The COVID 19 pandemic continues to disrupt the world and the environment as we used to know it. It has also had a significant impact on the administration of justice and the conduct of proceedings including arbitrations. Yet, resilience and swift adjustment has ensured that the wheels of justice continue to turn, despite the world-wide lockdowns and challenges that the current climate might pose.
Notably the International Chamber of Commerce (the “ICC”) published a Guidance Note on 9 April 2020 on possible measures that could be taken to mitigate the effects of the COVID-19 Pandemic. (ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic, available at https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effect-covid-19-english.pdfs).
The Guidance is aimed not only at tribunals but parties and counsel alike in order to provide a variety of suggested ways to progress ongoing proceedings. It is also aimed at providing reassurance to parties that wished to bring fresh proceedings and facilitates the means for them to do so.
The ICC has made clear that they are fully operational in these times and that their Guidance is aimed at ensuring that proceedings already underway continue to progress. Specific reference is made to Article 22(1) of the ICC Arbitration Rules (the “Rules”), that the tribunal and parties have a duty “to conduct the arbitration in an expeditious and cost-effective manner.” Further, tribunals are reminded that pursuant to Article 25(1) of the Rules, they have an additional duty to ensure that the proceedings are conducted within as short a timeframe as possible whilst giving the parties a fair opportunity to be heard. This restates the purpose and aim of providing an effective and speedy method of dispute resolution during unprecedented and highly uncertain times.
The Practical Implications: What Measures Are Permitted?
Many parties may have hearings scheduled during the next few months and will now need to make adjustments within the confines of the Rules. The Guidance Note serves as a reminder that incorporating a virtual or remote element is not a new concept in international arbitration proceedings where for example, there are practical challenges in getting all relevant individuals physically in one room to conduct the hearing.
The ICC has always made provision for the deployment of techniques and the use of technology which allowed for a proceeding to be conducted in a fair and efficient manner. (Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration, available at https://iccwbo.org/content/uploads/sites/3/2017/03/icc-note-to-parties-and-arbitral-tribunals-on-the-conduct-of-arbitration.pdf). Measures that are adopted, should be considered on a case by case basis to achieve the most appropriate way forward in the proceeding.
The starting point is Article 22(2), which permits a tribunal to adopt any measures it deems necessary to effectively arbitrate the proceeding.
The tribunal is required pursuant to Article 24, to convene a case management conference (the “CMC”) at the earliest opportunity, the first meeting in which a tribunal, the parties and their counsel get an opportunity to meet and set out the framework for the conduct of the proceeding.
CMCs have to date been conducted in a variety of ways, and have not always taken place in person. Tribunals have employed telephone conferencing, email exchanges and video conferences to conduct CMCs. These methods satisfy Article 22(2) and ensure that the tribunal’s obligation under Article 24 of the Rules is discharged. It should therefore not be too difficult to charter into familiar territory for holding a CMC, albeit from a workstation at home.
Particular Constraints and Possible Solutions:
The Rules do have some constraints. They prohibit a mere determination on paper of substantive issues. The tribunal is required to ensure that the parties each have a reasonable opportunity to present their case and meet the other party’s case (Art. 25).
There is some debate as to how one can fulfil the obligations under Articles 25(2) and 25(6), which should be read in conjunction with one another. The Articles require that the hearing take place with the parties together in person (if any of the parties so request).
The difficulty arises in relation to substantive hearings, which require the tribunal’s consideration of factual evidence, the presentation of legal argument and expert opinion.
However, Article 24(3) of the Rules provides the tribunal with the power to adopt appropriate procedural measures and/or modify the procedural timetable with the consultation of the parties. A range of measures are suggested by the Guidance including (among others):
- Disposing expeditiously of certain claims or defences as provided in paragraphs 74-79 of the Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (available at https://iccwbo.org/content/uploads/sites/3/2017/03/icc-note-to-parties-and-arbitral-tribunals-on-the-conduct-of-arbitration.pdf) within the remit of Article 22 of the Rules. This sets out that summary judgment applications could be made for expeditious determination of one or more claims or defences, on the grounds that those claims or defences are manifestly meritless or fall manifestly outside the jurisdiction of the arbitral tribunal. The application would be considered as a primary issue, with both parties being provided an opportunity to present their case and being heard at a hearing if appropriate. Thus, ultimately narrowing the issues in dispute;
- Resolving the issues in dispute in stages, i.e. bifurcating the proceedings if certain issues can be dealt with primarily, rather than leaving all issues to a final hearing if doing so would result in a more efficient resolution of the case for example disputes on jurisdiction and issues of merit could be taken in stages;
- Identifying whether the entirety of the dispute or discrete issues may be resolved on the basis of documents only and so on the papers, with no evidentiary hearing;
- Identifying issues that may be resolved by agreement between the parties, as the case may be with the assistance of their experts and thus narrowing down the issues in dispute;
- The tribunal request that the parties establish an agreed chronology of facts, a joint list of issues in dispute or other similar jointly produced documents that help define and narrow the range of issues in dispute;
- Organising mid-stream CMCs in order to assess with the parties a way in which to focus the dispute;
- Giving consideration to whether potentially dispositive issues can be decided without a document production/discovery phase, or with a limited, more narrow and focused production of documents considered material to the issue(s) to be decided;
- Identifying issues that may be resolved without witness and/or expert evidence, or on the basis of written questions from the opposite party or the tribunal and the provision of written answers/responses from the witness or expert;
- Considering whether site visits or inspections by experts can be replaced by video presentations or joint reports of experts;
- Considering whether the employment of a tribunal-appointed expert as opposed to party-appointed experts is appropriate;
- Using audioconference or videoconference for CMCs and hearings where possible and appropriate;
- Considering whether and how the number and size of submissions can be limited; and
- Considering whether the parties would agree to opt-in to the ICC Expedited Rules Provisions.
