[Pranay Jaiswal, a fourth year student at the ILS Law College, Pune, writes on how well the arbitral institutions in India have responded to the Covid19 crisis. This interesting post is in two parts. The first part can be accessed from here. This is the second part of the post]
Response of Arbitral Institutions to the COVID-19 Crisis– An Indian Perspective: Part 1I
By Pranay Jaiswal, IV BA.LLB, ILS Law College, Pune.
1. Pre-Existing rules of the Arbitral Institutions supporting the prevailing circumstances.
The Chartered Institute of Arbitrators (CIArb) is running an initiative known as Pandemic Business Dispute Resolution Service in collaboration with the Centre for Effective Dispute Resolution (CEDR). This initiative aims at resolving business disputes, or disputes that may arise, as a consequence of the pandemic,whatever stage it is at, with cost-effective and expedite resolution of disputes.
ICC has issued its 'Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic' dated 9 April 2020 ("ICC COVID-19 Guidance"), intimating parties regarding the steps which the ICC is taking in this regard, and the considerations which are relevant to the conduct of arbitration in the prevailing circumstances.
Institutions like London Court of International Arbitration have also issued “Guidelines to Arbitrators” adhering to the principle of arbitration i.e. flexibility and party autonomy. It grants freedom to the arbitrators to adopt the flexible procedure as they may deem fit in order to remedy the circumstance, the arbitral proceeding is in. The Guidance Note reflects upon the existing rules that inherently support the circumstances in the pandemic.
"14.4 Under the Arbitration Agreement, the Arbitral Tribunal's general duties at all times during the arbitration shall include:
...(ii) a duty to adopt procedures suitable to the circumstances of the arbitration, avoiding unnecessary delay and expense, so as to provide a fair, efficient and expeditious means for the final resolution of the parties' dispute.
14.5 The Arbitral Tribunal shall have the widest discretion to discharge these general duties, subject to such mandatory law(s) or rules of law as the Arbitral Tribunal may decide to be applicable; and at all times the parties shall do everything necessary in good faith for the fair, efficient and expeditious conduct of the arbitration, including the Arbitral Tribunal's discharge of its general duties."
Similarly, The International Chambers of Commerce (ICC) have given due consideration to the protection of party autonomy and flexibility in arbitration. On the other hand, in order to maintain the uniformity and the structure of the arbitral proceedings, the ICC has shown the adaptability of the inherent rules that support the current situations. For instance, Rule 22(2) of the ICC arbitration rules reads as follows;
"In order to ensure effective case management, the arbitral tribunal, after consulting the parties, may adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties."
a. Concerns Specific to India
India is trying to pave its way towards an International Arbitration hub through introducing the 2015 and the 2019 Amendments in order to improve Indian Arbitration and empower Arbitral Institutions. However, no significant steps or norms have been adopted by Indian Arbitral Institutions to deal specifically with the COVID-19 crises, in comparison to other foreign Arbitral Institutions. This becomes an impediment to India, especially when it is trying to promote Institutional Arbitration.
Nonetheless, there are some instances of steps being taken in the COVID-19 crisis. For instance, the Indian Council of Arbitration (ICA), has issued a notice on the manner in which the arbitration proceeding is to be conducted through video conferencing and is accepting the new arbitration matters through e-mail. But, it is still disappointing that the Institution has made the parties submit hard copies of the document post the lockdown orders, whereas, the other Arbitral Institutions have accepted electronic submission of documents as mentioned above.
Similarly, Section 19 of the Indian Arbitration and Conciliation Act, 1996, provides that, the parties may decide upon the procedure or arbitral tribunal shall be free to determine the procedure with the consent of the parties. However, in the matter where the assistance of the Court is required in taking evidence or under Section 34 challenge gets hampered due to shutdown of the Court. Even so, the Hon’ble Supreme Court, through its order dated March 23, 2020 has provided for relaxation for such timelines laid down in the Act.
2. Significant reduction in the Costs of arbitral proceedings
The transition that is taking place in the nature of conducting arbitral proceedings from having a consensus on a neutral place, to participating in the proceedings sitting at their convenient venue, the costs of the proceedings have reduced in these terms. Parties no longer have to travel to the place of arbitration as all the proceedings are taking place in virtual forms. Similarly, expenses required for the infrastructure in support of the arbitral proceedings have considerably mitigated.
