The views expressed in this article are those of the author’s own and do not, in any way, reflect the views of Derains & Gharavi.

Introduction

Article 22(1) of the ICC Arbitration Rules provides that the arbitral tribunal and the parties must make ‘every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute’. Although the length and the cost of proceedings are always a primary concern for arbitration practitioners, and even more so for the parties, these concerns are now undoubtedly more relevant than ever, and will remain so for some time. The impact of the COVID-19 pandemic on arbitration, specifically on the conduct of proceedings and the role of arbitrators is far from insignificant and recourse to arbitration may increase as a consequence of the situation caused by COVID-19.

First, with the near complete suspension, during lockdown, of judicial activities in many jurisdictions, cases that were originally scheduled for trial have been rescheduled at later dates.¹ In this context, it may not be excluded that parties involved in commercial disputes, generally adjudicated before commercial courts, may be able to mitigate the consequences of prolonged judicial inactivity by engaging in arbitration and obtaining expedited decisions by, for instance, opting for expedited proceedings that are facilitated by institutions.²

Second, for the same aforementioned reasons, arbitration is likely to develop within unexpected areas of traditional litigation, in which it was either never or very rarely used. For instance, as a consequence of the heavy caseload caused by the pandemic, a rise in demand for arbitration may develop in labor³ or real estate disputes.

Third, the number of requests for interim or conservatory measures, and accordingly the recourse to emergency arbitrators, is very likely going to increase as a result of the parties’ fear for the outcome of their dispute and a new-found willingness to secure a status quo in their relations.

Therefore, arbitrators face the need to adapt to increasing challenges, particularly in light of the new expectations from the parties. Although flexibility is already fundamental for arbitrators, now more than ever they may be required to remain fully available on short notice to respond to increasing requests for emergency measures or to deal with expedited proceedings.⁴ Arbitrators also face the challenges of dealing with technical issues and organizing virtual hearings, which despite not being uncommon,⁵ were not used by all arbitrators or were merely used for procedural hearings. In this respect, existing tools - such as the ICC Rules or the ICC Commission on Arbitration and ADR reports on ‘Controlling Time and Costs in Arbitration’ or the ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic of 9 April 2020 (the ‘ICC COVID-19 Note’)⁶ dealing with the ways to increase efficiency of proceedings in the current context are fortunately at the disposal of arbitrators to help them overcome these new difficulties. This article will conduct a brief analysis of the measures that have been provided to arbitrators in the current context; examining whether these additional powers to further improve the efficiency of proceedings should be maintained.

I - Analysis of the measures put at the disposal of arbitrators to ensure efficiency of proceedings in the context of the COVID-19 crisis

The ICC COVID-19 Note is a very complete tool that has been prepared to-date to help arbitrators (and parties) deal with the crisis. Arbitrators have been granted extended powers in the conduct of proceedings, and these will first be examined (A) before focusing on the procedural aspects associated with virtual hearings, which arbitrators have to face (B).

A - Analysis of the ICC COVID-19 Note

The aim of the COVID-19 Note is to ‘minimize and perhaps even avoid’ the disruption caused by the virus on the conduct of arbitral proceedings. In this respect, a full section of the COVID-19 Note is dedicated to ‘increasing the efficiency of the Arbitral Procedure’ and Article 8 is particularly effective in this regard. On this basis, as well as on the basis of Article 24(3) of the ICC Arbitration Rules, arbitrators, after having consulted the parties, are allowed to take some measures that can be divided into the following three categories:

First, measures that aim at reducing the number of overall claims: these include the right to dispose of certain claims or defenses, the possibility to resolve issues in stages by rendering one or more partial awards, the identification of issues that may be resolved by agreement between the parties, the organization of ‘mid-stream conferences in order to assess with the parties the most relevant issues and to consider possibilities for focusing on the most efficient means to resolve issues’ or requesting that parties establish an agreed chronology of facts, joint lists of issues in dispute or other similar jointly produced documents.

