The COVID-19 pandemic has created an exponential increase in the number of virtual arbitration hearings, including in the Middle East. In a previous client alert, we describe that virtual hearings come with certain advantages, such as overall efficiency, possible cost and time savings, and a better alignment with sustainability considerations for ‘greener’ arbitrations. However, they also present some unique challenges as discussed in this client alert, especially for arbitrations involving multiple jurisdictions, numerous witnesses and legal counsel, and in terms of ensuring that technology does not adversely impact the hearing.
This client alert reviews how Middle East arbitration centres (DIFC-LCIA; DIAC; SCCA; BCDR-AAA; QICCA) and arbitration laws (DIFC; UAE; KSA; Bahrain; Qatar) accommodate virtual hearings.
Virtual Hearings in Arbitration Centers in the Middle East
We describe below how five Middle East arbitral institutions accommodate arbitrations in a virtual setting:
- DIFC-LCIA Arbitration Centre (“DIFC-LCIA”): On January 1, 2021, the DIFC-LCIA released its updated arbitration rules, applicable to arbitrations commenced on or after January 1, 2021 (the “2021 DIFC-LCIA Rules”).1 The update to the DIFC-LCIA Rules generally widens the scope of the provisions pertaining to remote hearings and the use of technology to better accommodate hearings held with parties in different geographical locations. Article 19.2 sets out that, “hearing[s] may take place in person, or virtually by conference call, videoconference or using other communications technology with participants in one or more geographical places (or in a combined form).” While Article 19.2 of the previously applicable 2016 DIFC-LCIA Rules provided that hearings could take place via “video or telephone conference,” or in person, the provision made no express mention of virtual hearings or other communications technology that could be used for a virtual hearing. The change to Article 19.2 in the 2021 DIFC-LCIA Rules also acknowledges the possibility of a ‘hybrid form’ of virtual and in-person hearing, and highlights that participants may join the hearing from multiple locations.
- Dubai International Arbitration Centre (“DIAC”): DIAC arbitrations are still conducted in accordance with the DIAC Rules of 2007 (“2007 DIAC Rules”).2 The update to the rules, which was introduced in 2017 (“2017 DIAC Rules”), is subject to formal assent from the Ruler of Dubai. Article 20.2 of the 2007 DIAC Rules permits a tribunal, after consultation with the parties, to conduct hearings or meetings at a place that it considers appropriate. Given the relatively wide discretion granted to the tribunal by this provision, the arbitrators may determine that a virtual setting would be the most appropriate venue. Such a position would accord with Article 33(3) of the UAE Federal Law No. 6 of 2018 on Arbitration applicable to onshore Dubai-seated arbitrations (see further below). It is, however, worth noting that the 2017 update to the DIAC Rules, specifically Article 34.7 of the 2017 DIAC Rules, more explicitly endorses virtual venues, that is, hearings and procedural meetings conducted by electronic means of communication such as video conferencing.
- Saudi Centre for Commercial Arbitration (“SCCA”): The 2018 Arbitration Rules of the SCCA (the “2018 SCCA Rules”)3 do not expressly contemplate remote hearings. However, Article 17(3) provides that tribunals may meet at any location considered appropriate for any purpose, including hearings, which may include holding the arbitration virtually. In addition, the SCCA also put in place an “Online Dispute Resolution Protocol,”4 which is specifically designed for smaller disputes with a cap of SAR 200,000 (USD 53,319), according to which the arbitration is to take place exclusively online, including virtual hearings via the SCCA portal.
- Bahrain Chamber for Dispute Resolution and Arbitration and Mediation Center (“BCDR-AAA”): The 2017 Arbitration Rules of the BCDR-AAA (“2017 BCDR-AAA Rules”)5 allow for the conduct of oral hearings and the examination of witnesses by video or telephone conference. Article 22.7 in particular provides that the “arbitral tribunal may direct that witnesses be examined in person or by telephone or video conference.” On November 24, 2020, the BCDR-AAA also released “Guidelines on the preparation and conduct of online (“virtual”) hearings”6 (“Guidelines”) applicable to all arbitrations, whether located on the Chamber’s premises or with the parties and arbitrators joining remotely from different locations. The Guidelines set out various requirements and considerations in relation to: scheduling the hearing, lists of participants, and suitable platform suggestions for the smooth conduct of the hearing.
