarity, cooperation and collaboration in response to COVID-19. The statement emphasised the institutions' joint ambition to:
support international arbitration's ability to contribute to stability and foreseeability in a highly unstable environment, including by ensuring that pending cases may continue and that parties may have their cases heard without undue delay.
The ambition to see cases continue has led to a focus on the use of digital technologies, including virtual hearings. Online dispute resolution is not a new phenomenon. However, the global measures taken in response to COVID-19 have meant that the use of digital technologies to facilitate case preparation, management and hearings is no longer optional – particularly where parties are unwilling or unable to wait until the crisis has passed.
This reality has prompted numerous institutions to issue specific guidance to parties and tribunals grappling with how to convert physical in-person hearings into a virtual environment.
This article explores the guides, protocols and draft procedural orders issued by institutions and other bodies and considers how institutions are responding to the following key challenges:
- determining when it is appropriate to replace a physical in-person hearing with a virtual hearing;
- maintaining confidentiality and data security;
- mitigating due process concerns;
- mitigating the disruption caused by technological failures; and
- managing risks to the enforceability of awards.
A threshold question confronting parties and tribunals is whether it is appropriate to hear a particular case virtually. The ability of all participants to access the necessary technology, software and equipment and a reliable high-quality internet connection is a prerequisite to a virtual hearing. In addition, time zone differences may make it more difficult to convene a full day virtual hearing, so adjustments will need to be made to the hearing timetable. The Africa Arbitration Academy and Chartered Institute of Arbitrators (CIArb) suggest that where such access is unavailable, parties may solicit arbitral institutions or other centres to offer their venues.
The International Chamber of Commerce (ICC) and the Conflict Prevention and Resolution (CPR) Institute have most clearly set out the considerations for tribunals determining whether to proceed with a virtual hearing.
In its Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic, the ICC refers to factors such as:
- the nature and length of the hearing;
- the complexity of the case and number of participants;
- whether there are particular reasons to proceed without delay;
- whether rescheduling would entail unwarranted or excessive delays;
- the need for the parties to prepare properly; and
- whether the award will be enforceable.
The CPR Institute identifies the following relevant considerations:
- the tribunal's authority to convene a virtual arbitration hearing under the applicable arbitration rules and the parties' arbitration agreement;
- the applicable law, including any relevant or mandatory provisions regarding the conduct of hearings and the presentation of evidence and data protection;
- whether the logistical and technical challenges of holding a remote video hearing can likely be overcome such that a hearing can be fairly managed based on the particular circumstances of the case at hand;
- whether concerns about fairness or equal treatment of the parties can be reasonably overcome;
- whether cybersecurity concerns have been adequately addressed; and
- whether postponement until a hearing may be held in a single physical location could result in excessive delay, risks to health and safety or prejudice.
Where time zone differences cannot easily be accommodated, parties and tribunals may consider an asynchronous virtual hearing, which was suggested by Michael Hwang SC during a recent Singapore International Arbitration Centre webinar. This can be useful for oral openings and closings or jurisdiction challenges, although it is unsuitable for cross-examination. For an asynchronous virtual hearing to take place, one party appears before the arbitral tribunal and makes its oral submissions, the recording and transcript of which are uploaded to a secure online platform for the other party to review. The second party then appears before the tribunal and makes its oral submissions, the recording and transcript of which are uploaded to the same platform. The parties then convene with the tribunal for a final virtual hearing, during which any outstanding issues will be dealt with. This is a possible method of convening a virtual hearing while ensuring that parties have a reasonable opportunity to be heard.
Arbitral bodies such as the American Arbitration Association (AAA) (in conjunction with the International Centre for Dispute Resolution (ICDR)), the Africa Arbitration Academy, the CIArb, the CPR Institute and the ICC have issued detailed guides and protocols for virtual hearings and draft procedural orders. These materials take parties through the technological requirements and considerations necessary to ensure a successful virtual hearing.
A recurrent theme is how parties and tribunals can ensure the confidentiality of the proceedings and protect data exchanged or recorded electronically. Common recommendations include:
- using platforms that are password protected and provide unique, automatically generated meeting IDs for each virtual hearing;
- using only secure internet connections;
- nominating a host to control the entry of participants and providing the host with a list of participants before the hearing;
- avoiding using information that would disclose the parties' identities in the meeting description;
- being aware of the terms of service that apply to platform recording features and either disabling or formalising the conditions under which sessions will be recorded;
- if sharing recordings, using secure file sharing platforms or cloud storage (with a password protected link to the file which must be downloaded within a few days, after which the cloud recording will be deleted); and
- prohibiting any audio, video or screenshot recording of the hearing other than the official record.
Parties which seek more information on cybersecurity issues can also refer to the International Council for Commercial Arbitration-New York City Bar-CPR Protocol on Cybersecurity in International Arbitration (2020 edition) and the International Bar Association Cybersecurity Guidelines 2018.
Due process concerns are often raised as an obstacle to virtual hearings. For example, how can opposing counsel and the tribunal be confident that a witness is not being coached by someone off screen, through instant messages or by annotations on materials that are not visible on screen? Another common concern is how to prevent ex parte communications with the tribunal – for example, if one party joins a virtual hearing early or a party is disconnected part way through a hearing.
