Updated ICC Arbitration Procedures in Light of COVID-19

COVID-19 has caused widespread disruption in the global economy and has created new obstacles in the usual course of dispute resolution. While most arbitration institutions continue to facilitate and adjudicate cases, they are generally doing so remotely, often without access to their offices or hearing facilities. 

In a recent joint statement, the International Court of Arbitration (ICC), the International Centre for Settlement of Investment Disputes (ICSID), the Hong Kong International Arbitration Centre (HKIAC), the London Court for International Arbitration (LCIA), the American Arbitration Association International Centre for Dispute Resolution (AAA-ICDR), the Singapore International Arbitration Centre (SIAC), and others committed to working together to cope with the COVID-19 crisis.[1] These institutions aim to ensure that, despite the current climate of uncertainty, cases proceed without undue delay.[2]

In furtherance of this approach, new guidance from the ICC seeks to mitigate the logistical challenges of COVID-19-related restrictions for current and future arbitrations.

Existing Procedural Options

The ICC’s Rules already allow for a great deal of procedural flexibility in administering arbitrations, and this gives parties significant leeway to adjust to the realities of conducting an arbitration even in the face of COVID-19-related restrictions by streamlining or holding proceedings remotely. The new ICC guidance highlights some of these tools that may be particularly helpful to parties in ongoing arbitrations:[3]

• Tribunals and parties can modify procedural rules and timetables even midway through an arbitration.  Rule 24(3) allows parties and tribunals to hold additional case management conferences or discussions and amend or streamline their procedures in light of COVID-19.
• Tribunals can resolve disputes in stages through partial awards. This could help move cases forward even if, for example, a piece of key evidence for one issue cannot be procured as a result of COVID-19-related disruptions.
• Audioconference and videoconference technology can be used for hearings. This can prevent delays in case resolution if travel restrictions or health concerns prevent participants from appearing in person in the near- to mid-term future.
• Tribunals can resolve disputes, or subsidiary issues within disputes, on the basis of documents only. This could be useful in cases where travel to hearings is not feasible or hearings by teleconference are difficult to arrange.
• Some issues can be resolved without witness or expert evidence. If COVID-19 makes it difficult for experts or witnesses to testify, parties should consider if such testimony is necessary or if written questions to experts and witnesses could serve as a substitute.

Changes to ICC Procedures and Recommendations

Document Management and e-Filing

Notwithstanding the flexibility provided by the Rules, the ICC has made a few changes to its usual procedures in light of the COVID-19 crisis. Since the ICC Secretariat is working remotely, several procedures that previously required paper submissions can now be completed electronically.[4]

Notably, parties must now file new requests for arbitration (including pertinent exhibits) and other initiating documents in electronic form.[5] Where parties would generally sign paper copies of documents like the Terms of Reference for their arbitration, they are now encouraged to sign them in counterparts in electronic form. Likewise, parties are requested to allow final awards to be signed in counterparts by members of their tribunal.

Virtual Hearings

Parties in ongoing arbitrations will likely need to discuss whether to proceed with in‑person hearings given the significant obstacles posed by COVID-19. An in-person hearing may be preferable, but, during the COVID-19 crisis, in-person meetings may face delays, difficulties in securing an adequate venue, and additional health-related precautions for participants. The HKIAC has estimated that full or partial virtual hearing services were required in approximately 85% of all hearings in April and May of this year.[6]

A virtual hearing format removes those concerns, but virtual hearings present their own challenges. Even with no technical difficulties, there are challenges inherent in coordinating testimony across time zones, presenting evidence virtually, and assessing credibility over video feed. Parties should take note that tribunals have the power to proceed with virtual hearings without party agreement or over party objection. In these cases, tribunals must first assess whether the award will still be enforceable per ICC Rule 42—a critical consideration for parties to the arbitration—and provide a reasoned determination.[7]

Parties negotiating over the necessity of in-person hearings should also take note that, in its recent guidance, the ICC has clarified that Rule 25 does not require in-person hearings.[8] Article 25(2) states that, after studying the parties’ written submissions, the tribunal “shall hear the parties together in person if any of them so requests” (emphasis added). According to the ICC, this is intended to provide opportunity for a “live, adversarial exchange,” and the hearing can be conducted “in person by virtual means.”[9] None of the other Rules can be read to require in-person hearings (though tribunals in a particular dispute may decide that an in-person hearing is necessary).

