Referencing Errors in the Third Schedule to the Arbitration & Conciliation Act, 1996

Third Schedule to the Arbitration & Conciliation Act, 1996 ("1996 Act") is the Geneva Convention of on the Execution of Foreign Arbitral Awards. Article 3 to the III Schedule reads:

"If the party against whom the award has been made proves that, under the law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and (c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal." (emphasis added)

Article 1 is quoted in its entirety at the end of this blog post. In the III Schedule, it is divided into Articles 1(1) and 1(2). Article 1(1) deals with arbitral awards which are recognisable and enforceable and Article 1(2) concerns the conditions for recognition and enforcement. 

The text of the Geneva Convention does not seem to make this division. Article 1 of the text of the Conventions consists of two paragraphs as noted below:

"In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences  hereinafter called "a submission to arbitration") covered by the Protocol on Arbitration Clauses, opened at Geneva on September 24, 1923, shall be recognised as binding and shall be enforced......

To obtain such recognition or enforcement, it shall, further, be necessary..."

As would be apparent Article 1 of the Convention was not divided in two sub-articles. However, in the III Schedule this subdivision has resulted in a referencing error in Article 3- there is no Article 1(a) or (c)- there are only Articles 1(2)(a) and 1(2)(c).

The referencing error was not in the Arbitration (Protocol and Convention) Act, 1937. The Second Schedule to the 1937 Act did not divide Article 1 into two parts:

"Article I.-In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences (hereinafter called " a submission to arbitration ") covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced...

To obtain such recognition or enforcement, it shall, further, be necessary..." 

Hence, Article 3 to the Second Schedule to the 1937 Act did not contain this referencing error. On the other hand, III Schedule to the 1996 Act contains this referencing error in view of the division of Article 1 into two sub-Articles.  The Arbitration and Conciliation (Amendment) Bill, 2024 does not seem to address this referencing error. Somehow, this error seems to have escaped the attention of everyone in the last thirty years. The division in Article 1 to the Third Schedule, not being a reflection of the Convention's text, should be removed in the upcoming amendments to the 1996 Act. 

Article I of III Schedule to the 1996 Act:

"ARTICLE 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th,1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.

(2) To obtain such recognition or enforcement, it shall, further, be necessary:—

(a) that the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) that the subject-matter of the award is capable of settlement by arbitration under the law of the country in which the award is sought to be relied upon;

(c) that the award has been made by the Arbitral Tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) that the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition, appeal or pourvoi en cassation (in the countries where such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon."

A Bit More on Reciprocal Arrangements under Section 44 of the 1996 Act

In the last decade (yes you read it right!) we wrote two posts (here and here) on the notifications relating to reciprocal arrangements under the Foreign  Awards (Recognition & Enforcement) Act, 1961 and the Arbitration and Conciliation Act, 1996. Thanks to inputs from readers, we were able to get hold of a few more notifications. In this post, we provide a consolidated overview of the notifications and the law on the subject. It would be great if readers could contribute to the list of notifications either by posting the notification's link on the comment box or by emailing it to lawbadri@gmail.com.

1. Source: Justice Bachawat's Law of Arbitration & Conciliation (5th ed. 2010), P.2264 ff. List of countries notified under the Foreign  Awards (Recognition & Enforcement) Act, 1961 (p. 2296): The countries are Austria, Botswana, Bulgaria, Central African Republic, Chile, Cuba, Czechslovak Socialist Republic, Denmark, Ecuador, Arab Republic of Egypt, Finland, France, German Democratic Republic, Federal Republic of Germany, Ghana, Greece, Hungary, Italy, Japan, Kuwait, Republic of Korea, Malagasy Republic, Mexico, Morocco, Nigeria, The Netherlands, Norway, Philippines, Poland, Romania, San Marino, Spain, Sweden, Switzerland, Syrian Arab Republic, Thailand, Trinidad and Tobago, Tunisia, USSR, UK, United Republic of Tanzania, and USA.
2. Source: Reply to RTI Application (here): Singapore, Malaysia, Canada, Australia, China, Hong Kong SAR and Macao SAR, Mauritius

Some Related Issues:

Whether Notifications issued under the Foreign  Awards (Recognition & Enforcement) Act, 1961 could be used for Awards after 1996 Act was brought into force?

