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Role of Expedited Arbitration and Party Autonomy in Covid-19 related Supply-Chain Disruptions
The coronavirus (COVID-19) global health crisis is drastically impacting communities worldwide. It has caused unprecedented disruptions and damaged the world’s economy and business relationships. Great number of commercial disputes are coming forth as parties are finding it difficult to perform their contractual obligations. In fact, there is a complete possibility that the crisis will result in a surge of litigation and will consequently delay the resolution of pending court cases. In the present circumstances, with the focus being mainly on health care, the Court system is severely impacted. With the traditional form of arbitration proving to be no longer effective, people are now opting for Virtual Alternative Dispute Resolution or Online Dispute Resolution.
The complete impact of COVID-19 on the supply chains is still unknown, with China being optimistic about returning to normalcy (though currently, Beijing has been witnessing a sudden surge in the cases). China playing a significant role in the trading industry, is also known as the world’s factory. In spite of the optimism portrayed by China, there is no denying the fact that the pandemic will have global economic ramifications. As mentioned above, the effect on the supply chains will consequently lead to a lot of contractual disputes, and in most cases the parties will opt for expeditious resolution systems.
However, when opting for an expeditious method, it is important to keep a couple of things in mind. There are certain arbitral institutions that provide for an expeditious proceedings. Some organisations provide for the process of arbitration that are designed to help move cases from the appointment of arbitrator to final award in approximately six months. The arbitrators, in such cases are given the rules to shorten the time frame at the convenience of the parties. Expedited arbitration usually are a powerful means of resolving individual disputes in a timely fashion. It is also important to realise what party autonomy actually means in this regard. Part autonomy in simple words means that the parties should have the liberty to opt the arbitral procedure of their own choice and also to appoint arbitrators of their own choice if the agreement between them says so. If the parties agree, then their agreement can be enforceable even if it has been reached long after the underlying contract was signed.
When the parties enter into an agreement in haste, they often neglect what their real interests are. However, in the present circumstances when financial disruption seems inevitable (especially for small scale businesses), commercial viability will become a priority for parties. The use of viable and efficient means for resolving disputes will take the front seat for them. It is difficult to predict whether the businesses will return to normal or not. When it comes to supply chains, companies that have multi-sourced key inputs, must consider the secondary supplier options. It is inevitable for commercial disputes to arise, therefore, it is important for the parties to consider ADR options (especially expeditious arbitral proceedings). The main focus should be on achieving effective legal solutions for the commercial disputes arising during the current global crisis.
- Arbitration
- COVID-19
- Supply-chain disruptions
