Impact of Technology and Telecommunications in Arbitration Proceedings – Unlocking Efficiency, Accessibility and Security
Technology, Media & Telecoms Focus
In the realm of dispute resolution, the integration of technology and telecommunication are paramount for effective dispute resolution processes.
Law Update: Issue 368 - Technology, Media & Telecoms Focus
Khushboo ShahdadpuriSenior Counsel,Dispute Resolution
Rana HassanTrainee Solicitor,Intellectual Property
In the realm of dispute resolution, the integration of technology and telecommunication are paramount for effective dispute resolution processes. With the rapid advancements in these domains, modern arbitration proceedings are undergoing a transformative shift towards efficiency, accessibility, and security.
Technological advancement will continue to play a pivotal role in streamlining case management processes in arbitrations. To assist in navigating and facilitating the electronic exchange of communications, exhibits and submissions, various platforms such as emails, file share transfers, physical data carriers, and online case management platforms are increasingly relied on. Relying on e-briefs or e-bundles streamline proceedings and enhance accessibility and efficiency. Exploring the potential of machine learning artificial intelligence and specialised hardware or software would further serve to augment efficiency in arbitration proceedings.
Technological competence is increasingly crucial in arbitrator selection processes. Artificial Intelligence (“AI”) has made its mark by presenting a range of tools that can assist in addressing the diversity deficit prevalent in arbitral panels while streamlining the arbitrator selection process. Although AI tools for arbitrator selection haven’t fully materialized yet, initiatives like the Arbitrator Intelligence Questionnaire and the Global Arbitration Review Arbitrator Research Tool are pioneering efforts in leveraging AI to enhance transparency and reduce subjectivity in arbitrator selection process. Through aggregating biographical information and past-decision statistics, these tools empower parties with objective insights into arbitrator profiles ensuring the most suitable candidate is selected as well as promoting diversity.
Understanding the importance of cybersecurity and data privacy is paramount to uphold procedural integrity. Therefore, potential arbitrators who lack technological competence risk marginalisation in the selection process, underscoring the growing importance of technological literacy in arbitration. According to the ICC Commission on Arbitration Survey on Use of IT in International Arbitration (“Survey”), when participants were asked whether technological competence would be an important consideration going forward in the selection of arbitrators, 51% of respondents to the Survey responded ‘yes’, 40% responded ‘it depends’, and only 9% responded ‘no’. While the Survey’s utility may be limited given that it is based on voluntary reporting and does not reflect the views of all arbitrators, it does indicate the growing importance of such issues.
Artificial Intelligence (“AI”) has made its mark by presenting a range of tools that can assist in addressing the diversity deficit prevalent in arbitral panels while streamlining the arbitrator selection process.
Technology safeguards cybersecurity, data privacy, and confidentiality ensuring the integrity of arbitration proceedings. This is achieved by a number of ways such as encryption techniques to ensure secure data, multi-factor authentication for arbitration platforms and databases and software updates.
Cybersecurity concerns extend beyond unauthorised access or disclosure of data; they encompass the broader protection of arbitration's integrity. All the stakeholders in an arbitration share the responsibility for cybersecurity, given that breaches often result from human error. Counsel, arbitrators, parties, witnesses, and experts must be vigilant in safeguarding against external threats and mitigating internal risks, such as inadvertent disclosures or social engineering attacks.
To effectively manage cybersecurity risks, parties and tribunals must adopt reasonable security measures tailored to the specific arbitration. Early consideration of cybersecurity issues, preferably at the first case management conference, is essential. The ICCA-NYC Bar-CPR Cybersecurity Protocol for International Arbitration (“ICCA Protocol”) provides comprehensive guidance on implementing cybersecurity measures, emphasising a risk-based approach and party autonomy in agreement on security measures. Specific security measures outlined in the ICCA Protocol cover various areas, including asset management, access controls, encryption, communications security, physical and environmental security, operations security, and information security incident management.