However, it is perplexing that the Arbitral Institutions make parties bear a huge amount of fee even if the parties are not using the infrastructure of Arbitral Institutions. No stand has been taken by Arbitral Institutions regarding the reduction of fees or adjustment of the fee already paid for proceedings postponed or cancelled due to the pandemic. Except for SIAC, which has explicitly mentioned that there would be no discount in the fees or any adjustment towards the same in future, no arbitral institution has come out clearly on the policy.
3. Confidentiality during the Pandemic: A core principle of arbitration
Confidentiality and privacy are the core attributes of Arbitration. As arbitral proceedings are moving from physical to virtual hearings, ‘data confidentiality’ becomes a huge concern. Cyber threats such as breach of privacy and data, ransomware attacks and ransomware surround such technological steps. Preventive measures are required to be taken around this aspect.
Following are a list of precautions that can be applied:
· Encryption of data/ files using password
· Invitation link and restricted access
· Secure Internet Connections
· Secure storage of the recording of Hearings.
Some Arbitral Institutions such as the American Arbitration Association, have come up certain guidelines regarding Ethical Principles. Similarly, the International Chamber of Commerce has also taken up the measures by issuing the Cybersecurity Protocol for International Arbitration (2020), which sets out the guidelines for the conduct of the proceeding and in order to maintain the confidentiality of arbitration.
In India, DIAC, in its guidance note, has prescribed that the arbitrator may take a binding undertaking related to confidentiality by the parties. However, no procedure or remedy is mentioned in case of any breach of the data.
4. Third-Party Host for the conduct of virtual hearings.
In order to ensure smooth conduct of virtual hearings, many Arbitral Institutions have collaborated with online dispute resolution platforms. For instance, the Singapore International Arbitration Centre has insisted parties to arrange for virtual hearing facilities with a service provider (Maxwell Chambers ADR Hearing Solutions, in this case) including services for real-time transcription. In the domestic arena, famous upcoming legal-Tech startups such as Centre for Online Resolution of the disputes (CODR) and Presolve360 are assisting the Arbitral Institutions for the conduct of virtual hearings.
The manner in which disputes are resolved has undergone a sea-change because of the COVID-19 crises. However, the measures adopted by Arbitral Institutions are ambitious. Only time will prove the success rate of these norms.
There is a demand in the market for inexpensive and effective resolution of disputes, including those arising out of the COVID-19 crisis. Parties cannot afford to spend substantial time or money for dispute resolution. It is important that Arbitral Institutions answer to these demands by putting in place certain appropriate mechanisms. Unfortunately, Arbitral Institutions have hardly responded to this dire need of making dispute resolution more affordable.
Some Arbitral Institutions have not taken any effort to address the crisis and are still functioning with the existing rules/ procedures as though not much has changed. International arbitration’s success lies in adapting to the ever-changing times. Arbitral Institutions should do more for International arbitration to continue as an effective dispute resolution mechanism.
 Pandemic Business Dispute Resolution Service, http://ciarb.org/disputes/pandemic-business-dispute-resolution/
 ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19Pandemic. https://iccwbo.org/publication/icc-guidance-note-on-possible-measures-aimed-at-mitigating-the-effects-of-the-covid-19-pandemic/?dm=bypass
LCIA Notes for Arbitrators,
COVID-19 and the global approach to further court proceedings, hearings, by Norton Rose Full bright, April 2020, https://www.nortonrosefulbright.com/en-in/knowledge/publications/bbfeb594/covid-19-and-the-global-approach-to-further-court-proceedings-hearings
The "New Normal" For International Institutional Arbitrations, by Chakrapani Misra , Yashashree Munde and Rajeswari Mukherjee, June 17, 2020, https://www.mondaq.com/india/arbitration-dispute-resolution/954662/the-new-normal-for-international-institutional-arbitrations
Supra note 6
Covid 19: Supreme Court saves the day on limitation, https://www.barandbench.com/columns/litigation-columns/covid-19-supreme-court-saves-the-day-on-limitation
Arbitration Privacy and Confidentiality In the Age of (Coronavirus) Technology, David C. Singer,Wiley Online Library, https://onlinelibrary.wiley.com/doi/10.1002/alt.21849
 ICCA-NYC BAR-CPR CYBERSECURITY PROTOCOL FOR INTERNATIONAL ARBITRATION (2020) https://www.cpradr.org/programs/committees/digital-transformation-committee/index/_res/id=Attachments/index=0/ICCA-NYC%20Bar-CPR%20Cybersecurity%20Protocol%20for%20International%20Arbitration%20-%20Electronic%20Version.pdf/
Supra note 10