Yes, guess so. Please see Section 85 which states: 

"85. Repeal and savings.—(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.

(2) Notwithstanding such repeal,—

(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force;

(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." (emphasis added).

Whether precedents enforcing of foreign awards can be cited in the absence of tracing the relevant notifications?

Will not hurt making such an attempt. In the last post in 2018, we had noted:

"We spoke to some of the practitioners in the field. They say that none of the respondents had raised such an objection. Even if they raise such an objection, it would be possible to cite previous judgements where awards for such territories have been enforced. But the question is whether such an objection has been raised in the first place in those decisions?"

However, it is possible for a counter-argument (where applicable) that the objection regarding reciprocity was not taken before the court which enforcement a foreign award.

In any case, to address the information gap, it would be useful for courts deciding on enforcement of foreign arbitral awards to specify the seat of arbitration so that such precedents could be cited, in the absence of copy of notifications. We find that in several decisions enforcement foreign awards, courts have not been mentioning the seat/ place of arbitration. It would be useful if they did so. 

Some judgments mention the seat and courts in those cases have enforced foreign awards from seats not mentioned in the notifications issued under the 1996 Act (here). Some such judgments rendered in the last three years are as follows:

Switzerland: Pasl Wind Solutions Private Limited vs. GE Power Conversion India Private Limited (20.04.2021 - SC) : MANU/SC/0295/2021(strictly, not a decision enforcing a foreign award)

USA: International Nut Alliance LLC vs. Johns Cashew Company (09.12.2021 - KERHC) : MANU/KE/3139/2021 

Finland: Finnish Fund for Industrial Corporation Ltd. vs. VME Precast Pvt. Ltd. and Ors. (14.10.2020 - MADHC) : MANU/TN/5710/2020

Egypt: Angelique International Limited vs. Public Electricity Corporation and Ors. (23.06.2020 - DELHC) : MANU/DE/1290/2020  

UK: Glencore International AG vs. Hindustan Zinc Limited (08.06.2020 - DELHC) : MANU/DE/1238/2020 (London Court of International Arbitration-LCIA- Award enforced); Peniel Cashew Company and Ors. vs. Ahcom Sarl (30.10.2018 - KERHC) : MANU/KE/2997/2018 (CENTA award); C and C Maritime Pte. Ltd. vs. Advance Surfactants India Ltd. (24.01.2019 - DELHC) : MANU/DE/0280/2019.

Vidya Drolia v DTC: Part II: Interesting Aspects- Contradiction between Patel Engineering & Booz Allen

Para 17-19 of Vidya Drolia v Durga Trading Corporation is the next interesting aspect we take up in this post. We had discussed the nature of an arbitration agreement and its relation to the law of contracts in the previous post on this subject. In this post, we will discuss the contradiction between Booz Allen and Patel Engineering on whether subject-matter arbitrability is to be decided by a court under Section 8 and11.

In Vidya Drolia, the Supreme Court observed:

" When public policy mandates and states that a case or a dispute is non-arbitrable, the court would not allow an application under Section 8 (or even Section 11 as observed supra) even if the parties have agreed upon arbitration as the mechanism for settlement of such disputes." (Para 19, P. 24).

Justice Ramana's opinion also touches on this topic in many places but does not explicitly note the contradiction between the approaches in these judgments (Patel Engineering &  Booz Allen) noted above. So what exactly is the issue?

The issue relates to whether power exercised under Sections 8 and 11 are similar. What turns on this question is the point whether a court hearing a petition under these sections has to decide subject-matter arbitrability.

In Patel Engineering, the SC held that Sections 8 and 11 were complementary in that the judicial authority under Section 8 or 11 has to decide the jurisdictional issues raised before it. This would logically include questions as to arbitrability of the subject-matter as well. In Booz Allen, however, a two-judge Bench of the Supreme Court held that the nature and scope of issues that arise for consideration in a Section 11 application were narrower than those under Section 8. The court held that arbitrability was not to be determined by the court under Section 11. It is this contradiction that the court in Vidya Drolia highlighted and held: 

"We are clearly bound by the dictum of the Constitutional Bench judgment in Patel Engineering Ltd. that the scope and ambit of court’s jurisdiction under Section 8 or 11 of the Arbitration Act is similar." (Para 17, p. 20).