Other Arbitration Institutions
Other arbitration institutions around the world have likewise been adjusting to the new circumstances by publishing guidance on remote hearings and by supporting the progression of cases in the online world. The London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), the Arbitration Institute at the Stockholm Chamber of Commerce (SCC) and the Swiss Chambers' Arbitration Institution, for example, all remain operational and have been undertaking various efforts to support online hearings. In May 2020, Quinn Emmanuel participated as counsel in the first-ever online hearing with witness examinations at the International Centre for Settlement of Disputes (ICSID) in Alverley Investments Limited and Germen Properties Ltd v. Romania (ICSID Case No. ARB/18/30). The tribunal members and hearing participants were all in differing locations, spanning five countries and seven time zones. Despite the challenges, the ICSID Secretariat proved adept at supporting the tribunal and other hearing participants in getting comfortable with ICSID’s online platform (ICSID uses Webex exclusively due its security features), and the hearing progressed efficiently and with no significant hitches.
What Technology Is Required?
At a recent conference, members of the ICC suggested that technologies including (but not limited to) Zoom, Skype for Business, Webex, BlueJeans and the like, should be explored, including whether each individual attending the hearing has sufficient arrangements in place and whether the technology is workable to conduct the proceeding efficiently.
Suggestions included giving consideration to the equipment that each individual had access to; the possibility of utilizing a suite in an arbitration hearing centre for a tribunal member or counsel if certain technology was unworkable from home, the investment or renting of equipment, and testing to be conducted in the lead up to the hearing.
The Guidance acknowledges that there may be some differing opinions as to the meaning of ‘in person’ in the context of hearings. However resolved it is ultimately at the discretion of the arbitral tribunal as to how they construe Article 25(2) as requiring a face-to-face hearing, or whether the use of teleconferencing or videoconferencing technologies would meet the requirement.
The Guidance also lists various considerations that need to be made prior to the commencement of a hearing. These should not come as a surprise given that many are not limited to virtual hearings but in fact need to be made in face-to-face hearings also, including logistical arrangements, technical considerations, confidentiality, privacy and security, etiquette and presentation of evidence and examination of witnesses of fact and experts.
Face-to-face hearings have always had the advantage of maintaining confidentiality of the proceeding with all relevant individuals situated in one room. A primary concern of security arises where hackers may potentially access a virtual hearing which is otherwise intended to be confidential. Added security measures are required to be given consideration to such as use of passwords/passcodes and platforms/technology with added layers of security.
Any Difficulties or Changes Needed in Preparing Remotely?
Counsel will be required to place more reliance on the use of technologies such as those mentioned above, in conferring with their teams and also in interviewing witnesses and experts in the course of presenting the case, either for the purposes of the written presentation of the case or oral presentation at a hearing.
Whilst post-hearing considerations remain with the tribunal, who should be able to continue to draft awards and consult with their fellow tribunal members remotely, parties should give special consideration to any particular rules as to the seat of the arbitration and location of signature requirements that may be applicable.
Methods of Communication and the Transmission of Submissions
Following the Secretariat’s communication of 17 March 2020, all new requests for arbitration (including supporting documents) should be filed with the Secretariat in electronic form.
The ICC additionally encourages electronic transmission of documents, for example Terms of Reference are encouraged to be signed electronically in counterparts.
The Guidance also suggests that hard copies in the current circumstances should be dispensed with, with the tribunal encouraging electronic transmission of communications, submissions and supporting documents. Communications with the Secretariat are already expressly required to take place electronically.
This is not the final word. It is not the end, but in fact the beginning of the adjustment and redevelopment of the way in which proceedings will be conducted, as standard practice beyond the current COVID-19 pandemic. Quinn Emanuel remains at the forefront of testing these new measures.