AlkasimIntroduction
The world is rapidly evolving into a global village, with technology transcending every single aspect of human existence. Before the coronation of technology as the most efficient way of achieving almost every objective, Judex non calculat goes the adage [lawyers are not mathematicians]. Unfortunately, this is often true in relation to the machines that perform calculations for us (computers).
For a variety of reasons, the use of information technology in the legal context is still far below its potential; with the obvious exception of specific niches such as e-commerce law and related matters. Tech is often misinterpreted, reviled, mistreated, and generally considered to be someone else’s problem. This method of perception rapidly changed with the outbreak of the COVID-19 pandemic. The global pandemic of COVID-19 has impacted all industries worldwide and international commercial arbitration is no exception.
Nonetheless, many countries have called a halt to various fundamental operations until the dust settles. In the face of ever-increasing restrictions on peoples’ movement and institutional closures in Spring 2020, international arbitration has confirmed its status as a versatile alternative dispute resolution mechanism. International arbitral practitioners showcased the resilience and adaptability of international arbitration by choosing to resolve disputes remotely using a variety of technological means.
Before the COVID-19 pandemic, counsel, arbitrators, and institutions had already introduced, deployed, and used new technologies in international arbitration. Alas, despite the overwhelming gains, and for a multitude of reasons, technology has been utilized iteratively. However, as a result of the sudden resurgence of the COVID-19, the arbitral community should not be surprised that the use of technology at all levels of the international arbitration system has skyrocketed in the last two years. (1)
The pith of this article will be to examine how modern Tech can be positively utilized To enhance international commercial arbitration (ICA), the risk and benefits that comes with it and some legislations that guides such utilization.
CLARIFICATION OF SOME KEY TERMS.
Before delving into the main thrust of this article it will not be out of place to offer a brief exposition of some key terms to wit;
Information and communication technology (ICT)
International commercial arbitration (ICA)
Information And Communication Technology (ICT)
Information and communication technology (ICT) is defined as a diverse set of technological tools and resources used to transmit, store, create, share or exchange information. These technological tools and resources include computers, the Internet (websites, blogs and emails), live broadcasting technologies (radio, television and webcasting), recorded broadcasting technologies (podcasting, audio and video players, and storage devices) and telephony (fixed or mobile, satellite, Visio/video-conferencing, etc.) (2)
Moreover, ICT now is rapidly evolving into an autonomous entity, popularly referred to as “Artificial intelligence” (AI) that can be applied in various fields like, transportation, medicine, warfare, Journalism, Law etc. The most recent application of such high end modern tech (AI) are, Tesla’s self driving mode, automated targeting system of the Reaper drone , ROSS the “AI lawyer” to mention but a few. Though this technology are still in their developmental stage and not perfected “yet”, but still serve as a testament to the rapid evolution of technology.
International Commercial Arbitration (ICA)
As many legal concept go, the term international commercial arbitration defies a precise definition as scholars often use different approaches in determining whether a commercial dispute is domestic or one with a hint of international flavor. For this reason, it is behoveful to consider a number of definitions through the lenses of some legislations to achieve some level of precision.
1. Article 1492 of the French Code of Civil Procedure uses two approaches in determining whether a dispute is national or international. Firstly arbitration is international if it involves issues of international trade. The second involves focusing attention on the parties particularly their nationality or habitual place of residence or if the party is a corporate entity, the seat of its central control or management.(3)
2. The ICC Rules adopted the nature of the dispute as its own criterion whereas in 1927, it altered its rules to cover disputes which contain a foreign element even if the parties are nationals of the same country.(4)
3. Article 1 (1)(a) of the European Convention of 1960 define international arbitration agreement as arbitration agreement concluded for the settling of disputes arising from international trade between physical or legal persons having when concluding the agreement their habitual place of residence or their seat in different contracting States.
The Belgium and Switzerland legislations used the residence and nationality of the parties as the test of whether a particular arbitration is international or not.
