Remote hearings could trigger due process arguments in arbitration

The conclusion brings into sharp focus due process arguments where parties have been forced through necessity to conduct hearings remotely. Whatever the “new normal” will be for arbitration hearings, practitioners will need to be alive to potential arguments as to whether a party’s rights with regards to the presentation of its case, whether remotely or in person, have been infringed.

The research

The International Congress for Commercial Arbitration (ICCA) recently completed a research project investigating whether a right to a physical hearing exists in international arbitration. The project’s authors examined the procedures in 77 jurisdictions that are party to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).

The report focused individually on each jurisdiction and considered three main factors: provisions giving tribunals broad procedural discretion to decide the conduct of hearings; ordering documents-only arbitration; and provisions in the arbitration rules of the most relevant institutions in those jurisdictions expressly allowing remote hearings. Fundamentally, a tribunal’s procedural discretion in this regard is guided by its duty to safeguard the parties’ due process rights. That requires balancing whether the participants are able to attend remotely and effectively present their case, against considerations of access to justice and the duty to decide the dispute fairly and without undue delay.

Although a right to a physical hearing is not expressly provided in any jurisdiction, in a number of countries that right can be inferred, drawing from the principles of civil procedure law and constitutional guarantees, such as in Ecuador.

In some jurisdictions, for example Venezuela, a right to a physical hearing is limited to the first hearing, and these must be held either physically or, at least, not entirely remotely.

In contrast, laws in the United Arab Emirates (UAE) and the Abu Dhabi Global Market expressly give arbitrators the discretion to hold remote hearings. These laws expand on the United Nations Commission on International Trade Law (UNCITRAL) Model Law by making it clear that the appropriate place for a hearing can include a remote tribunal.

The researchers found a variance in interpretation of the Model Law, with countries adopting varying provisions allowing parties to request an oral hearing. Few jurisdictions translate the right to an oral hearing into the right to request a physical hearing, although in those countries with unreliable internet connections the right to an oral hearing could be seen as the right to a physical hearing.

However, for the vast majority of jurisdictions, the researchers concluded that the right to an oral hearing does not exclude holding it through video conferencing.

Remote hearings and due process arguments

From a due process perspective, the research highlighted interesting nuances when considering a tribunal’s powers in cases where the parties agree to hold a physical hearing. In several countries, including Spain, holding a remote hearing contrary to the parties’ agreement could lead to the eventual award being set aside. Other jurisdictions, such as England and Wales, Scotland and Singapore, qualify the grounds for setting aside arbitral awards with a further requirement that the violation of the parties’ agreement have a material impact on the outcome of the case or caused substantial injustice.

Other jurisdictions, including the UAE, potentially allow tribunals to order remote hearings notwithstanding the parties agreeing otherwise if respecting that agreement would delay the conclusion of the arbitration beyond the statutory time limit; or, according to the laws in Croatia, Iran and Qatar, violate the arbitrators’ duty to conduct the proceedings without undue delay. It seems that the impact of directions to this effect remain untested in the local courts in the context of the enforceability of subsequent awards, and it will be of interest to see whether this gives rise to any future challenges.

In any event, the research will certainly be helpful to arbitration practitioners. As the desirability of remote hearings – having once been the exception and since the pandemic, now almost unavoidable – comes under greater scrutiny as, one hopes, the pandemic situation starts to ease, practitioners will need to factor in potential due process arguments in light of the ICCA conclusions.