compliance, observance, consent

Will Technology Change the Course of International Arbitration?

       Over the last years, technology has had an increasingly important role in our daily lives and businesses. At the same time, we witnessed a growth in international arbitration mainly due to its appealing characteristics such as the flexibility of procedures and the confidentiality of proceedings. The use of technology in the legal industry, specifically in international arbitration, is no longer out of the ordinary. Instead, it became inevitable, especially after the travel restrictions and various internationally imposed lockdowns resulting from the COVID-19 pandemic. Some viewed the shift towards artificial intelligence, big data, and the Internet of Things as a threat to the international arbitration community, whereas others embraced this change[1].  What are the aspects of international arbitration affected by technology?

       First, technology can assist the parties throughout the course of arbitral proceedings. Videoconferencing proved to be efficient, especially during the COVID-19 pandemic, where physical presence was restricted.

       Carrying out virtual hearings is a practice that has been increasingly used during the pandemic, and the feedback of participants of such hearings was generally positive. However, most viewed it as a temporary measure driven by the necessity of holding hearings in order to continue the arbitral proceedings in a timely manner. They considered that joining virtual hearings from home may not be the most convenient, equipped, and/or confidential location. In many instances, an effective hearing requires a stable, high-quality connection and several screens to allow access to the hearing video, documents, live transcript, and internal communication between counsel and parties or members of the arbitral tribunal. Installing such setup at the home of each practitioner is definitely impractical.

       Even before the pandemic, several arbitration rules explicitly allowed arbitral tribunals to refer to technology during hearings. For instance, the International Chamber of Commerce (ICC) Arbitration Rules grant arbitral tribunals discretion to decide, in the absence of a parties’ agreement, on “using telephone or video conferencing for procedural and other hearings where attendance in person is not essential and use of IT that enables online communication among the parties, the arbitral tribunal and the Secretariat of the Court[2]. Also, article 28(4) of the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules of 2010, typically used for administration of proceedings in ad hoc arbitrations, allow arbitral tribunals to examine fact and expert witnesses “through means of telecommunication that do not require their physical presence at the hearing (such as videoconference).”

       Technology can also improve the method of exchanging correspondence and written submissions, and other documents in international arbitration between the arbitral institutions, the tribunals, and the parties. Currently, most of these exchanges happen via email, which is possible to intercept and forge. Additionally, in some instances, document exchanges happen without password protection or encryption which causes a problem mainly to the confidential nature of certain documents. As such, the establishment of an online platform is necessary to make such exchanges more secure and reliable. The most notable progress in this regard is by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) that introduced in 2019 the SCC Platform: a secure digital platform for communication and file sharing between the SCC, the parties, and the arbitral tribunal. In May 2020, the SCC extended the use of this platform for ad hoc proceedings, including free of charge use during the COVID-19 crisis[3].

       Technology not only affects the procedural aspect of international arbitration. New technologies and the disputes over the commercialization of those technologies have triggered some new substantive causes of action raised in cases where a new technology is at the core of the dispute. Traditionally, technology disputes have arisen in the context of claims between private parties usually grounded in breach of contract, tort, intellectual property rights, breach of confidence, or trade secrets. Technology disputes are not limited to information technology but also arise in a wide array of other business sectors such as telecommunications, biotech, pharmaceuticals, and other science and engineering fields[4].

       However, in the past couple of years, claims are being raised in a new context.

Investor-State claims are now arising from disputes over the commercialization of new technologies by governmental state measures, often where a technology or process’s efficacy or safety comes into question. A series of arbitrations have now commenced under the North American Free Trade Agreement (NAFTA) by investors against either Canada or the USA asserting to protect the integrity of the technology and its commercial value[5].

       While state courts, including in Lebanon, have suspended their work due to the COVID-19 crisis, international arbitration proved to be a flexible and adaptable alternative dispute resolution method. Its unique characteristics make the application of technology in this field even more interesting. While some argue that the new technologies will not pair well with international arbitration because of its confidential and private nature, technology, in its broader sense, is proving day by day to be the future of all industries, and the legal one is no different. It will surely be interesting to see how arbitration rules will be modified to adapt to the digital future.

 

[1] Jonathan Mackojc, 10 hot topics for international arbitration in 2018, Kluwer Arbitration Blog, March 2018.

[2] Appendix IV: case management techniques.

[3] Al Tamimi & Company, Use of modern technology in arbitration: evolution through necessity, lexology.com

[4] Gary L. Benton, Technology Disputes: Courts or Arbitration, svamc.org

[5] John Judge, The Impact of Technology on International Arbitration and the Nature of Substantive Claims Asserted in International Arbitration.

Marina Ibrahim
Notice: This article is protected under Lebanese Copyrights Law. No one shall copy more than 25% of this article without referring to its main source.

Subscribe to our newsletter!

Leave a Comment

Your email address will not be published. Required fields are marked *