Gathering from the above legislations, it is obvious that different legislation followed different approach in determining whether a commercial dispute is international or not.(5)
The Arbitration and Conciliation Act(6) appears to be more encompassing. Section 57(2) of the Act provides that an arbitration is international if
(a) the parties to an arbitration agreement have, at the time of the conclusion of the agreement, their place of business in different countries ; or
(b) one of the following places is situated outsides the country in which the parties have their place of business –
(i) the place of arbitration if such place is determined in or pursuant to the arbitration agreement;
(ii) any place where a substantial part of the obligation of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or
(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or
(d) the parties, despite the nature of the contract, expressly agreed that any dispute arising from the commercial transaction shall be treated as an international arbitration.
The provisions of Section 57(2) of the Act combined two criteria in defining the term “international”, that is, the place of business or habitual residence and the subject matter of the arbitration agreement. Furthermore, the Act states that if the parties expressly agree, regardless of the nature of the contract, “that any dispute arising from their commercial transaction will be treated as international”, it will be treated as such without more.
How Tech Can Be Utilized In International Commercial Arbitration
In its truest sense, information technology embodies any use of computers; every time a computer is used, information is operated through technology. As a corollary, “the use of technology in arbitration” may in fact cover a wide range of radically different actions that collectively cover and go beyond most legal practitioners’ daily work. Handheld devices (such as personal digital assistants or smart phones) are used for everything from simple word processing to online legal research, billing software, shared calendaring, automated interest calculation, automated conflict of interest checking, e-mailing, videoconferencing, and more exotic technologies like 3D virtual reality
The following is a general overview of some of the most prevalent types of technology used in arbitration; most other Tech applications (aside from legal research) are variants or configurations of these:
1. Modern tech goes beyond just processing data; it can be used to transmit the already refined data to various actors/stakeholders in the Arbitral process in real time thereby saving time and resources. The usual platforms for this are emails and web-based means such as web interfaces and bulletin boards.
2. ICA involves parties from different parts of the world (the arbitrators inclusive); invariably this posits that the parties have to converge at a specific location and at a specific time. This will undoubtedly cost a wanton loss of valuable time and resources. Utilizing modern tech by connecting all the entities involved in the Arbitral process through virtual means will do away with this plight. Some of the platforms through which this can be achieved extend to but are not limited to Zoom, Skype, Google meet, discord etc.
3. Modern technology makes it easier to create new documents. Tools like “copy and paste” help to speed up the production process. In the realm of arbitration, the drafting of an award frequently involves “copy and pastes” from the parties’ briefs and documentary evidence. Furthermore, modern technology has created a new way of creating documents, as it is no longer unheard of for people from all over the world to collaborate on document drafting.
4. Modern technology can also be used to improve case management by using progress tracking software, which shows, for example, where a given case is, in its life cycle, what the next expected actions are, and when the target date is. It may also depict graphically the links between the case’s various actors.
5. Technology has, to put it simply, “an amazing memory.” Tech has given us the possibility to track everything that occurs on our (virtual) desktop and, with the collaboration of others, on their desktops. Tech may indeed be used to record and store not only documents, but also presentations, oral statements, and video conferencing exchanges. The advantage (and sometimes the danger) of this is that such data can be reproduced by anyone gaining access to it with perfect accuracy and at any time.(7)
Guidelines On The Use Of Technology In International Commercial Arbitration
Surely one expects that if modern tech will be used as a platform for deciding multi-national commercial dispute between entities worth billions of dollars, there should be some sort of Rules and regulations guiding the use of such technologies in areas relating to data protection, fairness, consent and cyber security.
In 2021, the chattered institute of Arbitrators released a frame work tilted “Guideline on the Use of Technology in International Arbitration (2021)“(8) This Guideline is intended for use in conjunction with, and does not supersede, any laws or institutional rules applicable to the use of technology in an individual arbitration.
