2021 International Arbitration Survey: Adapting Arbitration to a Changing World

The School of International Arbitration (SIA), Queen Mary University of London is delighted to launch the results of its twelfth major empirical International Arbitration Survey. This is the fifth one in partnership with international law firm White & Case LLP.

The Covid-19 pandemic has presented challenges for the entire world - the arbitration sector was no exception. The 2021 International Arbitration Survey, Adapting Arbitration to a Changing World, explores how international arbitration adapted to these changing demands and circumstances. More than 1,200 respondents participated in the survey, the widest pool of respondents in the SIA Surveys to date.

View or download the 2021 International Arbitration Survey Report: Adapting arbitration to a changing world [PDF 1,329KB] or access the Report online via White & Case.

Executive Summary of Findings:

Current choices and future adaptations

• International arbitration is the respondents’ preferred method of resolving cross-border disputes for 90% of respondents, either on a stand-alone basis (31%) or in conjunction with ADR (59%).
• The five most preferred seats for arbitration are London, Singapore, Hong Kong, Paris and Geneva.
• ‘Greater support for arbitration by local courts and judiciary’, ‘increased neutrality and impartiality of the local legal system’, and ‘better track record in enforcing agreements to arbitrate and arbitral awards’ are the key adaptations that would make other arbitral seats more attractive
• The five most preferred arbitral institutions are the ICC, SIAC, HKIAC, LCIA and CIETAC.
• Respondents chose ‘administrative/logistical support for virtual hearings’ as their top choice adaptation that would make other sets of arbitration rules or arbitral institutions more attractive, followed by ‘commitment to a more diverse pool of arbitrators’.
• Arbitration users would be most willing to do without ‘unlimited length of written submissions’ and ‘oral hearings on procedural issues’ if this would make their arbitration cheaper or faster.

Diversity on arbitral tribunals

• More than half of respondents agree that progress has been made in terms of gender diversity on arbitral tribunals over the past three years. However, less than a third of respondents believe there has been progress in respect of geographic, age, cultural and, particularly, ethnic diversity.
• Respondents are divided as to whether there is any connection between diversity on a tribunal and their perception of the arbitrators’ independence and impartiality.
• 59% of respondents emphasise the role of appointing authorities and arbitral institutions in promoting diversity, including through the adoption of express policies of suggesting and appointing diverse candidates as arbitrators. However, the significance of the role of counsel is highlighted by about half of respondents, who included ‘commitment by counsel to suggesting diverse lists of arbitrators to clients’ amongst their answers.
• Many respondents feel that opportunities to increase the visibility of diverse candidates should be encouraged through initiatives such as ‘education and promotion of arbitration in jurisdictions with less developed international arbitration networks’ (38%), ‘more mentorship programmes for less experienced arbitration practitioners’ (36%) and ‘speaking opportunities at conferences for less experienced and more diverse members of the arbitration community’ (25%).
• The general consensus amongst respondents is that caution should be exercised when exploring whether adaptations in arbitral practice experienced during the Covid-19 pandemic may have an impact on promotion of diversity objectives, as it can go both ways.

Use of technology

• Technology continues to be widely used in international arbitration, particularly ‘videoconferencing’ and ‘hearing room technologies’, but the adoption of AI continues to lag behind other forms of IT.
• The increase in the use of virtual hearing rooms appears to be the result of how the practice of arbitration has adapted in response to the Covid-19 pandemic.
• If a hearing could no longer be held in person, 79% of respondents would choose to ‘proceed at the scheduled time as a virtual hearing’. Only 16% would ‘postpone the hearing until it could be held in person’, while 4% would proceed with a documents-only award.
• Recent (and, in many cases, new) experience of virtual hearings has offered an opportunity to gauge users’ perception of this procedural adaptation. The ‘potential for greater availability of dates for hearings’ is seen as the greatest benefit of virtual hearings, followed closely by ‘greater efficiency through use of technology’ and ‘greater procedural and logistical flexibility’. Aspects that gave respondents most cause for concern included the ‘difficulty of accommodating multiple or disparate time zones’, the impression that it is ‘harder for counsel teams and clients to confer during hearing sessions’, and concerns that it might be more difficult to control witnesses and assess their credibility. The fallibility of technology and the phenomenon of ‘screen fatigue’ were also cited.
• Post-pandemic, respondents would prefer a ‘mix of in-person and virtual’ formats for almost all types of interactions, including meetings and conferences. Wholly virtual formats are narrowly preferred for procedural hearings, but respondents would prefer to keep the option of in-person hearings open for substantive hearings, rather than purely remote participation.

Sustainability and information security

• Respondents show a willingness to adopt paperless practices, such as production of documents in electronic rather than hard-copy form; providing submissions, evidence and correspondence in electronic format; and the use of electronic hearing bundles. Many respondents would also welcome more ‘green’ guidance from tribunals and in the form of soft law.
• While the environmental benefits of remote participation rather than in-person participation are recognised, this does not generally drive decisions as to whether interactions should be virtual or in-person.
• Although users generally acknowledge data protection issues and regulations may have an impact on the conduct of arbitrations, the extent and full implications of that impact are not understood. 34% of respondents predicted that data protection issues and regulations have ‘limited impact at present but [this is] likely to increase’.
• The IT security measures and tools most used or recommended by respondents include ‘cloud-based platforms for sharing electronic or electronically submitted data’; ‘limiting access to prescribed individuals’; ‘data encryption’; and ‘access controls, e.g., multi-factor authentication’.
• Respondents appreciate being able to rely on specialist IT support and systems to ensure robust cybersecurity protections are in place.
• Although there are encouraging signs that users are mindful of cybersecurity issues and the need to address them, there is nonetheless ample scope for more engagement on this front.

Methodology

The research for this study was conducted from October 2020 to March 2021 in two phases, one quantitative and one qualitative. Phase one comprised an online questionnaire [PDF 1,287KB] of 31 in total (20 substantive) questions completed by 1,218 between 8 October 2020 and 21 December 2020. Phase two comprised 198 video or telephone interviews, ranging from 10 to 110 minutes long. They were conducted between early November 2020 and early March 2021.

Contact

Dr Maria Fanou, Attorney at Law
White & Case Post-Doctoral Research Fellow in International Arbitration

School of International Arbitration
Centre for Commercial Law Studies
Queen Mary University of London
67-69 Lincoln’s Inn Fields, London WC2A 3JB, UK
Email: m.fanou@qmul.ac.uk
School of International Arbitration Website.