Coronavirus & Arbitration: Institutional Responses, Challenges and Practical Tips (Part Two)

In the second of two articles (part one here) looking at the impact of coronavirus on international arbitration,[1] we consider the following two questions:

What challenges must arbitration overcome in order to fully adapt to the demands of remote working?
How, practically, can these challenges be met?

These are dealt with in turn.

Challenges of Remote Working

It is clear from the previous post that various arbitral institutions across the globe have responded quickly to set up remote working and to facilitate support at all stages of the process, whether this is at the point of new applications, awards or the hearing itself. However, it takes time to turn around a juggernaut and there are significant challenges which need to be overcome. We set out below a few key challenges.

Case Preparation & Pre-Hearing Stages

We anticipate a number of potential difficulties due to the lack of in-person contact.

First, evidence gathering. Given the restrictions that practitioners face with social distancing rules, individuals are going to face difficulties in meeting potential factual witnesses, having in person meetings with them to go through critical documents for potential exhibits.

Secondly, document management. Similar to the above, parties are going to need to think ahead (to the extent that they have or are not already doing so) about getting on top of large quantities of documents for the purposes of disclosure exercises at an early stage, particularly where physical access to such documents may or may not be restricted. As noted below, parties are already moving forward in this area.

Thirdly, experts. Working remotely may lead to difficulties where the dispute requires expert evidence and such experts need to physically review matters by (for instance) conducting a site visit.

Hearing Stage

Much has been said about the perceived difficulties of remote or 'virtual' advocacy, in particular when it comes to cross-examination. Often, these fears are overblown: cross-examination in international arbitration is a forensic exercise, and 'gotcha' moments are few and far between. However, that is not to say that transition to remote hearings will always be easy. In our experience of virtual hearings, there are a number of general, issues which parties will need to consider at an early stage.

First, ensuring the confidentiality of the arbitration is protected. This being one of the principal advantages for some commercial clients of the entire process, it is imperative to ensure that the software which is adopted for the hearing is appropriately secure.

Secondly, time zones. Given how arbitration disputes frequently involve parties across a variety of jurisdictions, sometimes at different ends of the globe, the need to think in advance of parties working across different time zones is paramount. For instance, if practitioners based in London wish to attend a hearing taking place in Hong Kong then the time difference is likely to cause problems for what would otherwise be a normal hearing timetable. This problem is relatively easily solved for shorter hearings (e.g., interlocutory hearings) where an early start in one time zone and a late finish in another might just do the trick but for longer hearings running over days (or hearings involving multiple time zones) careful advanced planning and diary management is required.

Thirdly, languages and multiple participants. As with the above, where individuals are based in different jurisdictions, parties will have to think ahead about the likelihood of participants speaking in different languages and requiring interpreters. Equally, where the hearing is being conducted remotely and virtually, practitioners are naturally not going to have the same physical set up with the usual breakout rooms in which to discuss events in the hearing, strategize and take instructions.

Fourthly, witnesses. Ensuring witnesses are provided with the appropriate documents that they may need to refer to or be referred to during the hearing and that their evidence is not compromised.

Practical Tips and the Way Forward

Whether the difficulties are at the pre-hearing stage or during the substantive hearing itself, it is our view that arbitration is likely to prove itself a flexible procedure to meet the challenges of remote working and virtual hearings during this period and beyond.

Two general points are worth making at the outset. First, that arbitration as a procedure starts from a position of providing great flexibility and it is indeed arbitration's flexibility as a dispute resolution mechanism procedure which is often a great draw for clients and practitioners. Parties have the ability work with the tribunals to mould the different procedural rules which they will ultimately be bound by. Secondly, the arbitration community has already made significant steps towards remote working in recent years even before COVID-19. For instance, the ICSID noted that in 2019, approximately 60% of the 200 hearings and sessions organised by ICSID were held by video-conference.[2] Equally, the White & Case/Queen Mary Survey for 2018 found that 17% of respondents 'always' used videoconferencing in international arbitration, 43% 'sometimes' used it, 30% 'sometimes' used videoconferencing, 5% 'rarely' and 5% 'never'[3]. Further, 89% of respondents said that videoconferencing should be used more often in international arbitration.[4]

With these preliminary points in mind, there are various solutions to the pitfalls outlined, some of which have already been set out in the Protocols and guides of the arbitral institutions referenced above.

For instance, at the pre-hearing stages, there are a number of effective document platforms which will allow practitioners to get on top of the documents at an early stage and in a paperless way. For instance, ICC in its Guidance Note highlights a number of different document sharing platforms which it cites could be used for the purposes of electronic bundles to be used at the hearing.[5] Practitioners will need to investigate whether these online platforms can be used at an early stage for the purposes of first understanding what documents each party has and then subsequently enabling practitioners to analyse them and make strategic decisions in relation to them. Equally, parties are going to need to plan early with regards to proofing and evidence gathering and to perhaps consider video conferencing software, to ensure that factual statements can be prepared on time.

