The 32nd Annual ITA Workshop and Annual Meeting also featured a mock pre-hearing conference that focused on a case study involving an ICC dispute brought by a Western international contractor/construction company against its Middle Eastern employer, a State-owned entity owned by State X. The relevant arbitration clause provided that “the hearing shall be held in a location in Paris, France to be agreed between the Parties, which will be designated as the ‘Hearing Venue,’” that the Governing Law of the Contract is the Laws of State X, and additionally specified that the arbitration shall be conducted in English.
The pre-hearing conference centered on three main issues familiar to many practitioners practicing during a global pandemic: (1) whether the hearing on the merits should be held virtually (the Tribunal had ruled that an in-person hearing was no longer possible); (2) whether a virtual platform can accommodate the interpretation needs of fact witnesses; and (3) requests to accommodate the bereavement of a party’s expert witnesses. While Claimants were of the view that the hearing on the merits should proceed as scheduled but should be held virtually citing financial pressures that would arise from any delays, Respondent considered that holding the hearing virtually would violate its rights to due process, as its ability to put on its case virtually would be compromised due to the need for interpretation for four witnesses who required interpretation from Arabic to English, and additionally requested that the hearing be postponed due to the bereavement of two of its experts which it argued caused and unreasonable burden and compromised its ability to prepare its case.
Thomas Innes (Steptoe & Johnson (London)) acted as counsel for Claimant, while Jawad Ahmad (Mayer Brown (London)) acted as counsel for Respondent. The Tribunal Members were Stephanie Cohen (Tribunal President, Independent Arbitrator (New York)), Anna-Maria Tamminen (Co-Arbitrator, Hannes Snellman (Helsinki)), and Joseph Chedrawe (Co-Arbitrator, Vinson & Elkins LLP (Dubai)).
The Parties’ Arguments
- Whether the hearing should be held virtually
While Respondent relied upon ICC Rule 25(2), which provided that “the arbitral tribunal shall hear the parties together in person if any of them so requests” (emphasis added), during oral argument Claimant cited the ICC’s COVID-19 Guidance which explained that the “in person” requirement of ICC Rule 25(2) “can be construed as referring to the parties having an opportunity for a live, adversarial exchange, and not to preclude a hearing taking place ‘in person’ by virtual means if the circumstances so warrant,” and that this interpretation was additionally consistent with other language versions of the ICC Rules. Claimant additionally cited secondary sources such as the work of Professor Maxi Scherer in support of its argument that the right to an adversarial exchange does not hinge on whether the exchange takes place in-person physically or remotely, along with other ICC Rules that permit the use of telephone or video conferencing for procedural and other hearings where in-person attendance is not essential.
Relying on the text of the arbitration agreement which stated that “the hearing shall be held in a location in Paris, France,” in its reply to Claimant’s oral argument Respondent argued that there was no authority for deviating from the Parties’ agreement to hold the hearing on the merits in person in Paris, and reserved its right to challenge any award that deviated from the Parties’ agreement. Respondent additionally argued that Claimants had failed to specify the “financial pressures” that would result from any delay in holding a hearing on the merits in person, and in any event that the resulting delay could be taken into consideration in a decision on costs.
- Witness testimony requiring interpretation from Arabic to English
On the corollary issue of witness interpretation, while Respondent was skeptical that Arabic to English interpretation could be accurately and efficiently provided in a virtual platform, Claimant argued that interpretation needs could be accommodated in a virtual setting by using different channels for audio interpretation, and additionally that the quality of interpretation might be improved as interpreters would be able to see the faces of the witnesses providing testimony which could result in more accurate translations.
- The bereavement of Respondent’s two experts
Providing more detail with respect to its application that the hearing be postponed due to the bereavement of its two experts, Respondent explained that its quantum expert was unable to prepare due to the death of their mother-in-law and need to make funerary arrangements, and that its local law expert (who had recently recovered from COVID) faced mitigating circumstances that compromised their ability to prepare including a death in the family (aunt), current family accommodations in a large household, and that they had been unreachable and unable to prepare for the hearing for over a month.
Claimant countered that the objection lacked merit as minimal preparation for the hearing would be needed as the experts had already submitted their written reports, that there was no indication that the experts were not able to attend the hearing, and alternatively that the portion of the proceeding concerning the experts could be bifurcated into a later phase if necessary.
The Tribunal’s Deliberations
During its deliberations, the Tribunal considered that a balancing exercise was required in which it must weigh the needs of proceeding with the hearing as scheduled (but virtually) against the reasons against proceeding. Taking into account its obligation to render an enforceable award, the Tribunal determined there was no indication that it would be set aside at the seat (France) if it proceeded with holding the hearing virtually, citing the absence of case law to the contrary. The Tribunal additionally noted that provided that there is no express prohibition against using virtual hearings in either the parties’ arbitration agreement or in the applicable arbitration rules, that virtual hearings should generally be acceptable. Indeed, while there was resistance to the use of virtual hearings early on in the pandemic, practitioners have found them to be surprisingly effective such that it is possible even more hearings will be conducted in a virtual manner long after the end of the global pandemic.
Ruling on the issue of interpretation, the Tribunal considered that a virtual platform would not pose difficulties to consecutive interpretation, that steps could be taken in advance to mitigate challenges associated with interpretation including through carefully selecting an interpreter and agreeing to a glossary, and that both Parties would face different challenges (party cross-examining, and the witness providing testimony) such that no party would be exceptionally advantaged/disadvantaged from the arrangement.
Finally, on the point of Respondent’s request to accommodate the bereavement of its two experts, the Tribunal was mindful of the global circumstances and challenges bereavement can present in arbitration proceedings, but considered that the hearing could not be indefinitely delayed on this account. The Tribunal emphasized that the expert’s reports had already been submitted, and that the experts would only be faced with preparing their brief direct testimony and to answer questions on cross-examination, and proposed that presentation of experts could be moved towards the end of the hearing to allow for additional time to prepare.