We invite readers to access this post in this blog written almost a decade back where we argued that given the decision of the larger Bench in Patel Engineering, Booz Allen's approach as regards arbitrability question under Section 11 (that the same has to be decided by the arbitrator) was not consistent with Patel Engineering:

"The pertinent question for the purposes of this post would be whether Patel Engineering gives an indication of whether a decision under Section 11 included a decision on issues of Arbitrability. This blawgger’s view is that it would. Two reasons: (1) In line with the Patel Engg approach, Arbitrability of the dispute would be a jurisdictional fact/ condition precedent for the Chief Justice to exercise jurisdiction; (2) Supreme Court’s concern was for the party who had not agreed to an arbitration agreement but had to go through the entire process of arbitration (because the Act did not permit a court to interfere unless provided so in the Act) and could only challenge the award under Section 34. The same situation applies to Arbitrability as well. In a petition under Section 11, if the contention is that the dispute was not arbitrable, and if the court mechanically refers the parties to arbitration, the party which raised such a contention will be unnecessarily put to the trouble of going through the entire arbitration process...

Therefore, this blawgger is of the view that the obiter dicta of the Supreme Court in Booz Allen ought to be placed below the decision of the Seven Bench Supreme Court in Patel Engineering in terms of binding force."

However, this "contradiction" is a virtually an academic issue, given that Sections 8 and 11 have been amended. We will address Vidya Drolia on the implication of these amendments in another post. But we will conclude this post summarising the concluding observations in Vidya Drolia on this question:

• Judicial review and court's jurisdiction u/ss 8 and 11 are identical but extremely limited [Para 96(b)]
• Patel Engineering is no more good law in view of the 2015 and 2019 amendments to the 1996 Act. [96(a)]
• By virtue of separability and competence principles, arbitral tribunal is the "preferred first authority" to decide all aspects of non-arbitrability and courts can have a second look in terms of Sections 34(2)(a)(i), (ii), or (iv) or 34(2)(b)(i) of the 1996 Act. [96(c)]
• But courts can exercise its jurisdiction where the subject-matter of the dispute is "manifestly and ex facie" non-arbitrable. [96(d)].

[Note that Para 96(d) of the court's view confers very limited jurisdiction on the courts in respect of non-existence or invalidity of agreements as well but we did not deal with these aspects in this post.] 

Guest Post: Response of Arbitral Institutions to the COVID-19 Crisis– An Indian Perspective: Part II

  [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[1] 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.[2]

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"),[3] 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”[4] adhering to the principle of arbitration i.e. flexibility and party autonomy.[5] 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."[6]

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[7] 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,[8] 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.[9]

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[10], 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.[11]

Some Arbitral Institutions such as the American Arbitration Association, have come up certain guidelines regarding Ethical Principles.[12] Similarly, the International Chamber of Commerce has also taken up the measures by issuing the Cybersecurity Protocol for International Arbitration (2020)[13], 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.[14] 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.

5.      Conclusion

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. 

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[1] Pandemic Business Dispute Resolution Service, http://ciarb.org/disputes/pandemic-business-dispute-resolution/

[2]Ibid.

[3] 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

 

[4]LCIA Notes for Arbitrators,

https://www.lcia.org/adr-services/lcia-notes-for-arbitrators.aspx#6.4%20Meetings%20and%20hearings

[5]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

[6]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

[7] Indian Council of Arbitration, http://www.icaindia.co.in/Notice-for-ICA.pdf

[8]Supra note 6

[9]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

 

[10] SIAC COVID-19 Frequently Asked Questions (FAQs), https://www.siac.org.sg/faqs/siac-covid-19-faqs

[11]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

[12] AAA Statement of Ethical Principles, https://www.adr.org/StatementofEthicalPrinciples

[13] 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/

[14]Supra note 10

Guest Post: Response of Arbitral Institutions to the COVID-19 Crisis– An Indian Perspective: Part I

 [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. This is the first part of the post] 

Response of Arbitral Institutions to the COVID-19 Crisis–  An Indian Perspective: Part 1

By Pranay Jaiswal, IV BA.LLB, ILS Law College, Pune.

