A reluctance to opt for litigation during the pandemic has seen new opportunities for arbitrators and other alternative dispute resolution practitioners. Shalvi Mehta assesses what should stay and what should go
Covid-19 and the subsequent lockdown hit the world out of the blue. Due to its unprecedented nature, none of us knew how to react or deal with it. Many lawyers were put out of work.
With the onset of covid-19, the response was to shut all public places and practise utmost social distancing. As a consequence of the rise in infections, the courts have been shut since mid-March 2020. It was time for everyone to step up and become adept at technology, and hence came the dependence on virtual hearings.
As we continue to maintain social distancing, even after the nation has been technically “unlocked”, the focus on practising online dispute resolution (ODR) is greater than ever. ODR is defined as a means to resolve disputes online, but a strict definition would suggest the inclusion of only alternative dispute resolution (ADR) methods of resolving disputes online.
Arbitration hearings are now regularly being conducted online, and both ad hoc and institutional arbitrations have adapted to virtual hearings and submissions. Having dealt with an institutional arbitration, as well as a few ad hoc arbitrations, during the lockdown, the author has observed an upward trend of accepting remote hearings and training with technology.
A common concern in both types of arbitration is about the way witness examinations will be carried out. The process of witness examinations may be easily interfered with when carried out virtually, and hence more reliance on witness statements is being given, rather than witness examinations. Witness examinations are an important process for resolving a dispute, and skipping the process completely might do harm to cases. Innovative ways to counter such a lacuna need to be figured out.
To give an example, one reputed international arbitral institute has reset the procedural timetable for an ongoing arbitration in such a way that the oral hearings for witness examinations fall in the middle of next year. Hopefully by then we can expect the situation will be good enough for us to travel and arrange for physical hearings.
This goes to show that even the best arbitral institutes are wary of conducting witness examinations virtually. No one is able to vouch for the confidentiality, transparency and reliability of a virtual witness examination.
In order to adapt to the pandemic situation, and to be able to take charge, all reputed arbitral institutes have uploaded FAQs for how to deal with written submissions and oral hearings virtually. The London Court of International Arbitration has also come up with new rules in 2020, which include virtual hearings as an option. What is to be noted, however, is that none of the arbitral institutes have reduced their fees, even though hearings are conducted virtually and the parties do not require arbitrators to travel.
Adapting to the new reality
For ad hoc arbitrations, there was resistance from arbitrators to start conducting online hearings at the start of the lockdown. However, realizing how long the pandemic would last, most arbitrators have now finally relented, but it took some time to reach this stage. The ad hoc arbitrators, who are generally retired judges working in different courts of law, learnt how to adapt to technology and then eventually allowed parties to represent their cases through video-conferencing.
Even the submission of documents was compulsorily to be made physically/via courier in domestic arbitrations, but it has now become the norm to only accept online submissions, generally via email. Arbitrators still have not formed the habit of reading and examining documents online. Hence, they have now formed a habit of getting prints from online submissions, even though these are bulky documents.
The process of arbitration remains more or less the same. Technical and internet bandwidth issues are being experienced during virtual proceedings, and these issues have at different times been from different ends. Even arbitrators have at times had to discontinue the hearing and adjourn it to the next day, owing to technical issues. These problems are inevitable and there is little or nothing one can do to prevent them.
During virtual hearings, all parties are required to be on mute. The tribunal decides the order of speaking among the parties in advance, to avoid chaos. For absolutely urgent rebuttals and issues in argument, the tribunal allows the parties to unmute themselves and speak.
Real time transcription services are being made available in international commercial arbitrations. This is a paid service, and many software services are available that provide this on video calls. Transcribers join on the same video hearing and use the software to transcribe the oral hearings. The only consideration is that parties must use a microphone so that every word can be correctly heard and noted.
A sudden emergence and conversation about ODR platforms have also been noticed. There are various ODR platforms, such as SAMA, Centre of Online Dispute Resolution (CODR), Presolv360, etc., that provide a range of services that can be explored. Despite the conversation around them, after some research, the author has found that very few people actually rely on these platforms.
Commercial disputes of lesser value, and with lesser complications, must utilize these platforms for a minimal fee, in comparison to schedule IV of the Arbitration and Conciliation Act, 1996. Such ODR platforms have experienced and specialized arbitrators, as well as credibility and enforceability of the award delivered. Reliance on these platforms also provides an equal playing field to younger lawyers and arbitrators.
Focusing on the positive side, at least conversation around the same has started. Even the government, during a recent NITI (National Institution for Transforming India) Aayog meeting held in June 2020, suggested some remarkable options for the promotion of ODR, and to lessen the burden of the courts.
Supreme Court judge Indu Malhotra also suggested shifting certain Insolvency and Bankruptcy Code (IBC) disputes to ODR. “Another area which has great potential for dispute resolution through the ODR mechanism are IBC disputes,” she said. “ADR modes should be used by creditors and debtors to resolve issues in the shadow of insolvency, particularly now, post covid-19. Low-volume and high-volume cases could be referred to online dispute resolution.
