Right to a Physical Hearing Project: The Release of 20 New Reports Reinforces Core Trends and Important Divergences

Following the publication of the first full tranche of reports in February, Co-editors Giacomo Rojas Elgueta, James Hosking and Yasmine Lahlou, in collaboration with ICCA, are releasing today the national reports from 20 additional New York Convention jurisdictions. These include: Austria, Barbados, Bolivia, Bulgaria, the British Virgin Islands (BVI), Chile, Costa Rica, Egypt, Germany, Guatemala, Hong Kong, Kenya, Mauritius, the Netherlands, Nigeria, the People’s Republic of China, Portugal, Sweden, Switzerland and Ukraine.

On behalf of the Co-editors, Giacomo Rojas Elgueta says "James, Yasmine and I are thrilled with this new release, which could not have happened without the enthusiastic response received from our diverse pool of national reporters. Quite apart from being an invaluable tool to practitioners, the survey offers a fascinating snapshot of how different jurisdictions are grappling with the legal issues around conducting remote hearings in a global pandemic. We are looking forward to publishing the final set of surveys soon and formally launching the report at ICCA Edinburgh 2021."

This latest instalment of responses to the global survey reinforces the core trends and important divergences identified by the Co-editors from the previously released national reports. As with those reports, no jurisdiction’s lex arbitri contains an express provision setting out a right to a physical hearing. However, the Netherlands stands out as the first jurisdiction surveyed where the lex arbitri expressly provides for the possibility of conducting remote hearings, subject to certain fundamental procedural safeguards.

In Model Law jurisdictions, the latest reports add new contours to the debate whether the provision granting the parties the right to request an “oral” hearing translates into a right to request a "physical" one. While the majority of those jurisdictions answer in the negative (Austria, Barbados, BVI, Chile, Costa Rica, Egypt, Guatemala, Hong Kong, Kenya, Mauritius, and Ukraine), a minority view that the right to a physical hearing must be inferred is reported in Germany. In Sweden, the reporters take a strong position, contested by other Swedish commentators, that the right to a physical hearing must be inferred from Swedish law, drawing from principles of the domestic procedural law. Interestingly, the word “oral” was expressly removed from the corresponding provision of the Bulgarian lex arbitri, thus confirming implicitly that the right to a physical hearing can be excluded.

Among non-Model Law jurisdictions, the position of Switzerland stands out as the right to an oral hearing is excluded altogether, even when the parties have chosen arbitration rules expressly recognizing such right or when the right to examine witnesses orally is provided in the terms of reference. In China, by contrast, a right to a physical hearing is recognized in litigation, and it cannot be totally excluded (although it is unlikely) that such right would extend to arbitration.

The possibility of holding hearings by videoconference has been confirmed in those jurisdictions where the courts have already grappled with remote hearings. For example, the Supreme Court in Austria has concluded that, as a general rule, remote hearings comply with the fundamental procedural principles of Austrian arbitration law. Although relying on the rules governing court proceedings, a similar conclusion was reached by the Supreme Court in Nigeria. In Hong Kong the Court of First Instance has stressed that references to the "place" of the hearing in the rules of civil procedure result from historical norms, and do not mandate a physical gathering.

Further, the latest reports show interesting nuances concerning the power of the arbitral tribunal to order a remote hearing despite the parties’ agreement to hold a physical one. In most jurisdictions (e.g., BVI, Chile, Costa Rica, Guatemala, Kenya) the arbitral tribunal is bound by the parties’ agreement. This also holds true in Portugal, but only provided the parties’ agreement was made before the first arbitrator accepts his or her appointment. The parties’ agreement to hold a physical hearing could, however, be superseded on the grounds of fairness and efficiency, if holding a physical hearing would no longer be possible due to the COVID pandemic, as in Bulgaria, Bolivia, Hong Kong and Mauritius. Notably, this issue is unsettled in the Netherlands, as there are different interpretations as to whether the provision recognizing the arbitrators’ power to order remote hearings is mandatory or not.  As to the consequences of not following the parties’ agreement, this may require a case-specific analysis.  In Switzerland and Austria, for example, the violation of the parties’ agreement would not constitute per se a ground for setting aside the award.

This new instalment also sheds further light on the domestic courts’ interpretation of the New York Convention. In Costa Rica, Egypt, Nigeria and Portugal, courts would refuse enforcement if a right to a physical hearing existed at the seat but was violated, without any additional showing. Courts in Ukraine would additionally require that the conduct of a remote hearing resulted in a serious violation of due process to warrant refusing the enforcement of a foreign award. To the contrary, the Germany report concludes that the existence of the right to a physical hearing at the seat would be inconsequential from a German law viewpoint.

These national reports come in addition to the 26 that have already been published on this dedicated page of the ICCA website. Around 30 more will become available by the end of April, completing a survey that will cover the globe. These reports, and in particular many of those released today, will be of particular interest to those involved in the Willem C. Vis International Commercial Arbitration Moot, the oral rounds for which - conducted by remote hearing - commence later this month.

 

Following publication of the third and last batch of national reports, the Project will continue with the publication of a volume in the ICCA Reports Series to be presented at the XXVth ICCA Congress in Edinburgh in September 2021. The volume will take stock of the findings of the survey and will include, alongside the Co-editors’ general report, a series of essays addressing the interplay between remote hearings and key conceptual issues in international arbitration.