Due-Process Paranoia And Virtual Arbitration In India

Yuvraj P. Narvankar

5 Nov 2020 8:30 AM GMT

  • Due-Process Paranoia And Virtual Arbitration In India

    The arbitration has always been one of the swiftest ways of resolution of any dispute. The flexibility and ability to adapt are core features of Arbitration. When the local and national courts are struggling to keep their doors open for the litigants in quest of justice, the international arbitral institutions have taken aggressive measures to keep the show going, albeit with its own...

    The arbitration has always been one of the swiftest ways of resolution of any dispute. The flexibility and ability to adapt are core features of Arbitration. When the local and national courts are struggling to keep their doors open for the litigants in quest of justice, the international arbitral institutions have taken aggressive measures to keep the show going, albeit with its own set of challenges. Though the latest parliamentary panel 103rd Report strongly recommends extending virtual court to cover arbitration hearings[1], unfortunately, in India both ad-hoc and institutional arbitrations are still struggling to find their way out from this virtual maze with tremendous anxiety for the fate of their Award in the event, they hold the arbitrations virtually, more so when one of the parties oppose it. The respondents, be it in litigation arbitrations, is a huge beneficiary of the delay and therefore consensual virtual hearings is a distant dream. The Arbitrators in India must overcome this due-process-paranoia and apply their minds to finding a way ahead since virtual is going to be a reality. In doing so, they can heavily borrow from the protocols and guidelines issues by several international arbitral institutions. Particularly ad-hoc arbitrations in India are sleeping giants who have forgotten their power under Section 19 of the Arbitration Act which authorizes them to conduct the proceedings in the manner they consider appropriate, parties failing to agree on the procedure to be followed. Due exercise of this discretionary power and regard to certain criterion, protocols and guidelines can certainly remedy this Due Process Paranoia.

    1. Decision with respect mode of conduct of arbitral process:
    2. The arbitrators are master of the proceedings under Section 19 of the Arbitration Act and before initiating the arbitral process virtually/remotely, the arbitrators must consider certain important factors since virtual hearings in some situations can adversely affect the level-playing field between the parties resulting in denial of Equal opportunities and equal treatment of parties which is the core of arbitral process as per Section 18 of the Arbitration Act. Following factors can be crucial.
      1. A Regard must be had to nature of controversy vis-à-vis virtual arbitration. E.g. in a case where extensive site inspection is necessary or where the evidence consists of unduly complex and voluminous documents, the use of virtual hearings can be inconvenient and can affect the sanctity of the arbitral proceedings.
      2. Another consideration is the technical preparedness of the parties since parties must have an equal opportunity to present their case and inequality can result from technical limitations. Certain platforms can exceed a party's technical knowledge. Local problems are also crucial factors. For example, where one of the parties is situated in a locality where there are frequent power failures/ outrages or a low Internet bandwidth, insistence on virtual hearings would impinge upon the principles of natural justice and due process. Such issues can be avoided by parties agreeing to the kind of technology and platform for virtual hearings.
      3. Cost concerns would also be equally crucial. "Virtual inequality" can be caused by disparities in parties' financial positions, since costs of acquiring necessary technological infrastructure may put a party in financial distress. On the other hand, in case of panel of arbitrators, the costs of logistics may be much more than the costs of virtual arbitration.
      4. In certain situations, use of hybrid pattern can be more productive instead of exclusive virtual hearings. These include the cases were certain substantive parts of the hearing can be conducted physically and procedural formalities can be had virtually. However, in such circumstances, arbitrators need to ensure that physical hearings have the presence of both the parties otherwise it may lead to anxiety on the part of the party not present physically but virtually.
      5. If the request to switchover to virtual mode is made in the middle of arbitration, a due regard must be had to the stage of the process and timeline. E.g. If claimant has cross examined the respondent in-person, and lockdown begins, then respondent may have legitimate apprehension that virtual cross examination of the claimant wouldn't be as effective as in-person. But if stage of evidence is yet to begin, opposition to virtual mode, may be a dilatory tactic. Similarly, if one party is opposing to virtual mode, past conduct and diligence of such party is a relevant factor to assess the genuine nature of this opposition.

    After consideration of the aforesaid factors, the arbitrators can take a decision to either conduct or continue the arbitration virtually or remotely or hold hearings in hybrid manner or to delay or postpone the proceedings till the situation returns to normalcy.

