THE ROLE OF TECHNOLOGICAL ADVANCEMENT IN ACCESSING TO INTERNATIONAL ARBITRATION AND DATA PROTECTION

Arbitration is one of the most flexible, efficient and certain alternative way to settle disputes / claims / controversy arising out of the contractual relationship between the parties. It is not governed by any local or national law but a set of rules or guiding principles that differs from institution to institution and also sometimes it is regarded as the ad hoc arbitration where national laws of a state govern the arbitration process. Over the period of time there have been certain amendments and developments in this field and emergence of international institutional arbitration. billions and billions of international trades takes place from each and every country and every trade are governed according to contractual terms and the heart and soul of the contract and remedy to every dispute is through and alternate dispute resolution technique primarily arbitration. To facilitate smooth and speedious mechanism of resolving conflict, international commercial arbitration acts as a medium between two international parties and aggregating them with information technology will help both the parties save time, effort, provide expeditious trial. This paper throws light on how international commercial arbitration combined with internet of things will enhance the trial procedure of arbitration and how rules/guidelines regarding data protection are needed so as to ensure security to all the confidential documents that are subject matter of the proceedings

TECHNOLOGY AND INTERNATIONAL ARBITRATION

One of the impacts of pandemic is the movement of people to isolation which led to increase of technology for their day-to-day work. From banking, to meetings, to court proceedings technology has come a long way.

Technology in access to international arbitration will help parties and the tribunal to be cost efficient, save time and provide speedy trial. The use of technology also helps reduce costs (including but not limited to venue fees) to ensure more justice in arbitration. Moving towards the use of technology in seeking justice should only be seeked as long as it does not hamper the rights of any parties and as long as participants are careful enough to ensure that one does not come at the expense of the other1. In addition, technology by use of artificial intelligence and machine learning can also address issues of arbitration itself, such as lack of diversity, environmental impact and transparency, which affect the conduct of arbitration.

By engaging with parties at an early stage on issues related to the use of technology (especially in the context of a virtual hearing), arbitral tribunals can effectively ensure a level playing field and reduce the risk of challenging an award in good faith on the basis of violations of natural justice or due process as a result of the use of technology2. In cases where the arbitration rules are silent on the use of technology and in the absence of an agreement between the parties, arbitration courts may be guided by the general provisions of the rules3. Where possible under institutional or other rules, the parties may also use expedited arbitration. to ensure the legitimacy of the arbitration process and the subsequent recognition and enforcement of arbitral awards, it is necessary to establish the basis on which the use of technology in international arbitration, including the use of electronic documents, online platforms and, of course, virtual hearings can be allowed4. International arbitration gives parties the flexibility to use technology in ways that help them achieve these goals, given the nature and complexity of the dispute.

It should also be noted that during the global COVID-19 pandemic, several arbitral institutions, such as the ICC, the SCCA in Riyadh, and the Cairo Center for International Commercial Arbitration (CRCICA), have issued recommendations and guidance aimed at assisting arbitral tribunals and parties to mitigate impact of COVID-19 by reminding them of the tools and methods already available and by providing information on existing technologies available for remote arbitration management, including holding “virtual” hearings. Prior to the global COVID-19 pandemic, a large number of arbitration rules issued by the world’s leading international institutions contained provisions expressly allowing the use of technology in arbitration, largely for reasons of time and cost5.

Technology continues to be widely used in international arbitration, especially in videoconferencing and courtroom technology, but AI adoption still lags behind other forms of IT. As the new report explains, while IT has undoubtedly changed the international arbitration process in a positive way, it would be wrong to think that any use of IT will always save time and costs or ensure efficient arbitration. The benefits of IT expansion in international arbitration far outweigh any risk, and the report argues that many widely available IT solutions are not used to maximize time and cost savings6.

