Are Virtual Hearings Allowed In International Arbitration?

Virtual hearings have become a prominent aspect of international arbitration, particularly after the COVID-19 pandemic made physical hearings challenging or impossible. While international arbitration has long been known for its flexibility and adaptability, the rise of digital technologies has further revolutionized the process. Virtual hearings, conducted via video conferencing platforms, have gained acceptance worldwide as they offer convenience, cost-effectiveness, and global accessibility. This technological shift has allowed arbitration to continue uninterrupted, even amidst global disruptions.

Are Virtual Hearings Allowed in International Arbitration?

Flexibility in Arbitration Rules

One of the core principles of international arbitration is its flexibility, which allows it to adapt to the needs and preferences of the parties involved. Many leading international arbitration institutions, such as the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), and Singapore International Arbitration Centre (SIAC), have embraced virtual hearings and other remote dispute resolution methods. These institutions have updated their procedural rules to accommodate virtual hearings and online dispute resolution (ODR), ensuring that arbitrators and parties can participate from any location globally.

COVID-19 Pandemic and the Surge in Virtual Hearings

The COVID-19 pandemic accelerated the adoption of virtual hearings in international arbitration. With travel restrictions, lockdowns, and social distancing measures in place, many arbitration proceedings had to be conducted remotely. The rise of platforms like Zoom, Microsoft Teams, WebEx, and specialized arbitration tools like ArbitralCloud enabled arbitrators, counsel, and parties to hold hearings safely and efficiently from different locations. As a result, virtual hearings have moved from being an exception to becoming a standard option in many cases. The International Bar Association (IBA) issued guidance on the use of virtual hearings, emphasizing that they could be used as an alternative to in-person hearings while maintaining fairness and efficiency.

Arbitration Institutions’ Support for Virtual Hearings

Several leading arbitration institutions have taken steps to officially allow and facilitate virtual hearings. For example:

• The ICC published a protocol on conducting virtual hearings and issued a report in 2020 to assess the impact of virtual hearings on arbitral procedures. It has become increasingly common for the ICC to facilitate online hearings, with the flexibility to switch to physical hearings if required.
• The LCIA also amended its arbitration rules to allow virtual hearings and procedural flexibility for the parties involved.
• Similarly, the SIAC allowed for virtual hearings under the SIAC Arbitration Rules, with provisions for conducting hearings through electronic means if all parties agreed to it.

Challenges and Considerations

While virtual hearings are becoming more widely accepted, several challenges still remain:

• Technological Barriers: Some jurisdictions or participants may face challenges related to internet access, hardware, or familiarity with digital platforms.
• Data Security: Virtual hearings require robust cybersecurity measures to prevent data breaches or unauthorized access to confidential arbitration proceedings.
• Due Process Concerns: Some parties might express concerns over fairness and due process, questioning whether remote hearings can replicate the fairness of in-person sessions, especially in complex disputes or those involving sensitive evidence.
• Witness Testimony: While witness testimony is possible through virtual hearings, some argue that in-person hearings offer better opportunities for cross-examination and assessing credibility.

The Future of Virtual Hearings in International Arbitration

Despite these challenges, the overall trend points towards the continued use and expansion of virtual hearings in international arbitration. Even post-pandemic, many arbitration institutions and legal professionals believe that virtual hearings will remain a viable option. The flexibility of virtual proceedings, coupled with artificial intelligence (AI), blockchain, and other technological advancements, is likely to shape the future of arbitration, making it even more efficient, cost-effective, and accessible to a global audience.

Example:

Imagine a multinational corporation involved in a complex commercial dispute with a foreign supplier. The arbitration proceedings are being conducted under the rules of the ICC, but due to the ongoing pandemic, travel restrictions make it difficult for the parties and the arbitrators to meet in person. In response, the parties and the ICC agree to conduct the hearings virtually using a video conferencing platform like Zoom. Despite the challenges of remote communication, the virtual hearings proceed smoothly, with all parties able to present their arguments and cross-examine witnesses using secure, encrypted platforms. In this case, the virtual hearings not only ensured the continuity of the proceedings but also reduced the overall costs of travel and logistical arrangements. The dispute was resolved efficiently, and the arbitrators were able to make their award promptly.

Steps that the multinational corporation should take:

• Ensure Technical Preparedness: All participants should test their internet connection and audio-visual equipment before the hearing to avoid technical issues.
• Data Security: Use end-to-end encrypted platforms to ensure the confidentiality of the proceedings.
• Adherence to Procedural Rules: Ensure that the virtual hearing follows the same rules and protocols as an in-person hearing, including the submission of electronic documents and proper witness procedures.
• Witness Preparation: Prepare witnesses for remote testimony, ensuring they are familiar with the technology and understand the virtual hearing process.