COVID-19: Arbitrating in the Midst of a Pandemic

The 2019 novel coronavirus disease (COVID-19) pandemic has resulted in a period of exceptional uncertainty as well as substantial market instability worldwide. As previous crises have shown, commercial pressures on parties can lead to an increase in disputes and recourse to national courts and other forms of dispute resolution, including arbitration. With a quarter of the world’s population living under lockdown conditions, parties, their advisors, and judicial and arbitral bodies worldwide now find themselves in a unique situation. The wide-ranging effects of the pandemic are not just creating exceptionally difficult commercial circumstances, but are having an impact on the normal operation of the bodies that are there to assist parties in adjudicating those disputes. Courts and arbitral institutions have been making changes to their operations to respond to the effects of the pandemic in order to reduce risks to their employees and their users, so as to do their part in reducing the burden on healthcare systems.

The inherent flexibility built into the rules of most arbitral institutions should possibly allow parties to confront the challenges of the current environment with a little more ease than users of the national courts (particularly those courts in which e-filing is still in its infancy). However, parties do not always make the most of that flexibility, and many in the arbitration community will be forced to find creative solutions and new ways of working. Surmounting these challenges might hopefully lead to more efficient ways of working in the future.

A practical summary of the current changes made by key arbitral institutions is set out below. We expect that further changes may be made over time, and parties should look out for further updates from the institution administering their cases in the coming weeks.

Arbitral instutions: summary of guidance issued

Overview

There is widespread closure of hearing facilities in Europe. In Asia, SIAC and HKIAC’s facilities in Singapore and Hong Kong respectively remain operational, albeit with strict guidelines in place for attendees to protect the health of staff and users. The AAA has also closed the AAA-ICDR.

For many institutions, some or all staff are working remotely and users are being urged to use email rather than telephone where possible to communicate with the institutions.

Unfortunately, delay on all fronts is very likely:

• The ICC and LCIA have expressly warned of delays in issuing awards. We anticipate similar issues to occur with other institutions.
• Whether due to a lack of remote working infrastructure or reduced staffing numbers due to sickness, increased response times from the institutions overall are anticipated.
• There are reports that a number of hearings due to take place this spring have been delayed or cancelled. We expect this number to increase in the short term as the various national lockdown deadlines are extended. Parties may need to re-schedule hearings that have been in the calendar for months (if not years), which could result in a bottleneck of demand at the most popular venues once these venues re-open.

Summary of institutional guidance

LCIA

The LCIA has stated that all staff are working remotely and will continue to do so for the foreseeable future. Parties have been advised to avoid contacting staff via telephone. In all but exceptional cases, correspondence will occur via email only. For all new or pending cases, the LCIA has published guidance. Key takeaway points from that guidance include:

• Parties should file all Requests through the online filing system (via https://onlinefiling.lcia.org/) or by email (casework@lcia.org) (with payment of registration fees to the LCIA bank account or by credit card).
• If any party intends to make an application for an expedited formation of the tribunal or the appointment of an emergency arbitrator, they must notify the LCIA in advance to casework@lcia.org or to accounts@lcia.org (as appropriate).
• Arbitrators have been asked to contact the LCIA directly via casework@lcia.org to deliver any awards. In the event that there are delays or situations where the delivery of an award is not possible, arbitrators should also notify the email address listed. The LCIA expects that a substantial portion of awards will be delayed. Parties should therefore plan accordingly.

ICC

The ICC issued guidance on 17 March 2020. Whilst all offices of the Secretariat of the ICC Court and the ICC Alternative Dispute Resolution (ICC ADR) Centre remain operational, all staff are working remotely. The ICC advises parties, arbitrators and legal advisors to use email to contact relevant individuals. Further takeaway points from the guidance include:

• Hearings and other meetings scheduled to take place at the ICC Hearing Centre in Paris until 13 April 2020 have been postponed or cancelled. Future bookings should be sent to the ICC Hearing Centre team at infohearingcentre@iccwbo.org.
• All new requests for arbitration and ADR, including pertinent exhibits, should be filed with the secretariat by email at arb@iccwbo.org.
• All requests for emergency arbitrators should be filed with the secretariat at emergencyarbitrator@iccwbo.org.
• Other ADR proceedings operated by the ICC Court or the ICC ADR Centre should be filed with the ADR Centre via adr@iccwbo.org.
• Any paper correspondence (including awards and ADR decisions), including in pending proceedings, should be sent via courier or post to the ICC. The ICC recommends that where paper correspondence is sent to its offices, the case management team should be promptly informed ahead of the dispatch so that they can expect the documents and plan accordingly.