Now let’s discuss on points where technology be it I.T. services, A.I., Machine Learning are paving a way in providing speedy and cost-efficient resolution to parties

  1. Analyzing of documents – Lawyers and advocates are many a times drowned in a pile of documents. There are a lot of scenarios where the issues in hands and the facts of the case are similar, so employing those techniques to learn and self-analyze the case will surely help in saving a bulk load of time and energy. What a lawyer has to do is to teach the software on how to detect the favorable documents, clauses, articles, agreements and then provide them with the relevant solution. This can be achieved when putting Machine learning and artificial intelligence to work.
  2. Interviewing witnesses and people in relation with the agreement- People in connection to international arbitration, reside at places were reaching to the venue may not be feasible and will be time consuming. So, by using software like google meet, zoom meeting, Cisco webx platform, the arbitrators can host a meeting from there place only and the proceedings can then be carried on. This will in turn save a lot of time and money, as it is substituting people from travelling from one place to another, only for to present before the tribunal.
  3. Virtual Proceedings – The tribunal can commence virtual proceedings where parties can sit and attend the trial from the comfort of their place which in turn will be cost effective and time efficient. This is turn will also have a great impact on the total cost of the proceedings and will be much less cheap than meeting physically at the prescribed venue.

While the majority of arbitrators are of the opinion that “increasing efficiency, including through technology”, is a factor that is likely to have a significant impact on the future development of international arbitration, use of technology in conducting arbitration opportunities remain limited, including due to unfamiliarity. It has been suggested that this unfamiliarity is due to the high cost of the technology, which is still relatively new (although an unbiased analysis might well suggest that such arguments ceased to be valid a few years ago). The experience with COVID has made it clear that not only is there technology that can make the arbitration process more efficient, but that the technology is available (and in some cases free.

DATA PROTECTION

With the introduction of the GDPR in May 2018, and in light of the ongoing challenges posed by COVID-19, guidance for arbitration professionals on the practical impact of data protection rules on international arbitration is becoming essential. Data protection laws, including the GDPR, can also affect international arbitrations in different ways. The processing of personal data is lawful under the GDPR only if it is carried out in accordance with one of the listed legal bases provided for by the regulation; however, it is not clear to what extent any of these legal frameworks apply to international arbitration. Thus, data submitted to international arbitration may be subject to the GDPR, and in case of violation, severe sanctions may be applied to participants.

The broad definition of data “processing” in the GDPR and its broader territorial coverage means that the GDPR may apply to different parties to an arbitration involved in a disclosure or fact-finding process, including a party, attorney, arbitrator, witness, expert, clerk. and a third-party provider if the participant or “data subject” is covered by the GDPR8 .

It is important to note that, if the processing of certain personal data for arbitration purposes is permitted by Article 6(1) GDPR, the processing of such data for other purposes is not permitted unless otherwise provided in Article 6(1) GDPR9. When participating in a U.S. legal proceeding or arbitration under applicable U.S. law, a party subject to GDPR or other data protection laws should be aware that such laws do not prevent disclosure of information during the course of a proceeding10. Arbitrators may maliciously use the GDPR as a shield to prevent disclosure of information relevant to litigation or requested by another party11. For example, the GDPR allows a party to process personal data if the processing is “necessary for the purposes of the legitimate interests pursued by the data controller or by a third party”, which may be specified by the parties to the arbitration. as the applicable legal basis for the processing of the relevant personal data, although there is limited advice on this.12

For the reason for the application of Data Protection Law in Arbitration, in February 2019, the International Council on Commercial Arbitration (ICCA) and the International Bar Association (IBA) established the Joint Working Group on Data Protection in International Arbitration with the aim of preparing a guide that provides practical guidance on data handling. defense in international arbitration. 12 

In the field of arbitration, a number of organizations have published helpful guidance on steps that can be taken to protect data in arbitration proceedings. Many of the key arbitration rules and guidelines have been updated over the past two years to include a general requirement for courts and parties to consult and address data protection issues in the early stages of arbitration [2]. According to the draft roadmap, participants should consider at the start of arbitration

  • all likely flows and other activities related to the processing of personal data,
  •  the data protection rules applicable to such flows and activities,
  •  the person or persons responsible for compliance with these rules; and
  •  how to comply with these rules effectively and economically,

with minimal disruption to the arbitration process. Participants should consider conducting data comparisons at the start of arbitration proceedings and identify the processing activities and flows of personal data that may take place, the data protection restrictions that may apply to each processing and flow, the persons who may be responsible for enforcing those restrictions, and measures to be taken to comply with these restrictions.13