Second, measures that aim at reducing the length of proceedings, inspired by the rules for expedited proceedings: identifying issues that may be resolved on the basis of documents only with no evidentiary hearing, considering whether certain issues may be decided without a phase for document production, identifying issues that may be resolved without witness and/or expert evidence or on the basis of written questions from the opposing party or the tribunal, 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 (the ‘Expedited Procedure Rules’).

Third, measures specifically addressing the current inability to hold in-person meetings/hearings: considering whether site visits or inspections by experts can be superseded by video presentations or joint reports from experts, using audioconference or videoconference for conferences and hearings where possible and appropriate.

Putting aside the measures under the third category, which will be later examined, the measures under the first and, more particularly, the second category may considerably change the way proceedings are conducted, by authorizing arbitrators to guide the proceedings without necessarily requesting the parties’ prior consent.

First, arbitrators have to be more involved in cases from the outset of proceedings. Up until the health crisis caused by COVID-19, arbitrators were, pursuant to Articles 23 and 24(1) of the ICC Arbitration Rules, compelled to establish the Terms of Reference within 30 days of receipt of the file and to convene, shortly thereafter, a case management conference to establish the procedure and the timetable. In most cases, time limits were fixed in agreement with the parties, and made to allow them to submit their respective submissions, as well as their document production request, if any. Although arbitrators were already encouraged to conduct the proceedings efficiently and to use techniques such as those described in Appendix IV of the ICC Rules of Arbitration, except when a particular issue was submitted to them, too many arbitrators waited until the document production phase, if contemplated, or even until the exchange of the parties’ submissions was completed, before conducting an in-depth study of the parties’ positions. To be able to dispose of certain claims or to identify issues that may be resolved by the agreement of the parties, as the ICC COVID-19 Note suggests, arbitrators cannot escape the need to have a thorough knowledge of the parties’ respective positions from the outset of proceedings.

Apart from Article 24(3) of the ICC Arbitration Rules which contemplates that procedural measures be adaptable or that the timetable be modifiable, and the Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules (the ‘ICC Note’) which provides for the ability of arbitral tribunals, after having consulted the parties, to take measures they consider appropriate,⁷ no specific provision previously allowed, at least expressly, arbitrators to intervene in the organization of the parties’ presentation of their case. By enabling arbitrators to decide on certain claims or to narrow the issues at dispute from such an early stage, arbitrators may be perceived to be expressing their preliminary views on the case, and to thereby losing their impartiality. However, this minor risk should not take precedence over the advantages of having the parties focusing on the most significant issues of their case at the outset. Indeed, having parties concentrate on issues or claims that are relevant to the outcome of the dispute, combined with the additional involvement of the arbitral tribunal in the merits of the case at an early stage of the proceedings, can only serve to benefit all participants in the proceedings; arbitrators will no longer have to deal with unsubstantiated claims and will possess greater knowledge of the main issues at stake, and parties will obtain an award within a reduced time frame. In fact, stressing that arbitrators must play a more active role at the outset of proceedings and enabling them to intervene in the way that parties present their case may be greatly beneficial to the efficiency of the proceedings.

Furthermore, providing the possibility for arbitral tribunals to accelerate the proceedings and to use the techniques used in arbitrations conducted under the Expedited Procedure Rules is also a move in the right direction. In effect, many arbitrators may have faced cases where they wished the parties had resorted to Expedited Procedure Rules even though the amount in dispute was over US$ 2,000,000. Increasing that ceiling will be another favorable move. Arbitrators were not expressly permitted by the ICC Arbitration Rules to suggest that the parties apply these Expedited Procedure Rules, rather, arbitral tribunals were only allowed to suggest to the Court that the Expedited Procedure Rules should cease to apply.⁸ The flexibility that such Rules provide, particularly the ability to prohibit requests for document production, and limit the length, number or scope of written submissions and written evidence,⁹ can be considerably efficient in reducing the associated length and cost of proceedings. However, parties may, for different reasons, still be reluctant to opt-in to the Expedited Procedure Rules and it is appropriate that arbitrators be allowed to explain the merits of such rules, and the benefits to the parties’ case to encourage their use, when the case warrants it.