AAA

The AAA recently issued guidance. Importantly, no hearings will take place at the AAA-ICDR until 17 April 2020 and all AAA staff are working from home at present. The AAA has also said that:

• Outside hearings away from AAA facilities may take place, but must be managed in accordance with certain conditions to protect users. Arbitrators must also consult relevant regulators to determine whether the hearing can go ahead.
• AAA staff are able to assist in coordinating calls/video conferencing to facilitate hearings taking place.

SIAC

At present, the SIAC is said to be fully operational, but with all staff working from home. Guidance as to how to liaise with SIAC staff by email during the pandemic can be found here. Maxwell Chambers is offering virtual ADR hearings, and those attending the hearing facilities in person are required to complete a health and travel declaration form and undergo temperature screening upon arrival. Guests and staff with a temperature of 37.6C or above will be denied entry.

HKIAC

The HKIAC reports that its premises in Hong Kong remain operational and accessible for hearings and meetings from outside parties. The HKIAC has also provided infrastructure to allow staff to work from home if necessary, which it has said will allow the institution to adapt to any further government restrictions on its operations. The HKIAC currently encourages e-filing delivered by email but will continue to accept hard copies. Several precautions have been undertaken to mitigate risk of the HKIAC’s guests and staff who opt to attend the facility rather than conduct proceedings online. These are as follow:

• Front-line service staff will wear face masks and maintain frequent hand washing, which is compulsory when returning from outside the office.
• All persons entering the building will be subject to a temperature check and must make a health declaration that they have, among other things, not travelled outside of Hong Kong in the past 14 days.

Practical steps that may be taken

In view of the changes made by arbitral institutions, a number of practical steps can be taken by parties and their advisors to reduce problems and delays:

• Parties travelling internationally (and in some cases, domestically) to attend hearings will need to pay close attention to updated immigration requirements or other movement restrictions. In many cases, allowances will need to be made for on-arrival quarantine periods or the impossibility of some individuals accessing the venue in question at all. Parties and their advisors should consider now where their witnesses, experts, arbitrators and technical support staff are based, and how that could affect upcoming hearings.
• Where possible, video conferencing or telephone conferencing should be considered. The technology available has advanced year on year and, with the right technical support in place, can be used very effectively.
• Electronic bundles rather than hard copy should be considered. If hard copy is being used, it should be noted that many third party suppliers and couriers will also be suffering from reduced staffing and so allowances for delays should be built in.
• Consider whether procedural decisions can be made on the papers alone, without the need for oral submissions.
• All arbitral institutions have expressed a preference for managing workflow through email in view of substantial staff working from home. Parties should expect delays in receiving confirmations and replies from the relevant institutions and they should therefore seek to issue documents or comply with requests 48 hours earlier than would normally be the case.
• Where emergency interim relief is expected to be needed, practitioners should familiarise themselves with the current procedures for making an application in advance, and notify the relevant institution that an application is coming so that preparations can be made. They may also wish to consider whether it is permissible more expedient to make an equivalent application to the courts of the relevant jurisdiction.
• Parties should show understanding to their counterparties where there are delays as a result of the pandemic. They may find themselves in need of reciprocal understanding as time goes by. Inflexible responses to counterparty requests for extension of time may also result in adverse costs awards.
• To avoid unnecessary risks, where a limitation period is looming in the coming months, it would be advisable for parties to secure an extension or waiver of the limitation period as soon as possible.
• Digital documentation submitted to an institution or tribunal should be properly tabulated and utilise the full features of PDFs, such as functional internal referencing and tabs. This will help all parties work on large documents and will assist when navigating documentation during teleconference and video-link hearings.
• Legal advisors should notify their clients that longer wait times for receiving responses and awards from arbitral institutions are anticipated to allow clients to plan ahead.

Finding ways to surmount the changed working conditions during the pandemic is new territory for all concerned. As the situation continues, we can expect arbitral institutions, technology providers and other stakeholders to respond with fresh ideas and methods to allow the parties to navigate this new and challenging landscape. It will be interesting to see whether these new practices will remain once the effects of the pandemic have passed.

Thank you to Matteo Clarkson Maciel, trainee solicitor at Kirkland & Ellis for his contribution to this blog.