Virtual Arbitration After COVID

Photo of Michele Connolly

The world has grown more accustomed to doing business virtually during the COVID-19 pandemic. As the vaccine rollout progresses, and businesses and lawyers ponder a future post-pandemic, the question arises: what permanent changes to the business world will this virus, and our greater reliance on virtual interactions, have wrought?

During the pandemic, many arbitral institutions have adapted by offering virtual hearings. Such virtual hearings offer a number of conveniences, particularly in the international arbitration context. Should businesses and lawyers consider using virtual hearings even after the global threat of COVID-19 subsides? Should businesses insist on writing virtual hearing provisions into their arbitration clauses? There are a number of factors to consider.

There is much to be said for the benefits of conducting hearings virtually. Particularly where witnesses are scattered across the globe, as can often be the case in international arbitration, the possibility of remote witness testimony has the potential for dramatic impacts on convenience, cost, and logistics.

Before deciding whether to agree to virtual hearings, either pre-emptively or once a dispute has arisen, business should consider the potential downsides. Access to technology is not uniform among nations or even within nations. Will uneven access to high-speed internet, for example, negatively impact your case? Or could it provide an advantage over an adversary?

While it may be more convenient for your witnesses not to have to travel internationally to testify, parties should consider the role of time zones in their decision-making. It would likely be unwise for a party's key witness to be testifying at 2 a.m. local time. It may be worth the inconvenience to have the witness in the same time zone as the arbitrator(s).

What role will language play in your arbitration? If key witnesses will need interpreters, that is a factor to consider. For some litigants, the virtual setting has made it more difficult to ensure that witness and examiner are not speaking over each other in the absence of body language cues. Such difficulties could be exacerbated when translators are needed and a third person is in the mix. Would virtual hearings make it easier for "check" translators - translators hired by one party to "check" the translation of the other party's translator - to participate?

Another consideration is how credibility and personality translate through a screen. Witnesses unfamiliar with technology used for virtual hearings may have difficulty being heard or may seem uncomfortable. Will the witness, for example, be able to maintain "eye contact" virtually? These are skills that can be learned, but should not be taken for granted. Nor should a party take for granted that a witness's charisma will translate through a computer screen.

A key consideration is the enforceability of an arbitral award. Article V of the New York Convention allows a party to challenge an award where "the party against whom the award is invoked...was otherwise unable to present his case." Parties should be sure that impediments presented by virtual hearings do not put an award at risk by subjecting such award to the argument that the losing party was substantially hindered in its presentation of its case because of some aspect of the virtual hearing.

One thing is certain, however. If a party decides to take advantage of virtual arbitration, an arbitrator with experience conducting virtual hearings should be chosen. After COVID-19, such arbitrators should not be difficult to find.

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