Same with lots of things in our usual work life, it is seen that Covid-19 outbreak has also forced to change the usual practice of domestic and international arbitration, especially the format of the hearings which were often held in person until today.
I. Usual Practice
In both international investment and commercial arbitration, parties may present their cases via oral hearings. Even though the written procedure may cover more details of the parties' submissions, analysing of the preliminary objections on jurisdiction and the merits of the case by the tribunals through oral hearings is a significant necessity and a vital element of the right to be heard.
Through the oral hearings, parties are able submit their pleadings and evidence to the tribunals more effectively. These hearings also include oral testimony and cross-examination of witnesses and experts of the parties by the parties' counsels. The tribunals have chance to ask direct questions to the parties, their counsels, witnesses and/or experts to enlighten the dispute. Therefore, oral hearings have a complete set of pros that parties may benefit from during the proceedings.
Until Covid-19 outbreak, most hearings on jurisdiction or merits of the case are held in person, while procedural sessions of the arbitration (such as the first session of the tribunal) are often held by telephone or videoconference.1 These oral hearing procedures are regulated under some arbitration rules such as ICSID Arbitration Rules and ICC Rules.
As per Rule 32 (1) of the ICSID Arbitration Rules "the oral procedure shall consist of hearing by the Tribunal of the parties, their agents, counsel and advocates, and of witnesses and experts." Besides, Article 26(1) of the ICC Rules provides that "When a hearing is to be held, the arbitral tribunal, giving reasonable notice, shall summon the parties to appear before it on the day and at the place fixed by it." And Article 26(4) states that "The parties may appear in person or through duly authorized representatives. In addition, they may be assisted by advisers."
It is understood from the above-mentioned provisions of ICC and ICSID Arbitration Rules that that format of the hearing is regulated as "in person" by default.
II. Covid-19 Outbreak's Effects on Hearings in International Arbitration
In international arbitration, for the sake of neutrality, oral hearings generally take place in a country which is different than the countries of both parties or in the place of arbitration institution, in which the dispute is being resolved. Therefore, it takes organization and effort for the parties, their counsels, witnesses and experts to participate in these hearings in person.
Especially during these COVID-19 outbreak times, it became much harder and dangerous to attend these oral hearings - and sometimes impossible due to international travel restrictions of states imposed within the scope of measures to fight against this outbreak-. Thus, parties started to make arrangement to postpone the oral hearings or conduct these hearings virtually through videoconferences.
III. Alternative Practice – Applicable Provisions
A. Submission of the Arbitration Materials
In commercial, investment or state-to-state arbitration proceedings, parties are often requested to submit the printed copies of the arbitration materials to the tribunals. Some recent initiatives of institutions may be evaluated as they made it easier to submit the arbitration materials such as memorials, expert reports, witness statements, etc. through submission of electronic copies only by email or cloud database during this pandemic time.
Videoconferencing is the first solution that comes to minds in order to comply with social distancing in arbitration practice during the outbreak since it is a procedure that is already being used by the law firms acting as counsels and arbitral institutions in the arbitration proceedings.
On the other hand, due to the general confidential conduct of the arbitration proceedings, videoconferencing can be challenging when its risks are taken into consideration. However, it is not the general view that the videoconferencing is not frequently used and may not be used during this outbreak time. To the contrary, it seems the appropriate way to continue to the arbitration proceedings and enabling the protection of confidentiality via the precautions which may be taken. In any case, it should be evaluated whether the videoconferencing would be appropriate or not by taking into consideration every special circumstances, scope, nature, the number of the witnesses and experts, etc of each arbitration case.
Some arbitration institutions contain specific provisions with respect to holding the arbitration hearings through videoconferences. For instance, Article 14(1) of the LCIA Arbitration Rules provides that: "The parties and the arbitral tribunal are encouraged to make contact (whether by a hearing in person, telephone conference-call, video conference or exchange of correspondence) as soon as practicable...." More importantly, under Article 14(4) of the LCIA Arbitration Rules it is considered as a duty for the arbitral tribunal to adapt the arbitral procedure to the existing circumstances. Article 14(4)(ii) states that: "a duty to adopt procedures suitable to the circumstances of the arbitration, avoiding unnecessary delay and expense, so as to provide a fair, efficient and expeditious means for the final resolution of the parties' dispute." Finally, in Article 19 of the LCIA Arbitration Rules, the videoconference is considered one of the formats of the hearing which is subject to the preference of the parties to the arbitral proceedings.
C. Steps Taken by Institutions
Apart from above, due to Covid-19 outbreak, many arbitration institutions have already published some guidance notes to encourage the parties to arbitral proceedings to hold virtual hearings. Some examples are as follows2:
- The Australian Centre for International Commercial Arbitration (ACICA): ACICA allowed virtual hearings to be held. It published Draft Procedural Order for the Use of Online Dispute Resolution Technologies which may be found online (https://acica.org.au/wp-content/uploads/2016/08/ACICA-online-ADR-procedural-order.pdf).
- International Chamber of Commerce (ICC): ICC published a Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic (may be found on: https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures- mitigating-effects-covid-19-english.pdf) All meetings of the Secretariat, ICC Court of Arbitration and the ICC ADR Centre are being conducted virtually. The hearings can also be arranged to be held virtually with the assistance of the Secretariat and the tribunals.
- Hong Kong International Arbitration Centre (HKIAC): Online dispute resolution is being actively encouraged. The HKIAC has an online platform to conduct e-hearings. In addition to the online hearings, the HKIAC has an online filing system for the documents to be submitted.The London Court of International Arbitration (LCIA): LCIA also has an online filing system same as the HKIAC for the documents to be submitted.
- Independent Arbitration Centre (DELOS): DELOS Dispute Resolution Centre published a checklist online in order to guide the parties though various questions whether to proceed with in-person hearings or virtual hearings. The checklist may be found online (on: https://delosdr.org/index.php/2020/03/12/checklist-on-holding-hearings-in-times-of-covid-19/).
- International Centre for Settlement of Investment Disputes (ICSID): As presented above, ICSID published a news release on its website encouraging online filings of requests for arbitration, pleadings, and post award applications (may be found online on: https://icsid.worldbank.org/en/Pages/News.aspx?CID=361).
- Singapore International Arbitration Centre (SIAC): SIAC also published a press release on COVID-19 case management update, allowing the electronic communication and filings through arbitration proceedings.
Undoubtedly, the current unfortunate COVID-19 outbreak affected international arbitration proceedings in different aspects. One of them is the oral hearings as explained above in depth. As shown above, arbitration institutions are trying their best to take the necessary steps in order to avoid any loss of rights.
On the other hand, hearings in person still seems to be the best way for the parties to use their right to be heard in the extensive arbitration cases such as some investor-state arbitration cases containing lots of witnesses and experts. As it will be practically very difficult (if not impossible) to conduct the cross-examination of these witnesses and/or experts, examine the witness and expert bundles through the videoconference hearings, the parties of these investment arbitration cases may likely prefer to hold the hearings in person even if it will cause to delays in these arbitral proceedings.
1. (ICSID Worldbank Oral Procedure - ICSID Convention Arbitration, accessed from: https://icsid.worldbank.org/en/Pages/process/Oral-Procedure-Convention-Arbitration.aspx)
2. Baker & McKenzie, The Show Must Go On: Alternative Dispute Resolution and Litigation During COVID-19 in Australia, accessed on: https://www.bakermckenzie.com/en/insight/publications/2020/03/alternative-dispute-resolution-covid19
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.