Impact Of COVID-19 On Litigation & Arbitration

By Alok Vajpeyi | April 6, 2020

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Impact Of COVID-19 On Litigation & Arbitration

The world is facing an unprecedented challenge due to the Coronavirus disease (“COVID-19”). Amongst other things, the COVID-19 has also impacted the functioning of the courts and the arbitral institutions. Through this article, I intend to cover the changes introduced by the Indian Courts and the Arbitral institutions in India.

COVID- 19: Courts in India

The Covid-19 pandemic, and the social distancing norms implemented to help fight it, have meant that the courts have had to limit their operations. While some urgent court hearings are proceeding virtually and some courts are taking steps to expand the availability of virtual hearings, many court hearings have been postponed for the time being.

In a major relief to the litigants, the Supreme Court exercising its inherent powers extended the period of limitation till further orders in all the proceedings in respect of Courts/Tribunals, irrespective of the limitation period prescribed under the general or special laws, whether condonable or not. Subsequently, the National Company Law Tribunals (“NCLT”) and the National Company Law Appellate Tribunal (“NCLAT”) have issued separate notifications that the period of limitation for filing appeal before NCLAT shall stand extended in terms of the order of the Supreme Court. Therefore, all timelines prescribe under the Insolvency & Bankruptcy Code, 2016 (“IB Code”) will stand extended till further notice.

The Supreme Court vide circular dated 26.03.2020 stated that it shall continue to function and hear matters involving extreme urgency. Further, the apex court allowed the use of Skype, Facetime or Whatsapp to the AOR/party in person, while appearing in the video conferencing.

Moreover, various High Courts in the country exercising their extraordinary powers have extended the stay on interim orders passed in their jurisdictions for a period of one month or more.

COVID 19: Arbitrations in India

In comparison to Court litigation, Arbitration seems to be more flexible and a better dispute resolution procedure amidst the COVID-19 pandemic. Therefore, the arbitral institutions across the globe have taken various steps to deal with the present situation.

In India, Section 19 of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) states that the Arbitral tribunal has the discretion to determine the procedure for conducting the arbitration. Considering the present situation, for domestic and India seated arbitrations, the Arbitral tribunal may consider incorporating technology in conducting the arbitration, which can be done through online filings and video conferencing.

Some of the arbitral institutions expressly provide for the use of video conferencing for conducting the arbitration. The rules of the Indian Council of Arbitration (“ICA”) provide that the Arbitral tribunal has the power to conduct arbitration proceedings through video conferencing, telephone or any similar means of communication in respect of such matters as may be feasible. Moreover, Indian Institute of Arbitration & Mediation (“IIAM”) and Indian Arbitration Forum (“IAF”) Guidelines 2018 provides that the witness may be examined by way of video conferencing. The IAF guidelines further provide that the case management conference can be conducted through the use of video conferencing.

Post the announcement of lockdown in India, the Arbitral institutions in India have not made any specific changes or announcements to deal with the present situation.

What can be improved?

In any such crisis, access to justice remains essential and therefore considering the increase in the quality of technology the Courts should further promote remote hearings, online filings, hearing through video conferencing etc. For example: the Supreme People’s Court of China ordered “courts at all levels to guide litigants to file cases or mediate disputes online, encouraging judges to make full use of online systems for litigation, including those for case filing and ruling delivery, to ensure that the litigants and their lawyers get better legal services and protection.

The Indian Courts can also consider making digital courts using cyberspace and technologies like block chain and cloud computing for handling disputes relating to online trade, copyright cases and e-commerce product liability claims.

Coming to arbitration, Arbitral Institutions across the globe have introduced various changes to assist the parties in administering the arbitrations. Some of the examples are as follows:

London Court of International Arbitration (“LCIA”): Since third week of March, 2020, the staff of the LCIA is working remotely and parties intending to file new cases can use LCIA online filing system. LCIA has provided dedicated email ids caseworks@lcia.org or accounts@lcia.org to the parties and the counsels for corresponding during this time. Further, the arbitrators are requested to deliver the awards online.

Hong Kong International Arbitration Centre (HKIAC): The HKIAC’s premises are kept open for the hearing and meetings. They have provided general safety precautions concerning its staff and facilities.

This pandemic has invited a lot of discussion on Online Dispute Resolution (“ODR”) system. Increasing ODR increases access to justice – both in terms of cost, accessibility and geographic or logistic challenges posed by traditional arbitration and litigation. There is no better time than this to test the viability of the ODR. Several private ODR platforms have also emerged in India in recent years. To build confidence and public trust in these ODR platforms, the government needs to issue regulatory guidelines on the minimum standard of fairness and data protection that these platforms should adhere to.

Conclusion

These are the challenging times in front of all the three organs of the State. However, every crisis brings some kind of opportunity, and therefore is the appropriate time that the Indian Courts as well as lawyers should adopt the technological advancements in the legal practice so as to better serve the public at large. There is no other alternative, the Courts cannot be shut for a long period of time, as it is often said that justice delayed is justice denied.

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