However, the thrust of this article is not the examination of such guidelines so, recourse will only be made to some of the important ones by the way. Some of the guidelines though not exhaustive are provided hereunder to wit;
1. Arbitrators should identify the extent to which they have powers and duties in relation to the use of technology in an arbitration.
2. Where arbitrators must decide on the use of technology in an arbitration, they should consider whether the proposed use is proportionate in all the circumstances.
3. Any technology used for common purposes in an arbitration must not undermine the fairness of the process and must be transparent.
4. Participants should take appropriate steps to ensure that the technology used in an arbitration remains secure and stable.
It is limpid that the above guidelines placed high premium on security, consent and fairness among all the entities involved; although if any of the entities “feel” otherwise then the use of mordern tech is not recommended.
The Benefits Of Utilizing Modern Tech In ICA.
1. It is cost effective; one of the main reasons for the adoption of “ICA” as an alternative way of resolving disputes involving big commercial entities is the pursuit of not over-stretching the envelope too far, that would otherwise be occasioned if the traditional means of resolving disputes (litigation) was resorted to. The application of modern tech in this regard will undoubtedly enhance cost saving in two aspects to wit;
a) Travel expenses; at the risk of stating the obvious, ICA involves entities from different nationalities, as a result, counsel, parties, arbitrators, witnesses etc have to travel and converge to a specific location for the Arbitral proceedings. The use of modern tech will do away with all these problems as all parties involved can simply converge through cyber space.
b) Documentation; the cost of transmitting, reproduction, saving and tracking of all related documents will be more cheaper as everything can be stored, accessed and downloaded on the cyber space. In essence all documentation needed for the effective resolution of such dispute will be readily available.
2. It saves time; one of the most fundamental reasons as to the adoption of ADR ( ICA in particular) by big commercial entities is to save time which seems to be one of the plague affecting litigaton. The use of technology will in every way enhance time saving, as all parties involved need not travel to the designated arbitral location or transport documents through carriers which will take an awful lot of time to reach the designated location which in turn will delay proceedings.
3. Secrecy it is beyond obvious that commercial entities explore various ways to keep their affairs private and not let their “business” out there for their competitors or general public to exploit. It is for this reason that ICA was even adopted in the first place. But imagine, throwing technology into the mix? ICA can now be conducted through an exclusive channel, at an exclusive time and with little or no possibility of their competitors having a sniff of the skeletons in their closet. It is even good for the die hard reputation they (commercial entities) built over the years.
4. In addition to the effects of accelerating the proceedings, lowering costs, and increasing the productivity of the various people involved in an arbitration, technology may make certain aspects of an arbitral procedure more effective, in the sense that tasks or goals can be accomplished in ways that would not have been possible without modern technology.
For example, in the absence of Tech availability, costs and time constraints may force the rejection of certain actions, such as hearing a witness or experts who may not be readily available, particularly in expedited procedures. This is why, for example, witnesses and experts were heard via video conference during Olympic arbitrations, where time constraints would have prevented their testimony if they had to be physically present.
5. Other benefits include the ability to easily archive documents and the ability to transport a large number of files (through cyber space) to a hearing without regard for their physical weight. Seems a little unnecessary, doesn’t it? Or, at the very least, it’s a factor in terms of convenience.
6. Mass claims. If the number of claimants is high, technology may be particularly useful in helping to simplify the process. This may for instance be achieved by streamlining the submission phase using electronic forms, as was done in the context of the Iraq compensation program or UNCC.
SquareTrade´s online assisted negotiation and online mediation program, which is primarily used for eBay disputes, is another good example, as SquareTrade resolves some 800´0001´000´000 disputes a year and its intake and first steps of resolution are entirely automated using interactive electronic forms. Modern Tech may also play an important role in class actions which in the US are now more and more brought to arbitration. (10)
Drawbacks of applying modern tech in ICA.
