SIArb Newsletters

By Chan Yong Neng - Pinsent Masons MPillay; Connor Clark & Horace Ng - Pinsent Masons

Introduction

1. In the biblical tale of the Judgement of Solomon, King Solomon ruled between two women both claiming to be the mother of a child. Solomon identified the true mother by proposing that the baby be cut in two, with each woman receiving a half. One woman was content with the proposal, while the other pleaded that the child be given to her rival. With this strategy, he was able to distinguish the mother as the woman who prioritised the life of the child over her own maternal instincts. In How Arbitration Works (Elkouri and Elkouri, 1960), the authors described Solomon as an arbitrator, and further remarked that the procedure utilised by the King resembled that used by arbitrators at the time of publication. Fortunately, the cut-throat arbitration style of the 1960s described by Elkouri and Elkouri is not commonplace in this age. Indeed, the availability of modern technology would have presented Solomon with alternatives in delivering justice.
2. Technology now has a central and indispensable role in fair, effective and efficient conduct of arbitrations, and has seen recent and dramatic increase in use following the COVID-19 pandemic.
3. In February this year, the ICC’s Arbitration and ADR Commission (the “Commission”) launched the report, “Leveraging Technology for Fair, Effective and Efficient International Arbitration Proceedings” (the “Report”). Although the Report was meant to be an update of the Commission’s 2017 report on Information Technology in International Arbitration (the “2017 Report”), what was produced is ultimately an entirely new resource. The Report offers pragmatic and practical guidance for arbitrators and practitioners on utilising technology effectively without compromising fairness or efficiency.
4. This article briefly (i) summarises the key points made in the Report; (ii) compares the Report with similar resources available (including the 2017 Report); and (iii) considers potential drawbacks of the availability of technology use in international arbitration, before concluding.

I. The Report

5. The Report was produced by an appointed group of experts, with its conclusions and recommendations being informed by survey responses from over 500 international arbitration community members on their views of use of technology tools and solutions. Appendix A to the Report provides an overview of those survey results, including some noteworthy findings that illustrate the increased use and approval of technology tools in international arbitration:
   1. 93% of respondents agreed that technology has improved the efficiency and cost-effectiveness of the arbitration process.
   2. 71% of respondents agreed that, post pandemic, they would be using online case management platforms / virtual data rooms for exchange of all or most communications and submissions.
   3. 74% of respondents agreed that, post-pandemic, they would be using hard copy documents less often.
   4. 88% of respondents agreed that, post pandemic, it should be the norm to conduct case management and other procedural conferences as virtual meetings.
   5. The technology solutions that  respondents would use ‘more often’ included videoconferences, online case management platforms, cloud filing sharing sites and hyperlinked submissions or e-briefs.

6. The key thrust from the Report is that arbitration participants should consider early how technology will be used in an individual case and it aims to provide guidance on how parties and tribunals can integrate technology in a way that will maximise savings of time and cost, with due regard for fundamental principles of fairness and equality. The Report comprises six Sections, with its recommendations detailed in Sections 3 to 6.
7. Section 3 of the Report focuses on effective case management when integrating technology in arbitration. It recommends that parties seek to agree specific IT solutions to an arbitration after a dispute arises, rather than mandating specific IT solutions within the arbitration agreement (that could be outdated by the time a dispute arises). However, the Report also recommends that, despite parties being able to agree to use IT at any stage of proceedings, they should bear in mind that once written submissions have been exchanged, agreeing on large-scale use of IT may be less efficient and cost effective, perhaps requiring parties to redo some elements of work. 
8. The authority and responsibility of the tribunal for the efficiency and the integrity of proceedings is emphasised, with the Report also providing examples of the way a tribunal may utilise its broad powers to manage the use of IT, subject to the fairness and equal treatment of the parties. In anticipation of the possibility that technical issues arise during the arbitration, the Report also makes the practical recommendation for each party to designate technical support persons who may be contacted in case of technical difficulty, and in lieu of contacting the full distribution list of case participants.
9. Section 4 of the Report canvasses a wide range of practical issues related to the electronic exchange of communications and notifications in an arbitration procedure. It highlights that regard must be given to the service requirements, including requirements as to mode and proof of service, under the applicable arbitration rules and mandatory laws. The Report explores various possible modes of electronic service, including use of email, file share transfers, physical data carriers (flash drives, hard disks etc) and online case management platforms (even briefly noting that in some jurisdictions, courts have confirmed that notifications in court proceedings have been validly issued via Facebook Messenger or WhatsApp). When using online case management platforms, the Report recommends putting in place protocols to regulate control and access to the documents, protecting data integrity, as well as standardising the types of data to be uploaded and how they are to be organised or named.
10. Section 5 of the Report identifies other uses of technology that the parties and tribunals may wish to consider, such as e-briefs and machine learning artificial intelligence. It suggests that tribunals may wish to undertake a rough cost-benefit analysis before ordering the presentation of e-briefs, given the costs involved in their preparation. If specialised hardware or software is required for an arbitration, the Report highlights that users should consider hardware interoperability, software compatibility, whether the tool is properly licensed and whether tribunal members and the parties have adequate technical ability and resources to properly utilise the tool.
11. Section 6 of the Report flags practical considerations and potential pitfalls related to the use of technology to facilitate evidentiary hearings, with special attention paid to the organisation of both virtual and hybrid hearings. For tribunals considering whether to order virtual hearings, the Report recommends consideration of amongst others, any potential violation to any parties’ due process rights, including the right to present one’s case, and technological limitations or time zone issues that may arise from participation from different locations and countries.
12. Overall, the Report concludes that there is no one-size-fits-all when it comes to technology, recognising also that available technology services change rapidly with technological advancements. The Report thus seeks to provide ‘starting points’ for potential technology users when investigating the technology marketplace.

