ICC guidance on mitigating the effects of the COVID-19 pandemic in arbitral proceedings
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On 9 April 2020, the ICC International Court of Arbitration issued a Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic.
The note provides guidance to parties, counsel and arbitrators on measures aimed at mitigating the effects the COVID-19 pandemic may have on ICC arbitrations and safeguard the parties' and tribunals' health and safety.
Its recommendations will be welcomed by both parties and tribunals caught in the midst of the COVID-19 pandemic, who want their disputes to be resolved in an expeditious and cost-effective manner.
The measures proposed are inspired by, and consistent with, the principles of cost-effectiveness set out in the ICC Rules, in particular Articles 22(1) and 25(1).
The ICC's proposed measures focus on two aspects:
- The possible mitigation of COVID-19 related delays; and
- The organisation of virtual hearings.
How to mitigate against COVID-19-related delays in arbitral proceedings?
Not all aspects of arbitral proceedings are necessarily delayed by the impact of the COVID-19 pandemic.
The ICC's note identifies aspects of proceedings that can take place remotely, including the tribunal's initial consultation with the parties for the organisation of the case management conference, pursuant to Article 24 of the ICC Rules, and the tribunals' deliberations or preparation of draft awards.
These aspects of proceedings do not necessarily require the physical presence of the parties or members of the tribunal in one place and are routinely performed remotely in many cases.
Importantly, the time limit for the submission of draft awards to the court, as well as the policy to reduce arbitrators' fees in case of unjustified delays, remain in effect. This is an important safeguard of the time and cost-efficiency encouraged by the ICC Rules in these challenging times.
In ICC arbitrations, tribunals enjoy wide discretion to adopt procedural measures or modify the procedural timetable. The discretion conferred by Article 24(3) of the ICC Rules can and should be used by arbitral tribunals to adapt and address issues caused by the COVID-19 pandemic.
In addition, the ICC has previously issued various tools, set out in notes and guidance documents, to help ensure ICC arbitrations are conducted in a fair and time and cost-efficient manner.
These tools include:
- The Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration; and
- Reports issued by the ICC Commission on Arbitration and ADR on Controlling Time and Costs in Arbitration and Effective Management of Arbitration – A Guide for In-House Counsel and Other party Representatives.
For example, tribunals may consider:
- Disposing expeditiously of certain claims or defences;
- Organising mid-stream procedural conferences to assess with the parties possibilities to resolve pending procedural issues;
- Identifying issues that may be resolved on the basis of documents only, with no evidentiary hearing; or
- Using either audioconferences or videoconferences for conferences and hearings.
For example, parties are required to submit new requests for arbitration, including exhibits, in electronic form. Parties and tribunals are also encouraged to communicate via electronic means for their submissions, including signing the Terms of Reference in counterparts and electronic form.
Similarly, and subject to any applicable requirements of mandatory law, the parties may agree that any award may be signed in counterparts and/or that all counterparts be assembled in a single electronic file and notified to the parties by the ICC Secretariat by email.
Virtual hearings: A foretaste of what lies ahead?
The COVID-19 pandemic has forced authorities to impose significant travel and meeting restrictions, preventing in-person procedural or evidentiary hearings.
Such hearings constitute important milestones in arbitral proceedings and should be treated with caution to ensure that holding virtual hearings during this period does not affect the fairness of the procedure.
This may be particularly relevant in cases where one party does not agree or objects to a virtual hearing and in light of the tribunals' obligations to ensure the award will be enforceable in law.
In addition, and in order to ensure compliance with applicable data privacy regulations, the ICC's note encourages tribunals and parties to enter a cyber-protocol and refers to its Annex II, which includes proposed clauses for inclusion in cyber-protocols of procedural orders.
Procedural issues that may arise in relation to the organisation of virtual hearings should be addressed carefully by tribunals.
These include:
- The logistics of the location of participants;
- The number of remote locations;
- The use of real-time transcript;
- The use of interpreters;
- Procedures for taking of evidence from fact witnesses and experts;
- The use of demonstratives; and
- The use of electronic hearing bundles etc.
The use of virtual hearings to circumvent travel and meeting restrictions represent an opportunity for parties and tribunals to test the technology available, as well as the procedural safeguards that need to be put in place, with a view to continuing and increasing its use in the post-COVID-19 world.
Virtual hearings are not unknown to international arbitration practitioners and may prove valuable tools in the quest for time and cost-efficient arbitrations in the future.
The ICC's note provides valuable guidance on how to achieve this, while safeguarding the integrity of the arbitral process.
However, some effects of the COVID-19 pandemic may be impossible to overcome through the use of technology. For example, delays may prove more difficult to mitigate if the COVID-19 pandemic affects the parties themselves, including their witnesses and the possibility to access evidence.
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