CONCLUSION

The first part of the article aims to throw some light on the benefits of the usage of technology in access to international arbitration and how international institutions like ICC, SCAA guided in setting up to virtual hearing. Then a few points on how A.I. and Machine Learning can help analyze data and documents and relieve burden from the lawyers as well as arbitrators. Then moving forward, the article discusses how guidelines for data protection are being carried and framing of ules is being done. Even though there are lot of benefits of using technology as a platform in conducting arbitration proceedings but, moving forward, we cannot totally rely upon on it. Lack of physical meeting will in turn result in loss of touch, risk of data protection, security of evidences /documents/ filings, incur expense in educating the parties on how to access the platform, issues with connectivity and on-time availability of resources. Using of AI and Machine learning software cannot also guarantee in successfully analyzing the documents, in a way human mind can.

Having one set of rules/instruction in conducting of proceeding and by using a secured platform by a reputed institution, will surely pave way in conduct of arbitration proceeding and a trust factor will build among all the parties and the arbitrators and there will be ease of proceeding having only one set of International Arbitration rule which in turn will ease in interpretation of all of the rules and articles.

Ending this article with a note that, we cannot fully be dependent on technology to help us get access to justice, because there will always be one set of people, larger than who are educated enough to use the tech, will always prefer and insist on going with physical hearing largely because of lack of education, lack of access to resources, skepticism about the tech and complex way of handling the proceedings. Tech can be a supplement but should not be a primary resource in conduct of any kind of proceedings.

REFERENCES

  1. Namrata Mayur Shah (Rashmikant andPartners)http://arbitrationblog.kluwerarbitration.com/2021/12/23/think-arbi-has-technology-worsened-the-conduct-of-arbitrations/ (last visited on 7th Feb 2022)
  2.  Al Tamimi & Company , https://www.lexology.com/library/detail.aspx?g=8869fc87-e787-419c-ab6a-23e33905a366 (last visited on 9th Feb 2022)
  3. Katherine Proctor , Partner London ,https://kennedyslaw.com/thought-leadership/article/access-to-justice-in-arbitration-costs-and-technology/ (last visited on 7th Feb 2022)
  4. Matthew Saunders , https://www.ashurst.com/en/news-and-insights/legal-updates/covid-19-and-the-embracing-of-technology—a-new-normal-for-international-arbitration (last visited on 10th Feb 2022)
  5. Al Tamimi & Company , https://www.lexology.com/library/detail.aspx?g=8869fc87-e787-419c-ab6a-23e33905a366 (last visited on 9th Feb 2022)
  6. Abby Cohen Smutny Global Head of International Arbitration Practice Group
    White & Casehttps://www.whitecase.com/publications/insight/2021-international-arbitration-survey/technology-virtual-reality (last visited on 5th Feb 2022)
  7.  https://www.paulweiss.com/practices/litigation/international-arbitration/publications/gdpr-issues-in-international-arbitration?id=37691 (last visited on 10th Feb 2022)
  8.  Erik G W Schäfer
    COHAUSZ & FLORACK  https://globalarbitrationreview.com/guide/the-guide-evidence-in-international-arbitration/1st-edition/article/managing-data-privacy-and-cybersecurity-issues (last visited on 8th Feb 2022)
  9. (last visited on 7th Feb 2022)
  10. https://www.paulweiss.com/practices/litigation/international-arbitration/publications/gdpr-issues-in-international-arbitration?id=37691 (last visited on 10th Feb 2022)
  11.  BAKER BOTTS L.L.P.  https://www.bakerbotts.com/thought-leadership/publications/2020/february/foreign-data-protection-laws-in-us-litigatio (last visited on 7th Feb 2022)
  12. Neva Cirkveni and Per Neuburger  https://oblin.at/publication/clash-of-the-titans-gdpr-and-international-arbitration-a-look-at-the-future/ (last visited on 8th Feb 2022)
  13. Martindale , https://www.martindale.com/legal-news/article_greenberg-traurig-llp_2544975.htm (last visited on 8th Feb 2022)

Author: Akshit Mehta


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