At the hearing stage (whether this is a substantive merits-based hearing or a procedural/interim matter), institutions are already getting ahead in setting up Protocols for effective virtual hearings on different online platforms.

First, regarding the confidentiality of the proceedings, parties will have to think ahead about which platform to use and what procedures to put in place. For instance, ICC in its Guidance note has provided (again without endorsement or warranty) a list of various video platforms to which it has licensed access.[6] Furthermore as noted above, the Seoul Protocol has set out some detailed guidance for the operation of videoconferencing. It sets out procedures for what it defines as the 'Hearing Venue' (the site of the hearing) and the 'Remote Venue' (where the remote witness, factual or expert, is located to provide his/her evidence). Article 2 set outs out minimum standards with regards to the confidentiality and security concerns, as has been highlighted elsewhere[7], noting for instance:

'2.c The Venue shall be in a location that provides for fair, equal and reasonable right of access to the Parties and their related persons, as appropriate. Similarly, cross-border connections should be adequately safeguarded so as to prevent unlawful interception by third parties, for example, by IP-to-IP encryption.

2.2 The Parties shall use their best efforts to ensure the security of the participants of the video conferencing, including the Witnesses, Observers, interpreters, and experts, among others.'[8]

Moreover, the Chartered Institute of Arbitrators has also released a 'Guidance Note on Remote Dispute Resolution Proceedings'[9] which at section 6 deals with confidentiality and privacy concerns. For instance, details of the full names and roles of all participants to the remote proceedings should be (amongst other things) circulated in advance.[10]

Secondly, with regards to practical difficulties like time zones, ICC Guidance Note[11] has already highlighted the issues which the Tribunal will need to consider in order to ensure equality and a full opportunity to present its case during a virtual hearing, which include (amongst other things) different time zones and the number of participants and locations.[12] Careful case management in advance will be needed to ensure that practitioners are able to attend hearings in different jurisdictions to where the Tribunal is based: for instance in the Hong Kong example above, greater allowance is going to be needed for the time difference, so a one week trial may extend to being double the time.

Thirdly, in relation to language and multiple witnesses, it will clearly be a matter for the relevant institution/tribunal and parties but again the guidance notes of different institutions have already put forward some suggestions. For instance, the Seoul Protocol opts for consecutive interpretation rather than simultaneous[13] whereas Annex II of the ICC note leaves it for the parties.[14] Equally, guidance such as that issued by the Chartered Institute of Arbitrators (amongst others) has sought to cater for the move from a physical to a virtual hearing, for instance providing for a breakout room[15], noting that 'the other party should not have the ability to hear or view muted caucus proceedings as body language of participants, as well as their reaction might negate the whole idea of confidentiality of caucus meetings'.

Fourthly, various measures can be envisaged for ensuring the integrity of the process and the evidence of the witnesses. For instance, the Seoul Protocol notes at Article 3.1:

'During the course of the video conference, the only persons present in the Remote Venue shall be the Witness giving evidence (with his/her counsel, if applicable), interpreters, paralegals to assist with the documents, and representatives from each Party's legal team on a watching brief. Each Party shall provide the identities of every individual in the room to the other Party/Parties and to the Tribunal prior to the video conference and the Tribunal shall take steps to verify the identity of each individual present at the start of the video conference'[16].

Conclusion

Remote working and the move to virtual hearings will no doubt present challenges to all elements of the legal sector. However, arbitration and the arbitral community seems ideally well positioned to meet these challenges. It remains a flexible and adaptable mechanism which will help clients achieve practical solutions in an uncertain time and arbitral institutions have responded quickly and proactively to adapt to the demands of remote working and virtual hearings.

[1] Adapted from an article distributed on 20 April 2020, 'Coronavirus & Arbitration: Institutional Responses, Challenges & Practical Tips'

[2] https://icsid.worldbank.org/en/Pages/News.aspx?CID=362

[3] Link to study on https://www.whitecase.com/publications/insight/2018-international-arbitration-survey-evolution-international-arbitration; page 32

[4] Link to study on https://www.whitecase.com/publications/insight/2018-international-arbitration-survey-evolution-international-arbitration; page 33

[5] https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf; at paragraph 33

[6] https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf; paragraph 32

[7] As also flagged by http://arbitrationblog.kluwerarbitration.com/2020/04/06/safeguarding-the-future-of-arbitration-seoul-protocol-tackles-the-risks-of-videoconferencing/

[8] http://www.kcabinternational.or.kr/user/Board/comm_notice.do?BD_NO=172&CURRENT_MENU_CODE=MENU0015&TOP_MENU_CODE=MENU0014

[9] https://www.ciarb.org/media/9013/remote-hearings-guidance-note_final_140420.pdf

[10] Ibid. paragraph 6.2

[11] https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf

[12] Ibid. paragraph 28