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Sunday, July 5, 2020

Virtual ADR Essence Of ‘Arbitration’ In This Lockdown



As we are all challenged by the current Covid-19 pandemic, it strikes me that the Alternative Dispute Resolution (ADR) method is perhaps no longer an alternative to our traditional court system, but rather the only viable method for the expeditious resolution of disputes.
Prior to Covid-19 our judicial system in Bangladesh was congested with huge numbers of cases, whereas the numbers of Honourable Judges sitting in the Apex Courts (both Appellate Division and High Court Division) and Lower Courts of the country are very few to handle these cases and they remain under burdensome pressure throughout the year to dispose of these cases. Until the beginning of this pandemic the total number of the cases pending with the country's highest and lower courts exceeded 36 Lakhs. Of the pending cases, more than 14 Lakhs were civil cases while more than 20 Lakhs were criminal cases and more than 1 Lakh were other miscellaneous cases. The statistics further show that more than 5 Lakhs cases are pending in the apex court while more than 32 Lakhs cases are pending in the lower courts of the country.
However the current pandemic has led to a shutdown of the entire court system. Civil trials have been suspended and Court appearances are not taking place. The crux is that the proceedings of the cases have been left in the midpoint. Recently the virtual operation of the Courts have commenced to some extent on urgent matters, particularly the hearings on bail applications and injunction applications. However the backlog in the courts will challenge the entire court system when this crisis will end. That will lead to a greater uncertainty.
If this is the case, then why should we not rely heavily from now on upon different modes of alternative dispute resolution procedure? Since ADR involves informal settlement procedure out of court between the parties, surely there are efficient/cost effective mechanisms that will allow cases to be arbitrated through the use of video technology. Virtual ADR allows cases to be seamlessly resolved without the need for travel by any parties or counsels. All participants can hear and see each other through virtual operating system. The arbitrator will be able to separate the parties and engage in meaningful settlement discussion as if all were present at the same location. From now on the parties would in fact be advised to incorporate a provision for virtual arbitration (if necessary) as a mode for resolution of disputes in their future commercial transactions.
As followed by all the international arbitration centres/boards across the world, it is advisable that all the usual procedures for arbitration can be conducted through virtual operation of the tribunal. The preliminary hearing, fixing of schedule of the arbitral tribunal's sittings, determination of arbitral tribunal's fees and expenses, submission of pleadings (statement of claim, statement of defence and statement of counterclaim and/or amendment of any of its pleadings) along with documentary evidences in the forms of exhibits, statements of each parties' witnesses (which stands as examination-in-chief of witnesses in the arbitration proceedings), cross-examination of witnesses, final and closing arguments of the counsels for the respective parties in the arbitration-all these can be operated virtually through the operation of video technology.
Besides all these it is necessary to keep in mind that the laws regulating arbitration proceedings in different jurisdictions of the world have always preserved provisions providing safeguards to the arbitrating parties to recourse to the Court of law when necessary. This means an arbitration "proceeding" (whether operated in-person or virtually) is always within the purview of the recognized system of law. As for example in Bangladeshi jurisdiction, if any of the parties during continuance of arbitration proceedings feels necessary to protect any of their interests pertaining to subject matter of the dispute in the arbitration which would otherwise frustrate the purpose of the arbitration, s/he can claim protective relief(s) under Section 7A of the Bangladesh Arbitration Act, 2001. The Hon'ble High Court Division of the Supreme Court of Bangladesh earlier by its Judgment passed in Desktop Computer Connection Ltd. vs. ST Electronics (Info-Software Sys) as reported in 15 BLC (2010) stated that where the preservation of subject matter of the dispute of an arbitration proceedings is concerned, the Court under Section 7A of Arbitration Act, 2001 must exercise its restraint power and arrive at substantive findings. At the same time the Hon'ble High Court Division of Bangladesh by its Judgment passed in Crown Maritime Co. Ltd. vs. Royal Boskalis Westminster NV as reported in 16 BLC (2011) stated that at circumstances a monetary compensation may well be an adequate relief but there are instances where an order of injunctive relief may still be necessary to preserve the subject matter of the dispute for proper and effective adjudication of an arbitration proceedings. These are few of the many examples of preventive measures taken by the Bangladeshi Courts during the course of the arbitration proceedings. Looking into the jurisdiction of our neighbouring country (India) reflecting Section 7A of the Bangladesh Arbitration Act, 2001, Section 9 of the Arbitration and Conciliation Act, 1996 (as amended later by Section 17 of the Amending Act 2015) has given the court wide powers to grant interim measures of protection to the arbitrating parties as may appear to the court to be just and convenient. In Leighton India Contractors Private Ltd. vs. DLF Ltd. decided on May 13, 2020, the Delhi High Court has reiterated that the scope of Section 9 of the Indian Arbitration Act is very broad and that it is an expansive provision which does not curtail the powers of the court.
Apart from the above the parties to an arbitration agreement can also take recourse to the Court of law before commencement of arbitration proceeding or even after completion of arbitration proceedings challenging the award of the arbitral tribunal.
So greater utilization of ADR will result in both lawyers and clients resolving their cases. Otherwise all the memories fade, witnesses disappear, parties become entrenched in their positions and costs mount as cases plod their way through an inefficient court system. Hence as decided by the Hon'ble High Court of the Supreme Court of Bangladesh by its Judgment passed in ECOM Agro Corp. Ltd. & another vs. Mosharaf Composite Textile Mills Ltd. as reported in 23 BLT (2015), an arbitration is public policy as in law it can be said to an alternative dispute resolution which has been accepted whole over the world. When there is an agreement having an arbitration clause it is settled principle of law that before instituting any suit parties must or shall invoke the arbitration proceedings.
No one knows when we will get back to normal. Rather arbitration shall be the preferred forum for the speedy, cost effective resolution of disputes. By doing so we ensure that this will lead to a speedy resolution of disputes between the arbitrating parties thus reducing expenses and saving time for all concerned.
(Abir Abbas Chowdhury is an Advocate of the Supreme Court of Bangladesh).