Arbitrators directly suggesting to the parties that they should have recourse to these rules may be more convincing than a mere notification from the Secretariat that such rules may be used.¹⁰ However, without the parties’ acceptance, arbitrators will not be able to impose an expedited procedure. The COVID-19 Note indicates that arbitrators may, pursuant to Article 24(3) of the ICC Arbitration Rules ‘adopt appropriate procedural measures’ after having consulted the parties, including for instance ‘considering whether potentially dispositive issues … can be decided without a phase for the production of documents, or with a highly limited production of documents’ or ‘identifying whether the entirety of the dispute or discrete issues may be resolved on the basis of documents only, with no evidentiary hearing’. In this context, the question arises as to whether arbitrators are limited to pointing out to the parties these techniques or whether they can go a step further and impose these on the parties on the basis of Article 24(3), if after having consulted the parties, one party objects to their proposal (for example, not to have a phase of document production). In this respect, although the ICC COVID-19 Note dictates that these measures may be ‘considered’ and that discussions with the parties should be undertaken on this basis, it seems that Article 8 would have no utility if arbitrators could not decide against the parties’ decision on these specific questions.

Moreover, the process is the same when the Expedited Procedure Provisions apply. Indeed, paragraph 115 of the ICC Note specifies that ‘the arbitral tribunal may, after giving the opportunity to the parties to state their views, (1) decide the cases on documents only, with no hearing and no examination of witnesses, (2) decide not to allow requests for the production of documents and (3) limit the number, scope and length of submissions’.¹¹ Hence, it appears that, on the basis of paragraph 8 of the ICC COVID-19 Note, combined with Article 24(3) of the ICC Arbitration Rules, arbitral tribunals should be able to decide, after having consulted the parties, on particular procedural questions such as the holding of a hearing or a document production phase. In any case, these measures will hopefully encourage parties and arbitrators to communicate more effectively in reaching a satisfactory resolution and avoid further prolonging proceedings when dealing with parties acting in bad faith.

B - Procedural aspects that arbitrators have to face in virtual hearings

Even if the analysis of the measures suggested by the ICC COVID-19 Note shows that many tools to improve the efficiency of proceedings are put at the arbitrators’ disposal, it is clear that they are (and will be) dealing with major difficulties. Among these difficulties is the inability to conduct in-persons hearings, which implies finding alternative solutions such as virtual hearings.

With the borders between countries restricted and other restrictive measures such as mandatory lockdowns or imposed quarantine, parties and arbitrators encounter great difficulties to physically meet, let alone hold a hearing.

Faced with such an unavoidable problem, parties may either adjourn scheduled hearings in ongoing cases or organize virtual hearings. Similarly, for new cases, in the event that parties and arbitrators consider the holding of a hearing to be necessary, a virtual hearing may be the only available option for quite some time.

Although conference calls and videoconferences were already permitted and even expressly contemplated by some institutions¹² (for instance for the organization of proceedings or hearings with no witnesses or experts or for the cross-examination of a witness unable to attend the hearing), this was not the preferred method of conducting hearings amongst the majority of arbitrators and parties. Nevertheless, arbitrators, regardless of their familiarity with technology, have today no other choice than to learn to conduct virtual hearings. Fortunately, useful guidance such as the already existing Seoul Protocol on Video Conferencing in International Arbitration (‘the Seoul Protocol’)¹³ or newer standards in the Africa Arbitration Academy Protocol on virtual hearings in Africa (the ‘AAA Protocol’)¹⁴ or, again the ICC COVID-19 Note, considerably assist them in this difficult task. Indeed, conducting a virtual trial may present many difficulties and concerns. The decision rendered by the Federal Court of Australia on 15 April 2020¹⁵ dismissing a request of adjournment made by the Respondent party, mentioned the main concerns: (1) technological limitations, (2) physical separation of legal teams, (3) expert witnesses, (4) fact witnesses and cross-examination, (5) document management, (6) future issues and (7) trial length and expenses. The Court however decided that none of these issues constituted a substantive obstacle to holding a virtual hearing.

