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Mar 18, 2021 at 5:23 PMEspecially in times of Corona, the question arises in disputes in the field of logistics and transport: how can one quickly obtain a decision in the legal dispute? Arbitration courts are an alternative to state jurisdiction and can score points with particularly flexible procedural design.
by Thorsten Vogl
(Zurich) This noteworthy advantage, especially in the current situation that makes travel and gatherings impossible, received further impetus from a decision of the Austrian Supreme Court, which allowed an arbitration court to order a hearing via video conference, even if one party opposes it (Austrian Supreme Court, decision of July 23, 2020, Az. 18 ONc 3/20s). Specifically: In January 2020, the arbitration court scheduled an (in-person) arbitration hearing for April 15, 2020, as part of an arbitration proceeding that had been pending since August 2017.
Start of the Hearing Adjusted for Time Difference
Due to the Corona pandemic and after hearing the parties, it ordered on April 8, 2020, that instead of the in-person hearing, a video conference would be held. Since the witness to be heard was based in Los Angeles, it moved the start of the hearing (originally 10:00 AM) to 3:00 PM CET, taking the time difference into account, which meant a start time of 6:00 AM for the witness. The arbitration defendants opposed the video conference: they claimed that due to the very short notice of the rescheduling, they had too little preparation time available. A start at 6:00 AM for the representative based in Los Angeles was considered harassing. Furthermore, the witness could be influenced: it could not be checked whether other persons were present in the room, it was unknown which documents the witness was using; additionally, he could receive chat messages unnoticed. Therefore, the arbitration court was biased, as it violated the requirement of fair treatment of the parties and failed to take measures against the abusive influence of witnesses. They further justified their bias application by stating that one of the three arbitrators had rolled his eyes during the statements of the arbitration defendants’ lawyer when the issue of bias was discussed on April 15, 2020. The Supreme Court rejected the bias objection with sound arguments: – The date had already been set long in advance; therefore, the arbitration defendants had sufficient time to prepare.
Preparation Not Impeded
The fact that a short-term rescheduling took place did not impede them in their preparation. The rejection of a request for postponement did not justify concerns of bias. It is inherent in the nature of things that the party making such a request has a greater interest in the postponement than the opposing party. However, this does not mean that an imbalance is accepted in the event of a rejection of the request, especially since the arbitration defendants had not substantiated a prevention of the witness but merely referred generally to his workload in rescheduling cultural events due to the COVID pandemic. In this context, the early hearing date was advantageous, as the witness could then return to his work during the morning. 2 – The early start time should also not be regarded as unfair treatment, as due to the time difference, the hearing necessarily took place at off-peak times for one of the parties. Additionally, the advantage should be appreciated that no exhausting, time-consuming, and costly trip from Los Angeles to Vienna was necessary. – The use of video conference technology is, as the court elaborates with reference to literature and case law, (in Austria) widespread, which also extends to arbitration law. Particularly the COVID-19 pandemic has further expanded the application of video conferences.
Globally Recognized Video Conference Technology
Since the court used WebEx, a globally recognized and widely used video conference technology, there is no violation of Art. 6 ECHR, as this provision guarantees not only the right to a hearing but also the right to access to justice, which is linked to the right to effective legal protection. Video conferences lead to cost and time savings, thereby promoting the enforcement of rights while simultaneously ensuring the right to a hearing. This is especially true in the event of a looming standstill in the administration of justice. Furthermore, the witness influence alleged by the arbitration defendants cannot be completely ruled out even in in-person events, whether through modern technology or through traditional arrangements and prior information of the witness. Video conferences also offer quite efficient control options: frontal and close observation, recording of the hearing, direct eye contact with the camera to avoid reading chat messages on the screen, the possibility for the witness to pan the camera around the room, and keeping his hands always visible.
In light of all this, the order of a video conference, even against the will of one party, cannot justify concerns of bias of the arbitration court. – Regarding the facial expressions of one of the three arbitrators, the court noted that even if one interprets the eye-rolling as disapproval of the lawyer’s statements, this does not mean that he would not decide objectively on the matter in dispute. – A comprehensive view of the previously mentioned individual circumstances also does not lead to the emergence of the fear that the court would not decide objectively. Comment The decision of the Austrian OGH provides a reliable guideline for the ordering of video conferences by arbitration courts, also influencing the handling of different time zones and strategies to avoid witness influence.
Video Conference Does Not Violate Right to a Hearing
Since it is clarified that the order of a video conference, even against the will of one party, neither violates the right to a hearing nor the right to a fair trial, the conduct of such a hearing cannot lead to the annulment of the arbitration award nor to the rejection of arbitrators. The fact that the OGH points out the cost savings through video conferences (no travel costs, absence fees, etc.) is particularly interesting for SMEs: for them, it often concerns lower amounts in dispute. “Classic” arbitration proceedings with their abundant costs are therefore quite unsuitable for this group. If one wants to offer an interesting option for this group, which has so far played only a weak role in arbitration, it is essential to focus on such “cost-reducing” factors. In this regard, the SGO – Permanent Swiss Arbitration Organization – is a pioneer. It was explicitly founded by Prof. Dr. Dr. Hans Giger with a focus on SMEs.
Moreover, one can assume a growing importance of video conferences in the context of arbitration proceedings. For example, the ICC has included the possibility for the arbitration court to provide for video conferences in its new arbitration rules, which came into force on January 1, 2021 (see Art. 26 para. 1). If these rules are agreed upon, it can be assumed that the parties consent to the conduct of video conferences. 3 Incidentally, it should also be noted that the International Council for Commercial Arbitration has launched a research project “Does a Right to a Physical Hearing Exist?”; the results of the survey are likely to be exciting!
Thorsten Vogl. Ass.iur – Associate
Member of the Board of the Permanent Swiss Arbitration Organization (SGO) Zurich. Honorary member of the Association pour l’unification du droit en Afrique (UNIDA), Paris. Editor of the Zeitschrift Strassenverkehr/Circulation routière. Specializing in transport law and supply chain law. https://www.gsl-group.ch/de
