In a year of distance, international businesses have had a taste of virtual arbitrations, and they like it. The world has witnessed unprecedented caseloads across most arbitration institutions, which practitioners anecdotally describe as the greatest number of cases they have had in years — if not ever.
Since the start of 2020, many global businesses have turned to arbitration as court systems struggled to cope with choke-full numbers of civil applications and when coronavirus laws restricted public gatherings.
The international arbitration community responded by drafting alternative options for handling disputes through virtual means, which stakeholders pivoted quickly and effectively.
As businesses saw their disputes resolved using virtual means, making significant savings in the process, many seem to have adopted virtual platforms as their go-to dispute resolution modality.
For example, the International Chamber of Commerce (ICC) reported 946 new arbitration cases in 2020, the highest since 2016. As a result, the Chamber updated its Rules of Arbitration to allow for more flexibility with virtual hearings and updated its arbitration code of conduct to cater to virtual processes needs — including broad discretionary power for arbitral tribunals and greater flexibility for the parties in their dispute procedures.
Industry observers expect this trend to continue as practitioners lean towards more remote and virtual options for handling disputes. Neither is it difficult to see why. Arbitration provides the perfect opportunity for businesses to combine the best of technology and innovation — parties can tailor clauses to the clients’ preferences, including those for cost reduction, travel and safety considerations, and the need for private, efficient resolution.
The slow but steady rise of arbitral institutions in Africa is attributable to the institutional support available. A 2020 survey identifies about 90 arbitration centres in Africa, with South Africa, Egypt, Rwanda, Nigeria, and Kenya hosting the best of them.
This increase in facilities has seen the Africa-related arbitration caseload surge, signifying the capacity of arbitration institutions to innovate and adapt to emerging commercial needs. Since 2019, these institutions have handled thousands of international, high-profile cases, signifying they are coming of age and developing their reputations.
As foreign investment into Africa continues to grow, so will the demand for dispute resolution. What key themes and trends are likely to characterise arbitration practice in the years ahead?
Firstly, remote hearings have become commonplace during the pandemic, showing them to be an efficient and cost-effective alternative to in-person hearings. We can expect parties and tribunals to want more wiggle room to leverage virtual hearings as a lasting feature of arbitral processes going forward, even when in-person hearings become an option again.
Secondly, over the past year, contractual disputes have arisen on the scope of force majeure clauses. Whereas some governments have used the pandemic as a chance to make important econo-political changes to address investment concerns, others have altogether ‘ignored’ the crisis and made no relief provisions for the legal sector. We will likely witness a spike in Covid-related cases from investors looking to benefit from investment reliefs.
Thirdly, there have been predictions for increased corporate insolvencies in many world economies.
In cases where an arbitral counterparty is insolvent or at risk of becoming insolvent, counsel and arbiters must carefully examine their case strategy to minimise the risks associated with insolvency in the arbitral process.
Finally, recent reforms of some continental and international arbitral institutional rules have transformed the processes and conduct of arbitrations, with increased tools, procedures, and technology creating efficiencies that are likely to outlast the arbitration needs of the pandemic.
Evelyn Njiru, is a partner at G.M. Gama Advocates LLP, A World Law Alliance Member.