These concerns put aside, if a virtual hearing is ultimately organized, be it without the parties’ agreement per ICC COVID-19 Note,¹⁶ certain parameters are to be duly agreed upon by arbitrators and parties to ensure its good functioning.

The first step is to choose a suitable platform amongst the variety of existing ones, such as Zoom, Webex, Bluejeans, Gotomeeting, Skype for Business, Microsoft Teams, etc. to host the hearing. Each platform has its pros and cons and it is key that it be selected in agreement with the parties who may have their own preferences. For instance, it is important to choose one with adequate chat capabilities or one that is compatible with document management systems that allow arbitrators and the parties to share files and communications, such as the one recently created by the Stockholm Chamber of Commerce (‘SCC’), the ‘Ad Hoc Platform’.¹⁷ It is noteworthy, that many arbitrators find it challenging to decide which platform to use, having never used them previously in a similar context and being generally unaware of their subtleties. There exists thus an increased need to discuss with arbitration centers or other arbitrators, learn from their experience, discuss with the parties and draw from any useful tips available on specific platforms. The ‘Virtual Hearing Guide for Arbitrators and Parties utilizing Zoom’ prepared by the American Arbitration Association and the International Centre for Dispute Resolution (AAA-ICDR)¹⁸ gives recommendations to help optimize the use of Zoom, and may be a good illustration of the requirements needed generally. Specifically, it provides information regarding Zoom technical support, relevant security considerations, and advice for preparing and conducting the virtual hearing.

Second, the privacy of the hearing and protection of the confidentiality of electronic communications, referred to as the ‘Cyber-Protocol’ by the ICC COVID-19 Note, need to be evaluated at the outset. An ID meeting and a password for access to the meeting need to be fixed. In that respect, each party will be required to submit a list of participants to be given access to the virtual hearing, in advance of the hearing. In the same vein, confidentiality agreements binding the participants should also be prepared. Further, arbitrators and the parties should agree on whether to record the virtual hearing, and on the minimum requirements of encryption for protection against hacking or illicit access. Annex I of the AAA Protocol may help in this respect as it details appropriate minimum cybersecurity standards. The required technology, equipment and software needed for all participants to ensure, inter alia, adequate connectivity, are other elements to be determined in advance. Furthermore, mock sessions should be conducted prior to the hearing in order to test the performance of the tools and the good functioning of break-out rooms. Naturally, measures to palliate technical breakdowns or failures also have to be determined in advance. Arbitrators need to ensure that all these requirements are contained in a detailed Procedural Order. Here, again, models are provided in Annex 2 of the ICC COVID-19 Note as well as by the AAA-ICDR.¹⁹

The examination of witnesses and experts is another crucial question. In fact, the organization of the examination of witnesses and experts is probably the hardest challenge in virtual hearings. Although the Seoul Protocol may be relied upon, it was not originally prepared for the specific context of the COVID-19 pandemic. The difficulties are further exacerbated, as every witness/expert currently testify from different countries, where access to technology is not always guaranteed or where connectivity can be fragile. Ensuring equality between the parties in this context, although a heavy task, is essential. Holding a virtual hearing can only be materially feasible if the witnesses/experts from both sides are put in the same conditions and if the technology available to them is compatible.