1. Cyber Security: The first obvious draw back is the issue of cyber security. Just as technology is rapidly changing the entire perception of human existence, there are [personal gains or for the benefits of their employers. Multi Billion dollar companies resort to arbitration for their affairs not to appear in the public eye.
However, their competitors or some couch potatoe tech “genius” might see this as an opportunity to hack and access sensible information and materials, intercept documents that are uploaded to a “secure” network for the smooth resolution of the dispute (at hand); information that is worth billions of dollars to the right buyer.
2. The authenticity of information and materials might be questioned; against the back drop of the issue of cyber security, information and materials supplied by commercial entities are prone to be altered when those information are hacked or intercepted. Such as record of transaction, statement of account, terms of contract, signatories etc.
3. System malfunction. This is a major draw back, as files, documents, records, evidence etc might be lost due to the entire network collapsing or the storage system being corrupted or even during the Arbitral process the connectivity continuously breaks down. This will lead to the proceedings starting afresh or parties involved will go through the pains of re-transmitting documents and materials for the effective resolution of the dispute. This unfortunate draw back kind of throw the entire prospect of cost and time saving under the bus.
4. Misuse or premature technology available; the whole idea of implementing tech in ICA is to pursue efficiency and effectiveness without necessary sacrificing quality and fairness in the Arbitral process. What if the technology is not even well developed or parties involved in the Arbitral process misuse the technology for reasons not far away from ignorance? That will undoubtedly leave a dent on efficiency and effectiveness.
Recommendation
There should be a central, effecient and private network/ platform for parties intending to utilize tech in ICA. This will go a long way in ensuring that the network/platform is not misused or easily accessible by third parties.
Mechanisms should be put in place to ensure that all sensitive materials and information are kept away from Public eye. This system should be manned by experts. This will go a long way in ensuring security and further foster confidentiality.
Just like most arbitration-based legislations, a unified International Law should be enacted with a view of defining” when and how” tech should be utilise in ICA.
Conclusion
ADR is always viewed as a penacea to the inadequacies occasioned by the traditional way of resolving disputes (litigation), through time and cost saving, secrecy and opportunity for parties to determine the way and manner the whole ADR process should be conducted. But what is even more impressive is that this entire process has been made faster, cheaper, more effective and efficient without sacrificing quality and fairness in the Arbitral process by the use of modern technology; albeit with some of it downsides, still it’s a profound propect to pursue. Lord Denning MR was spot on when He uttered those immortal words in the case of PARKER V. PARKER “If we never try what has not been done before, we shall never get anywhere. The law will stand still while the rest of the world will move on.”(11)
About the of the Writer:
Suleiman Abubakar Sadiq is a 400lvl student in Faculty of Law, ABU, Zaria. He is the co-founder of “Law in practice” a focus driven hub that assist law students to realize and unlock their full potential and be the best version of them selves. He is currently the secretary General of the federation of African law student north west directorate.(FALAS)
Phone: 08160434132 Mail: [email protected]
References;
1) Aranjo, S.K., Use of modern technology in Arbitration: evolution through necessity, available at –
2)
3) Decree Law No. 80-500 of 12 May, 1981
4) Article 1, International criminal court (ICC) rules
5) Cap 12 Article 176 Swiss Act on Private International Law, 8th December, 1987
6) Cap 18 LFN, 2004
7) Kaufmann, K.G and Schultz, T. [2005] The Use of Information Technology in Arbitration Jusletter
8) Framework Guidelines on the use of technology in international commercial arbitration 2021
9) Kaufmann K.G [2001]. Arbitration at the Olympics: Issues of Fast-Track Dispute Resolution and Sports Law, Kluwer
10) Wühler, N. (1999).The United Nations Compensation Commission: A new contribution to the process of international claims resolution, 2 J. Int´l Econ. L. 249
11) (1954) 15 AII AT 22
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