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Arbitration in unprecedented times: An optimal alternative for resolving disputes

Author(s): Lauren Tomasich, Mani Kakkar, Sarah Firestone

Apr 1, 2020

With the COVID-19 pandemic forcing significant, temporary changes for courts and businesses alike, parties will have to think of alternatives beyond the courtroom to resolve disputes. Like many jurisdictions tackling this pandemic, Canadian courts have responded with closures and limiting hearings to urgent cases only. These closures, combined with the fact that many commercial disputes may arise as a result of the substantial impact the COVID-19 pandemic has had on business operations, means that parties should consider dispute resolution mechanisms that are effective, customizable and efficient. Arbitration (whether domestic or international) could be the answer.

Parties may elect to arbitrate their dispute on consent

Arbitration is a purely consensual method of dispute resolution. In the current circumstances, parties may elect to abandon a civil action to enter into an arbitration that can resolve disputes more expeditiously or more readily accommodate measures like social distancing.  Arbitration also has other key advantages.

Advantages of arbitration

Customization

A key advantage to arbitration is the ability to select institutional rules or ad hoc rules that are conducive to resolving a dispute efficiently. Finding expert arbitration counsel is key to determining which set of institutional rules or ad hoc rules should be adopted. For example, if a dispute requires immediate resolution, counsel can craft a set of ad hoc rules that enable expedited submissions and the rendering of a final award (e.g., in as little as 72 hours). On the other hand, a complex dispute may require more procedural protections and longer timelines. Arbitrations allow parties to calibrate the right balance of procedural protections to efficiency.

Parties can also select arbitrators best suited to resolve their dispute. An arbitrator with relevant experience and familiarity in an industry could expedite the resolution of a dispute significantly. This is especially true for industries involving a high degree of technical knowledge.

Arbitration can also readily be done virtually. Procedural hearings and case conferences are already typically done by teleconference in arbitration.

Arbitration tribunals and institutions are also more accustomed to videoconferencing. For example, many institutional rules provide that evidence can or must be presented by witness statement rather than orally, and it is generally open to the tribunal to make these determinations rather than merely following the rules of evidence applicable in court proceedings. If evidence is to be presented orally, it is also more commonly presented remotely in arbitrations, through video or telephone conferencing. Therefore, the infrastructure may already be in place.

Efficiency

Arbitrations will be an even more efficient option given the potential backlog of cases that courts will face when they reopen. With the help of experienced arbitration counsel and arbitrators, the process is generally more efficient than pursing a dispute in court – and indeed presents a more flexible and immediately available option which may be key in current circumstances.

Arbitration is not necessarily mutually exclusive of other forms of alternate dispute resolution. Arbitrators can encourage settlement where appropriate and ultimately enter a consent award if requested by the parties. Under some arbitration rules the tribunal can itself even conduct mediation, conciliation or other procedures as appropriate.

Confidentiality

Unlike courts, arbitrations are generally private allowing for confidentiality (including of sensitive information) which may be important in the context of disputes that arise in the current climate.

Conclusion

The ability to customize the process, proceed efficiently and maintain confidentiality – hallmark advantages of selecting arbitration— can be especially advantageous as businesses navigate the impacts of the COVID-19 pandemic.

For further insight on the legal and business considerations related to COVID-19, visit the Osler COVID-19 page.

Canadian and International Arbitration: A guidebook for effective arbitration

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