Evidentiary hearings require meticulous planning to ensure that technological advancement is taken advantage of properly. The proliferation of virtual hearings, accelerated by the global pandemic, presents both opportunities and challenges for arbitration practitioners and tribunals. While virtual proceedings offer significant cost savings and increased accessibility, concerns regarding witness testimony integrity and technological limitations persist. In addition, understanding hybrid hearing models further enhances adaptability, catering to diverse procedural needs and technological capabilities.
Before proceeding with virtual hearings, tribunals must meticulously weigh various factors, including due process protections, technological capabilities, and any potential risk to the enforceability of awards. It is imperative to address objections raised by parties, ensuring that each party is afforded a reasonable opportunity to present its case while safeguarding the integrity of the arbitration process.
While tribunals possess broad discretion to conduct proceedings as they see fit, they should remain vigilant in safeguarding the rights of all parties involved. By adopting measures to mitigate technological challenges, such as backup technical solutions and real-time transcripts, tribunals can ensure that the arbitration process remains robust and equitable.
Providing technical tutorials or conferences during arbitration fosters competency and proficiency among stakeholders.
In anticipation of technical difficulties during the arbitration proceedings, parties may designate technical support persons to address issues promptly, minimising disruptions. Parties should replace corrupted files or inoperable links promptly, without compromising the arbitration record. Additionally, technical tutorials or training sessions may be necessary, particularly if specific IT solutions are employed. These sessions should be agreed upon by parties and conducted impartially to ensure fairness.
Given the ongoing need for technological adaptation, parties should communicate and confirm technology approaches, seek procedural directions from the tribunal as needed, and ensure adequate training and resources for all participants. Technical testing before virtual hearings is advisable to pre-empt any issues that may impede the parties' ability to present their cases effectively.
In instances where the tribunal mandates the use of technology solutions, such as online case management platforms, considerations on the reasonableness of the costs incurred may arise. the tribunal might assess whether the expenses associated with IT solutions used by the winning party qualify as arbitration costs, taking into account factors such as the solution's specificity to the case, its proportionality to the matter's size and complexity, and the confidentiality level of the information involved. For instance, while certain IT may be appropriate for a multimillion-dollar dispute, it might not be necessary for smaller cases, or where the sensitivity of the information varies.
Typically, contracts specify only minimum requirements for proof of delivery and increasingly contain provisions for electronic communications. While electronic transmission and receipt of information via email are generally uncontroversial, precautionary measures can be considered, such as requiring recipients to check their electronic mailbox at specified intervals and acknowledge receipt, particularly if receipt is not acknowledged within a certain timeframe.
Acknowledgements of receipt can be generated by many email programs, and parties may agree on manual acknowledgments to ensure successful access to files. Internet-based document repositories/data rooms can also track access to files. Additionally, certified email services can confirm delivery, receipt, content, chain of custody, and chronological stamp of emails and contents, which may be advisable in cases where the receipt of emails is contentious or strict interpretations of the right to a proper defence applies. However, such tools may have limited utility outside specific countries.
For documents requiring a signature, such as arbitral awards or Terms of Reference under the ICC Rules, it's essential to consider formal legal requirements for validity, especially in electronic forms. Traditionally, a 'signed' document has been interpreted to require a physical or 'wet ink' signature on paper. While electronic signatures are increasingly accepted, their legal equivalence varies by jurisdiction. It is important to note that with the enhanced use of AI technology, signatures may be easily replicated, resulting in forgery.
Parties should analyse both the law at the arbitration seat and the likely place of enforcement regarding electronic signature equivalence. Given uncertainties and varying recognition of electronic signatures internationally, parties may opt to produce and retain at least one hand-signed physical original of an award, particularly if electronic signatures are used. Alternatively, to avoid ambiguities and risk of non-acceptance of electronic signatures, parties should agree on the use of electronic signatures at the outset.
As international arbitration embraces the digital age, it is essential to strike a balance between leveraging technology for enhanced efficiency and upholding the principles of due process and fairness. By embracing advancements in IT and virtual hearing technology while remaining cognisant of potential challenges, arbitration practitioners and tribunals can navigate evidentiary hearings with confidence, ensuring that the integrity of the arbitration process is upheld in an ever-evolving landscape.
For further information,please contact Khushboo Shahdadpuri and Rana Hassan.
Published in May 2024
