Virtual Hearings in Arbitration In India: A Reflective Analysis

Introduction

Virtual hearings in Arbitration are not an avant-garde concept. Virtual mechanism for hearings has been used and been in development over time, but with the unfortunate outbreak of Covid-19, it has become the new norm. The operation of virtual hearings in Arbitration is not without its demerits (discussed below). However, for the sake of this article, the authors will focus on how the international arbitration community has gone about extenuating this void forced upon us by the global pandemic. The topic of virtual hearings in arbitration has been res integra in India; a matter untouched. Per contra, the global community has been proactive in trying to curb the predicament and sporadically flourish the procedural flexibility which is inherent in Arbitration and continues to be one of its hallmarks.

The authors through this article have attempted to illuminate the pro-activeness of the international community. Simultaneously, the authors would try to highlight India’s hesitant approach, ending with the suggestions & analysis of the authors in the form of way forward.

International Plaudits

Considering the importance of virtual hearings amidst the pandemic, a lot of leading international arbitration institutions have launched or amended various rules & regulations to streamline their active and future arbitration proceedings. Their efforts have come in various forms:

Leading institutions such as ICC, International Centre for Settlement of Investment Disputes, Hong Kong International Arbitration Centre, Lagos Court of Arbitration, Stockholm Chamber of Commerce, Vienna International Arbitration Centre etc. have all released respective protocols to mitigate the effects of Covid-19 on arbitration hearings. The Singapore International Arbitration Center (SIAC) has released a case management update to effectively manage virtual hearings. Twelve Arbitral Institutions have urged the people of the world to join forces in efforts to tackle this pandemic.

London, one of the most prestigious seats in Arbitration, and a global pioneer renowned for fostering best legal practices and policies, also accepted virtuality with open arms. UK judiciary’s pro-arbitration stance can be best interpreted from one of their recent judgments, Re: Halliburton v. Chubb [2020] 3 WLR 1474, wherein the value of institutionalized arbitration is clearly visible from their active submission on the matter on request from the Supreme Court and High Court of UK. Apart from being the catalysts of change, some of these institutions also assisted the judiciary by expounding on the aspect of arbitrator bias in multi-reference arbitrations. Amongst these submissions was a submission from the London Court of International Arbitration (LCIA) that released their amended rules in August with effect from October 2020. The 2020 Rules also discussed subsequent multiple proceedings and claims and addressed virtual hearings in depth.

Seoul International Dispute Resolution Centre was one of the first institutions to provide a protocol on Virtual Hearings. The Protocol tackled the problems which would arise out of virtual hearings. Issues such as due process requirements; confidentiality; mode of video conferencing and what would qualify as a platform for virtual hearing were minutely addressed in the protocol. In order to enhance the effectiveness of virtual hearings, the protocol also provided for a trial run to familiarize arbitrators and counsels with the platform to be used for the hearings.

A recent addition to the list of arbitration institutions which have developed elaborate rules and regulations for virtual hearings has been the Abu Dhabi Market Arbitration Centre. The Centre has drafted novel rules and protocols to establish itself as a front-runner in the race to modernization. The protocols deliver an effective constitution, which elucidate upon various complications that can possibly arise, such as a defined speaker and attendees’ terminology. Furthermore, it encourages witnesses to give out a declaration in light of any applicable law. The use of an invigilator was recommended by the protocols for inspection, pre hearing etc. It clarified and outlined what requirements would constitute a remote hearing, viz.: 1) A Virtual platform for conferencing; 2) An electronic database management software and; 3) Use of live transcripts. Inter alia, it illuminated on semi-virtual hearings, confidentiality and enforcement plus recognition of award arising out of such arbitrations. (See here)

Ad-hoc and institutional arbitrations in India have ceased to continue active witness examination or hearings, hiding behind the excuse of COVID-19. The juxtaposition of party autonomy with classic delay tactics and the lackadaisical attitude of the Tribunals have brought the Arbitral machinery to a complete stand-still.

