OUTLINING THE FRAMEWORK OF VIRTUAL ARBITRATION HEARINGS IN TIMES OF A PANDEMIC
Vivek Joshi & Rohan Gulati (Symbiosis Law School, Hyderabad).
This article was first published by LiveLaw.
In the wake of the rapid spread of the Novel Coronavirus (hereinafter referred to as the “COVID-19”) pandemic, the worldwide situation has become unpleasant altogether. It has created an unprecedented scenario all across the globe causing nation-wide lockdowns in several countries. The governments have resorted to imposing several travel restrictions, both domestic and international, in order to contain the spread of COVID-19. Similarly, there has been a considerable impact on the day to day hearings of the arbitral institutions all across the globe, which has stalled the conduct of several in-person arbitration hearings. Subsequently, in all likelihood this is going to be the situation for the next few months at least.
Meanwhile, due to such travel restrictions, the framework of in-person arbitration hearings has been substituted with the next best alternative method viz., Video Conferencing or Virtual Hearings. Bearing the same in mind, several arbitral institutions, in their respective rules provide for virtual hearings, which are mentioned and discussed in the present article, and it has only been a matter of time, that they invoked such rules for the convenience of the parties. Pertinently, during such times, two-fold problems warrant an assessment viz., (i) not pertaining to videoconferencing but rather the conundrum surrounding the conduct of a virtual hearing and (ii) lack of leading provisions governing virtual hearings in the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “1996 Act”).
The present article has been narrowed down on the slew of measures adopted by international and domestic arbitral institutions for switching to a virtual mode of hearing during the COVID-19. The first part of the article primarily focuses on outlining the framework for virtual arbitration hearings. The second part focuses on analysing and scanning drawbacks of virtual hearings along with addressing these drawbacks by referring to a few contemporary international protocols which lay down the guidelines for video conferencing in international arbitration and also concern both physical and cyber-security. Third part is a bird’s eye view of the provisions that have been or may be invoked by arbitral institutions on both domestic and international fronts concerning virtual hearings. Lastly, and fourthly, the article concludes by providing certain recommendations to the 1996 Act and the rules to be devised for virtual hearings by arbitral institutions.
II. VIRTUAL HEARINGS: AN OUTLINE
Arbitrations across the globe adopt two-fold strong premises viz., (i) Convenience of the parties and (ii)Dynamism adopted in hearings. In short, arbitration deviates from the uniform procedure of tedious litigations, and are seemingly flexible. Whilst party autonomy stands as one of the pillars of arbitrations, the convenience of the parties needs to be respected in the parallel front. In view of the same and in order to accommodate hearings on a day-to-day/regular basis, several arbitral institutions have switched to an online mode via video conferencing wherein, along with the arbitral tribunal, the disputing parties, case counsel, witnesses, tribunal secretary, and stenographers. Additionally, this platform allows having access to documents during the course of the proceedings as well.
For instance, the Singapore International Arbitration Centre (SIAC) is encouraging and promoting the utilization of services being offered by the Maxwell Chambers for virtual ADR hearings. Another instance, worth citing is that of the Arbitration Place Virtual e-hearings based out in Canada, wherein the institution primarily offers client altered variants in the form of e-hearings for facilitating all types of dispute resolution. Thus, one of the forefronts of international commercial arbitration, as addressed hereinabove is the dynamic nature of the proceedings. Be it an in-person hearing or virtual hearing, the arbitral proceeding can be set into either one without much hassle.
III. SCANNING DRAWBACKS IN VIRTUAL HEARINGS
Notwithstanding the fact about how convenient it might be for the parties to adjust and adapt to a virtual hearing setup, there arise multiple issues right from its commencement. Mentioned hereinafter are a few drawbacks pertaining to the conduct of virtual hearings:
1. Logistical Blocks: There arises a primary need to trace out certain logistical issues including but not limited to, the lack of bandwidth which may not be available to the parties. This may create the primary issue regarding the clarity of both audio and video during the course of virtual hearings. Further, in case the issue of bandwidth is addressed prior to the hearing, the parties may face snags with respect to the platform or domain on which they are connected for the virtual hearing.
There appears to be comparatively less number of institutions providing services equivalent to that of Maxwell Chambers or Arbitration Place Virtual in terms of e-hearing facilities. Therefore, not everyone who is part of the arbitration proceedings will necessarily have access to such platforms which provide for virtual hearings.