- Qatar International Centre for Conciliation and Arbitration (“QICCA”): The procedural rules of QICCA are mainly based on the UNCITRAL Arbitration Rules (“QICCA Rules”).7 Article 29.4 of the QICCA Rules allows for the examination of witnesses, including expert witnesses, through modern means of both audio and video telecommunication that do not require physical presence at the hearing. There are otherwise no further specifics set out in the QICCA Rules regarding fully virtual hearings.
Arbitration Laws in the Middle East
The move to virtual hearings also raises the question as to whether arbitration laws in the Middle East accommodate virtual hearings. We describe below the relevant provisions of arbitration laws in five Middle Eastern jurisdictions:
- DIFC Law No. 1 of 2008 (“DIFC Arbitration Law”): The DIFC Arbitration Law, largely based on the UNCITRAL Model Law on International Commercial Arbitration (“UNCITRAL Model Law”), does not expressly refer to the use of technology for the conduct of arbitration hearings. The DIFC Arbitration Law does, however, grant the arbitral tribunal discretion to determine “any place it considers appropriate” for the hearing of the parties, witnesses, experts or parties (Article 27(2), DIFC Arbitration Law).
- Federal Law No. 6 of 2018 on Arbitration (“UAE Arbitration Law”): Article 28(2)(b) of the UAE Arbitration Law expressly provides the tribunal with powers to “hold arbitration hearings with the Parties and deliberate by modern means of communication and electronic technology,” unless otherwise agreed by the parties. Article 33(3) of the UAE Arbitration Law further emphasises that hearings may be held through modern means of communication “without the physical presence of the Parties at the hearing.”
- Saudi Arabia Royal Decree No. M/34 of 2012 Concerning the Approval of the Law of Arbitration (the “KSA Arbitration Law”): The KSA Arbitration Law, broadly modelled on the UNCITRAL Model Law, does not make any express reference to the use of technology for conducting the arbitral hearing. However, it is left to the parties to agree on determining the procedures for the arbitration (Article 25, KSA Arbitration Law). Additionally, under Article 28, the parties also have the freedom to agree on the venue of the arbitration “having regard to the circumstances of the case, including the convenience of the venue to both parties,” and the tribunal may convene at any venue it deems appropriate for the hearing.
- Legislative Decree No. 9 of 2015 (“Bahraini Arbitration Law”): The Bahraini Arbitration Law has incorporated the UNCITRAL Model Law (with some additions), but does not specifically set out provisions relating to virtual arbitration hearings. However, Article 20(2) of the Bahraini Arbitration Law/UNCITRAL Model Law allows the parties to agree on the place of arbitration, and failing such agreement the tribunal has the power to determine any location it considers most appropriate for the hearing.
- Law No. 2 of 2017 Promulgating the Civil and Commercial Arbitration Law (“Qatari Arbitration Law”): The Qatari Arbitration Law is generally modelled on the UNCITRAL Model Law. Article 20(2) of the Qatari Arbitration Law grants relatively wide discretion to the arbitral tribunal in that it permits the tribunal to determine any venue that it deems appropriate for carrying out the hearing of the parties, witnesses and experts to the dispute. The Qatari Arbitration Law does not further specify whether the venue could be in a virtual setting, or whether the parties can make use of technology such as video conferencing.
The rules of multiple leading Middle East arbitration centers, as well as Middle East arbitration laws, generally permit the use of technology and a virtual setting as a hearing venue, either expressly or impliedly. This institutional and legislative support provides a strong launching pad for parties, counsel, and tribunals to hold their hearings virtually, be it now due to COVID-19 restrictions or going forward in a post-COVID world.