ICC Canada and ArbitralWomen: Virtual Proceedings – The Good, the Bad, and the Ugly
On September 25, 2020, the Canadian Committee of the International Chamber of Commerce Court of International Arbitration (ICC Canada) held its annual International Arbitration Conference in collaboration with ArbitralWomen and INSOL International. The first of the three events in the conference was a panel discussion between Alexis Mourre (President of the ICC Court), John Judge (Arbitration Place), Yasmine Lahlou (Chaffetz Lindsey LLP) and Sandra Gonzalez (Ferrere) on best practices for virtual proceedings. Louise Barrington (Arbitration Place) moderated the session.
In a pre-recorded video, Janet Walker (chair-elect of ICC Canada) thanked everyone for participating in the event. Tina Cicchetti (current chair of ICC Canada) spoke next, acknowledging the difficulties that the international arbitration community has faced this year. However, while the world may be a different place, Cicchetti explained that this was an opportunity to reflect on best practices going forward. And what better way to start than by discussing virtual proceedings?
Louise Barrington began by asking Sandra Gonzalez two definitional questions. First, what are the key features of a virtual hearing? Gonzalez explained that, in general, a hearing is an oral phase in the arbitral proceedings. Before COVID-19, hearings allowed parties to deliver arguments in a face-to-face setting. Today, the switch to remote communication has significantly changed the way parties interact with each other throughout the proceedings. Instead of delivering submissions in person, parties must do so across computer screens. Second, Barrington asked how a virtual hearing is different from an interlocutory conference. Gonzalez noted that unlike interlocutory conferences, where parties discuss a specific procedural matter, a virtual hearing allows parties to present their full case. The added complexities of hearings, in particular the examination of witnesses, makes the impact of the switch to virtual hearings all the greater.
The panel then considered how, due to COVID-19, parties are faced with a dilemma: should they have a virtual hearing now, or should they wait for in-person hearings to resume? What factors drive their decision? According to Yasmine Lahlou, while efficiency and expediency are important, they are often not the main deciding factors. Instead, Lahlou emphasized the most valuable part of international arbitration is the opportunity to present one’s case in front of a fair, neutral, and sophisticated tribunal. As a result, parties will make their decision whether to proceed remotely or wait for an in-person hearing based on how much they desire a physical “day in court”. For example, parties’ whose case depends on the tribunal finding their witnesses more credible than the opposing parties’ witnesses may want an opportunity to cross-examine opposing witnesses in person, hoping that attacks on witness credibility will have a greater impact when conducted in-person. Lalou also observed that attending a proceeding in-person has an equalizing effect, because all parties (big or small) are treated the same way. Hence, in a David-and-Goliath situation, the less-powerful party may press for an in-person hearing.
The discussion then shifted to whether tribunals have the power to impose virtual hearings without the parties’ agreement. Alexis Mourre speculated that most arbitration rules will allow tribunals to order a virtual hearing. However, if an arbitration agreement specifies a designated place of arbitration, it is unclear whether the global pandemic can be considered a circumstance that frustrates such a clause.
Barrington also asked Mourre to comment on Article 25(2) of the ICC Arbitration Rules, which states:
After studying the written submissions of the parties and all documents relied upon, the arbitral tribunal shall hear the parties together in person if any of them so requests or, failing such a request, it may of its own motion decide to hear them. [Emphasis added]
Mourre responded that the true intention of Article 25(2) has been lost in translation. The French version more accurately translates into “adversarially” rather than “together in person”, meaning that it does not require parties and their counsel to be physically present at the hearing. Mourre revealed that a series of amendments are being made to the ICC Rules, which will include a change to the English version of Article 25(2) to bring it in line with the French version, effective January 2021.
John Judge spoke about mandatory laws of Canada and the provinces which may impact a tribunal’s authority to order a virtual hearing in cases seated in Canada. Practically speaking, the answer is no. The Model Law, which has been implemented across all Canadian provinces and by the federal government, provides tribunals with plenary power to control a proceeding. Judge also advised how tribunals can address Article 25(2) before the new ICC amendments come into effect in 2021: the ICC’s Guidance Note on Article 25(2), which adopts a less literal interpretation of “together in person”, can be incorporated into the Terms of Reference or a procedural order, thus unambiguously permitting virtual hearings.
The next topic was “inequality of arms” between the parties, and how such inequality is affected by the move to virtual hearings. Barrington canvassed the panel’s opinion on how to address David-and-Goliath situations where some parties lack the necessary internet bandwidth or equipment to engage reliably in a virtual hearing. Lahlou explained that compromises must be made to ensure that everyone has a fair chance to present their case. If the stronger party refuses to settle for lower-performing equipment or to make allowances for time lost to technical problems, the tribunal may decide to postpone the proceedings until in-person hearings resume. Mourre seconded this opinion, adding that differences in parties’ familiarity with virtual platforms can also lead to unequal treatment.
Barrington then asked panelists about their thoughts on the use of a third-party provider for virtual hearings. Judge thought it worthwhile to bring in a third-party provider, as many vendors offer customizable platforms that make it easier to manage a virtual hearing. Gonzalez’s opinion differed slightly; in her view, third-party platforms may not be necessary for every tribunal. The decision to invest in one will depend on the tribunal’s specific needs, and the nature of the issues that come before it.
Upon being asked to provide their best tips for virtual hearing etiquette, all panelists agreed that parties should be muted when they are not making submissions. Moreover, the less theatrics, the better. In a virtual hearing room, it is not possible to jump out of one’s chair and shout. When it comes to advocacy, Judge explained that it can be difficult to build up momentum in a virtual cross-examination. Strategic question formulation is therefore critical: counsel should opt for short and succinct questions. Lahlou added that it is important to pay attention to one’s client throughout the process. Because the client cannot have their physical “day in court”, they must feel that their needs are being met by counsel.
Overall, the panel agreed that virtual hearings are here to stay. In fact, they will likely become the norm for smaller claims and procedural hearings. On that note, panelists referred the audience to the following sources for further advice on virtual hearings: the ICC’s Virtual Hearings, CIArb’s Guidance Note on Remote Dispute Resolution Proceedings, LCIA’s Updates to the LCIA Arbitration Rules and the LCIA Mediation Rules (2020), and ICDR’s Virtual Hearing Resources.