27 Nov Virtual Arbitration: Issues and Possible Solutions as ADR Goes Digital
On November 26, 2020, Disini Buted Disini hosted Virtual Arbitration: Issues and Possible Solutions as ADR Goes Digital, a webinar that is part of the firm’s Digital Transformation Thursdays. This webinar delved into the challenges faced by international courts in alternative dispute resolutions due to the shift from physical arbitration to virtual arbitration in light of the COVID-19 pandemic.
The first speaker, Dr. Maria Hauser-Morel, Counsel for HANEFELD (Paris), talked about the digital transformation of international arbitration before and after the pandemic, as well as the future of arbitration in light of such transformation. Dr. Hausel-Morel presented the six pillars in arbitration in the context of the International Chamber of Commerce (ICC) Arbitration: communication with ICC arbitration users, internal meetings of ICC staff, ICC court sessions, oral hearing and meetings in ICC cases, seminars and conferences, and ICC Commission reports.. She explained that, even before the pandemic, some of these pillars were already done virtually. For example,, communication with ICC arbitration users have been through exchanges of email and video conferencing since 2007. Similarly, ICC Court sessions, traditionally held in person, shifted to virtual arbitration when ICC opened its first overseas office in Hongkong, followed by other offices in different countries. Because of this evolution, most ICC Court sessions have already been done in hybrid form since 2010. However, some of the pillars continued to be done in the traditional manner. Internal meetings of ICC staff were all done in person to ensure consistency in the decisions. Oral hearing and meetings in ICC cases were also conducted physically, but there were exceptional cases where teleconferences were held in lieu of physical hearings. Seminars, conferences, and ICC Commission reports, were also done in a traditional manner.
Since the pandemic happened, Dr. Hauser-Morel explained that virtual arbitration became the norm. On that note, Dr. Hauser-Morel enumerated four pillars on the future of arbitration. First, there will be more remote hearings and meetings. Some of the issues that may arise in this regard are time zone differences, technical disparities among countries, objection to remote hearings, and cybersecurity. Second, there will be more diversity in terms of arbitrator appointments, party representations, and choice of institutions. Third, all arbitral events, such as teaching seminars and conferences, will be held online. Lastly, Dr. Hauser-Morel emphasized that the future of arbitration also entailed greener arbitration in that the exchange of physical paper documents are discouraged.
In the second talk, Atty. Janice Lee, International Dispute Resolution Counsel of the Harry Elias Partnership (Singapore), zeroed in on specific situations that arise specifically in virtual arbitration and the possible solutions for issues that may arise. First, the applicable law, procedural rules, or parties’ agreements specify a requirement for “in-person” hearings. The issue on recognition and enforcement risks should be resolved with either the parties’ express consent to virtual hearing or the postponement of such hearings, if necessary. The second scenario that Atty. Lee presented is the due process implications of technical issues. For example, glitches in video or audio feed during the hearing may lead to egregious errors in the virtual hearing process, leading disadvantaged parties may argue that the proceedings were unfair. To address this issue, she said that the tribunal either needs to “cure” any procedural or technical defect immediately before proceedings or consider adjourning if technical issues persist. The third scenario Atty. Lee presented is the hacking or hijacking of video feeds, leading to the possibility of leaked confidential and sensitive information. As a possible solution, she said that the tribunal should strengthen its cybersecurity protocol and use sufficient encryption to gatekeep the proceedings.
The fourth and fifth scenarios involved the question of the integrity of a testimony in a virtual setting. Atty. Lee explained that this risk can be mitigated through the installment of necessary equipment, such as rotating cameras to monitor the room. Lastly, she reiterated that in virtual arbitration, the parties are scattered across multiple time zones, and scheduling a common time will become very difficult. Atty. Lee pointed out that this issue can be addressed by shortening the hearing time and/or have multiple tranches of hearings. In conclusion, she enunciated the importance of careful consideration on the pros and cons of virtual arbitration.