Excerpt

With advent of global pandemic, everything on this planet has come to a standstill creating hurdles in daily life. Dispensation of Justice is one of the crucial things which is witnessing significant impact due to the COVID-19 crises. Arbitration being the alternatve dispute resolution method to litigation is also facing the hurdles making it difficult to make it accessible for the parties. This piece analyses the problems that are being encountered in the prevailing circumstances and how the arbitral insitutions are tackling towards it or what are the measure that can imbibed to make the procedure party- friendly.  

1.      Introduction

In the prevailing circumstances arising from the COVID-19 pandemic, there is an increase in the number of disputes arising out of contracts, which are to be resolved. Parties are unable to find solutions to the crisis and an unforeseen situation that the pandemic has resulted in.

The conventional way of resolution of disputes through litigation is found to be cumbersome as the physical operation of the Courts has come to a standstill due to the lockdown restrictions. Even though the courts are phasing to new alternatives such as video conferencing, non-urgent matters remain in abeyance.

Parties are facing problems in performing their part of contracts leading to substantial difficulty in project completion. The defaulting parties are relying on the ground of force majeure and other defences such as incapacity to perform, change of law, delay in payment, etc. This has led to many unresolved issues which are likely to be referred to arbitration in the near future, thereby leading to a flood of references to Arbitral Institutions.

Arbitral Institutions will have to get these disputes resolved in an efficient, effective and in an expeditious manner in the backdrop of the COVID-19 situation. Some Arbitral Institutions have positively reacted to the pandemic situation by taking steps which set a benchmark for other Arbitral Institutions to follow. These measures are the subject-matter of this post.

2.      Virtual Hearings

Virtual hearings are becoming the norm in International Arbitration considering that proceedings cannot be conducted in person. Incubating the usage of technology during such times when parties cannot meet in person to resolve disputes, virtual hearings are certainly going to prove a definite alternative to the existing way of conducting proceedings. Hence, there are numerous benefits that virtual hearings provide, even outside the circumstance in which we currently find ourselves.[1]

At the same time, virtual hearings bring with themselves, certain problems. As is the human nature, parties tend to lose concentration in lengthy proceedings that could prove as a major drawback of virtual hearings. Nonetheless, this can be regulated by Tribunals with the consent of parties, by scheduling the hearings at specific time slots convenient to all the parties. This will be in consonance with the fundamental principle of arbitration: equal treatment of the parties.

Additionally, major issues arise out of cross-examinations held virtually. Evidence could be manipulated, putting one party at a disadvantage.

To mitigate this problem, tribunals could seek a 360 degree view of the witness. Another method to address this issue is to enable Arbitral Tribunals to focus/zoom on the witness’s image on the screen which will help in detecting cues that suggest that the witness is being coached. For instance, the fact that a witness is constantly looking away from the camera may indicate that another person is aiding the witness during cross-examination. Whispers and shuffling of papers may raise suspicions that something is afoot.

Another concern that virtual hearings attract is that of  “Seat of the arbitration”. Previously, the parties used to agree upon the seat expressly or impliedly or the tribunal would designate the seat. However, a decision on the seat would be a challenge in ‘online’ proceedings. Consider, for instance, a case where the sole arbitrator is located in India, one party is located in New Zealand and the other party is located in Sri Lanka. The party in New Zeland has to create a software as per the contrct for the Sri Lankan party. In this case, it would be extremely difficult for the tribunal to designate a seat, especially if parties have not agreed to any seat in the arbitration agreement. This is a grey area that needs further research and Arbitral Institutions should address to the earliest.

3.      Recourse to Emergency Arbitration

Emergency arbitration is witnessing a significant rise in International Arbitration in recent times, especially owing to the COVID-19 pandemic.[2] Access to emergency relief could preserve the status quo and protect cash flow to contractors executing projects.

