Key Considerations in Drafting Dispute Resolution Clause in the COVID-19 Era; Pitfalls to Avoid

The COVID-19 pandemic continues to pose challenges to the arbitral process in an unprecedented manner. It has propelled the arbitration regime across the board in which virtual hearings have predominately replaced face-to-face hearings. As it remains uncertain whether it will be safe for parties to congregate in the same room, it is apparent that virtual arbitrations will continue to proliferate. To this end, many leading arbitral institutes have introduced guidelines and best practices for virtual hearings to ensure a fair and viable alternative to arbitrating in person.[1] Similarly, some jurisdictions have taken substantial steps in recognizing the validity of virtual hearing by producing rulings to circumvent a possible objection to the finality of award.[2] Whilst there is a growing acceptance of virtual hearing amongst the stakeholders of international arbitration, as a potent mechanism, there still exists a lingering concern over due process considerations pertaining to virtual hearings. Such concern may invite overzealous judicial scrutiny of the final award, undermining the expeditious and smooth resolution of the dispute. As such, if the parties elect to conduct a virtual hearing, it is even more critical to carefully tailor a dispute resolution clause that is suited to the specific characteristics of the virtual proceedings and ensure efficient resolution of the dispute.To this effect, this post aims to highlight key considerations to be factored in by parties when drafting a dispute resolution clause, which considers complications presented by the COVID-19 pandemic. Particular attention should be given to the following issues to produce an even-handed and enforceable award while obviating the risks of litigation.