Additional issues arise from the fact that the witnesses/experts may be physically alone in a room, counsel being unable to be present in the same room.²⁰ The way in which witnesses/experts are authorized to communicate with counsel, either through chat rooms on the platform or through other channels such as WhatsApp, needs to be determined clearly with the arbitral tribunal. Further, as a result of the absence of any representative from the opposite team, sequestration has to be closely organized, to ensure that the witness is not being coached. The AAA-ICDR Model Order and Procedures for a Virtual Hearing provides useful advice in that regard, suggesting that a witness should sit at an empty desk, with his/her face clearly visible, with the webcam positioned at face level close to the witness, and that the witness should be able to provide a 360-degree view of the remote venue if asked to do so by the arbitrators.²¹ Further, the way documents are dealt with needs to be strictly organized. Although the set of exhibits to be presented to the witness/expert will be shared in advance by counsel, maybe on a specific document server, measures have to be taken to verify that the witness has a clean set that does not bear any annotations. Thus, as advised in section V of Annex II of the ICC COVID-19 Note, it shall be ensured by the parties that demonstrative exhibits and presentation of evidence are visible to all participants. Finally, other organizational questions encountered in every hearing, have to be discussed more in depth, such as the use of an interpreter (probably sequential and not simultaneous) so as to ensure that he/she is capable of intervening remotely. If not, other options, such as the recording through the platform may be used, although not optimal as the recording of a full-day hearing leads to significant file-sizes.

Organizing a virtual hearing is thus undoubtedly more complex and time consuming for arbitrators and parties than a physical hearing as it requires added attention to every detail, and sometimes unknown difficulties, to make it work efficiently. With many templates and instruments at their disposal, coupled with some creativity, there are however no reasons to believe that arbitrators will fail in this task. It is even likely that some might embrace the change and continue to conduct virtual hearings well after the pandemic subsides. Similarly, in this particular period, arbitrators are undoubtedly increasingly willing to be pro-active and imaginative in their cases and willing to use the new tools at their disposal effectively. One legitimate question remains, however: whether the new powers granted to arbitrators should be maintained after the end of the pandemic?

II - Should the arbitrators’ extended powers be maintained after the end of the pandemic?

It can be said that nothing will ever be the same when the pandemic is over. Parties and arbitrators will have experimented with new ways of conducting arbitrations and expectations of the parties will likely have changed. In this context, one can thus question whether the powers granted to arbitrators in the conduct of proceedings, in particular by the ICC COVID-19 Note, should be maintained after the pandemic is over.

As discussed above, arbitrators have been granted increased powers in order to enhance the quality of proceedings and reduce their length, to the extent possible. Although the new approach adopted in times of COVID-19 may only be applauded, is it solely justified by the current exceptional situation or should it be prolonged thereafter? Should the extended powers granted to arbitrators in the way proceedings are conducted, which may enable them to take decisions against the parties’ wishes, be maintained in the future?

It is a fact that some granted powers, discussed above, such as the ability to dispose of certain claims, to proceed without a phase for document production, to dispense of a hearing or to impose a virtual one against the parties’ will, may contribute to a better efficiency of proceedings. These extended powers are certainly also found attractive for some arbitrators who might consider using them more frequently in other proceedings. However, the application of these extended powers in practice, at least for some of them, may raise certain difficulties and doubts as to the benefit of maintaining them in the future.

This is particularly the case regarding the arbitrators’ ability to conduct a virtual hearing without the parties’ agreement. The ICC COVID-19 Note indicates that the arbitral tribunal can ‘determine[s] to proceed with a virtual hearing without party agreement, or over party objection’²² adding that the ‘tribunal may, in appropriate circumstances, adopt different approaches as it exercises its authority to establish procedures suitable to the particular circumstances of each arbitration and fulfills its overriding duty to conduct the arbitration in an expeditious and cost-effective manner’.²³ Although arbitrators were already expressly authorized by the ICC Arbitration Rules to opt for a telephone call or videoconferencing in the absence of the parties’ agreement, it merely concerned case management conferences.²⁴

Other institutions also mentioned the possibility to hold virtual hearings and also focused on preliminary procedural meetings.²⁵ Article 19(2) of the LCIA Rules goes further in stating that ‘the Arbitral Tribunal shall organize the conduct of any hearing in advance, in consultation with the parties’ adding that ‘the Arbitral Tribunal shall have the fullest authority under the Arbitration Agreement to establish the conduct of a hearing, including its date, form, content’. It then specifies that ‘as to form, a hearing may take place by video or telephone conference’. Although it could be understood by the latter sentence that the arbitral tribunal can decide itself on the form that the hearing will take, the reference to ‘the arbitration agreement’ could be understood as limiting the arbitrators’ possibility to impose a virtual hearing without the parties’ consent. In any case, in practice, arbitrators are generally not in favor of ignoring the parties’ joint preference, and with good reason.