    1. Initiating the remote/virtual hearings:
      1. To avoid any potential challenges to arbitral awards a regard must be had to the agreement between the parties since party autonomy is supreme in Arbitrations. In absence of any agreement between parties about the use of virtual hearings or sans any specific provisions in the procedural rules governing the arbitration, it is necessary to execute special Virtual Hearing Agreement. Such an agreement can be executed separately or can reflect in the correspondence between the parties or can form part of the first Procedural Order.
      2. Such a procedural order with respect to virtual hearings must be comprehensive and should deal with following issues:
        1. chronological events that necessitated the virtual hearing,
        2. Names and details of the participants,
        3. Deciding digital platform for conducting virtual arbitration hearings,
        4. Necessary technical capabilities and specifications of the system.
        5. Method for confirming and identifying all participants, including any technical administrator
        6. Dos and don'ts for the virtual hearings.
        7. possibility of using demonstratives, including shared screen views or electronic hearing bundle hosted on a shared document platform that guarantees access by all participants
        8. Unanimous consent for conduct of arbitration virtually/remotely.
        9. Technical guidelines/manuals.
        10. Online Etiquette and Due Process Considerations.
        11. Deciding the ancillary services to be employed for backup communications or document storage.
      3. Several arbitration institutions have devised their own protocols for technical specifications.[2] A useful reference can also be made to Annex I of ICC Guidance Note on Possible Measures aimed at mitigating the Effects of the COVID-19. It provides for checklist for a protocol on virtual hearings. There are several International arbitral institutions which have devised their own rules and protocols for virtual arbitrations.[3] in India, recently, the Delhi High Court issued a guidance note for conducting arbitration proceedings by video conferencing and directed the Delhi International Arbitration Centre to adopt these guidelines with effect from 8th June 2020.[4]
      4. As aforesaid, the decision about digital platform can form part of the first procedural order. While choosing the digital platform regard can be had to the following considerations:
        1. Functionality and features of the software.
        2. Capacity of the platform to show the clear image and crystal-clear audio.
        3. Capacity for participants.
        4. Capacity of the digital platform to operate with low bandwidth. (In such cases the parties can be asked to record/video graph their submissions and share it via email.)
        5. Option of screen sharing for focusing the relevant documents and pages.
        6. Optional breakout rooms for the arbitrators and councils to deliberate and discuss privately.
        7. Restrictions on recording of the screen for maintaining the confidentiality.[5]
        8. Security players and encryption to address privacy and confidentiality concerns.[6]
        9. Whether platform is prohibited in particular jurisdiction of either of the parties?
        10. Past record or security breaches of the proposed platform.
      5. Appropriate decision about the digital platform is important since it bears direct relationship with due process.
      6. The arbitrator(s) can also decide if an independent technical third-party support would be required so that the arbitrator and the parties would not be pre-occupied by the technical compliances of the virtual setup, and nitty-gritty is taken care by the experts. While appointing such independent technical support a regard must be had to the party's concerns about costs and confidentiality and unanimous consent be recorded for bearing the costs equally and limited waiver of confidentiality.
      7. Absent these technical experts, the tribunal can arrange a pre-hearing conference and "dry-runs" of the platform to test the technology in advance. The transcription and transcribing services can also be tested similarly, beforehand.
      8. Most importantly, the tribunal must set flexible timelines so in the event the proceedings had to be adjourned due to system failure, entire schedule isn't affected. Also, if one of the parties loses connectivity in the middle of the hearing, the tribunal and the other party must be notified instantly so no submission is made in absence of the other party.
    2. Conduct of virtual/remote arbitral hearings:
      1. Despite technological advances, a particular concern remains the inability to see mutual reactions around the hearing room. The attorneys accustomed to physical settings and adept at gauging the reactions of the tribunal feel handicapped virtually. It is therefore necessary to minimise the gap between actual physical hearing and virtual hearing. Though several arbitral institutions or bodies have put exclusive rules in place for the governing virtual arbitrations[7], it must be remembered that the rules are merely enabling and it is the arbitral tribunal that must conduct the arbitration in the manner it deems appropriate.
      2. The actual conduct of virtual hearings will consist of majorly two parts, firstly, examination of the witnesses and oral submissions.
        1. The examination of witnesses:

