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Freshfields Sustainability

| 3 minutes read
Reposted from Freshfields Risk & Compliance

Can technology bring about greener and more cost-efficient arbitrations?

Did you know that offsetting the carbon emissions of a medium-sized arbitration would require planting nearly 20,000 trees, or all of the trees in New York’s Central Park?

This is mainly due to the emissions caused by the air travel associated with in-person meetings and hearings (indeed, flights account for nearly 93% of carbon emissions for in-person hearings, as reported by GAR based on a Herbert Smith Freehills study).

In response, the international arbitration community has started to focus on reducing the carbon footprint of traditional arbitration proceedings—and has frequently looked to technology solutions to help.

How is technology used in arbitrations to increase efficiency, reduce costs and reduce waste?

Electronic rather than hard copy communications. Filing electronic only correspondence and pleadings has gained considerable traction in international arbitration. Paperless proceedings bring both cost and environmental advantages. Some practitioners and arbitrators still prefer hard copies, yet tools like PDF annotation software, e-briefs with hyperlinked exhibits and legal authorities, e-bundles and tablets can smooth the transition away from paper. In fact, the International Chamber of Commerce (ICC) rules encourage parties to rely on electronic communications (subject to any mandatory rules of law), and the new International Centre for Settlement of Investment Disputes (ICSID) arbitration rules provide for the e-filing of documents as a default.

Online file share transfer rather than USB flash drives. The old method of transferring large amounts of data by shipping USB flash drives across the globe (to the client, the counterparty and the tribunal) produces unnecessary carbon emissions and poses security problems (as devices can be lost, stolen or corrupted). Instead, parties can resort to cloud-based file storing and sharing services or more sophisticated case management platforms administered by arbitral institutions.

Virtual rather than in-person meetings and hearings. Pandemic-induced lockdowns forced arbitration users to resort to videoconferencing as an alternative to in-person interaction. Practitioners held witness interviews, strategic calls with clients, procedural hearings with tribunals and even conferences and webinars virtually. Moreover, fully virtual hearings became commonplace, helping both the planet and the bottom-line (given that virtual hearings generate 19 times fewer emissions and cost 6% less than in-person hearings, as reported by GAR). Indeed, according to the recent ICC report on leveraging technology for fair, effective and efficient international arbitration proceedings, 78% of survey respondents attended virtual evidentiary hearings during the pandemic (with the majority recommending Zoom and Microsoft Teams). And 68% of survey respondents believed that virtual hearings were not less effective than in-person ones. Not surprisingly, arbitral institutions like the ICC and ICSID recently revised their rules to explicitly confirm tribunals’ authority to decide whether to conduct a hearing virtually (thus allaying potential enforceability concerns).

Is that it?

No, there is a widespread effort across all stakeholders to make arbitrations greener in order to achieve environmental, social and governance goals. For example, the Campaign for Greener Arbitrations recently launched the Green Pledge and six Green Protocols with detailed recommendations to promote clean energy forms, reduce long-haul travel, and reduce waste. The Green Pledge has been signed by over 1000 individuals, law firms, arbitrators, arbitral institutions and corporations.

What’s next?

Although it might take some time for new habits to catch on, it is undeniable that technology can make arbitration proceedings more cost-effective and greener—which should be very appealing to arbitration stakeholders. Indeed, the ICC report confirmed that, for the post-pandemic period, there is a strong interest in continuing to communicate electronically, use videoconferencing, employ online case management platforms, and store and share files on the cloud. Additionally, as COVID restrictions ease, practitioners have also started to explore hybrid settings in which many participants attend hearings remotely (as opposed to pre-pandemic “hybrid” hearings where perhaps just one witness or expert testified remotely because they were unable to travel).

It will be crucial for parties and arbitrators to embrace the momentum and familiarize themselves with, and use, these new technologies. After all, it is unlikely that we’ll be returning anytime soon to a world in which all witness sessions are live, all pleadings are printed, and all hearings are in person.


arbitration, international arbitration