By Arijit Sanyal (CyberArb Member)
The global arbitration community responded well to the COVID-19 outbreak by infusing technology seamlessly, not knowing what challenges awaits it as technology became an integral part of international arbitration, now even more so, as virtual hearings have become more prevalent. As Mr. Ben Giaretta, Chair of the CIArb London Branch, puts it in the CIArb News,
“The seeds have been planted. We may not know which plants will flower, and many will die off before they mature, but future historians will be able to trace back their present to what we are doing now, and to how we have adapted to the change around us”. As the post-COVID era begins to emerge, there will be challenges arising from the use of technology which international arbitration, may or may not be ready to deal with. How it deals with it, will shape up the future of international arbitration and dispute resolution.
Against this backdrop, the Chartered Institute of Arbitrators (CIArb) has published the CIArb Framework Guideline on the use of Technology in International Arbitration (the Guidelines). The Preamble to the Guidelines, among other things, aims to narrow down the gap as far as understanding and processing technology is concerned to match the societal norms. While doing so, the Guidelines provide for two parts dealing with general principles and best practices, respectively. This blog aims to analyse Part I of the Guidelines and simplify the general principles for facilitating proportionate use of technology in international arbitration.
PART I OF THE GUIDELINES
Part I of the Guidelines is aimed at formalising the use of technology in international arbitration, by aiding the applicable institutional rules.
Guideline 3: Arbitrator’s Powers and Duties
To begin with, Guideline 3 deals with the arbitrator’s powers and duties concerning the use of technology (Guideline 3.1). Having due regard for the mandatory laws of the seat, Guideline 3 requires arbitrators to seek clarification on the use of certain technology to ensure its use is not barred by the applicable laws (Guideline 3.3). Additionally, arbitrators are required to provide a reasonable opportunity to the concerned parties to comment on the use of technology, before deciding on or against using a particular technology (Guideline 3.4). Furthermore, whenever the parties cannot reasonably agree on the inclusion of a particular technology, it is an arbitrator’s duty to decide, while being cautious not to jeopardise the arbitral proceedings (Guideline 3.5). While the parties are free to decide the technology they will use privately, the Guideline suggests that the arbitrators can direct parties in their private use of technology to safeguard the due process of the arbitral proceedings (Guideline 3.7).
Guideline 4: Proportionate Use of Technology
Moving forward, Guideline 4 concerns the proportionate use of technology, which adds up to an arbitrator’s duty to decide the technology that may be used in considering whether such technology would be proportionate during the whole process. The Guideline provides that an arbitrator should decide on the use of a particular technology in light of technical, monetary, and environmental considerations (Guideline 4.2). Smaller cases and even larger cases may be carried out by a less sophisticated technology depending on the requirements of the process (Guideline 4.3).
Additionally, due consideration must be given to make use of technology proportionately by adopting measures such as outsourcing the use of technology to a single operator (Guideline 4.4); by adopting such use to the needs of the parties such as by using technology to aid parties with disabilities, etc. (Guideline 4.5). Furthermore, the Guideline empowers the arbitrators to take measures to make technology accessible to the parties who may not be able to do the same for
specific reasons (Guideline 4.5).
Guideline 5: Fair and Transparent use of Technology
While using any technology for a common purpose, it must be ensured that fairness and transparency of the arbitral process are not undermined. It is for the same reasons that Guideline 5 requires the arbitrators to be aware of certain challenges concerning the parties, which may undermine the fairness of the arbitral process. For instance, software may not support multiple languages or there may be one of the parties may experience some technological barriers (Guideline 5.2). It is an arbitrator’s duty to transparently conduct the proceedings and ensure that necessary steps are taken so that the parties can discuss and comment on the use of certain technology (Guideline 5.4). Additionally, the arbitrators should refrain from using technology, such as analytical software, which undermines their independent decision-making (Guideline 5.5). The arbitrators should ensure that the parties are taken into confidence before employing a specific technology on one hand.
