The Advantages of Arbitration During the Coronavirus Pandemic
By Adrianne Goins and Elena Guillet
The current outbreak of novel coronavirus (2019-nCoV or COVID-19) is causing widespread repercussions. The virus is affecting every aspect of life: courts have been forced to close, trials by jury have been postponed in some jurisdictions, some business disputes are on hold, and businesses face ever increasing economic uncertainty.
Arbitration’s inherent flexibility provides a real advantage over traditional litigation in these new circumstances. Indeed, most civil disputes – even those currently pending before courts – can be submitted to arbitration for enforceable awards. Arbitral institutions can step in to resolve disputes for businesses, eliminating some of the uncertainty. The British Columbia Commercial Arbitration Centre (BCICAC) is reminding its users:
Most civil matters that are currently before the courts can be submitted to arbitration for an award that can be enforced in court. Parties can choose their own procedure, including selecting the BCICAC domestic commercial arbitration rules or a set of rules that mimics those that would apply in a court proceeding, where the arbitrator acts effectively as a private judge.1
The forced digitalisation in the way we conduct international arbitrations may be the push to bring online dispute resolution (ODR) to commercial arbitration generally. Online arbitrations are already widely used, for instance, for internet domain name disputes which can be legally binding or non-binding in nature. An increasing reliance on technology in arbitration proceedings would even address the criticisms international arbitration has been facing lately. Parties in international arbitrations have complained of rising costs and procedural delays, specifically in arbitrations where it is increasingly challenging to get parties from different countries, as well as arbitral tribunals, in the same room at the same time.
Arbitral institutions around the world have been swiftly putting in place solutions to the new challenges posed by COVID-19. While much arbitration business can proceed remotely, institutions are dealing with reduced staff and concerns about in-person hearings. Parties and arbitrators are further affected by travel restrictions and governmental measures where arbitral seats are situated. Arbitral institutions have taken and continue to implement new steps to safeguard their operational stability. Most institutions are adopting cautionary measures, encouraging their staff to work remotely, postponing or cancelling hearings and digitalising more administrative and procedural aspects.
Hafez Virjee of Delos Dispute Resolution and Maria Hauser-Morel of Hanefeld have published a checklist targeting items to be considered for hearings conducted under any arbitration rules or administered by any institution in light of the COVID-19 outbreak. The checklist considers items such as the location of the hearing, the hearing participants and whether they are travelling from an “affected area.” Even before the outbreak, the Korean Commercial Arbitration Board (KCAB) published the Seoul Protocol on Video Conferencing in International Arbitration. The Protocol addresses all aspects of conducting video-conference hearings in international arbitrations, from witness examination to technical specifications. These and other resources can help guide arbitrators and parties as they continue to resolve disputes under present restrictions.
Moreover, conscious that the increase in electronical filings and use of videoconferencing in arbitration proceedings would lead to heightened concerns of cybersecurity and privacy protections, some arbitral institutions, like the American Arbitration Association and its international division, the International Centre for Dispute Resolution (AAA/ICDR) have established cybersecurity policies and training for arbitrators. Similarly, the 2020 Cybersecurity Protocol for International Arbitration was recently published by the International Council for Commercial Arbitration (ICCA), the New York City Bar Association and the International Institute for Conflict Prevention & Resolution.
In the COVID-19 chaos, arbitration can proceed without significant interruption and is well placed to handle creatively and flexibly the practical difficulties arising as we navigate this new world of social distancing and remote working. To assist companies in resolving disputes, we have compiled the following list of measures taken by arbitral institutions around the world:
The AAA/ICDR is cancelling any hearings taking place in-person at the AAA-ICDR hearing facilities until at least 17 April 2020 and is encouraging the use of alternative arrangements such as the use of video, teleconferencing or postponements.
The use of video conferencing, internet communication and telephonic conferences was already envisaged by the AAA Commercial Arbitration Rules (R-32(c)).
ACICA is requesting that all new filings be made by email and is urging parties to take steps to agree in writing that notification and delivery by electronic means is authorised in order to avoid any potential delay to the commencement of an arbitration.
FINRA has postponed in-person arbitration and mediation hearings until 1 May 2020. All other case deadlines remain in place, subject to the parties agreeing otherwise.
The hearing facilities at HKIAC remain open and operational with some additional precautionary measures for staff and guests. HKIAC is also encouraging use of its integrated virtual hearing services.
ICC has digitalised requests for arbitration, applications for emergency arbitrators and requests in other ADR proceedings, whilst postponing or cancelling all hearings and meetings taking place at the ICC Hearing Centre in Paris until 13 April 2020.
ICSID has reminded users that requests for arbitration, post-award applications, conciliation and fact-finding proceedings can be filed electronically. ICSID has been facilitating electronic filings and helping dispense with the need for hard copy submissions. ICSID is encouraging parties and tribunals to use electronic hearing bundles in lieu of hard copies at hearings. Finally, ICSID published a guide to online hearings.
JAMS has kept a skeleton staff to allow cases to continue to move forward and has introduced additional video conferencing services for mediations and arbitrations.
KCAB is operating under a rotation system with at least one case manager in the office during normal office hours and others working remotely. Some hearings are being rescheduled, and parties are encouraged to consider video conferencing through the Seoul International Dispute Resolution Centre.
LCIA has encouraged protective healthcare measures in its offices. All requests, applications under LCIA Article 9, and correspondence are to be by email. Arbitrators will also deliver their awards by email.
SCC’s case management has been fully digitalised since 2013; therefore, there should be no interruptions to its operations.
SIAC has asked arbitrators and parties to be mindful of travel restrictions and governmental measures when considering in-person meetings or hearings.
Please visit our Coronavirus: Preparation & Response series for additional resources we hope will be helpful.
1 Notice to the Legal Profession: Re: Arbitration of legal disputes during COVID-19 social distancing measures, https://vaniac.org/
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.