The ICC has published a checklist intended to help parties design a protocol for their virtual hearings.[10] Other arbitration organizations, such as the HKIAC, have published a similar tool.[11] Considerations that are highlighted in these publications include:

• Logistical Issues: Parties should finalize the list of participants in advance (including arbitrators, parties, counsel, witnesses, experts, administrative secretaries, interpreters, stenographers, etc.). They should also ensure mock hearings can be held in advance of the scheduled date to test equipment and procedures.
• Technology: Parties and tribunals must first decide on the technology to be used and ensure all participants know how to use it. It is also important to confirm that the lighting and sound is adequate in each hearing location, to decide what support will be available during the hearing, and to set up back-up systems and contingency plans.
• Confidentiality: Parties should determine whether the hearing will be recorded and how. During the arbitration, all virtual arbitration chambers should be password protected, including break-out rooms, such that no unauthorized parties can join the hearing.
• Process: Parties should agree on points of basic etiquette, such as how individuals can indicate they wish to speak (i.e. physically or through the technology). Participants should make sure to mute microphones unless speaking, avoid backlighting that conceals their appearance, and use headsets to protect privacy at their location.
• Witnesses and Experts: Parties should discuss how evidence will be presented in a virtual environment, how witnesses and experts will be examined, whether witnesses will be virtually sequestered (or will be able to communicate with parties/counsel in chat rooms), and whether hearing invigilators need to attend the same premises as witnesses to make sure there are no other people or devices present.

Cybersecurity

The COVID-19 pandemic has also created many cybersecurity challenges as institutions move toward conducting their operations remotely, often using new communication and videoconferencing platforms. Parties should be especially aware of cybersecurity concerns and applicable regulations as they proceed with virtual hearings and transmit documents online.  Before holding a virtual hearing, the ICC recommends that parties and tribunals consult with each other and establish a cyber-protocol that complies with data privacy regulations and has included a list of suggested clauses for a cyber-protocol in its recent guidance.[12]

Practice Pointers

While the ICC is an early leader in providing these updated protocols, we expect that other major arbitration institutions will ultimately provide similar guidance. In light of these procedural options, parties to arbitrations, or those planning potential arbitrations, should consider the ICC’s advice and take steps to ensure that they are able to effectively manage an arbitration and present their case.  In particular:

• Counsel for parties in ongoing arbitrations should be aware that they may face delays in their proceeding as a result of COVID-19-related logistical issues. It may be prudent to revisit case strategy and identify areas or issues that can be streamlined or moved to electronic format.
• Parties may face additional negotiations over changes to their particular arbitration’s procedural rules going forward, especially if one party insists on in-person proceedings or physical copies of documents. Case management teams will facilitate these discussions.
• Counsel should be as flexible as possible about case scheduling, deadlines, and electronic submissions given the hurdles imposed by the ongoing crisis.
• Counsel should ensure they are prepared to conduct hearings by videoconference or telephone and should assess any changes to case strategy that these will necessitate. 

Morrison & Foerster associate Mikaela Ediger contributed to the writing of this alert.

[1] Hong Kong International Arbitration Centre et al., Joint Statement by Arbitral Institutions: Covid-19 and Arbitration (April 6, 2020), https://www.hkiac.org/sites/default/files/ck_filebrowser/PDF/News/Covid-19%20Joint%20Statement.pdf (last visited May 28, 2020).

[2] Id.

[3] International Court of Arbitration, Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic (April 9, 2020), ¶8, https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf (last visited May 28, 2020).

[4] Id. at ¶¶10-15.

[5] Id. at ¶11; International Court of Arbitration, Urgent COVID-19 message to DRS community, https://iccwbo.org/media-wall/news-speeches/covid-19-urgent-communication-to-drs-users-arbitrators-and-other-neutrals/ (last visited May 28, 2020).

[6] Hong Kong International Arbitration Centre, Virtual Hearings at HKIAC: Services and Success Stories, (May 6, 2020), https://www.hkiac.org/news/virtual-hearings-hkiac-services-and-success-stories (last visited May 28, 2020).

[7] International Court of Arbitration, supra note 3 at ¶22.

[8] Id. at ¶24.

[9] The Secretariat’s Guide to ICC Arbitration states that whether the Tribunal construes Article 25(2) to require an in‑person hearing “will depend on the circumstances of the case.”  Id.

[10] Id., pp. 7-8.

[11] Hong Kong International Arbitration Centre, HKIAC Guidelines for Virtual Hearings (May 14, 2010), https://www.hkiac.org/sites/default/files/ck_filebrowser/HKIAC%20Guidelines%20for%20Virtual%20Hearings_0.pdf (last visited May 28, 2020)

[12] Supra note 3 at ¶¶26-27, pp. 9-13.