International arbitration in 2021
The future of remote hearings in a post-pandemic world
The COVID-19 pandemic has had an unprecedented impact on the arbitral process. At the start of the pandemic, several hearings were postponed due to travel restrictions and social distancing measures. Nevertheless, illustrating the adaptability and flexibility of arbitration, several tribunals and arbitral institutions quickly adapted by ordering remote hearings. Indeed, since the start of the pandemic, relatively few hearings have been held entirely in person, with most being semi- or fully remote. According to a recent survey conducted by the ICC, by Q4 2020, 71 per cent of users had participated in fully virtual hearings, an increase from 36 per cent in Q1.
Given the absence of express provisions addressing remote hearings in most arbitral rules or national arbitration legislation at the start of the pandemic, many arbitral institutions promptly released guidance to assist arbitration users. Examples include COVID-19: Information and Guidance in SCC Arbitrations (27 March 2020); ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic (9 April 2020); and HKIAC Guidelines for Virtual Hearings (14 May 2020).
Non-institutional guidance was also released in the form of external protocols, notably the Seoul Protocol on Video Conferencing in International Arbitration, and Africa Arbitration Academy’s Protocol on Virtual Hearings in Africa; and model procedural orders, such as the CPR’s Model Procedural Order for Remote Video Arbitration Proceedings and PLC’s Procedural Order for Video Conference Arbitration Hearings.
Many arbitral institutions have now taken steps to update their rules to provide expressly for the use of remote hearings. For example, Article 19.2 of the LCIA Arbitration Rules 2020 now provides that ‘a hearing may take place in person, or virtually by conference call, videoconference or using other communications technology with participants in one or more geographical places (or in a combined form)’. Similarly, Article 26.1 of the new ICC Arbitration Rules 2021 provides that ‘[t]he arbitral tribunal may decide, after consulting the parties, and on the basis of the relevant facts and circumstances of the case, that any hearing will be conducted by physical attendance or remotely by videoconference...’.
These changes will help to minimise the risk of due process challenges on the basis of a tribunal’s decision to order a remote hearing. Indeed, in a recent decision of the Austrian Supreme Court in Case No. 18 ONc 3/20s, the Court confirmed the Tribunal’s power to hold remote hearings over one party’s objections and rejected due process concerns. We anticipate that this general approach will, by and large, be followed by courts in arbitration-friendly jurisdictions.
However, will a post-pandemic world be different? How should tribunals assess the pros and cons of a merits hearing where there are no impediments to travel? With this in mind, ICCA recently launched a research project entitled ‘Does a Right to a Physical Hearing Exist in International Arbitration?’.
The reality is that remote hearings can work, and we have seen several successful examples of this. The technology used to facilitate remote hearings is now well established, with significant improvements made in terms of functionality to better suit the needs of remote hearings. Indeed, remote hearings have already become more sophisticated and physical hearing centres have started adapting their spaces to cater for a future with remote or partially remote hearings being the norm. There are also many advantages to remote hearings, including cost efficiency. Hearings are expensive and remote hearings have the obvious advantage of promoting savings on flights, accommodation and hearing centre costs.
Fewer flights, and a shift from paper to online hearing bundles, also results in a significantly lower carbon footprint, which fits into the broader initiative, led by the likes of the Campaign for Greener Arbitration, of making arbitration more environmentally friendly.
Debates as to whether hearings should be remote, in person or a combination of the two will now be a regular feature of the arbitral process. Tribunals will need to take into account a number of factors when deciding whether to hold remote or in-person hearings, including: (i) the nature of the evidence and whether an in-person hearing would assist with the resolution of the dispute; (ii) the size and complexity of the dispute; (iii) technological considerations; (iv) time zone considerations; and (v) any justifiable concerns regarding witness tampering.
Against this background, remote hearings may well become the default position for smaller, less complex cases, as the efficiency gains far outweigh any due process risks. By contrast, for larger and factually complex disputes, we expect many tribunals to prefer the practice of in-person hearings, perhaps with certain remote components where appropriate.
Provided that tribunals exercise their discretion in a thoughtful and reasoned manner, taking into consideration the views of both parties, the issues in dispute and under no circumstances putting personal preferences first, users of arbitration will benefit significantly from the availability of remote hearings in a post-pandemic world.