The Challenges Brought by COVID-19: How has International Arbitration been Affected?

The world is facing unprecedented impacts from the coronavirus pandemic. The outbreak of COVID-19 has wide-ranging implications for people, businesses, governments and institutions in every part of the globe. Not surprisingly, the widespread travel restrictions and related quarantine measures, the prolonged shutdown of government offices, and the significant business disruption caused by people being encouraged (or, in some cases, directed) to work from home is having an increasing impact on the conduction of international arbitrations.

The coronavirus crisis will not prevent the emergence of new disputes and arbitration demands. On the contrary, the trend is that more disputes (and new types of disputes) may occur as a result of COVID-19. Many of them referred to arbitration. Fortunately, the arbitration procedure - due to its inherent flexibility - is more adaptable to the current circumstances when compared to traditional court litigation.

In this regard, the Asian arbitration community has played a key role in improving arbitration flexibility and in developing the use of new technologies to arbitral proceedings. These are fundamental for the main Asian arbitration hubs (especially Hong Kong and Singapore) to be properly prepared to continue meeting the needs of the parties during this time of crisis. For instance:

  • During the Seoul ADR Festival in 2018 and at the initiative of the Korean Commercial Arbitration Board ("KCAB") the Seoul Protocol on Video Conferencing in International Arbitration (the "Seoul Protocol") – which  Co-author Yu-Jin Tay is one of the lead drafters – was mooted and has recently been published online (accessible here). The Seoul Protocol serves as a convenient VC protocol for counsel and arbitrators to adopt or adapt for their hearings. It also contains technical specifications and best practices for the planning, testing and logistical arrangements associated with conducting virtual hearings in international arbitrations;
  • The Hong Kong International Arbitration Centre ("HKIAC") has recently improved its e-Hearings services, offering parties, lawyers, arbitrators and mediators a comprehensive range of integrated virtual hearing services, consisting of: (i) HD video conferencing system; (ii) audio conferencing system; (iii) online document repository; (iv) real-time transcripts; and
  • The Singapore International Arbitration Centre ("SIAC"), in cooperation with Maxwell Chambers, also offers virtual ADR hearing solutions, which are essential to provide an alternative to the traditional in-person hearings and meetings. Maxwell Chambers has an integrated platform for case preparation and connected hearing room services to the parties and tribunals. It enables parties and arbitral tribunals to access case files from anywhere and enable parties to work around current travel restrictions.

Furthermore, in light of the recent events, several arbitral institutions issued communications to their users regarding the functioning of their staff and what the parties should do regarding present and future proceedings. In the following paragraphs, we describe how the main Asian-based and International arbitral institutions are responding to the current scenario, as well as some challenges we recently faced in the conduction of international arbitrations due to the COVID-19 pandemic. The initiatives described in this article are in effect on the date of this publication but they may be subject to frequent revision; therefore, we advise lawyers, arbitrators, mediators and parties to consult the relevant centre's website.

1. INTERNATIONAL ARBITRATION IN ASIA DURING THE COVID-19 PANDEMIC

The conduction of arbitration hearings through videoconference and other technology platforms is likely to become a new norm. This is not unfamiliar to international arbitration practitioners and hearings via video-conference have been increasingly common even without the COVID-19 pandemic.

As described below, given the precautionary measures that are being taken by Asian arbitral institutions to minimise the potential impacts the COVID-19 pandemic may have on the progression of arbitrations and to safeguard the health and safety of everyone involved in arbitral proceedings, the Soul Protocol is a welcome tool for establishing international standards for videoconferencing in arbitration.

HKIAC

HKIAC has issued the Precautionary Measures in Response to COVID-19, which was recently updated on 26 March 2020 (accessible here), establishing a list of general precautions concerning its staff, facilities and visitors. According to this communication, the institution informed that:

  • HKIAC's headquarters: HKIAC's premises in Hong Kong remain operational and accessible for hearings and meetings, however:
    • Parties are advised to consider using HKIAC’s virtual hearing services (details of which can be found here);
    • All guests coming to HKIAC's facilities are required to complete this Health Declaration Form, prior to visiting the centre or upon entering the centre, as well as
    • All guests and HKIAC's staff will only be permitted to enter HKIAC’s premises if they: (i) have been in Hong Kong continuously for the past 14 days; (ii) are not living with someone who has travelled outside of Hong Kong within the last 14 days; (iii) have not, to their knowledge, been in direct contact with a person diagnosed with COVID-19; and (iv) are asymptomatic;
    • All persons entering HKIAC's facilities will be subject to a temperature check. Entry will only be granted to individuals with a temperature below 37.8°C;
  • HKIAC's staff: except for essential operational staff and when case management so requires, HKIAC staff is working remotely;
  • Sanitation measures: overall, HKIAC informed that is has increased cleaning/sterilisation of its facilities, and that its staff will be required to maintain high standards of personal hygiene.

