Mohit Khullar and Prachika Agarwal take an honest look at the present situation of arbitration in India and the steps India should take to keep their arbitration system operating well and open for litigants in spite of the COVID-19 threat. The world has a long way to go before we get COVID-19 behind us, but no doubt, the technology we will learn to apply in our businesses throughout this threat will become our closest allies!
As of 12:00 p.m. ET May 7, 2020, according to the Center for Disease Control and Prevention (CDC), almost all countries worldwide have reported COVID-19 cases of citizens affected. In India, 53,045 cases of COVID-19 are confirmed; 1,787 people have died; and 15,331 people have recovered from the virus. But we will get through it…
India’s response in March 2020
The prime minister of India enacted a nationwide lockdown to reduce the number of infected cases. It was essential, timely -- halting India’s government completely except for urgent matters. India’s courts closed doors too, relying on video conferencing for hearings. But within weeks the lockdown forced litigants to face unsustainable hardships. So the Supreme Court of India passed a blanket order dated March 23, 2020, specifying that the period of limitation in arbitration in all proceedings before any court or any tribunal shall be extended from March15, 2020 until further orders are passed.1
On May 6, 2020, the Supreme Court of India again passed an order extending the period of limitation for statutory provisions under the Negotiable Instruments Act and the Arbitration and Conciliation Act as well.2
How do arbitration proceedings fit within the COVID-19 times?
Despite the increasing restrictions and complete lockdown in India, urgent arbitral proceedings may still be conducted virtually through video conferencing. Such technology for virtual operations means COVID-19 will not inhibit arbitration from proceeding as usual.
Section 19 of the Arbitration & Conciliation Act,1996 states that, “the arbitral tribunal shall not be bound by the Code of Civil Procedure of 1908 or the Indian Evidence Act of 1872. The parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.”3
Although the Arbitration & Conciliation Act of 1996 is silent on the conduct of arbitration proceedings through video conferencing, Section 19 certainly allows the arbitral tribunal the same technology. The arbitral tribunal can authorize all parties to the arbitration proceedings to file pleadings through electronic mail and conduct proceedings via video conferences to satisfy social distancing requirements without losing productivity.
Even the Indian Council of Arbitration (ICA) recommends that the arbitral tribunal may conduct arbitration proceedings by videoconference, by telephone or any means of communication feasible. During International Commercial Arbitration, virtual proceedings such as videoconferencing are already an established norm; therefore, domestic arbitration proceedings should likewise adopt this method to ease arbitration during lockdown.
Is digital arbitration the “new normal” even for dispute resolution?
The practice of using digital technologies in dispute resolution proceedings is not new. We no longer need to endure the traditional form of arbitration time and cost for such things as manual processes and substantial expenses paid for communication, travelling and conducting court hearings. Many countries have already moved to digital means of arbitration to cut such costs and save time such as USA, UK, Singapore, European Union, Brazil, China, etc.
For instance, Singapore is emerging as an international leader in post-discovery litigation technology, making electronic filing mandatory in 2000. The country has since established a nationwide system for electronic courtrooms called “litigation.” Singapore has also invested heavily in establishing itself as a regional center for Alternative Dispute Resolution (ADR) by recently opening a high-tech facility for international arbitrations that offers a modern venue with state-of-the-art software and services.4
Singapore’s government and its legal community are working together to modernize dispute resolution proceedings. Fully electronic arbitrations, including a master set of digitized arbitration content, is provided to each party and is now an integral part of that vision. Claimants, respondents and arbitral panellists all have web-based access to all of the digitized materials. At the same time, each party retains secure, private access to internal legal documentation -- including notes, tags, research, private documents and so on. Parties can perform quick data searches at any time. They can also annotate, categorize and organize documents into custom binders and share document markup and commentary among designated users.
A crucial benefit of this setup is that legal insights and strategies remain within a single set of materials instead of getting displaced or lost within complex email threads or piles of hardcopy documents. All materials can also be hyperlinked for expedient review of key evidence. This “advanced litigation technology” has been deployed in selected legal matters by multiple courts and centers in Singapore and has generated enthusiastic feedback from participants.
Key benefits of digital arbitrations include paperless proceedings, remote participation (to protect against an epidemic like COVID-19), enhanced collaboration and increased security for sensitive materials.