“A scheme similar to the Hong Kong ODR Scheme for the MSME [micro, small and medium-sized enterprises] sector could be formulated for India, for commercial disputes having high-volume and low-value transactions. The need of the hour today is to develop a robust ODR platform, which is easily accessible, user-friendly, less expensive and efficient for the resolution of disputes.”
The post-pandemic scenario for arbitrations will be in favour of virtual hearings. Unless physical presence is absolutely necessary, oral hearings will be taken virtually. This saves much of the client’s costs. Generally, lawyers, arbitrators and their clients live in different parts of the country, if not the world. So, for oral hearings, just the travel and the lodging costs range into the hundreds of thousands of rupees. The clients can now totally avoid this with virtual hearings, especially when it is not necessary to be physically present.
Arbitration will finally turn out to be less expensive, as we had earlier promised it would be. It will also become quicker, due to less wastage of time in travelling and visiting physically. ODR can become a permanent solution, and the use of technology is increasingly going to cement its place, even after the pandemic.
Feasibility of other processes
Other ADR processes such as mediation, negotiation and conciliation are also taking the virtual route. Another positive trend that the author has witnessed is lesser disputes opting for arbitration and/or litigation. With the dent in earnings due to the lockdown, most corporate houses are turning to settle and mediate matters, rather than fighting the same in court and waiting for years to get a result. Considering the uncertainty that has dawned on businesses around the world, dependence on mediation and negotiation is bound to increase.
Corporate houses in general have realized the need to preserve their relations with all parties concerned until the days when business and the market will return to an upward swing. In trying to balance their relationships, they have understood the importance of mediating and/or settling a dispute, rather than fighting over one through unnecessary litigation and/or arbitration.
For mediation particularly, no change in the process has been noticed. Video- conferencing is just as effective as physical meetings. Yes, the advantage of being able to judge the body language of witnesses in physical appearances is missing. However, the efficiency does not waiver. Mediation is comparatively much easier to conduct than arbitration, as there are not many procedural requirements. Hence, it is much easier to conduct online.
The same goes with negotiation. One has to adapt to presenting documents online via video-conferencing. Screening the documents and sharing screens are the only new aspects during negotiation. Everything else works in the same way as it used to in physical meetings. In fact, people shouting over each other’s voices occurs less in online hearings because of the very helpful “mute” button.
Covid-19 has also taught most industries the importance of a well-drafted contract. The need to renegotiate contracts has also increased. Negotiation, hence, is now done virtually to secure the rights and liabilities of all parties and participants.
Advantages in the implementation of ADR processes are plenty. Not only are time, money and resources saved, but also, none of the procedural mishaps in litigation and/or arbitration are experienced in mediation/negotiation. Witness examinations, necessities for oral hearings, transcription services, etc., are not compulsory for other ADR processes.
That is more the reason why people have been choosing mediation over arbitration/litigation during the pandemic. Virtually mediating or negotiating a dispute and/or a contract has been much easier to carry out. Implementation of such ADR processes is thus going to be far easier, in comparison to other modes of dispute resolution.
Change in mindset needed
The current global pandemic crisis requires us to adapt at all levels. Most people are relying on technology for their daily chores, from buying groceries, entertainment and relaxation to carrying out their professional duties.
A new mindset to not only accept the new normal, but also adapt to the changing times, is needed. This is, of course, a privileged thought and not applied to people who are struggling to make money. However, for the lawyers who are grateful to still have work on our hands, we must be able to take it in our stride and change our outlook on how hearings need to be conducted.
The world around us is changing, and it is also increasingly difficult and unsafe to step out of our homes. Sitting in the comfortable corners of your houses, if you are still able to carry out your professional duties, consider yourself lucky.
To answer the titular question, the shift to ODR is still taking shape in India, and the journey has not been the most ideal. However, credit where it’s due, all individuals and organizations concerned are continuously trying to step up and fill the gaps whenever discovered. Virtual court hearings will only be able to be fully functional once the technological infrastructure across all age groups, social strata and demographics is made accessible and improved.
For the more privileged and educated sector, people are quickly picking up the pace and trying to acclimatize as swiftly as possible. What we need is a uniform set of guidelines for the different modes of dispute resolution. The uncertainty that people experience with respect to enforceability and efficiency of these proceedings is still high. This is also one of the reasons why people are wary of using ODR and utilizing it to the maximum. Legislators must consider this situation as urgent, and drive the change by releasing guidelines to use for all types of ODR, filling up the empty spaces as soon as possible.
ODR is the silver lining to a dark and grim expanse of cloud that lawyers are experiencing. All that we can do is quickly get used to a more technologically driven world, and utilize the facilities at our disposal.
SHALVI MEHTA is an arbitration and commercial disputes lawyer based out of Ahmedabad, Gujarat.