SIAC

Both SIAC and Maxwell Chambers have put in place precautionary measures in response to the COVID-19 crisis (accessible here and here, respectively). In general, they are encouraging parties to use the Maxwell Chambers Virtual ADR Services in place of in-person meetings or hearings (more information on this service can be accessed here). In particular, the initiatives adopted by SIAC and Maxwell Chambers concern to:

  • Self-declaration and temperature screening: all visitors to the chamber's premises will be required to complete a health & travel declaration form and temperature screening upon arrival. Those who are found to have a temperature of 37.6°C and above will be denied entry;
  • Maxwell Chambers' staff: all staff will be required to take their temperature at least twice a day. Those who are unwell will be asked to see a doctor and not come to work. The staff will be divided into two groups and part will be working from home, in order to minimise physical contact. Overseas business and leisure travel are temporarily suspended;
  • Public common areas: the common areas will be disinfected at least four times a day and the frequency of cleaning may be increased;
  • Hearing rooms, executive suites, business centre and arbitrators' lounge: all contact areas and surfaces will be disinfected, including but not limited to: tables and chairs, sofas and couches, telephones, shelves, doors and handles.

SIAC has also updated its communications procedures, as follows:

  • General communications: all communications with the SIAC Secretariat shall be made via email (casemanagement@siac.org.sg);
  • Communications related to existing cases: shall be directed to the relevant SIAC Case Counsel. The updated contact details of SIAC's Case Counsels can be accessed here;
  • Filing new cases: notices of arbitration shall be filed via email (casemanagement@siac.org.sg);
  • Emergency interim relief: applications for emergency interim relief under the SIAC Rules shall be filed via email (casemanagement@siac.org.sg) and parties are advised to notify the secretariat in advance to ensure the application is promptly processed;
  • Payments: all payments to SIAC shall be made via electronic bank transfer only;
  • All communications from SIAC, including Awards issued by the Registrar, will first be transmitted via email, with original copies to follow (where applicable);

In Singapore, we have experienced many arbitral hearings being impacted with delays arising from postponements and rescheduling of hearings as well as a few suspensions of long ongoing hearings. In the case of some pending litigation in Europe in connection to arbitrations in Singapore, some hearings have been cancelled in favour of documents-only determination by the court (e.g. in Geneva court proceedings) and others involve injunction hearings taking place by telephone conference (e.g. London court proceedings);

2. GLOBAL EFFECTS OF THE COVID-19 PANDEMIC IN INTERNATIONAL ARBITRATION

Similar to HKIAC and SIAC, other international arbitration institutions around the globe are obviously being affected in the way they administer their arbitration cases. Although procedural teleconference hearings are relatively common in arbitration, institutions, parties, lawyers and arbitrators are having to adapt under current circumstances.

The London Court of International Arbitration ("LCIA")

Since 19 March 2020, LCIA's staff is working remotely. According to the Services Update: COVID-19 dated 18 March 2020 (accessible here), as a general rule, the LCIA will correspond with parties and arbitrators by email only. In practice, this means that:

  • Filing new cases: parties intending to file new cases should either use the LCIA's online filing system (accessible via this link) or notify the court through the following email (casework@lcia.org), with payment of registration fees;
  • Questions, documents and correspondences: parties and arbitrators should avoid contacting LCIA by telephone and should address all questions, documents and correspondences to the following emails (casework@lcia.org or accounts@lcia.org);
  • Awards: arbitrators are requested to deliver their awards by email (casework@lcia.org). LCIA will transmit awards to parties electronically, with originals and certified copies to follow, once LCIA office has re-opened.