But the benefits don’t end there. In an increasingly global and mobile world where companies and law firms often have widely dispersed offices and employees – and where many of the disputes themselves are increasingly international in nature – the ability for parties, legal teams, technical experts and even panellists to fully participate in arbitration proceedings in real time from remote locations provides considerable cost and convenience advantages. Transcriptions of the proceedings can be consulted as they are created. Electronic hearings mitigate the logistical complexity of the court hearing process to speed up the time to resolution.
The electronic bundle technology also enhances collaboration among legal team members and their clients, regardless of where they are working from. Teams maintain 24/7 access to their own private, secure digital “war room” where they can view and organize all relevant materials, assemble timelines, build arguments, and confer on strategy, both in anticipation of the hearing and during actual proceedings.
In addition, incalculable security benefits are available to confine the distribution of sensitive documents and other information within a single online workspace. Authorized participants can log in and access arbitration-related materials at any time once those materials have been digitized and uploaded to the repository, and they can do so at their convenience from any location. Because of this, they no longer need to create and distribute multiple hard copies, share electronic documents via email, or download files to local computers, mobile devices or flash drives – which are notoriously vulnerable to loss or theft.
How does an online alternate dispute resolution (ADR) service function for litigants?
An online ADR service center functions somewhat like an offline arbitral institution. One can approach these institutions either ad hoc or on an agreement basis. Litigants generally have a pre-arrangement for settlement of disputes, be it business-to-business (B2B) or business-to- consumer (B2C), under the aegis (protection) of such online arbitral institutions.
Agreements between the institution and the litigant can span many aspects of contract management including:
- the method of initiating the process into action;
- the kind of settlement to be pursued;
- the fee structure;
- the goodwill and good faith in the rights and the responsibilities of the parties;
- the arbitral institution;
- the procedures to be followed;
- the law applicable; and
- the confidentiality, security of all parties, etc.
When a dispute arises, either of the parties can approach the organization involved and work to resolve the issue for any type of service agreed to -- whether it is negotiation, mediation, arbitration, conciliation, evaluation or any other service. This is an eagle's eye view of the whole arrangement!
Here are a few online ADR institutions currently providing services:
Indian set-up and Online ADR
Online alternate dispute resolution (ADR) in India is in its infancy stage and it is gaining prominence day by day. With the enactment of Information Technology Act, 2000 in India, e-commerce and e-governance have been given a formal and legal recognition in India. The Ministry of Law and Justice has taken steps to introduce Online Dispute Resolution through mediation, arbitration, and conciliation.
Evidently slowly and gradually government departments and private companies are understanding its importance and moving a step forward towards adopting online ADR. For instance, the Department of Consumer Affairs, Government of India has planned to roll out an Online Consumer Dispute Resolution (OCDR) platform that follows best practices emerging in the global e-Commerce arena. A few legal tech companies in the country are testing the waters for deploying Online Dispute Resolution (ODR) as a means to resolve legal disputes. Presolv3605 is one such company that specializes in online commercial dispute resolution. Nevertheless, there is growing conviction that it is only a matter of time before ODR is adopted at scale in India.
Conclusion – pandemic or not, it’s all good!
Dispute resolutions are ongoing throughout the world and videoconferencing or teleconferencing can be used for a particular purpose like recording testimonies of witnesses, but to implement the same as a rule for conducting the entire arbitration proceedings, specific orders would have to be issued under Section 19 when arbitration proceedings begin.
We cannot deny that other countries have already resorted to, or are in the process of, initiating digital arbitrations. Otherwise litigants will keep on suffering trying to do their jobs using manual processes and authorities will later face many challenges in handling these issues.
That’s why technology transformation is very much in need at this time. It gives us the opportunity to keep going successfully using the technology that allows us to work remotely during pandemics like COVID-19.
Because the spreading COVID-19 has yet not been controlled, the lockdown may increase or fluctuate from time to time. We need to appreciate the fact that we are into this new normal life that will continue for a long time.
We will adjust sooner rather than later! It’s all good!
5. presolv360 – Resolve Legal Disputes Online
ABOUT THE AUTHOR
Mohit Khullar, Head of Commercial and Contracts with SMEC (India), has a rich and proven track of more than 19 years in the area of contract management, commercial management, drafting, negotiations and business strategies.