Arbitration & Covid 19 Pandemic: Pre & Post COVID Scenarios

By Harshvardhan Abburi

The COVID 19 pandemic has put a full stop on our daily activities. This has resulted in a lockdown at the world level. With the ongoing pandemic, it seems like its effect is not going to lessen for some more time. It has led to disruptions at all levels across the world with no exception to the legal system along with the Alternate Dispute Resolution Mechanism. The legal system nowadays adopted video conferencing as a medium for hearings and litigating. The Supreme Court on 23rd March 2020 took suo moto cognizance of the hardships faced by the litigants during the pandemic. In the order passed by it, the period of limitation in every proceeding shall exist extended with effect from 23rd March 2020 till further orders. 

Challenges to face during COVID 19:

The pandemic has brought challenges to the fore even within the realm of arbitration proceedings especially in terms of the limitation period. Section 29 A of the Arbitration and Conciliation Act provides that within 12 months from the date when the reference to the arbitration tribunal, the arbitral award must be awarded. This time period can be extended to six months with the consent of the parties. However, a further extension can only be granted by the Court.

So, the parties can file a joint application or any of the parties can file an application before the Court within sufficient time from either after the completion of 12 months or before the completion of 12 months. The order of the Supreme Court dated 23rd March 2020 proves beneficial to the parties in this context. 

Modern Procedures in Arbitration Proceedings:

In India, the Indian Council of Arbitration (ICA) is the dominating institution that governs the procedure of Arbitration proceedings and the International Commercial Arbitration. Almost all the arbitrational institutions across the world have adopted several measures for the COVID-19. The institutions like the International Chamber of Commerce, Singapore International Arbitration Centre, London Court of International Arbitration, Australian Center for International Commercial Arbitration, Hong Kong International Arbitration Centre have permitted the online or virtual hearing and filing of the matters. 

In the wake of COVID 19 and Arbitration, the Delhi International Arbitration Centre has also issued an announcement that the parties and arbitrators are free to resort to the teleconference method for conducting proceedings Arbitration during Covid and the same must be communicated to the Institution through an Email. In India, all the proceedings related to arbitrations are being held virtually during COVID-19.

ADR mechanisms were introduced to reduce or to extract the burden of the court system and are cost-effective as well as less time-consuming. Arbitration, being one of the common alternates, is the most favourable way to avoid the pendency of cases of the court system and the lengthened litigation process, used as a dispute resolution method by almost all the countries across the world including India. In this crucial time, the scope of arbitration is adapting to COVID-19 at a very rapid rate. Arbitration is securing a prominent place through its inherent flexibility, the rationale of the arbitral process, and the efficiency features which makes it a more effective and easy tool for dispute resolution at this challenging time.

With the view to continue the smooth functioning during this difficult situation, different arbitral institutions made some changes with regards to their operation which are mostly related to the internet and technology. The completion of contractual obligations during this pandemic is a very challenging task and becomes a headache for almost all of most of the business houses. Companies are looking for legal assistance with regards to force majeure provision and their ability or inability to perform the contractual obligations at this crucial situation arose due to COVID-19. Therefore, the big business entity or industry or corporate houses chose for arbitration for adjudicating their various contractual disputes. So it is predicted that the number of cases referred to the arbitration may increase after COVID-19.

In the wake of COVID-19, several norms have been adopted by the various famous arbitration institutions such as the international chamber of commerce (ICC), London court of arbitration, Singapore court of arbitration (SIAC), and many others to mitigate this pandemic. Various arbitral institutions have adopted the virtual or online system of filing and hearing matters. A joint statement has also been published by thirteen arbitral institutions in this regard. Interestingly, the virtual changes have been welcomed by several major arbitral institutions. With the increase in the necessity, the scope of arbitration is supposed to capture the future avenue and may clutch the opportunity pre and post COVID-19 pandemic. There are various mechanisms which make the arbitration proceedings preside over the traditional litigation practice. Online Dispute Resolution (ODR) is one of the several mechanisms developed to the process of settlement of disputes outside courts through the application of new technology coupled with the ADR mechanism. Most of the countries like China, U.S.A, and Brazil have already adopted the ODR mechanism for resolving their e-commerce dispute. 

The application of technology has been introduced to reduce the nee0d of close contact. This pandemic has forced the application of such types of technologies to a legal shape. However, as the COVID-19 becomes a part of human vulnerability to practice law, the arbitration will be the best solution to resolve the dispute through a virtual hearing method and it would be cost-effective also.

Conclusion:

The COVID 19 has introduced a new era of arbitration which can be done through technology only. It is not only effective and time-saving for arbitrators but also the parties need not be physically present while hearing. Well, it can be said that the adopted mechanism for arbitration can be used post Covid period. This would create less burden on arbitrators and would be effective also.

Webliography:

1. Future Frame of Arbitration Post COVID 19, Retrieved from https://thedailyguardian.com/future-frame-of-arbitration-post-covid-19/

2. Arbitration during and post-Covid 19: A perspective, Retrieved from https://singhassociates.in/arbitration-during-and-post-covid-19-a-perspective/

India: Impact of COVID-19 on Arbitration Proceedings in India, Retrieved from https://www.mondaq.com/india/operational-impacts-and-strategy/911554/impact-of-covid-19-on-arbitration-proceedings-in-india