The Pros and Cons of virtual hearings in international arbitration

Virtual hearings have become a “must” in international arbitration. Prior to the Covid-19 pandemic, very few arbitration practitioners could say that they were experienced and fully comfortable holding virtual hearings. However, in the wake of the pandemic, the international arbitration community has embraced virtual hearings, leading to the gradual adoption of guidelines and best practices on the matter.

The popularity of virtual hearings can be attributed to their numerous advantages. First, they offer unparalleled flexibility, accommodating the busy schedules of the parties, arbitrators and counsel involved. 

Second, since the need to travel is removed from the picture, virtual hearings are often easier to schedule and save considerable time and costs.

Third, virtual hearings offer a sustainable alternative, significantly reducing the carbon footprint associated with extensive travel for in-person hearings. The environmental benefits are substantial, considering the multitude of plane journeys that could be avoided by using virtual platforms.

Of course, the shift towards virtual hearings is not without its pitfalls. The major disadvantage is the absence of face-to-face interaction, resulting in reduced opportunities to interpret body language and non-verbal communication from witnesses and the tribunal. 

Another, perhaps less obvious drawback are the reduced informal interactions facilitated by in-person meetings. These conversations are often key in facilitating the resolution of disputes beyond the formal agenda of the hearing. It is indeed very unlikely that parties agree to settle during a virtual hearing. 

Furthermore, technical glitches caused by slow internet connections may also cause delay to the proceedings and cancel out the time and cost benefit of holding the hearing virtually. This can be resolved by establishing a protocol in advance of the virtual hearing, stipulating the required hardware and connection speeds for each participant, and therefore helping to avoid patchy connection. Lastly, it may also put at a disadvantage parties that do not have the level and quality of equipment and internet connection required for such virtual hearings. 

Considering the above, should we go back to the default way of holding hearings in-person? The answer is a "no", but we must also think carefully about whether a virtual hearing would be beneficial to the case at hand. For example, procedural hearings may almost always be held virtually, but the decision to hold substantive hearings in-person should be contingent upon the specific circumstances of the case. Arbitration practitioners should thus evaluate each case individually to determine the most suitable approach to follow.

Ultimately, the choice between in-person and virtual hearings should rest with the parties, their counsel, and the arbitrators and a careful assessment of potential time and cost savings should always be weighed against the benefits of holding hearings in the traditional manner.

Watch Nadia Darwazeh share her thoughts on the benefits and pitfalls of virtual hearings in international arbitration