ONLINE ARBITRATION HEARINGS
Law, as well as all other disciplines, could not stay immune from adopting itself to the world-wide technological evolution and digital transformation. Global effects of the Covid-19 pandemic fostered this adaptation by moving legal processes into online platforms. Arbitration is one of these legal processes that is affected from the Covid-19 pandemic and adopted itself into technological developments. Below is an overview of arbitration hearings and how they are conducted online in today’s world.
Arbitration, as a dispute resolution mechanism, sets an alternative to litigation before domestic judiciary. It is conducted through an arbitral tribunal that consists of a single arbitrator or a panel of arbitrators who are appointed by the parties of the dispute or an international mechanism. As this brings a neutrality element to arbitration, parties of a legal relationship may agree to solve any dispute arising among them as regards to this relationship through the way of arbitration.
Such an agreement between the parties can be formed before or after the occurrence of a dispute. Along with agreeing on arbitration as the dispute resolution method, parties are also free to determine the rules applicable to the arbitration proceedings and the seat of arbitration. It is this emphasis on the will of the parties to freely determine the applicable law and the seat of arbitration that allows them to agree also on the conduct of arbitration hearings online.
Conducting arbitration hearings online became essential, especially for international arbitration, with the restrictions introduced globally due to the Covid-19 pandemic. UNCITRAL Rules requires a foreign element within the contract between parties of a dispute in order to categorize an arbitration as international. This foreign element can be satisfied, inter alia, with a difference on the nationalities of parties or the location of seats of businesses.
As parties of an international arbitration tend to agree on a third country as the seat of arbitration, for neutrality purposes, restrictions, such as those on travel, caused by the Covid-19 pandemic. Since these restrictions make it unbearable for parties that choose a third state as the seat of arbitration to attend hearings, it has become inevitable to have online hearings and adapt regulations on arbitration accordingly.
Some examples from the regulations made by arbitration institutions to allow conducting hearings online are as follows:
Istanbul Arbitration Center (ISTAC)
ISTAC in Turkey published “Online Hearing Rules and Procedures” for the online arbitration process. According to Article 2 of the Rules and Procedures, “At the request of any party or in cases where the Sole Arbitrator or the Arbitral Tribunal deems appropriate, hearings or meetings may be conducted through video conference or teleconference.” In accordance with these rules and procedures, a sole arbitrator or a panel of arbitrators, by taking the opinions of the parties, can determine the software of the online hearing, confidentiality and security measures, and other issues before conducting the hearing.
Then, the sole arbitrator or the panel prepares the technical infrastructure for the online hearing and shares it with the parties. In this case, submissions of documents can be done electronically upon the permission received from the sole arbitrator or the panel. Likewise, the sole arbitrator or the panel can also decide to record the audio of the hearing with the permission of the parties and then to transcript them into written records, at the expense of the parties.
Hong Kong International Arbitration Center (HKIAC)
HKIAC gives importance to the online arbitration system and has published a guideline for virtual hearings. The parties can choose the online procedure by filling out the online virtual hearing inquiry form or contacting directly to the arbitration center. HKIAC provides an IP-based video conference system that can support up to eight different locations, a Cloud-based video conference system that is compatible with all major video conference platforms, and flexible pricing options. And for the audio conference, it provides high-speed connection to more than 80 countries and supports up to 30 lines.
International Centre for Settlement of Investment Disputes (ICSID)
ICSID is another institute that provides services for online arbitration as “available in ad-hoc proceedings under UNCITRAL and other non-ICSID sets of rules at competitive rates”. ICSID, additionally, provides dedicated support, high-definition audio and video, real-time document display, virtual chat function, World Bank Group’s stringent security, virtual court stenographer. ICSID uses Cisco’s Webex platform for online hearings.
It is clear from these observations that the requirements of our age and changes in technology are affecting legal processes while arbitral institutions are adapting themselves according to these developments. It still however, needs further steps as there is need for more guidelines on online arbitration, together with more available platforms for virtual hearings.