Guideline 6: Secure use of Technology
It is incumbent on the participant of the arbitral proceeding to take the necessary steps to ensure that the use of technology during the arbitral process remains secure and stable. As security lapses and data breaches can cause breach of confidentiality; loss of essential data, etc. it is an arbitrator’s duty to adopt best practices and encourage parties to do the same (Guideline 6.3). The interested parties should adopt a risk-based approach when high stakes are involved in an arbitral proceeding (Guideline 6.4). Lastly, the parties have a mutual duty to disclose one another whenever they detect a cyber-attack or lose data, to appropriately respond to the incident (Guideline 6.5).
APPLICATION OF PART I BY ARBITRATORS
The Guidelines introduce a series of general principles meant to be a stepping stone for arbitrators and other parties to an arbitral proceeding. While the arbitrators have wide powers with regards to the use of technology, they cannot do so in disregard to mandatory laws of the seat and/or the applicable rules. What is new about the Guidelines is that it explicitly suggests arbitrators to refrain from using analytical software which may undermine or influence their decision-making process. Arbitrators are encouraged to discuss the use of certain technology at the earliest possible stage, which will ensure that delays do not take place by way of challenges once an award is passed. The arbitrators are required to take every possible step, so as to ensure parties are not treated differently as far as access to/use of technology is concerned.
Therefore, while Guidelines 4 and 5 require an arbitrator to take positive steps to make the use of technology proportionate, fair and transparent, they are also required to consider additional grounds such as a party’s understanding of the technology to be used; presence or absence of technological infrastructure; an individual’s biological response to technology, etc.
This is in line with the works carried out under other institutions such as the ICC Commission Report titled, “Information Technology in International Arbitration” (the ICC Report). The ICC Report aims to throw light on the use of technology in international arbitration, against the backdrop of substantial increase in the use of technology. The ICC Report is based on the premise that, while use of technology in international arbitration has grown exponentially, lack of sophisticated technology became apparent. Resultingly, the ICC Report aims to provide a framework for the parties for evaluating technologies to be used in the proceedings. Though the ICC Report precedes the Guidelines, the suggestions contained in it regarding the use of particular technology for various functions may aid the decision-making process. As a result of this a conjoint reading of the Guidelines and the ICC Report can not only lead to best practices but also supplement one another if and when the need to do so arises.
To ensure party agreement, and the fair and transparent use of the technology it is incumbent on the tribunal to incorporate such details in a procedural order. There are model procedural orders provided by arbitration institutions or initiatives. One example is the Template for Procedural Order on Cybersecurity for Arbitral Tribunal prepared by CyberArb. It provides a non-exhaustive cybersecurity checklist for the stakeholders in the proceedings. The stakeholders undertake to comply with the checklist “to safeguard the security information of the proceedings as well as its confidentiality, integrity and availability.” Another similar source is provided in Appendix B of the ICC Arbitration and ADR Commission Report on Leveraging Technology for Fair, Effective and Efficient International Arbitration Proceedings titled “Sample Procedural Language Relating to Technology Tools and Solutions”. Appendix B includes sample wording for procedural directions to prepare for case management conference, terms of reference regarding electronic communications, and first procedural orders. To maximize the safety and integrity of the proceedings, it is advisable for the parties and the tribunals to make use of these resources.
While technology has been infused with international arbitration for quite some time now, the Guideline has attempted to list certain best practices for the ease of parties to the arbitral proceedings. The Guideline emphasized the discretion of arbitrators and practical considerations are not undermined. It is incumbent on the arbitrators to be mindful of the applicable laws as it may allow one of the recalcitrant parties to apply for setting aside of the final award. While Part I of the Guidelines is the first step towards normalising the use of general principles and best practices with regards to the use of technology in international arbitration, it paves the way for leading institutions to amend their rules or bring in supplementary rules as far as the use of technology is concerned. This will not only address a few common issues such as technological literacy amongst empanelled arbitrators; outsourcing the handling of technology to third parties; procedure to raise objections with regards to the use of a certain technology, etc., but will ensure greater participation of parties in a hybrid environment which may as well become the norm.