“Virtual” Dispute Resolution in International Arbitration

Abstract

Before the pandemic, international arbitration embarked on the reform of the rules prompting a new wave of procedural regulations on the use of telematic means for hearings and taking of evidence. As part of this trend, for instance, the German Arbitration Institute (DIS) and the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) revised their respective rules. The COVID-19 pandemic, acting as a major disruptor created significant effects on online dispute resolution (ODR). The impact of the pandemic has been significant on both substantial and procedural rules leading to adjustments. The panoply of rules emerging in the various arbitral setting poses several questions. The paper aims at throwing light on COVID-19-related effects on international arbitration rules by examining the delicate balance between competing priorities and the observance of legal principles (both of substantive and procedural nature). The analysis proceeds in four parts. Firstly, it addresses the question of the legitimacy and authority of these provisions. Although many arbitration rules already referred to virtual hearings, some of the more recent provisions were adopted as “technical notes” or “protocols” as emergency solutions. Their continuity in time might be subject to confirmation once the pandemic effects ease. Secondly, it turns the attention to the nature of the process and the different roles. For those cases in which the arbitral agreement stipulated a specific “place of arbitration” the shift to a virtual environment could be considered detrimental for the parties’ rights. This entails looking at these provisions through the lens of the due process of law principle and further examining the scope of the arbitrators’ mandate. Thirdly, in terms of cost efficiency, online dispute resolution has its clear advantages. However, it may hinder transparency and the enjoyment of third party rights, a rather recent achievement in international arbitration. This requires gearing new ways in which transparency could be articulated in a virtual environment. Fourthly, confidentiality and security concerns are examined. Although cybersecurity protocols and procedural orders dealing with the organization of virtual hearings attempt to avoid this, it might be difficult to rule out all risks in a real context. Finally, the paper advocates for a holistic approach to “virtual” dispute resolution acknowledging the various interests at stake.