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TECHNOLOGY IN INTERNATIONAL AND DOMESTIC ARBITRATION

Updated: Dec 4, 2021

Author: Christie Merin Manoj, V year of B.B.A.,LL.B(Hons.) From Lovely Professional University, Punjab.

Co-author: Ruban Joe Toniyo, V year of B.B.A.,LL.B From Christ (Deemed to be University), Bengaluru.


ABSTRACT

With rising number of cases in the Courts on a daily basis, people have started resorting to other mechanisms like Alternative Dispute Resolution (ADR). Thanks to technology, a new branch of ADR has come up called the Online Dispute Resolution (ODR). ODR is not jurisdiction bound, and is a lot more flexible than conventional court systems. This article examines the use of virtual hearings and ODR in different countries. The article identifies the rising need for ODR, its scope and its downsides. A brief of India’s position on ODR has also been given. Towards the end, the article also identifies and summarizes the importance of virtual hearings in this era.


INTRODUCTION

China’s Confucian theory suggests that arbitration and mediation is not an alternative, but a necessity to solving problems. Much like the theory, recent trends show that Alternative Dispute Resolution System (ADR) is not an ‘alternative’ anymore. There has been a huge paradigm shift from traditional court systems to ADR, especially during the pandemic. ADR has been successful in outweighing the cons of litigation such as heavy paper work, procedural delays, complexity in process, unsatisfactory decisions etc.


The COVID-19 pandemic has increased our reliance on technology; classes, grocery shopping, work from home, meetings, weddings, reunions, etc.; all of these can be done using the smart phone. The legal space is no different when it comes to dependence on technology by the extensive use of videoconferencing and virtual hearings. What was an exception before, has become a necessity. While desperate times call for desperate measures, crisis management has called for adoption of technology in arbitration. ODR (Online Dispute Resolution) is the new buzzword. The prime advantage of ODR is that it is not tied to any particular jurisdiction. Just a smartphone and a website or a software helps you connect with the parties in dispute.


DO ARBITRATION LAWS MAKE IT MANDATORY FOR IN-PERSON MEETINGS?

The answer is no. In 2020, ICCA (International Council for Commercial Arbitration) compiled surveys covering 86 New York Convention jurisdictions including India. None of the surveyed jurisdiction mandates in-person meetings or physical hearings for arbitration. India’s lex arbitri, i.e., Arbitration and Conciliation Act 1996, does not expressly provide for a right to physical hearing in arbitration. Article 24 of UNCITRAL Model Law on International Commercial Arbitration gives the arbitral tribunal the right to decide on oral hearings. Although India has not formally adopted the Model Law, Section 24 of the Arbitration Act is much similar to Article 24. Therefore, no law mandates physical meetings unless the tribunal thinks otherwise.


HOW DID JUDICIAL SYSTEMS WORD-WIDE REACT TO VIRTUAL ADR HEARINGS DURING THE PANDEMIC?

Courts all across the world reacted promptly to the pandemic by implementing different measures so that the judicial system remains immune to the consequences that the pandemic has brought about. The Federal Court of Australia had issued Special Measures in Response to COVID-19 to facilitate virtual hearings and continued disposal of cases using remote access technology. In a case it was observed by the Court that the counsel who were physically separated could use WhatsApp groups to communicate during hearings. In the USA, judges livestream on Zoom through YouTube channels. They also have channel directories for each court on their website along with links. The UK Court recently introduced a ‘List Assist’ tool to improve listing decisions. The tool is expected to replace manual paper diaries and merge with the case management system across all the courts and tribunals to improve listing decisions.


WAS INDIA READY FOR VIRTUAL ADR PROCEEDINGS AND DIGITAL COURTS?

Generally before the pandemic, India wasn’t a tech-oriented country. Using technology in different spears of industry had started to gain popularity, but at a slow pace. However, the pandemic became a blessing in disguise and people started to use technology for many things they thought would be impossible to be done online. India’s judicial system has been handling the COVID-19 pandemic well, especially in the field of Alternative Dispute Resolution. The country launched its first digital court called the Jupitice in May 2021 which aids to solve commercial and civil disputes using ADR and ODR techniques. Recently, it introduced a customized MSME court (Micro, small, and medium-sized business court) to swiftly resolve the rising disputes in the small to mid-level businesses. Embracing the importance of ODR in this era, the NITI Aayog had launched a handbook on ODR which Justice DY Chandrachud thinks has the potential be a watershed document on ODR. Most importantly, the Supreme Court recently asked all the high courts to make e-filing of petitions mandatory from January 1, 2022. The Court strictly made it clear that no physical filing should be done after the said date. This is a very important contribution to digitizing our judiciary. With loads of cases getting piled up each day in Courts, small steps like these might help save time and paper work.


WHAT ARE THE PITFALLS OF VIRTUAL HEARINGS/ODR?

Nonetheless, ODR is like a double-edged sword; it’s important to take the bad with the good. Not being able to maintain a stable connection throughout the proceeding is the major downside. Some complain about connectivity issues while some others about struggles with unfamiliar technology. Time difference between different countries is a curse. Sometimes lawyers or clients accidently switch on the mic, often leading to conversations being overheard and unpleasant disclosures. The recent “kitten lawyer” incident in the USA which made the whole world laugh is arguably one of the most ridiculous complications of virtual hearings. In this incident, the lawyer accidently switched on a ‘cat filter’ which made him look like a kitten while arguing before the judge. Some extreme cases of virtual hearings gone wrong may include the incident of a woman who appeared naked during a trial, or, another woman who was seen drinking beer during a mediation proceeding.


ODR – NEED OF THE HOUR

The whole point of ADR is to conquer the difficulties of conventional court systems. An arbitration proceeding completely fails as an ‘alternative’ if it takes as long as a lawsuit to get solved. The quintessence of ADR can be said to happen only if it truly acts as an alternative. However, the pandemic has hindered a lot of legal proceedings and the courts are plagued by delays. Therefore, ODR is the need of the hour. The International Arbitration Survey is an annual survey conducted by the Queen Mary University, London to understand the trends and future direction of International Arbitration. The reports released in 2018 showed that 78% of the respondents had never or rarely used technology for hearings. However, the result dropped to 26% for the same survey conducted in 2021. The massive jump from 78% to 26% shows how important technology has become to arbitration during the pandemic. It is also important to adopt AI (Artificial Intelligence) tools to our legal system. For example, predictive coding has been extensively used in the USA and the UK. This computer assisted review utilises technology to assist with the review of the documents. In a recent English judgement, some 17 million documents were reduced to 3.1 million by using predictive coding. The court was of the opinion that predictive coding is efficient in cases where documents are of this size. It is important to introduce AI of this kind to our system as well to avoid manual work and save time.


CONCLUSION

Certainly ODR does showcase some unavoidable complexities, but, they are largely outweighed by the results. Given the alternative of not having hearings at all, it would be better this way with some complications. India’s initiatives like the NITI Aayog’s Handbook and Jupitice are excellent measures taken to deal with ODR effectively. “Justice delayed is justice denied”, is what law students are taught in their colleges. Therefore, instead of setting aside proceedings, it would be better to continue with virtual hearings in ADR for speedy disposal of cases.