The ability for arbitrators to determine to ‘proceed with a virtual hearing without party agreement, or over party objection’, provided by the ICC COVID-19 Note, can, in our view, only be justified by the need to respond to the particular difficulties encountered due to the virus and render the proceedings more efficient in these circumstances. Despite the indisputable advantages of virtual hearings, arbitrators should not be, unless under very specific condition, allowed to impose their views and organize a virtual hearing when the parties’ joint preference is for an in-person hearing. Furthermore, and subject to the lex arbitri, a denial of an oral hearing, when requested by one party, may be grounds for non-recognition of the final award pursuant to Article V(1)(b) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the ‘New York Convention’).²⁶ Hence, if such ability remains when the pandemic is over, it should be used with great circumspection.

Second, it cannot be ignored that when making procedural choices such as dispensing with the document production phase, arbitrators are necessarily, although not voluntary, influenced by their cultural background. In normal times, arbitrators would indeed be guided by the parties’ will, which may themselves be of a different cultural background, and such difficulty would not occur. However, if arbitrators are allowed to take decisions without prior consultation of the parties, they might be, although possibly indirectly, influenced by their own cultural background. For example, an arbitrator of civil law background, is more likely to avoid or limit the document production phase, while arbitrators of common law origin, would certainly prefer to include such phase in the proceedings. Yet, the influence of the arbitrators’ background, although not conscious, can be perceived as being contrary to the cultural neutrality expected from arbitrators and may lead to the parties appointing arbitrators in consideration of such criteria.

More generally, one could question whether arbitrators, enjoying more freedom, would be tempted to impose procedural behaviors that may be inspired by their own national system, for example to play an active inquisitorial role, which could raise a question of compatibility with applicable national arbitration legislations as well as risks that arbitral awards could be refused recognition pursuant to Article V(1)(b) of the New York Convention.²⁷ However, for awards not to be recognized, breach of due process by arbitrators, such as an abusive use of the extended powers granted to them would have to be established, which is a high threshold to prove. With the ‘due process paranoia’ that has developed in the past years, it is expected that arbitrators will use these new powers with great caution. Nevertheless, the way in which they use them should be closely followed to appreciate if the objective in implementing them, i.e. that the proceedings be more efficient, is satisfied.

Conclusion

The global spread of COVID-19 has compelled the various participants in arbitration proceedings to rapidly adapt to the emerging challenges, in particular with regard to scheduled hearings that could no longer be held in-person, leading arbitrators and parties to organize hearings remotely. Arbitrators, with the help of instruments put at their disposal such as the AAA-ICDR Model Order and Procedures for a Virtual Hearing, the Seoul Protocol or the ICC COVID-19 Note have already started to face new obstacles in this regard and will have to be creative and patient in order to make things work adequately.

However, besides an immediate impact on arbitration proceedings, it is certain that arbitrators will also have to deal and adapt to the parties’ new long-term expectations. This is why new tools, such as the ICC COVID-19 Note, which enable arbitrators to tailor the proceedings to maximize efficiency, are more than welcome. Although an increased number of pro-active arbitrators, mindful of not unnecessarily increasing the costs and length of proceedings, can only be encouraged, arbitrators should never neglect the parties’ interests when taking decisions against the parties’ will. There is no doubt that parties will be even more concerned by the arbitrators’ respect of procedural fairness. Hence, the right to impose virtual hearings on reluctant parties should only be used with great caution even if expressly provided for in any applicable arbitration rules.

In general, however, the benefit of having arbitrators playing a more active role should be, if well defined, encouraged. It may be time for change!

---

---