Turkish Law Blog

COVID-19 and e-Arbitration: The Takeaways for Turkey

Gizem Halis Kasap Gizem Halis Kasap/ Wake Forest University
30 March, 2020

We are living in an ever more digital era, yet many of the practical realities of international arbitration has remained unchanged. Arbitrators, lawyers, and parties have been resistant to adopt technology in the same way that other large professions have. That is to say, lawyers and arbitrators still typically attend hearings in person, and paper documents are still often incorporated in the proceedings. But, with the outbreak of COVID-19, arbitration is arguably witnessing 10 years of technological transformation compressed into 10 days.

Emerging Issues in the Wake of Covid-19

By its very nature of international arbitration, the parties to the dispute, the arbitrators, witnesses or lawyers are often from different countries. When the merit hearings take place, it is almost inevitable that international travel will be necessary— requiring people to board a plane to sit in with others in the hearing at a distance of less than 6 feet/2 meters. The international arbitrators, whose median age is over 60, are often in a high-risk group and would be reluctant to take such travel or sit in, much less being able to devote his best efforts to resolve the dispute at hand. Despite these challenges on the side of arbitration, the COVID-19 does not prevent arising of conflicts, and in fact, it can potentially lead to more conflicts due to force majeure and rebus sic stantibus clauses. The question then arises how institutions, arbitrators, lawyers, and parties can steer this new reality.

Trends in the World

The major arbitral institutions have taken action plans regarding COVID-19.[1] While some institutions have postponed hearings to a time when in-person meetings would be safe again (which is unknown for now, and arguably, it may remain just a “wishful thinking“ for a long period), some have decided to proceed with hearings via video conferencing without rescheduling the date originally decided. Although the incorporation of the technology into arbitration proceedings has existed to some extent, it appears that we will now see more cases presented in an electronic format, hearings conducted via video-conferencing or use of real-time electronic transcription services. It is then expected that the parties involved in the arbitration process will face a COVID-19 learning curve for technology. Nonetheless, maximizing technology to keep arbitration moving may trigger a permanent change in our practice — making it more efficient and swifter than what it was before.

Implications for Turkey

To date, e-arbitration has mainly been existed under the auspices of online dispute resolution and used to resolve disputes that arise from business-to-business transactions that are conducted through e-commerce. As such, the use of e-arbitration has been limited for the resolution of traditional cross-border commercial disputes.

With the COVID-19 push, virtual hearings, online document repositories and the like are likely to continue being incorporated into international arbitration. On Turkey’s end, there is no legal framework that stipulates the rules for e-arbitration — neither on the national level nor provided by the arbitral institutions. Although some of the rules found in the legal framework for conventional arbitration can be successfully applied in e-arbitration, the need for a specifically designed legal framework for e-arbitration remains exists. Against this backdrop, using e-arbitration in Turkey is challenging to some extent given that International Arbitration Law No. 4686 does not specifically deal with e-arbitration. For example, while Art. 4 of Law No. 4686 expressly provides that arbitration agreements which had concluded in the electronic environment qualify as an arbitration agreement in writing, there remains unknown, say, how an e-arbitration award will be enforced without being converted into a signed and printed copy.

If the Turkish legislator and arbitral institutions follow the trend and merit due consideration to the fact that COVID-19 accelerates an increasing reliance on technology in the legal world, they can turn the pandemic into a chance to revolutionize arbitration without waiting to transplant the legal framework from others. The flexibility inherent to arbitration and the contractual nature of this resolution system would be a great first venue to implement these technological advances available in the legal industry. It is therefore of importance that the Turkish legislator and arbitral institutions keep abreast of the latest trends of developing and promoting the use of remote technology.

[1] E.g. Important Information for ACICA Users-COVID-19 Update, Australian Centre for International Commercial Arbitration, https://acica.org.au/important-information-for-acica-users/. (last visited Mar. 26, 2020); Precautionary Measures at HKIAC in Response to COVID-19, Hong Kong International Arbitration Centre, https://www.hkiac.org/our-services/Facilities. (updated version as of Mar. 26, 2020); Covid-19: Urgent Communication to DRS Community, International Chamber of Commerce (Mar. 17, 2020), https://iccwbo.org/media-wall/news-speeches/covid-19-urgent-communication-to-drs-users-arbitrators-and-other-neutrals/

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