II. Comparisons 

13. The Report has been prepared in view of the changes brought about by the COVID-19 pandemic and serves as an update to the report published in March 2017 by the same task force titled ‘Information Technology in International Arbitration’.
14. While the use of IT in international arbitration was already becoming widely adopted in 2017, its use was not the foregone conclusion it is today since the onset of COVID-19. The updated style of the Report, which methodically addresses aspects and issues of IT now familiar to most practitioners, reflects the Commission’s aim at providing detailed guidance on the use of IT considering its necessity and prevalence in the modern day. This contrasts with the frequently-asked-questions style of the 2017 Report, which was ostensibly intended instead to provide a framework for practitioners considering the use of IT in arbitration proceedings.
15. Furthermore, compared to the 2017 Report which lamented a lack of reliable information and hard data regarding the frequency and sophistication of IT use in international arbitration, the Report has been prepared with the benefit of a survey of 500 members of the arbitration community, the results of which are reflected in the breadth and extent of detail of different types of IT canvassed in the Report.
16. For example, greater attention has been focused on topical aspects of IT such as virtual hearings and cybersecurity, the former now a mainstay in arbitral proceedings and the latter a prevailing concern in the industry. The Appendices to the Report include a checklist for practitioners as well as sample procedural orders in relation to virtual hearings, encompassing details such as camera set-up for witnesses and break-out room functionality. Sample language has also been included in Appendix B in relation to data protection and information security with reference to the ICC Data Privacy Notice for ICC Dispute Resolution Proceedings and the ICCA-NYC Bar- CPR Cybersecurity Protocol for International Arbitration.
17. The Report complements other recent publications by various organisations regarding IT in international arbitration. Examples include:
    1. The CIArb Framework Guideline on the Use of Technology in International Arbitration issued in December 2021, which outlines general principles and a high-level summary of similar issues discussed in the ICC Report including best practices relating to cybersecurity;
    2. The IBA’s Technology Resources for Arbitration Practitioners, first published in March 2019, which offers a list of providers of common IT solutions such as case management platforms, technology assisted document review software, and translation tools; and
    3. The Protocol for Online Case Management in International Arbitration produced by the Working Group on LegalTech Adoption in International Arbitration in November 2020, which provides a deeper dive into the usage and functionalities of online case management platforms.