In a time when parties are hesitant to navigate through the virtual proceedings, the expansive umbrella of violation of principles of natural justice and lack of due process are often their go-to arguments for pushing the dispute resolution in a perpetual limbo. Such a chain of impediments in the dispute resolution process would lead to travesty of justice and this position can be remedied only by a resolute judiciary and formalized institutes. In relation to the aforementioned elucidation, the Austrian Supreme Court delivered a notable judgment in Case No. 18 ONC 3/20c, delivered 23 July 2020, establishing two very important principles in reference to due process and virtual hearings:

  1. Undertaking virtual hearings despite a party’s objection is within the power of the Tribunal. It would not constitute a ground for challenge of an award;
  2. Rolling of an eye by an Arbitrator does not amount to a bias.

This judgment is applicable to every tribunal seated in Austria. Not only does it affect positive action, but it has also sent a positive signal all around the globe to states wanting to establish themselves as the leaders of this field. Regardless, this judgment has been interpreted keeping in mind what would happen if an arbitrator or a tribunal initiates virtual arbitration proceeding despite one party’s’ objection. Similarly, the Indian Courts need to stride forward and establish stronger principles in relation to virtual hearings in arbitration.

In every arbitration friendly jurisdiction, there is a healthy promotion of institutional arbitration. As one can notice above, numerous positive steps have been taken by the best arbitral institutions. Keeping that in mind, parties should increasingly rely on arbitration institutions as they are better suited to handle and manage virtual hearings and are driven by experts in the field.

The Indian Narrative: A Parallel Misfortune

“The challenges occasioned by the outbreak of COVID-19 have to be addressed while preserving the constitutional commitment to ensuring the delivery of and access to justice to those who seek it.”

The Supreme Court of India.

While arbitrations fell between the cracks of the Indian legal framework, highly anticipated guidelines were laid down by the Apex Court in reference to shifting physical court hearings to the virtual courts. However, these only catered to the needs of the High Courts and District Courts and no reference was made to the arbitral tribunals or arbitral institutions. Duty-bound High Courts formulated video-conferencing rules for litigations, but outright omission to mention arbitral tribunals consigned the latter to perpetual oblivion. The guidance note issued by the Delhi High Court did not cater to ad-hoc arbitrations and protocols for commencing virtual proceedings were crafted by the Indian Council of Arbitration and the Indian Arbitration Forum. The list of urgent matters posted by the Supreme Court and the draft rules for video-conferencing published by the e-Committee make no reference to arbitration cases or tribunals. Limitation period of various classes of pending matters was extended, National Company Law Tribunal (NCLT) mandated the filing of brief Joint Memo as written submissions to the opposing party and video-conferencing was undertaken in the National Consumer Dispute Redressal Commission. When the pandemic hit, arbitral tribunals were the first to be forgotten, which almost feels as if a force of habit.

The e-Courts Mission Mode Project (MMP) under the National e-Governance Plan (NeGP) integrates the efforts of digitization with finer points of governance that cater to citizen welfare, transparency and homogenization of services. Initiatives such as LIMBS and National Judicial Data Grid that provide statistical information on pending and disposed cases, e-filing application for High Courts and District Courts or online status check for traffic department cases are testaments to the fact that digitization and Tele-Law are recognized as the need of the hour by the Government. However, overlooking virtual court initiatives for arbitral tribunals, a ministry-mandated national repository of cases and records, absence of Court mandated meeting platforms and a lack of computer-trained judicial officers all add to the woes of the suffering litigants. However, though there may be divergence in Indian public policy and the on-ground reality, the scope of reformation is consistently amplifying.

The Way Forward

“The fears we don’t face, becomes our limit”

– Robin Sharma.

Creating a mark in the Covid-19 hit world, virtual hearings are representative of both, our present and the future. Venturing into the unknown is always dicey, but averting the risk in this case is a slippery slope. With 61% of people voting to choose virtual hearings due to time and cost savings benefits post the Covid scenario, the 2021 survey undertaken by White & Case also suggested a hybrid mechanism which would allow the disputes to be a mix of both in-person and virtual hearings for varying disputes.

