Prior to the start of the Covid-19 pandemic in late 2019, the use of technology in international arbitration was steadily increasing. Parties were seeing advances in the use of electronic bundles for hearings and electronic filing of documents. In addition, a key development saw video-conferencing utilized for expert/factual witnesses. However, the rapid spread of the pandemic, and subsequent lockdowns across the globe, have forced the arbitration community to embrace technology in a way never seen before. Not only do experts now routinely provide evidence by video-conference, but whole hearings take place remotely. 2020 saw the London Court of Arbitration’s (LCIA) updated rules tackle the challenges of the pandemic head-on, including by expanding provisions that encourage the use of virtual hearings and the primacy of electronic communication, and numerous other arbitral bodies (the ICC being one example) publish guidance focused specifically on measures to mitigate the effects of the pandemic on arbitral proceedings, specifically by virtual hearings.
Remote hearings are undoubtedly cheaper and more efficient. The often high costs associated with parties, their advisors and experts traveling to the location of the arbitration have now been removed with parties able to join from the comfort of their own homes. From an environmental perspective the use of remote hearings is also a significant improvement. There has long been an environmental argument against arbitration and, prior to the pandemic, one particular group (the Campaign for Greener Arbitration) had been calling for a more sustainable approach, including recommendations of flying less and encouraging the use of video-conferencing.
However, remote hearings are certainly not without their disadvantages. Most obviously, the reliance on high quality internet speed and functioning technology can burden many participants. This is especially noticeable for advocates who need to be able to communicate clearly with the arbitrators and their instructing counsel, neither of which is easy during a remote hearing. Legal teams have resorted to communicating by instant messaging services or emails, however, neither of these methods has the speed or clarity of speaking in-person. Further, many advocates rely on interpreting an arbitrator’s body language to detect if they are interested (or not) in a particular argument, but this is near impossible when the arbitrator is visible only from one point-of-view on a small screen. Time zones also present practical challenges to parties based in different locations and who may, as a result, be required to attend hearings at unsociable hours.
The hybrid or semi-remote hearing has the potential to address a few of these disadvantages. Typically this involves legal teams and arbitrators being in the same venue but experts attending remotely. This certainly eradicates some of the concerns highlighted above. Hybrid hearings also utilize “hubs” in various countries – centers fully equipped with technology that enables parties to attend remote hearings without the risks of poor internet connection or technical difficulties. These local hubs are of particular importance in developing countries which do not always have the same reliability of internet, especially in the context of increasingly global arbitration.
In addition, remote/hybrid hearings may encourage expansion of the pool of available expert witnesses and, in turn, increased diversity across that pool. Without the concerns of cost or travel, parties may access expert witnesses in all countries of the world. It will also be interesting to see whether remote/hybrid hearings affect the trend in international parties’ choices of arbitration seat. The delocalization of hearings could present international contracting parties with greater choice of arbitration location, without locality or ease of international travel to that location being decisive factors. 2020 has seen Japan, in particular, actively seek to increase its popularity worldwide as a seat for international arbitration, as part of a broader governmental strategy to encourage more widespread international arbitration in the country. The Japan International Dispute Resolution Centre has been actively promoting its virtual hearing facilities throughout the pandemic, and has plans to expand these including through agreements with other arbitral institutions (including HKIAC and SIAC) to host and assist arbitrations between parties that may have previously overlooked that location.
Whilst it seems that remote hearings as a result of Covid-19 measures will be the norm for a while longer, it is quite possible that even after social-distancing rules have been relaxed, remote hearings in some form may be more prevalent than in-person hearings. It is clear that they have the potential to be more cost effective and time efficient and, as such, present the international arbitration community with an opportunity to market itself as a cheaper and more accessible alternative to traditional methods of dispute resolution. The community will also be taking a distinct step towards a more environmentally-friendly and sustainable future for its practice, which is a factor that will only grow in importance to parties in the coming years.