The COVID-19 pandemic has an impact on the daily life of all businesses and citizens in some way. Further, the pandemic also affects arbitral proceedings, as traditional practices and agreed timetables may prove difficult to adhere to.
In these exceptional circumstances, it is increasingly important that arbitration offers an expeditious, flexible and reliable way of resolving disputes and providing access to justice. Speed and efficiency are important in already ongoing proceedings, but also in new disputes that may arise as a result of contractual disruptions in a difficult economic and business environment.
The FAI continues to be fully operational
The FAI continues to manage its ongoing proceedings and ensures the management of new proceedings without undue delay. Already prior to the pandemic, the FAI administered its disputes mainly electronically.
The pandemic has a particular impact on the organisation of hearings
In particular, the organisation of hearings can be difficult during the COVID-19 pandemic. Meeting people and traveling might result in an increased risk of infection. In addition, COVID-19 restrictions and lockdowns may have an impact on the organisation of hearings.
On 16 March 2020, the Finnish Government issued a strong recommendation for all citizens over 70 years of age to avoid physical contact with other people whenever possible; in other words, to stay in quarantine-like conditions. THL, The Finnish Institute for Health and Welfare, has also recommended that younger healthy citizens avoid going to workplaces, schools and day care, avoid using public transportation and meeting friends physically. According to the instructions of THL, all persons returning from abroad must avoid spending time outside of their homes and, if possible, remain in quarantine-like conditions for 14 days. The Finnish Ministry of Foreign Affairs recommends that persons do not travel abroad, though necessary travel for work is permitted.
The current restrictions and recommendations will be shifted towards normal conditions. However, the restrictions and risks might affect the operations of arbitral tribunals and the organisation of hearings for a long time to come.
The FAI encourages arbitral tribunals, parties and counsel to efficient and fair proceedings
Pursuant to Art. 26 of the FAI Arbitration Rules, the arbitral tribunal shall, subject to the FAI rules and any agreement of the parties, decide on the manner in which the arbitration shall be conducted. The arbitral tribunal shall ensure that the parties are treated with equality and that each party is given a reasonable opportunity to present its case. All participants in the arbitral proceedings shall make every effort to contribute to the efficient conduct of the proceedings in order to avoid unnecessary costs and delays.
As for the hearings, Art. 36 of the FAI Arbitration Rules states that the arbitral tribunal, at any stage of the proceedings, may hold hearings for the presentation of evidence by fact or expert witnesses, or for oral argument by the parties. The arbitral tribunal fixes the date, time and place of the hearing after consulting with the parties. The arbitral tribunal may, after consulting with the parties, direct that witnesses be examined through means that do not require their physical presence at the hearing, including by videoconference or by telephone (Art. 36.3). The arbitral tribunal establishes the sequence and schedule of the hearing after consulting with the parties. Any witness who gives oral evidence may be questioned by the parties in such manner as the arbitral tribunal shall determine (Art. 36.5).
The FAI Arbitration Rules enable the organisation of hearing also virtually. The arbitral tribunal has broad procedural rights to decide on the organisation of hearings. When using its rights, the arbitral tribunal shall take into account the requirement of equal treatment of the parties, give each party a reasonable opportunity to present its case and avoid unnecessary costs and delays.
In case a hearing, due to the pandemic, would need be postponed in a way that affects the procedural timetable, it is normally recommended that the arbitral tribunal at least discuss the option of organising a virtual hearing with the parties.
Organising physical hearings
When assessing whether a physical hearing can be organised, the following aspects may be considered:
- Do travel restrictions prevent arbitrators, parties or witnesses from taking part in the hearing?
- Are there any persons amongst the arbitrators, parties, counsel or witnesses that belong to at-risk groups?
- Can the hearing be organised partly virtually (e.g. so that the arbitral tribunal, parties and counsel gather physically and witnesses are heard virtually, or so that the tribunal and counsel for both parties gather at their respective locations and they can confer privately amongst themselves during the hearing)?
- Are there any available locations for the hearings, where the risks of infection can be minimised and to which travelling is easy and safe?
- In case physical hearings cannot be organised in accordance with the original procedural timetable, how long is the delay?
- What are the costs of postponing the hearing?
Organising virtual hearings
When assessing whether a virtual hearing can be organised, the following aspects may be considered:
- Can the hearing be organised partly virtually (e.g. so that the tribunal and counsel for both parties gather at their respective locations and they can confer privately amongst themselves during the hearing)?
- Is there any technical tool that the tribunal, parties, counsel and witnesses could use (FAI arbitrators have reported to use Microsoft Teams; however, the FAI does not endorse any specific technical solution). When considering different technical solutions, it is recommended to bear in mind that all parties of the proceedings make every effort to contribute to the efficient conduct of the proceedings to avoid unnecessary costs and delays
- Technical tools (microphones, cameras and connections) shall be checked carefully before the hearing.
- The arbitral tribunal, parties, counsel and witnesses shall ensure that the confidentiality and privacy provided for in the FAI rules be ensured (e.g. the use by participants of enclosed spaces in their offices or homes)
- How can the tribunal ensure the integrity of the process (the participants are alone in their respective locations and are identified at the beginning of the hearing; the participants decide on who are allowed to confer privately amongst themselves during the hearing)?
- Can data security be ensured?
- Is the award enforceable according to the applicable procedural law (lex arbitri) if the decision regarding the hearing is made against the will of one of the parties?
- Are there any reasons to use post-hearing briefs, although not agreed upon in the original procedural timetable?
Amending procedural timetables and extending the time limit for the final award
According to the FAI Arbitration Rules, a procedural timetable must be established at an early stage of the arbitral proceedings. If changed circumstances do not allow for the rendering of the arbitral award within the time limit set in the FAI rules, the arbitral tribunal shall ask the Institute for an extension of the time limit. According to the FAI Arbitration Rules, the final award shall be rendered within nine months from the date on which the arbitral tribunal received the case file from the Institute. According to the FAI Expedited Arbitration Rules, the final award shall be rendered within three months.
The request for an extension of the time limit shall always be reasoned. Before submitting the request, it is recommended that the arbitral tribunal consult with the parties and that the views of the parties be submitted to the Institute along with the request for extension.