2. Confidentiality vis-à-vis virtual hearing: Certain stakeholders may have concerns with respect to the safety of the documents being shared via virtual platforms. In other words, during the course of the proceedings, there may be several documents that need to be circulated or passed by the case counsel, which are shared online as well. Therefore, the type of encryption that these virtual platforms contain, warrants an assessment from the viewpoint of experts in order to ensure utmost confidentiality is maintained throughout.
3. Credibility of witness testimony: It is pertinent to address the issue regarding the credibility of the testimony of witnesses during the arbitral proceeding. Due to the absence of the witness for an in-person hearing, the tribunal may perhaps find it challenging to evaluate and analyze the body language, facial expression, and tone of answering of the witnesses. The aforementioned play an indispensable role in discerning the character of the witness and statements made thereafter. It is comparatively easier during an in-person hearing to trace out such factors however, in the process of e-hearings the aforesaid drawback may have a contrasting affect towards the dispute altogether.
Another significant aspect that warrants attention is that of witness tutoring, which maybe in the form of reading out from a script that may have been prepared prior to the hearing or follow instructions from a third party during the testimony. These aspects may be present or located in the interior of the hearing room, where the camera does not focus or will not be able to locate. Thus, it is indispensable to ensure that the witnesses are not involved in acts which would undermine the credibility of their statements.
4. Adjusting official working hours: Majority of the international commercial arbitrations, may have the parties/arbitrators/case counsels in different parts of the world. In the ordinary course of hearings, they would travel to the venue of the arbitral proceedings however, during these unprecedented times as right now, when travel restrictions have been imposed, the aforesaid turns void. Therefore, whilst being in different parts all across the globe, another issue which may arise is with respect to the global time zones and regular office hours. For instance, a proceeding scheduled to commence at 1pm in Singapore would mean that in case the arbitrator is based out in London, he would need to be ready at 6am as per the London timings. Therefore, there arises a major concern with respect to the coordination of timings as well.
IV. ADDRESSING THE DRAWBACKS
In order to address the aforementioned drawbacks, which might occur during the course of the virtual hearings, strong emphasis is laid on the Seoul Protocol on Video Conferencing in International Arbitration(hereinafter referred to as “The Protocol”). The primary objective behind The Protocol was initially laid down in 2018, which aimed at establishing such features that would be beneficial for the international arbitration community at large. Thus, in the wake of 2020, The Protocol received the go-ahead and was subsequently enforced in Seoul. Recently, on 20th March, 2020, the Protocol got triggered due to the COVID-19 to facilitate the international arbitrations. The extracted and summarized relevant provisions of The Protocol in order to address the drawbacks are as follows:
1. Witness Examination Generally (Article 1): The article provides an exhaustive procedure to be followed during the witness examinations along with the requirement that the venue shall allow a reasonable part of the interior of the room to be shown along with reasonable distance from the witness. Further, the witness shall be sitting at an empty desk and the face shall be clearly visible.
2. Video Conferencing Venue (Article 2): This assures that all logistical setups are made prior to the commencement of the video conference and all technical assistance is provided throughout the course of the hearing in order to avoid any glitches etc.
3. Technical Requirements (Article 5): The Protocol is extremely specific towards transmission speeds and the equipment to be utilized in order to ensure the virtual hearing is glitch-free. Further, detailed technical requirements are provided in the Annexure attached to The Protocol relating to video, audio, picture, channels, bandwidth and bridging requirements as well reflecting the extent of how exhaustive it is in itself.
Further, the issues or drawbacks concerning the confidentiality of documents can be addressed by way of the ICCA-NYC Bar-CPR Cybersecurity Protocol for International Arbitration, 2020(hereinafter referred to as the “Cybersecurity Protocol”). The Cybersecurity Protocol has been established bearing in mind specifically the requirements of international commercial arbitrations. The purpose of the Cybersecurity Protocol is two-fold: (i) providing reasonable security measures for arbitration matters and (ii) increasing awareness about security requirements in international arbitrations. Therefore, the Cybersecurity Protocol is an entire substantial and procedural protocol in itself.
V. INSTITUTIONAL FRAMEWORK FOR VIRTUAL HEARINGS: EXTRACTED AND SUMMARIZED
1. Model Law
Article 28 (Hearings): Arbitral Tribunal may examine witnesses by way of video conferencing.
