Releasing the pressure valve (commercial feature)

Arbitration offers a viable alternative to courts. By Mercy McBrayer

One area where the COVID-19 global pandemic’s impact has been deeply felt is in national courts. As of early 2020, the potential for contagion spread made in-person court appearances impossible in many jurisdictions. For some judicial systems, interim solutions to keep dockets moving were deployed, such as virtual hearings. But many judicial systems were forced to suspend operations altogether while solutions were developed. Even in jurisdictions that could immediately implement virtual settings, this did not always allow disputes to proceed uninterrupted. In some cases, moving to a virtual forum was not a comprehensive solution. The outcome is another looming crisis for many judiciaries around the world: a compounding bottleneck of cases that now threatens to overwhelm dockets in many regions for months or years to come.

As global justice systems seek long-term solutions to alleviate the burden that they now find themselves under, many are seeing the capacity for arbitration to provide a substantial contribution. Arbitration is a mechanism that has historically supplemented and supported domestic judiciaries and has the potential to do so now in a significant way. Moving disputes, especially commercial disputes, into arbitration provides a beneficial solution to both parties and judiciaries. This is because of the autonomy arbitration gives parties in choosing not only the process by which their dispute will be resolved, but also their decision maker. 

Parties in arbitration have the freedom to select arbitrators based on any factors they deem relevant and desirable, such as experience as a judge or technical expertise in a certain industry. Parties in arbitration also have the ability to agree the briefing and hearing schedule of a dispute directly with their chosen arbitrators. They need not wait in a queue to appear on a docket. In turn, when parties resolve their dispute in arbitration instead of resorting to the courts, the courts’ dockets are freed up to address matters which cannot be heard in any other forum. This in turn alleviates the burden on national courts and ensures swifter due process for all. 

Parties in arbitration can proceed with their disputes independent of the courts but with the assurance that the process is legally binding and enforceable. In most jurisdictions, the validity of arbitration is not tied to specific physical venues. Parties may choose any physical location for hearings that is convenient for them, even one outside the relevant jurisdiction. They may also choose to hold hearings virtually with all parties remaining in their home locales. The location of the proceedings in arbitration will often have no bearing on the law that is applied to the substantive dispute, nor on the enforceability of a resulting award. 

For commercial disputes arising during the pandemic, arbitration has become an increasingly attractive option. But for commercial disputes that had already entered litigation and were stalled by the pandemic, arbitration may offer solutions to these parties as well. Parties may agree to move their existing disputes from litigation into arbitration on the condition that the arbitrator adopt any decisions already made by the courts. Parties may also choose to selectively define the substantive issues the arbitrator may consider. Parties may even choose a retired commercial judge or counsel with extensive commercial litigation experience as their arbitrator to ensure a cohesive transition from litigation to arbitration.

The due process concern that ‘justice delayed is justice denied’ has rarely been more pressing than it is today. Arbitration as a mechanism for commercial dispute resolution has the potential to provide solutions for parties in receiving timely outcomes while also alleviating the significant burden of delayed cases which many courts now face. As has been the case throughout history, arbitration can be a vital means to support judiciaries and parties in achieving justice, even in the face of a global pandemic. 

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Mercy McBrayer

Mercy McBrayer, MCIArb, Research and Academic Affairs Manager, Chartered Institute of Arbitrators.