What Are Virtual Hearings in International Arbitration?

Virtual hearings have become an increasingly common feature in international arbitration, especially after the COVID-19 pandemic. These hearings allow parties, witnesses, and arbitrators to participate in arbitration proceedings remotely, using video conferencing tools and other online platforms. Virtual hearings offer several advantages, such as reduced costs and increased flexibility, but they also come with challenges related to technology, security, and maintaining procedural fairness.

What Are Virtual Hearings in International Arbitration?

Definition

Virtual hearings in international arbitration are hearings conducted remotely through video conferencing or other online platforms. Participants—including the arbitrators, parties, witnesses, and legal counsel—attend the hearings using digital tools like Zoom, Microsoft Teams, or specialized arbitration platforms. This form of arbitration hearing eliminates the need for physical attendance and allows participants to join from any location globally.

Key Features of Virtual Hearings

• Remote Participation: All parties, including witnesses and arbitrators, attend the hearings via video or audio conferencing.
• Use of Technology: Platforms such as Zoom, WebEx, or bespoke arbitration platforms are used for video conferencing, real-time document sharing, and screen sharing.
• No Physical Presence Required: Virtual hearings remove the need for physical travel, allowing parties and witnesses to participate from anywhere, which is especially important for cross-border disputes.
• Real-Time Communication: Participants can communicate with each other in real-time through chat, voice, and video, and share documents instantaneously.
• Digital Exhibits and Evidence: All evidence and documents are submitted electronically, and parties can display documents or exhibits in real-time during the hearing.

Differences from Traditional In-Person Hearings

• Traditional Hearings: In-person hearings involve physical presence at a designated venue, where arbitrators and all parties gather, present evidence, cross-examine witnesses, and participate in discussions. These hearings often require substantial travel, accommodation, and logistical coordination.
• Virtual Hearings: Virtual hearings remove the logistical burden of travel and accommodation. They can take place at any location as long as the parties have access to appropriate technology. While the arbitration process remains largely the same, the hearing itself is conducted remotely.

When Are Virtual Hearings Used?

• Cross-Border Disputes: Virtual hearings are especially useful in international arbitration, where the parties and witnesses may be based in different countries. They allow for seamless participation regardless of location, time zone, or travel restrictions.
• COVID-19 Impact: The COVID-19 pandemic significantly accelerated the adoption of virtual hearings due to travel restrictions and health concerns. Many arbitral institutions and courts adapted their processes to allow for remote hearings.
• Cost-Effective Disputes: For disputes that are not large in scale or where the costs of in-person hearings would be disproportionate, virtual hearings offer a more affordable alternative.

Rules for Virtual Hearings in International Arbitration

Institutional Rules

Most arbitration institutions, such as the ICC, LCIA, SIAC, and HKIAC, have updated their rules to accommodate virtual hearings. Some of the key rules include:

• Procedural Flexibility: Institutions provide flexible guidelines that allow parties to agree on the method of conducting virtual hearings, including which platform to use and how to handle the exchange of documents.
• Witness and Expert Testimonies: Parties can opt to have witnesses testify remotely via video conferencing, and some institutions allow expert witnesses to participate in virtual hearings.
• Document Submission: Institutions facilitate the submission and sharing of documents electronically during the virtual hearings. These documents can be shared in real time and reviewed by all participants.

Ad-hoc Arbitration

In ad-hoc arbitration, the parties are free to agree on the use of virtual hearings and establish their own procedural framework. It is important to outline the technical requirements, such as the platform to be used, in the arbitration agreement.

Benefits of Virtual Hearings in International Arbitration

• Cost Reduction: Virtual hearings eliminate travel and accommodation expenses for arbitrators, parties, and witnesses. This is particularly significant for cross-border disputes, where travel costs can be substantial.
• Increased Efficiency: Virtual hearings streamline the process, allowing participants to focus on the substantive aspects of the dispute without the logistical challenges of physical hearings.
• Greater Flexibility: Virtual hearings offer flexibility in terms of timing, enabling hearings to be scheduled outside of regular working hours, making it easier for parties across different time zones to participate.
• Reduced Environmental Impact: By eliminating travel, virtual hearings contribute to a reduction in carbon emissions, making them a more sustainable option compared to traditional hearings.

Challenges of Virtual Hearings in International Arbitration

• Technical Issues: The use of technology comes with the risk of connectivity issues, audio or video disruptions, and platform glitches. A stable internet connection and proper equipment are essential for the smooth conduct of virtual hearings.
• Security and Confidentiality: Virtual hearings require robust cybersecurity measures to protect sensitive information. There is a risk of data breaches or unauthorized access if appropriate security protocols are not in place.
• Witness Credibility: Conducting hearings remotely may affect the perception of witness credibility. Some arbitrators and parties may feel that witnesses are less credible when they testify remotely, as it lacks the in-person engagement and cross-examination of traditional hearings.
• Limited Personal Interaction: Virtual hearings may limit the ability for arbitrators and parties to interact informally or build rapport, which can sometimes enhance the understanding of a case in traditional arbitration settings.

Legal Protections and Consumer Actions

Ensure Proper Technical Setup

Parties should confirm the technical requirements for virtual hearings, including the use of secure platforms, high-quality audio and video equipment, and a stable internet connection. Arbitration institutions often provide guidelines for these setups.

Security Measures

It is essential to implement strict security protocols, such as encryption and password protection, to protect confidential information during virtual hearings. Many platforms provide these features, but it’s up to the parties to ensure they are enabled.

Witness Preparation

If witnesses will testify remotely, ensure they are well-prepared for virtual participation. This includes understanding how to use the video conferencing platform, knowing where to sit, and ensuring proper lighting and camera angles.

Agree on Virtual Hearing Procedures

Parties should agree in advance on the procedural rules for virtual hearings, such as the platform to use, time zones, document-sharing methods, and the extent of cross-examination or oral submissions.

Consumer Safety Tips

• Test Technology Beforehand: Conduct a trial run of the video conferencing platform to ensure there are no technical glitches during the actual hearing.
• Maintain Confidentiality: Ensure that all digital communications during the hearing are secure. Use encrypted communication platforms and avoid public networks.
• Stay Organized: Keep digital copies of all documents organized and accessible during the virtual hearing, ensuring that they can be shared instantly if required.
• Prepare for Remote Testimony: If you plan to present a witness remotely, ensure they are well-prepared and understand the limitations and challenges of testifying via video conference.

Example

Scenario:

A multinational company (Company A) and a supplier (Supplier B) are involved in a contract dispute over a delivery delay. Both parties are located in different countries, making in-person hearings impractical.

Steps in the Process:

• Both parties agree to conduct the hearing virtually under the ICC rules, using Zoom as the video conferencing platform.
• The hearing is scheduled for a time that accommodates both parties’ time zones, and the arbitrator ensures that the platform is secure and all participants can access it.
• The documents and evidence are exchanged electronically before the hearing, and the arbitrator and counsel review them in real-time during the virtual hearing.
• Witnesses testify remotely, and the arbitrator cross-examines them using the video platform’s features.
• The hearing concludes in two days, and the final award is issued electronically within six weeks.

Outcome:

The process is cost-effective, efficient, and timely, with no need for international travel, allowing both parties to resolve the dispute efficiently despite geographical distances.