The model ADR code set up by institutes like ICC, LCIA, SIAC etc have turned heads due to their infrastructural finesse and resolution success-rate. For this reason, institutional arbitration has found mention in the Arbitration Act in reference to appointment of Arbitrators, and in the 2014 Law Commission report, lauding the establishment and working of arbitration centers’ by the High Courts of Delhi, Punjab and Haryana, FICCI etc. More arbitration institutions can be formalized and promoted in India with a proper charter that contains a constitution, rules, protocols etc. The 2019 Amendment inserted Part 1A to the 1996 Act that provides for the establishment of a Arbitration Council of India for framing policies for uniform professional standards for arbitrations, for grading arbitral institutes, and holding stakeholder training programmes. Government can provide further impetus to institutionalization by providing land, funds, subsidies etc to establishing bodies of these institutes and declaring them institutions of national importance. (See here)

Arbitration matters must be prioritized when virtual courts begin and fast track procedure mentioned in Section 29B of the 1996 Act should be allowed to be taken up even after the appointment of the Arbitral Tribunal. If one of the parties does not consent to this, the Arbitrator must use his powers under Section 19(3) of the Act and order an expedited procedure to secure the ends of justice. These tribunals secure access to speedy justice, boast affordability and are cost-effective for self-represented and low-income litigants. It was observed that PGI Chandigarh saves about Rs. 10,400 every time a doctor is examined by video conferencing. These testaments are best suited examples to further the ‘Due-Process’ concerns that also find mention in UK’s pro arbitration stance. Public consultation over proposed amendments and draft guidelines should be undertaken by the government to ensure complete justice. Sourced feedback from stakeholders, domestic and international arbitral institutes must be considered along with adopting best international practices as committed under Article 51 of the Constitution.

The Campaign for Greener Arbitrations was founded in 2019 with the goal of reducing the carbon footprint of International Arbitrations. Its guiding principles and green protocols embolden the adoption of video-conferencing, filing e-documents, use of e-communication services and reducing/eliminating long-haul travel wherever possible. E-Courts and E-Governance initiatives all forward the cause of rationalization of costs and economization of paper. A similar “Green Drive” was initiated by the Punjab and Haryana High Court wherein official letters, notices, circulars etc were all sent through email.

In numerous situations parties to a contract require immediate resolution of certain disputes such as to restrain/injunct the other parties from taking an action that may cause an irrepearable harm to the former party. Such situations being an emergency of sort, if the contract allows, emergency arbitrations if initiated would be beneficial to secure both parties against such irreversible actions. However, such arbitrations may need to be done on a priority basis and a public health crisis such as Covid 19 may restrict physical hearings from taking place, albeit, virtual hearings being unaffected by such a pandemic. With the Supreme Court declaring that –

“[F]ull party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders, described as “awards”. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties. Such orders are preferable to and are made under Section 17(1) of the Arbitration Act.” (In Amazon.com NV Investment Holdings LLC v. Future Retail and Ors., SCC OnLine SC 557.)

Therefore now, virtual hearings for emergency arbitral awards have been given an unprecedented impetus by the Supreme Court itself, and various ongoing arbitrations in India can take advantage of this historic decision.

Debating over this issue and understanding best practices is increasingly important but real change can be effected only by a unanimous commitment from the State, its legal fraternity, the anxious litigant and budding lawyers who undertake to do what is best for the client. Users should be forward looking and prepared to deal with transformative technologies as they come our way.

In the end, the authors would reiterate that – A revolutionary action is never a solitary step and therefore, must fit into the larger narrative of transformation and innovation, of which arbitrations have been a constant pioneer.

 

(This post has been authored by Dhruv Srivastava and Aafreen Choudhary. Dhruv is a graduate of Lloyd Law College, Greater Noida and Aafreen is an Associate at Jurisconsultus Advocates)

CITE AS: Dhruv Srivastava and Aafreen Choudhary, ‘Virtual Hearings in Arbitration in India : A Reflective Analysis’, (The Contemporary Law Forum, 3rd November 2021) <https://tclf.in/2021/11/04/virtual-hearings-in-arbitration-in-india-a-reflective-analysis> date of access

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