Right to a Physical Hearing Project: Release of the General Report
ICCA is pleased to announce the release today of the General Report, the culmination of the multi-jurisdictional survey concerning the question whether a right to a physical hearing exists in international arbitration. The General Report is authored by Co-editors Professor Giacomo Rojas Elgueta, James Hosking and Yasmine Lahlou.
ICCA President Lucy Reed commented:
"I congratulate the Co-editors on this comprehensive and easy-to-navigate General Report. It will be valuable to arbitrators, counsel, academics and the judiciary far beyond the Covid-19 pandemic conditions that inspired the Right to a Physical Hearing project."
Having launched their survey in September 2020 in collaboration with ICCA, the Co-editors released 78 national reports from New York Convention jurisdictions addressing questions such as: Is a right to a physical hearing expressly provided by – or can it be inferred from – the relevant arbitration law; what is the impact of the parties’ agreement on the arbitrators’ procedural discretion to order a remote hearing; and can remote hearings affect the validity or enforceability of an award?
The General Report now records the key finding of the survey – the lex arbitri in none of the surveyed jurisdictions contains an express provision granting parties to an arbitration the right to a physical hearing, with the majority of reporters concluding that the right to a physical hearing is in fact implicitly excluded by their jurisdiction’s lex arbitri. To the contrary, five reporters answered that a right to a physical hearing should be inferred from the lex arbitri (Ecuador, Tunisia, Venezuela – although limited to the first procedural hearing, Vietnam and Zimbabwe), while in six jurisdictions the reporters took the view that the question whether parties have a right to a physical hearing remains unsettled. Notably, the arbitration laws in five of these six jurisdictions are based on the UNCITRAL Model Law, Article 24(1) of which prompted debate in many of the reports about whether the parties' right to request an "oral" hearing translates into the right to request a "physical" hearing.
The General Report describes the background and methodology of the survey and offers high-level conclusions drawn from the answers provided in the national reports, which are the crown jewel of the project. In addition to outlining the project’s core principles of focus, comprehensiveness, diversity, relevance and consistency, the General Report highlights both convergences and divergences among the 78 jurisdictions on the survey’s key issues.
In most surveyed jurisdictions’ rules applicable to litigation, parties either have a right to a physical hearing or, in any case, hearings are physical as a matter of practice; however this does not have any repercussions on arbitration. Only in two of the covered jurisdictions (Ecuador and Tunisia) did the reporters conclude that the existence of a right to a physical hearing in litigation implies that such right also exists in arbitration, while in the People’s Republic of China the national reporters affirmed that, although unlikely, the possibility that such right could be extended to arbitration cannot be totally excluded. In a minority of jurisdictions, the conclusion that a right to a physical hearing in arbitration is implicitly excluded is reinforced by the finding that such right does not exist in the general rules of civil procedure either, based on the a fortiori argument that, given the rationale of arbitration as a flexible and efficient alternative to State court proceedings, it would be paradoxical if arbitral tribunals were not granted the same discretion to order remote hearings as State courts.
In the few jurisdictions in which the reporters found a right to a physical hearing, they also found that such right does not trump party autonomy and can generally be waived by agreement of the parties. Equally, where a right to a physical hearing in arbitration does not exist, arbitrators generally may not overrule party autonomy and disregard the parties' agreement to have a physical hearing, although there are substantial nuances among jurisdictions, including as to the consequences attached to a violation of the parties’ agreement by the arbitral tribunal. In a significant number of jurisdictions, however, national reporters argue that there can be circumstances in which an arbitral tribunal can validly override the parties’ agreement to hold a physical hearing subject to a balancing exercise with other competing interests.
The majority of national reports conclude that the arbitral tribunal’s decision to conduct a remote hearing over the objection of both parties may jeopardize the validity of the award but only if the parties timely object. In the jurisdictions where the right to a physical hearing exists, the survey shows that its violation would not amount per se to a ground for setting aside the award in any except Vietnam. As to the vast majority of jurisdictions where the right to a physical hearing does not exist, the national reporters analyzed the circumstances under which the failure to conduct a physical hearing could nonetheless lead to the vacatur of an award. In almost all jurisdictions the question of setting aside will ultimately be determined by whether there has been some kind of due process violation.
The survey also sheds light on the possible repercussions of a remote hearing on the enforceability of the award. An interesting divergence emerged in the domestic courts’ interpretation of Article V(1)(b) of the New York Convention, which is alternatively interpreted as a safeguard of the forum’s due process standards or as referring to the procedural rules of the law of the seat. The survey results evidence a variety of nuances in relation to Article V(1)(d), in particular as to whether the violation of a procedural rule of the law of the seat (including a breach of the right to a physical hearing, if it existed) would amount per se to a ground for refusal. Finally, when analyzing courts' interpretation of Article V(2)(b), the national reporters generally agreed that this ground for refusal requires showing that enforcing the foreign award would run contrary to the forum’s (rather than the seat’s) notion of public policy, and that the threshold for such showing is very high.
The General Report will also be published in hard copy as part of a volume of the ICCA Reports Series, together with a set of essays addressing the interplay between remote hearings and key conceptual issues in international arbitration. That volume will be launched at the XXVth ICCA Congress in Edinburgh in September 2022.