Certain arbitral tribunals have digitized applications for emergency arbitrators.[3] Arbitral Institutions in India provide recourse to such procedure under their rules. For instance, the Delhi Centre for International Arbitration, Nani Palkhiwala Arbitration Centre and Mumbai Centre for International Arbitration have incorporated similar provisions in their respective arbitration rules.

However, it is pertinent to note that even if these institutions have incorporated the provisions of emergency arbitration, the position of the Indian Courts is very dicey regarding it. It can be seen from the judgement of HSBC PI Holdings[4] and of Raffels Design International[5] that there is no uniformity on the stand of the Indian Courts regarding the enforceability of the emergency awards.

4.      Electronic Correspondence

Many institutions have explicitly dispensed with the need for hard copy submissions. Requests for arbitration and evidentiary submissions can be made via email. Some institutions have already informed parties to ongoing arbitration that email would be the only mode of correspondence between the institution, parties and arbitrators. Electronic correspondence is something that presents very little concern for commercial parties.[6]

5.      E-filing – Written Submissions and Evidentiary Documents (Electronic Bundles)

Arbitral Institutions have been stressing upon the e-filing of written submissions. Even documents relevant to a case and of evidentiary nature are made to be submitted online.[7] Institutions like LCIA, ICC have already issued guidelines pertaining to initiation of the new arbitral proceedings through the online filing system of the institution.[8]

Similarly, in India, the ICA has issued a notice describing a procedure for filing of arbitration matters.[9] Even so, the ICA has forced the parties to submit the hard copies of documents post the lockdown orders, which may not be desirable.[10]

6.      Exclusion of Oral hearings.

Given the prevailing conditions of the pandemic, certain flexible steps have been introduced by Arbitral Institutions with the consent of the parties.  In some cases, parties have jointly requested for suspension of the proceedings to hold “without prejudice” settlement talks. In less complex cases, parties have requested the tribunal to dispense with oral hearings and decide the dispute based on documents alone.[11]

In India, the Delhi International Arbitration Centre (DIAC), has issued a consolidated guidance note[12] wherein it has mentioned that the arbitrator may prescribe a fast track procedure for expeditious disposal of disputes where the arbitrator may decide upon the documents alone, on the exclusion of oral evidence.[13]

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[1] Key measures taken by Arbitral Institutions in response to the COVID-19 pandemic, Stephen Harwood,

https://www.shlegal.com/news/key-measures-taken-by-arbitral-institutions-in-response-to-the-covid-19-pandemic

[2] GEOGRAPHICAL ORIGIN OF PARTIES IN EA CASES (2010 – 2019), Pg. 19, https://www.siac.org.sg/images/stories/articles/annual_report/SIAC%20AR_FA-Final-Online%20(30%20June%202020).pdf

[3]How COVID-19 might affect international arbitration, by Tola Adeseye, APRIL 8, 2020 http://arbitrationblog.practicallaw.com/how-covid-19-might-affect-international-arbitration/         

[4] MANU/MH/0050/2014

[5] MANU/DE/2754/2016

[6]IBID.

[7]COVID-19: Arbitrating in the Midst of a Pandemic, by Matteo Clarkson Maciel, 01 APRIL 2020

https://www.kirkland.com/publications/article/2020/04/covid19-arbitrating-in-the-midst-of-a-pandemic

[8]LCIA Online Filing, https://onlinefiling.lcia.org/

[9] Indian Council of Arbitration, http://www.icaindia.co.in/Notice-for-ICA.pdf

[10]Supra note 6

[11]International Arbitration During COVID-19: A Case Counsel’s Perspective, by Chahat Chawla, June 4, 2020.

http://arbitrationblog.kluwerarbitration.com/2020/06/04/international-arbitration-during-covid-19-a-case-counsels-perspective/?doing_wp_cron=1594217832.5939691066741943359375

[12] GUIDANCE NOTE FOR CONDUCTING ARBITRATION PROCEEDINGS BY VIDEO CONFERENCE. http://dacdelhi.org/DataFiles/CMS/file/guidancenote.pdf

[13] Section 29B of the Arbitration and Conciliation Act, 1996.