The materials published by institutions offer practical suggestions for how to mitigate these concerns, including as follows.
Ensure integrity of oral evidence
When a witness is giving evidence, the camera should be positioned to provide a view of a reasonable part, if not all, of the room. The tribunal should be able to ask the witness at any time to orient the webcam to provide a 360-degree view in order to confirm that no unauthorised persons are present.
Witnesses should give evidence sitting at an empty table and, if they need to refer to hard copy documents while giving evidence, counsel should provide the witness with clean, unannotated sets of these materials and may place them in a sealed envelope that is to be opened for the first time during the examination.
The tribunal should be allowed to ask the witness at any time to display the set of documents or witness statement to which they are referring in order to verify that they do not bear any annotations.
Ensure witnesses cannot access real-time transcripts
Witnesses should be asked to confirm that they are not receiving communications or assistance of any sort from any unauthorised person during the testimony. Further, pre-agreed ground rules should be prepared and made available to each witness.
Prevent ex parte communication with tribunal
Any private chat features available on the virtual platform should be disabled, and security features (eg, waiting rooms and secure breakout rooms) should be utilised. Further, the host should be allowed to lock the hearing once all authorised participants have joined.
A specific issue flagged in the CPR Institute's Annotated Model Procedural Order for Remote Video Arbitration Proceedings is whether the applicable procedural law authorises tribunals to administer oaths to witnesses by videoconference. If it does not, the model procedural order recommends that parties advise the tribunal what process they propose that it follow to ensure reliable testimony.
The disruption and delay caused when technological problems prevent participants from joining a virtual hearing, disconnect them part way through a hearing or reduce the quality of audio or video is a significant disadvantage of a virtual hearing, particularly where all participants are joining from different locations.
The various guidance notes published by the arbitral institutions offer practical suggestions for minimising the disruption caused by technological problems or failures, including:
- conducting a trial run in advance of the hearing;
- arranging a back-up option, such as an alternative virtual platform or lower technology option (eg, an audio-only conference bridge);
- having a technician on hand to assist, where possible; and
- agreeing in advance the protocol to be followed if there is a disconnection or failure that cannot be rapidly resolved.
Ultimately, the tribunal must determine whether technological failures compromise the proceedings to the extent that one or both parties were not given a reasonable opportunity to present their case. The Africa Arbitration Academy Protocol, the CPR Institute Annotated Model Procedural Order and the Seoul Protocol on Videoconferencing in International Arbitration expressly contemplate that a tribunal may pause or terminate a virtual hearing if it deems the videoconference so unsatisfactory that it is unfair or prejudicial to either party or compromises the integrity of the proceeding.
A key consideration with any virtual hearing is whether it risks the enforceability of the resulting award. This issue is of particular concern where the parties' arbitration agreement (including any institutional rules governing the arbitration) does not provide for virtual hearings, a party objects to a virtual hearing or local enforcing courts question virtual hearings.
The CIArb Guidance Note cautions as follows:
Due to differences in legal opinions and interpretations across jurisdictions, remote means of reaching a resolution to a dispute might be questioned by some enforcing domestic courts or may be used [as] a ground for challenge by parties. Parties should be aware of this possibility and adjust where necessary to ensure enforceable resolutions to disputes.
The Africa Arbitration Academy Protocol, the American Arbitration Association-ICDR Model Order and the CPR Institute's Annotated Model Procedural Order provide draft orders recording the parties' agreement to a virtual hearing and waiving the right to object to an award on the ground that the hearing of the dispute was conducted virtually, as well as draft orders recording the tribunal's determination to proceed with a virtual hearing in the absence of party agreement.
However, even if the parties expressly agree to conduct a virtual hearing, such agreement does not bar a party from challenging an award based on the manner in which the remote proceeding was conducted.
The CPR Institute therefore recommends that to protect the enforceability of an award, the tribunal monitor the proceedings to ensure that every party's right to present its case has not been jeopardised and act quickly to rectify any incident that may have been prejudicial to parties. A practical solution may be for the tribunal to allow parties to submit post-hearing submissions to ensure that all of the points in each party's case are addressed or recall witnesses for limited cross-examination if technology fails during a particular segment of the virtual hearing.
The guides, protocols and procedural orders discussed in this article demonstrate that many of the perceived barriers to effective virtual hearings can often be overcome through careful planning, preparation and tailored procedural orders along with continued vigilance by tribunals, counsel and parties as to due process issues throughout the proceedings. It remains to be seen whether the more widespread uptake of digital technology in international arbitration as a result of COVID-19 will outlast the pandemic, offering a lower cost and more environmentally friendly alternative to physical in-person hearings in appropriate cases.
For further information on this topic please contact Andrew Battisson or Tamlyn Mills at Norton Rose Fulbright's Sydney office by telephone (+61 2 9330 8000) or email (email@example.com or firstname.lastname@example.org). Alternatively, contact Sherina Petit at Norton Rose Fullbright's London office by telephone (44 20 7283 6000) or email (email@example.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.
Katie Chung, special counsel, Clinton Slogrove, associate, and Ingrid Olbrei, graduate, assisted with the preparation of this article.