    Virtual depositions remain a concern because of limited visual cues from the tribunal. The Supreme Court of India has been cautious by not allowing witness examinations in virtual courts during the pandemic in states until the respective High Courts lay down requisite guidelines.[8] Therefore, be it ad hoc or institutional, there must be rules or directions in place before one begins with virtual examinations. The concerns are several. The Expert witnesses cannot connect with the tribunal, to assess whether the tribunal is on the same page or missing the point. Similarly, the tribunal is unable to see the expert's body language to test the veracity of the testimony. A good solution is to have a HD camera installed with feature of zoom-in. Virtual cross examination can also be replaced by hot-tubbing to avoid any expert witness tilting in favour of the party who hires it or exaggerating.[9]

    The factual witnesses must maintain the degree of seriousness which they would maintain in the physical settings and should be so counselled beforehand to avoid the effect of 'online disinhibition' during witness testimony. Also, it is the responsibility of the counsels to limit cross-examination only to the relevant issues avoiding the questions about admitted points or contents of documents. Thus, avoiding the temptation to inflate the evidence and agreeing to common ground leads to balanced and quality virtual witness examination. Etiquettes for virtual examination can be summarized as follows:

    1. Not to speak simultaneously and mute microphones when not speaking.
    2. Use the hand gesture or 'raise the hand' feature for interruption.
    3. Identify the light source and sit against it so as to make the face more visible and positioning the camera at eye level so witness can look into the camera and not at the screen.
    4. Adjustment of camera angle to cover the entire body to observe the body language.
    5. Using quality camera and microphone and standard equipment.
    6. When the witness is under cross examination, the tribunal can insist for two cameras, one which covers the witness and the other which covers 360-degree viewing of the room. This is to avoid any prompting to the witness. This can also be achieved by showing the entire room at the commencement of the cross-examination and at the end of it and in the meantime, asking the witness to sit facing his back to the door. The witness can also be reprimanded in the event if it looks at any place other than the camera.
    7. It is also necessary to ask the witness to share the screen to ensure that no pop-ups or prompts appear on his screen which may prompt him.
    8. To arrange for an independent technical support which will share the relevant documents on the screen from the online evidence bundles stored on the cloud or highlight relevant portions.

      2. Oral Submissions:

    In the event of Ex-parte arbitration, absent party must be notified of each and every step in the virtual arbitration and such procedural history must elaborately reflect in the Award An experienced Arbitrator knows that Award is actually written for a losing party.

    1. Concerns about form of Award:

    Digitally signed award generally stands at par with the 'wet ink' award, but it is advisable to dispatch 'wet ink' awards to the respective parties in order to obviate any potential challenge to the award because of its form.

    Last but not the least crucial factor is the need for change of mentality of the Indian Courts to frown upon the virtual arbitrations with temptation to interfere. If the decision of virtual hearing is taken on correct parameters and conducted in right earnest, the award resulting from virtual process must stand at par with regular award.

    Thus, pre-empting potential challenges and remedying them, can lead to smoother and effective virtual arbitrations, which is a future of arbitration in India.

    Views are personal.
    (Author is a Practicing Lawyer & Fellow of Chartered Institute of Arbitrators (London))

    [2] E.g. Article 5 of Seoul Protocol on Video Conferencing in International Arbitration

    [3] African Arbitration Academy's Protocol on Virtual Hearings in Africa, COMBAR's guidance note on remote hearings and DELOS' checklist on holding arbitration hearings in times of COVID-19 and HKIAC's Guidelines for Virtual Hearings, ISTAC Online Hearing Rules and Procedures etc.

    [4] http://www.dacdelhi.org/topics.aspx?mid=55

    [5] Guideline No. 9 of HKIAC Guidelines for Virtual Hearings.

    [6] Cyber-security guidance and protocols have been published by the arbitration community (E.g. the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration, the IBA Presidential Task Force's Guidelines on Cyber Security and the ICC's Note on Information Technology in International Arbitration

    [7] ISTAC Online Hearing Rules and Procedures, SCIA Online Arbitration Rules, IDAC India's Online Arbitration Rules 2020, Guidance Note on Remote Dispute Resolution Proceedings by Chartered Institute of Arbitrators (UK). ACICA Online Arbitration Guidance Note

    [8] In Re: Guidelines for the Courts' Functioning Through Video Conferencing During Covid Pandemic, Supreme Court, Suo Motu Writ (Civil) No.5/2020,

    [9] See Chartered Institute of Arbitrators guidelines on Witness Conferencing.

    [10] State of Maharashtra v. Praful B. Desai, (2003) 4 SCC 601

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