Institutional responses to the COVID-19 pandemic

Introduction

As the COVID-19 pandemic has shut down 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 to international arbitration is acute. However, given that arbitration is a flexible and consensual process, it is well positioned to respond swiftly to these challenges. Indeed, in a short space of time there has been a significant and collaborative response from the international arbitration community, led by the major arbitral institutions, to find ways to maintain access to justice in a timely and efficient manner.

The response from arbitral institutions

Arbitral institutions are at the forefront of the international arbitration community’s response to COVID-19. Commendably, many institutions have largely remained fully operational while implementing remote working practices and virtual hearings (see our prior article on COVID-19 and The Global Approach to Court and Arbitral Proceedings). 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 joint ambition of the institutions 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 (see our previous article Online Dispute Resolution and electronic hearings).

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 current crisis passes.

This reality has prompted a number of 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:

i. Determining when it is appropriate to replace a physical in-person hearing with a virtual hearing

ii. Maintaining confidentiality and data security

iii. Mitigating due process concerns

iv. Mitigating the disruption caused by technological failures

v. Managing risks to the enforceability of awards

When to use virtual hearings

A threshold question confronting parties and tribunals is whether a particular case is appropriate for virtual hearing. Clearly, 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. Additionally, 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 not available, parties may solicit arbitral institutions or other centres to offer their venues.

The ICC and the CPR Institute have most clearly set out the considerations that tribunals should take into account when 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 the hearing would entail unwarranted or excessive delays, the need for the parties to properly prepare for the hearing 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 and/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 and/or prejudice.

Where time zone differences cannot be easily accommodated, parties and tribunals may consider an asynchronous virtual hearing, which was suggested by Michael Hwang S.C. during a recent SIAC webinar. This can be useful for oral openings / closings, or jurisdiction challenges, though 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 will be 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 and the recording and transcript of which will be uploaded to the same platform. The parties will then convene with the tribunal for a final virtual hearing during which any outstanding issues are dealt with. This is a possible method of convening a virtual hearing while ensuring that parties have a reasonable opportunity to be heard.

Confidentiality and data security

Arbitral bodies such as the American Arbitration Association (AAA) (in conjunction with the International Centre for Dispute Resolution (ICDR)), Africa Arbitration Academy, CIArb, The CPR Institute and the ICC have issued detailed guides or protocols for virtual hearings as well as 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 generate unique, automatically generated meeting IDs for each virtual hearing;
• Only using secure internet connections;
• Nominating a “host” to control entry of participants and providing the host with a list of participants before the hearing;
• Avoid using information that would disclose the identity of the parties in the meeting description;
• Awareness 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, use 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 is deleted); and
• Prohibiting any audio, video or screenshot recording of the hearing other than the official record.

Parties seeking more information on cybersecurity issues can also refer to the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration (2020 Edition) and the IBA Cybersecurity Guidelines 2018.

Due process concerns

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:

To ensure the integrity of oral evidence

• When a witness is giving evidence, position the camera so that it provides a view of a reasonable part of, if not the entire, room and allow the tribunal 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 desk or table and, if it is necessary for the witness 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;
• Allow the tribunal to ask the witness at any time to display the set of documents and/or witness statement he or she is referring to in order to verify that they do not bear any annotations;
• Ensure the witness does not have access to any real-time transcript;
• Ask the witness to confirm that he or she is not receiving communications or assistance of any sort from any unauthorised person during the testimony; and
• Prepare pre-agreed “ground rules” made available to each witness.

To prevent ex parte communication with the tribunal

• Disable any private chat features available on the virtual platform;
• Utilise security features of virtual platforms such as waiting rooms and secure breakout rooms; and
• Allow the host 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 the tribunal to administer oaths to witnesses by videoconferencing. If it does not, the model procedural order recommends that parties advise the tribunal what process they propose the tribunal should follow to ensure reliable testimony.

Minimising disruption

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 how to minimise 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 such as an audio- only conference bridge;
• Having a technician on hand where possible to assist; and
• Agreeing in advance the protocol to be followed if there is a disconnection or failure that cannot be rapidly resolved.

Ultimately, however, 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 Seoul Protocol on Video Conferencing in International Arbitration expressly contemplate that the 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.

Enforceability risk

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 may question virtual hearings.

The CIArb Guidance Note cautions that, “[d]ue 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 AAA-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 actually conducted.

The CPR Institute therefore recommends that to protect the enforceability of an award, the tribunal should 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 a parties. A practical solution may be for the tribunal to allow parties to submit post-hearing submissions to ensure all points in each party’s case are addressed, or to recall witnesses for limited cross examination if technology fails during a particular segment of the virtual hearing.

Conclusion

The guides, protocols and procedural orders discussed in this article demonstrate that many of the perceived barriers to effective virtual hearings can be overcome in many instances through careful planning, preparation and tailored procedural orders along with continued vigilance by tribunal, 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.

With thanks to Ingrid Olbrei, graduate, for her assistance with this article.