2. Institutional Arbitration Bodies (International)
2.1 Singapore International Arbitration Centre (SIAC) - (Schedule 1 – Emergency Arbitrator) –
Rule 7: The Emergency Arbitrator may utilize the video conferencing facility for hearing the disputing parties as an alternative to an in-person hearing.
Rule 8: Power of Emergency Arbitrator to order or award any interim relief via video conferencing.
Article 14.1 (Conduct of proceedings): Allows the parties and the Arbitral Tribunal to conduct the proceedings via video conferencing.
Article 19.2 (Oral Hearings): Allows video conferencing as a mode of oral hearing.
Article 24(4) (Case Management Conference and Procedural Timetable): Case Management Conference may be conducted by video conferencing.
Appendix IV (Case Management Techniques): Encourages the use of video conference (for procedural or other hearings) where attendance in-person is not essential.
Appendix V, Article 4(2) (Emergency Arbitrator Rules): Emergency Arbitrator may conduct hearing through video conference.
Appendix VI, Article 3(5) (Place of the Emergency Arbitrator Proceedings): In case of expedited procedures, the Arbitral Tribunal may conduct hearings via video conference.
3. Institutional Arbitration Bodies (Domestic) –
Article 28 (Hearings): Arbitral Tribunal may examine witnesses by way of video conferencing.
Article 8 (Case Management Conference): Case Management Conference may be conducted by video conferencing.
Article 28 (Examination of witnesses via video conferencing): In exceptional circumstances, video conferencing of witnesses may be allowed.
VI. RECOMMENDATIONS AND CONCLUSION
Bearing in mind the aforesaid discussion, there arises a stark need to lay due emphasis on the 1996 Act. In this regard, an attempt to trace out certain provisions which may be accommodated in the 1996 Act with regard to virtual hearings, which would be add-ons during unprecedented times like right now. In light of the aforesaid, mentioned hereinafter are a few prospective recommendations:
1. Potential Amendment to the 1996 Act: Section 24 and 29 of the 1996 Act lay down the law for ‘hearings’ and ‘decision making by the arbitral tribunal’ respectively. However, the aforementioned provisions seem to have a grey area vis-à-vis any possibility wherein a hearing via video conferencing may be conducted. For starters, from a bare perusal of Section 24, the arbitral tribunal seems to have sufficient power to decide whether to conduct oral hearings for presentation of evidence or oral argument but makes no mention for conducting a virtual hearing or that they may consider the option of conducting one if it is not explored by the disputing parties to the case. Therefore, a possibility of conducting a virtual hearing per se may be inserted under the aforesaid provisions.
2. Insertion of Video Conferencing rules in the 1996 Act: Another insertion by an amendment worth consideration is that of certain set of rules in lieu of which virtual hearings may be conducted. Similar to how the 1996 Act is based on the UNCITRAL Arbitration Rules, the rules for video conferencing may be founded and introduced on the basis of The Protocol as discussed under the second part of the article. They shall be exhaustive enough to address both legal and technical concerns bearing in mind the best available technology offered by arbitral institutions in India.
3. Virtual Hearings under the New Delhi International Arbitration Centre (NDIAC) Rules: Bearing in mind the primary objective of the establishment of the NDIAC, in order to further refine the process of institutionalized arbitration in India, the draft rules may contain provisions which enable the possibility of conducting virtual hearings. Such rules may also be based on The Protocol and may even be able to address cybersecurity concerns on the basis of the Cybersecurity Protocol.
4. Flexibility in institutional arbitrations: Notwithstanding the conduct of either virtual hearings or in-person hearings, in order to promote India as an arbitration-friendly hub, the dynamism of arbitral proceedings need to be appreciated. Therefore, providing a more versatile environment to the arbitrations in India may also assist in the growth by a large margin.
Despite tracing the drawbacks and addressing them subsequently, there appears to be a fair amount of work required to be done at the ground level. COVID-19 has opened a new sphere for outlook and forced the arbitration regime to adopt the format of virtual hearings. Whilst courts and litigants are still trying to adjust into the virtual hearing setup, institutional arbitration hubs have been a step ahead. Therefore, institutional arbitration has yet again proved that its core strength lies in the framework and convenience it provides to the parties. However, India possesses an advantage to consider such changes from the international arbitration community and build up on the same.