Should I Stay or Should I go

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Fernanda Lopes de Alcantara Gil

Law degree from Fundação Getulio Vargas de São Paulo. Coordinator of GV Estudos em Arbitragem (GVEArb). Arbitration and civil litigation attorney

 

When the topic is arbitration and the pandemic, it is impossible not to think about the impact that COVID-19 had on arbitration hearings. What once was one of the most intense and exciting moments of the entire arbitration proceeding became yet another video call, just like everything else did since March 2020 – not to mention the impossibility of networking by personal contact with arbitrators, opposing counsel, witnesses, experts…

One of the questions that most intrigued lawyers was: is it safer to stay the proceeding and wait for a “traditional” hearing or to go in search for an alternative that allows for the immediate examination of witnesses? Is it possible that the virtual hearing is one of the many activities that gets people craving for the return of in-person interactions? What happens if there is no agreement between the parties as to whether the hearing should be virtual or not?

The answers are not obvious, much less unanimous. The discussion is controversial to the point of becoming one of the procedural issues of the XXVIII Willem C. Vis International Commercial Arbitration Moot, which took place virtually in the end of March, 2021. In the mock casefiles, the claimant accepts the virtual hearing since it is interested in a fast conclusion of the proceedings. Respondents, on the other hand, are more interested in the examination of the witnesses, and prefer an in-person hearing.

Even though the situation was created for an arbitration moot, the mock case showcases a common discussion since the beginning of the pandemic. Many faced had to choose between the distant and uncertain possibility of an in-person gathering, and the bet on the unknown and unsafe virtual scenario.

All over the world, arbitral tribunals and arbitral institutions have adapted to the new reality, offering the remote conduct of oral arguments and witness examinations, or even hybrid options between virtual and in-person presentations. Adding the impossibility of having a traditional hearing since the imposition of sanitary precautions to the agility expected of an arbitration, the result was an increase in the popularity of the virtual environment.

Even though many cases were successful with the videoconference proceedings, the will of the parties remains a cornerstone of arbitration, and if the parties decide to have in-person hearings, they will have to wait for the “old normal” to come back. In deciding for virtual proceedings, parties must weight both advantages and disadvantages of the alternative, and a very extensive list of aspects shall be considered.

The advantages come quickly to mind: the remote conduct of proceedings allows for an immediate hearing, reduces costs with the transportation of witnesses, parties and arbitrators, makes the communication between co-counsel for each party easier, and eliminates hours spent in transit that may be valuable during preparation for the hearing. Besides, with the video call option, parties may spend less money on accommodation expenses, renting of venues for the hearing, employees, catering and so on.

Regarding the disadvantages, they are not so clear. The lack of in-person contact with expert and fact witnesses can make the job of counsel and arbitrators harder – after all, the oath is the sole guarantee that witnesses are not lying, and the body language is practically impossible to identify by video. Moreover, the network’s instability may delay or make it impossible for the virtual hearing to be concluded, and the confidential information in arbitration have higher risks of being leaked, since it is easier to record the hearing and data protection breaches may take place.

In international arbitrations or in those that involve more than one language, the translation can also pose a challenge during the virtual hearing, as it may interfere in the pleader’s speech, since there is a delay caused by the network latency even in videoconference platforms that offer the simultaneous translation gadget. In those cases, the different time zones involved may be a problem, as the hearing becomes more tiring and less efficient (since the parties may use more days with reduced hours, for example).

However, the long period of isolation posed by the pandemic made it possible for multiple of the problems mentioned above to be solved. By this time, many virtual hearings have been performed with more or less success. As an example, confidentiality rules that are specific for the virtual environment were created and applied in arbitration proceedings, as well as best practices to guarantee that witness statements would not be tampered.

The conclusion is that the pandemic made the search for alternatives inevitable, and some of them may even be useful after the elimination of the virus’ threat. Even though such alternatives were not always well accepted, the virtual conduct of arbitration hearings made the proceedings better for many. Even with all technical issues that may arise, the remote hearings are here to stay, and it is possible – if not probable – that they are, in fact, the “new normal”.

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