International Chamber of Commerce ("ICC")

Pursuant to the COVID-19: Urgent Communication to DRS Community dated 17 March 2020 (accessible here), all ICC's offices worldwide are operational, but the ICC's staff is working remotely. The ICC is strongly advising that all communications with the Secretariat (including those related to case management purposes) be conducted by email. In particular:

  • Filing new cases: parties intending to file new cases should notify the Secretariat through the following emails:
  • Pending cases: although the Secretariat has advised that all communications be conducted by email, if parties or arbitrators need to send any correspondences (including awards and ADR decisions) to the Secretariat, they should promptly inform the case management team ahead of dispatch;
  • Hearings at the ICC Hearing Centre in Paris: all hearings and meetings scheduled to take place at the ICC Hearing Centre in Paris until 13 April 2020 have been postponed or cancelled. For additional information, parties and arbitrators should contact the ICC's staff through this email (infohearingcentre@iccwbo.org);
  • Other meetings and travels: all business travels by ICC's staff members has been suspended, and meetings scheduled to take place at the ICC offices worldwide are being conducted virtually.

Recently, in a pending ICC arbitration that we are currently involved related to an infrastructure project in Africa, one of the parties involved in the case requested for an open-ended extension of time for filing its statement of defence. It remains unclear how the tribunal will react to this motion, even more considering that most lawyers, experts and parties involved are from European countries.

International Centre for Settlement of Investment Disputes ("ICSID")

The ICSID is coordinating with arbitrators and parties on precautionary measures to be taken by all participants to ICSID hearings. The ICSID is encouraging parties in arbitrations to stay up-to-date on country advisories, screening measures and quarantines that may affect their travel.

For queries regarding specific cases, parties should contact the arbitral tribunal or committee secretary directly. For general queries, parties are advised to contact the ICSID Secretariat (icsidsecretariat@worldbank.org).

In an investor-State arbitration we are currently conducting, a one-day jurisdictional objection hearing was originally scheduled to be held in the coming weeks. In theory, the hearing could be conducted through videoconference. In practice, however, many obstacles will be presented, since neither arbitrators nor lawyers are advisable to be clustered in the same space which requires, for instance, the coordination of numerous different connections.

American Arbitration Association / International Centre for Dispute Resolution ("AAA/ICDR")

While the AAA/ICDR remains active and operational, no hearings will take place in AAA/ICDR hearing facilities until at least 1 June 2020, according to the COVID-19 Update dated 31 March 2020 (accessible here). In cities where governmental authorities have shut down activities, AAA/ICDR's physical offices will be closed immediately.

According to the AAA/ICDR update, case management staff will contact parties and arbitrators to discuss alternative arrangements, including the use of video, teleconferencing or postponements. However, the institution has advanced some guidelines and measures that parties and arbitrators shall take into account during this period:

  • Filing new cases: the AAA/ICDR has strongly encouraged parties to file new cases electronically. The institution provides two ways to file new cases electronically (general details here):
    • Fast File a Case: which has been described as the fastest mode to file a new case, through this link;
    • AAA WebFile®: for parties who have already filed cases before and have accounts on AAA WebFile®, through this link.
  • Hearings: the AAA/ICDR case management staff will coordinate calls to address any concerns raised about participation in hearings. The AAA-ICDR is also monitoring its hearing docket, and will be reaching out on some cases to raise these issues. To the extent in-person hearings may be taking place outside the AAA/ICDR's facilities, parties, lawyers, arbitrators and mediators shall:
    • Consult city, state and federal and other applicable regulations and guidance to determine their impact on the hearing;
    • Promptly raise with each other and the AAA/ICDR any concerns about their participation resulting from limitations on travel imposed or urged by governmental and regulatory authorities. Sensitivity to individuals who are at a higher risk of COVID-19 must be taken into account when considering alternative hearing arrangements;
    • Not attend in-person hearings if:
      • They present fever, cough, shortness of breath, symptoms of respiratory distress, or other symptoms of an illness (further guidance from organisations such as the Centers for Disease Control and the World Health Organisation shall also be taken into account);
      • They are travelling from an affected area experiencing COVID-19 outbreaks or widespread transmission as defined by organisations such as the Centers for Disease Control and the World Health Organisation);
      • They have been in direct contact with someone known to have COVID-19.
  • Alternative hearing capabilities: The AAA/ICDR is encouraging parties to contact case management staff to assist with alternative hearing arrangements, including the use of video teleconferencing that will allow for remote participation in hearings.