International Arbitration During the Pandemic

In the context of the international public health emergency caused by the new COVID-19 pandemic, many countries have introduced measures to control the disease. These measures are necessary but at the same time, they have had a negative impact on business, especially cross-border transactions, as they have affected the movement of people and transportation of goods. These measures have also made significant changes to international arbitration procedures.

Problems caused by the pandemic

Against the background of the problems that have arisen, countries, arbitration institutions and courts, lawyers have created a number of mechanisms for the further unhindered resolution of international disputes, the number of which has not decreased.

On the contrary, in the near future, we will see an increase in the number of lawsuits by international investors against states due to losses incurred in connection with measures restricting economic activity.

One such measure is the suspension of procedural time during a state of emergency. Another measure is the settlement of disputes through online arbitration (using electronic means of litigation).

Procedural terms may be suspended by law or by agreement of the parties. With regard to suspension in accordance with the law, the applicable law in most cases will be the law of the country in which the arbitration was initiated. However, China, a country that was initially more affected by the virus, has not introduced any special legislation. This is due to the fact that the parties may invoke force majeure to apply for a stay of proceedings, except when the resolution of arbitration disputes in China is available online.

Resolving commercial disputes by virtual arbitration

Most world-renowned arbitration institutions have established mechanisms to ensure that the arbitration proceedings continue as far as possible:

• The International Court of Arbitration (ICC) has set up a rapid response team.
• The International Court of Arbitration in London (LCIA) recommends using its virtual platform or email to apply. Our lawyers will provide you with legal advice on the impact of Covid-19 on corporate procedures in England.
• Hong Kong International Arbitration Center (HKIAC): most of its members work remotely. The Center now accepts documents online in accordance with applicable rules. As for hearings, users are offered a wide range of services for virtual hearings.
• The American Arbitration Association (AAA) does not hold hearings offline, moving completely to virtual proceedings.

You can request detailed information from our consultants in the framework of the legal consultation on the settlement of international disputes through ADR.

The final word

Informatization of judicial systems through the introduction of modern IT technologies is one of the most effective ways to improve the availability and quality of justice in the world.

The introduction of electronic services of international arbitration can not only significantly speed up the process of consideration of cases, but also reduce court costs due to the need for physical presence at the meeting and the involvement of a professional representative.

Moreover, the use of IT technologies can significantly reduce the time, labor and financial and economic costs of performing routine processes. In the near future, the development of IT technologies will most likely allow us to abandon face-to-face meetings on cases for small amounts.