The spread of COVID-19 has a major impact on all spheres of our life, including justice administration. State courts in Germany and Russia have responded to the decease outbreak by delaying or suspending proceedings deemed being non-urgent. The status of matters pending before courts is changing on a daily basis, in most cases providing little clarity about when or how they will be addressed. Thus, in Germany in-person hearings have been postponed for up to six months.
This is happening against the background of the imminent flow of disputes stemming from the disruption of production chains and contractual delays caused or exacerbated by the COVID-19 crisis.
Under such circumstances, international arbitration is worth to be considered as an alternative for immediate and efficient resolution of pending and forthcoming disputes. In this regard, the main German and Russian arbitral institutions are taking precautionary measures to minimise the potential negative impact that corona-crisis may have on the progression of arbitrations and to safeguard the health and safety of everyone involved in arbitral proceedings. Below we have compared the solutions being offered by the German Institution of Arbitration (“DIS”) as the leading German arbitration institution and main Russian arbitration providers in order to overcome the restrictions caused by the COVID-19 crisis.
Initiation of arbitral proceedings
Commencement of the arbitration is one of the most important and formalised stages of any arbitral proceedings which exerts influence on the further progress of the case. Against this background, all arbitration institutions in Germany and Russia adopted measures facilitating submission of claims and requests for arbitration in electronic form.
According to the announcement addressing the COVID-19 situation, claimants need not file a hard copy intended for the DIS and, therefore, the electronic transmission of the request for arbitration via e-mail suffices for the commencement of the arbitration.
(a) The International Commercial Arbitration Court at the Chamber of Commerce and Industry (ICAC)
The ICAC has opted for the similar approach as the DIS. The informative letter on its web-site suggests that any documents relating to the commencement of the arbitration can be filed in electronic form via e-mail. However, the ICAC and arbitral tribunals reserve the right to request original documents in hard copies.
(b) The Russian Arbitration Centre at the Russian Institute of Modern Arbitration (the RAC)
The RAC is one of few arbitration institutions world-wide which have developed an own digital platform allowing the parties and arbitral tribunal to upload, store and exchange documents in electronic form throughout all stages of arbitral proceedings. Thus, as it mentioned in the address of the RAC’s Executive Administrator, the parties are welcome to submit their claims and requests for arbitration via the Online System of Arbitration or by e-mail.
(c) The Arbitration Centre at RSPP (AC at RSPP)
The AC at RSPP is being in line with the common trend and also offers to the parties an option to commence arbitration proceedings by filing a claim by means of its online platform or e-mail as it is clarified in the information note.
Summarising, the measures adopted against the pandemic of coronavirus are not a hindrance for the initiation of arbitration proceedings in Germany and Russia.
Exchange of evidence
Traditionally, the exchange of evidence is loosely regulated by most of arbitration institutions. Usually these issues are left to the parties’ autonomy and tribunal’s discretion. Parties therefore are free to agree on the exchange in paper form as well as by means of e-mail or virtual data room provided by professional provider. Under the current circumstances, traditional mail and courier services lack reliability and e-mail is often not an option for documentary heavy proceedings. Thus, today the parties as never before need a reliable digital platform for the exchange of sizable volume of materials with high standards of data protection. In this light, arbitral institutions could be a great help in this regard.
The current 2018 DIS Rules address primary the communications with the DIS officers where electronic form is prevailing over hard copies. Following this principle, the DIS in its announcement recommends all participants of arbitral proceedings to submit all documents addressed to the DIS to its official e-mail address. Moreover, the DIS requests all participants to refrain to the greatest extent possible from the transmission of portable storage devices.
However, the exchange of evidence between participants of arbitral proceedings is not covered by the rules and has not found its place in the COVID-19 announcement. Therefore, the DIS does not provide parties with any support in this regard leaving this issue to their own discretion.
In Russia arbitration institutions traditionally play more proactive role being a kind of intermediate agent between the parties and the tribunal.
The ICAC Rules envisage that the parties shall transmit all documents related to the arbitration to the ICAC Secretariat. Similar to claims and requests for arbitration, it was suggested that during the pandemic these documents shall be communicated via e-mail subject to the right of the ICAC Secretariat or tribunals to request hard copies. Like the DIS, the ICAC does not have its own or recommended online system designed for storage and exchange of materials relating to arbitral proceedings. However, the parties are free to reach an agreement to use any technical solution of their own choice.
As sated above, the RAC is the only Russian and one of very few international arbitration institutions which have developed its own online poral, where all participant of arbitral proceedings can upload, store and exchange documents in electronic form. In current circumstances this service cannot be overestimated, as it allows to overcome the constraints caused by social distancing.
(c) AC at RSPP
The AC at RSPP Rules provide for transmission of all documents through the Arbitration Centre itself in paper form. However, in the light of the measures imposed against COVID-19, the Centre has encouraged the parties to file all documents in electronic form. However, although the AC at RSPP is currently developing its own online system, up to date it is operating only for submissions initiating arbitration like claims and requests for arbitration. Therefore, parties have to transmit all pieces of documentary evidence by e-mail or show initiative and use solutions provided by professional providers.
In the light of social distancing caused by the spread of the coronavirus, the conduct of oral hearings has become the main hindrance for the smooth progress of arbitration proceedings. More often than not parties and tribunals are inclined to postpone hearings until the restrictive measures are lifted. However, up to date it is hardly predictable when the consequences of the virus will be overcome. Moreover, it may be too costly to suspend some sizable international disputes for such an indefinite time period. In this regard, the assistance of arbitration institutions in organizing online hearings could be a great help.
Notably, both Germany and Russia belong to the continental system of law meaning that oral hearings serve primarily for the exchange by the parties of their legal assessments and usually last several hours instead of several days or a couple of weeks as in the common system. Therefore, it seems less problematic to hold online oral hearings in these countries. Amongst all arbitration institutions both in Germany and Russia only the RAC provides parties with a free of charge digital solution for online conduct of oral hearings by means of video conferencing. Noteworthy, the offered platform allows participants not only visually communicate with each other, but also to share documents and demonstrate their presentations within the course of hearings.
All other arbitration institutions (DIS, ICAC and AC at RSPP) leave this issue entirely to the parties and tribunals, who are usually reluctant to take the initiative.
Termination of the Arbitration
Unlike state courts, members of arbitral tribunals are not bound to meet in person to discuss the case and render the award. Therefore, the imposed social distancing is not an impediment for the arbitral award to be prepared. The problem can occur on the stage of the issuance of the hard copy of the award, due to limitations in mail and currier services operation.
The DIS in its COVID-19 announcement suggests that the parties are allowed to come to the agreement that the award to be issued in electronic form. Otherwise, if a party insists on the paper copy, such original hard copy “will, in deviation from the practice heretofore, not bear the signature of a Counsel of the Case Management Team and they may not necessarily be bound”. This approach is quite arguable because according to the New York Convention, the UNCITRAL Model Law and national legislation of most countries the party seeking the enforcement of an arbitral award shall submit it in original hard copy.
The aforementioned concern is thought to be a reason why all leading Russian arbitration institutions have not changed their regulations regarding the issuance of awards which shall be in paper form and signed by the members of arbitral tribunal.
Unlike courts, international arbitration due its procedural flexibility allows parties to resolve their disputes regardless the restrictions imposed in the light of the COVID-19 pandemic. However, arbitration institutions in some aspects could take more proactive role by offering to the participants of arbitral proceedings technological solutions and services facilitating smooth progress of cases in the time of the COVID-19 crisis.