III. Potential drawbacks to the availability of technology in international arbitration 

Technological playing field

18. It would appear that the pandemic was a panacea for the legal fraternity’s notorious inertia and caution towards adopting new technologies. By way of example, only 2% of respondents surveyed in the Report were in the practice of utilising online case management platforms or virtual data rooms for all exchange of communications and submissions pre-pandemic, but 71% said, post-pandemic, they would utilise them more often. Section 2 of the Report also underscores that basic technological competence is now expected of arbitrators and counsel, and 51% of respondents consider it an important consideration when selecting an arbitrator. The Report also countenances the possibility that arbitrators may require more than just basic technological literacy to accommodate parties’ expected technology needs, so much as needing to undergo training to understand the software and tools employed by parties during arbitration.
19. In a time where the use of IT has become imperative, and possibly unavoidable, it is important for practitioners to stay abreast of when and how to effectively utilise IT solutions. The need to ‘upskill’ and adapt means a potentially uneven playing field, favouring able and competent users. There are also costs associated with technology tools, resulting in greater and wider access to the parties with deeper pockets. Such access brings tangible advantages. For example, having access to and effectively implementing technology assisted review software can afford a party a massive time and cost advantage in respect of discovery, in contrast to another party that is confined to the laborious traditional manual document review. Indeed, survey respondents to the Report were close to evenly split on whether they believe technology has levelled the playing field between parties.
20. The Report notes that technological challenges or disadvantages may be particularly pronounced in emerging markets, and aims to help level the playing filed by increasing awareness of and access to information on technology tools and practices.
21. The authors suggest that the tribunal will also have an important role in mitigating an uneven technological playing field, by staying conscious to potential imbalances between the parties that would result from adoption of technology and taking reasonable steps to contain the imbalances. For example, if a party is domiciled in a country with limited internet access and known slow access speeds, a tribunal should consider whether use of virtual hearings would still be appropriate for fair conduct of the proceedings. 

Effectiveness and fair conduct of virtual hearings

22. While participants in the Report’s survey expressed a largely positive attitude towards the use of IT in arbitrations, they were noticeably more divided on the utilisation of virtual hearings. Despite 88% supporting virtual case management and procedural conferences as the norm, 56% did not think there should be a presumption (whether physical or virtual) in respect of evidentiary hearings.
23. 32% of respondents believed virtual hearings were overall less effective than physical hearings, 49% considered that cross-examination and ensuring integrity of testimony were less effective virtually, and over 40% also believed interaction with counsel, hot-tubbing and settlement opportunities were less effective when hearings were virtual. The results also suggested that technical difficulties experienced during virtual hearings may have caused prejudice to a party’s presentation of their case.
24. Although several judicial rulings in various courts around the world have dismissed due process concerns in the context of virtual hearings in international arbitrations,^[1] a recent Canadian litigation case has shown that apprehensions over the integrity of witness evidence via videoconference are not wholly unfounded.^[2]
25. Where virtual hearings are implemented, it is important for parties to put in place protocols for the conduct of such hearings (as well as the use of IT during the hearings). Appendix D to the Report provides a suggested template procedural order for conduct of evidentiary hearings via videoconference. To prevent witness tampering, it is also common for witnesses to be disallowed from using virtual backgrounds and for a witness to conduct a virtual ‘room tour’ before testifying or to maintain a second camera angle.

Conclusion

26. Although the brutal means utilised in the Judgement of Solomon are now a distant memory in the history of arbitration, the industry should not be complacent in utilising newly available technology tools that go to the very heart of an effective, efficient, and just arbitral process.
27. The survey results that informed the Report are clear – the international arbitration community is increasingly engaging with the use of technology to enhance the arbitration process. The Report provides practical advice on how this may continue. It is therefore imperative for arbitrators and practitioners to make provision for appropriate use of technology tools through the necessary procedural orders. As a starting point, Appendix B of the Report provides sample procedural language relating to general use of technology tools, and Appendix D provides a template procedural order for conduct of evidential hearing via videoconference.

^[1]See e.g. Austrian Supreme Court Case No. 18 ONc 3/20s (The Austrian Supreme Court found that the arbitral tribunal’s decision to hold a remote hearing did not violate the parties’ right to be heart and treated fairly. The Court rejected the Respondents’ arguments on the issues of: holding a remote hearing against the objection of a party; disadvantages due to differing time zones; and fear of witness tampering in videoconferencing); and Sino Dragon Trading Ltd v Noble Resources International Pte Ltd [2016] FCA 1131 (The Federal Court of Australia rejected an application to set aside an arbitral award on the basis of unequal treatment and procedural unfairness due to technical difficulties in videoconferencing.)

^[2]Kaushal v. Vasudeva et al. (2021 ONSC 440) (The witness' wife and son were communicating and gesturing to him off-camera during his testimony over Zoom. The Ontario Superior Court of Justice struck out the evidence and held that this was misconduct and an abuse of the court’s process.)