In the wake of the Glasgow Climate Pact reached at the recent COP26 Conference, it is clear that the urgent need to cut emissions of greenhouse gasses will shape our daily lives in ever more tangible ways over the coming years. Increasingly, businesses must consider the environmental impact of all aspects of their operations. This will include the way businesses seek to resolve the disputes that inevitably arise in the course of commercial relationships. Likewise, the dispute resolution industry itself will face increasing accountability for its carbon footprint and wider environmental impact.
As a potentially sustainable form of dispute resolution, International Arbitration starts from promising foundations.
Whereas (at least before the COVID-19 pandemic) traditional courts relied upon in-person hearings, in International Arbitration it is principally a matter of the parties' choice as to whether any or all parts of the process need to be conducted in this way. The lack of a traditional physical base has also led International Arbitration to readily embrace electronic documents.
Yet despite this strong starting point, the environmental impact of International Arbitration can still be very significant. A study conducted by the Campaign for Greener Arbitrations estimates that a single major international arbitration could require the planting of almost 20,000 trees to offset its carbon emissions, once sources such as flights and other transport, hotels, paper use and data storage are taken into account.
The adaptations made during the COVID-19 pandemic have undoubtedly pointed towards the long-term direction required. Under domestic and international travel restrictions, parties and their advisors have had to choose between conducting their trials virtually or waiting until an indeterminate point in the future at which a traditional in-person trial might be possible. Faced with such delays, the International Arbitration community has overwhelmingly embraced remote trials.
As with the adaptations made by traditional court systems, it remains to be seen how widely these innovations will remain part of the approach to International Arbitration in a post-pandemic world. In particular, there is ongoing and lively debate among practitioners across the dispute resolution industry as to how well virtual trials compare with the more traditional in-person variety when it comes to serving the interests of justice and the parties and witnesses involved.
Whilst reasonable people may differ on this issue, a couple of considerations are worth bearing in mind:
- Many of the solutions which the industry has relied upon to keep trials moving during the pandemic have been existing, off-the-shelf products, including videoconference technology such as Zoom and Microsoft Teams, which were not designed specifically for processes such as witness cross-examination. If tribunals and practitioners have been able to navigate the demands of the pandemic using this technology, imagine what can be achieved going forward with platforms specifically designed to be used as virtual courtrooms, some of which are already on the market; and
- Whilst client need and preferences will always have a key role to play in shaping any International Arbitration, it is clear that environmental considerations will increasingly drive the options available. For example, both the London Court of International Arbitration and the International Chamber of Commerce's Court of International Arbitration have recently introduced new rules which confirm the primacy of electronic communications and put the availability of a virtual hearing on a firm footing. Arbitrators and other practitioners too will have their say: the Campaign for Greener Arbitrations has instituted a "Green Pledge" to which practitioners can sign up, committing themselves to, for example, encouraging the use of videoconferencing facilities as an alternative to travel.
At Brodies, during the pandemic we have successfully conducted several virtual International Arbitration trials, using technology to seamlessly bring together the tribunal, counsel, witnesses and documents in order to ensure that our clients' disputes can be resolved as expeditiously as possible. Happily for clients, these innovations have also driven cost efficiencies, with travel costs an obvious saving.
Besides retaining the best of the innovations encouraged by the pandemic, what more can the International Arbitration community do to reduce its carbon footprint? One area in which International Arbitration arguably lags behind more traditional court systems is in encouraging parties to consider whether a formal dispute resolution process is required at all. In England and Wales, for example, parties are required to attempt to identify and narrow the issues in dispute before commencing proceedings, and to keep settlement under consideration at all times, in order to ensure that only truly intractable disputes end up at trial. By contrast, the rules of International Arbitration laid down by bodies such as the LCIA and ICC tend to have fewer or no formal requirements in this regard.
Fortunately, seeking to avoid unnecessary disputes ought to be common sense for any dispute resolution practitioner. If a dispute can be resolved consensually rather than through lengthy proceedings, whether in arbitration or before the courts, then the benefit will be felt by both the planet and the client's pocket.
Contributor
Partner
