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Positive Impact of Arbitration during COVID-19

The positive impact of Arbitration during COVID-19

 Alternate Dispute Resolution (ADR), mainly denotes a wide range of dispute resolution processes that act as a means of disagreeing parties to come to an agreement without using the means of litigation. It is a collective term that refers to the ways in which the parties can settle disputes, with the help of a third party. It is also known as external dispute resolution (EDR). ADR has gained widespread acceptance among both the general public and the legal profession in recent years and is also being adopted as the means to help settle disputes alongside the court system itself. There are various widely used forms of ADR such as Arbitration, Mediation Negotiation, and Conciliation. Among all the other forms of Alternative Dispute Resolution (like mediation, conciliation, and negotiation), arbitration has gained widespread recognition globally. In the process of Arbitration, there has to be a valid Arbitration Agreement between the parties prior to the emergence of a dispute for the process of arbitration to exist. In this method of dispute resolution, the parties refer the dispute to a third party, who is appointed as an arbitrator. The decision of the arbitrator is binding on both the parties and his decision is given in the form of an award. However, in the present circumstances where the spread of Coronavirus (COVID-19) has put everything on hold, it is important to address its impact on ADR.

 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. A great number of commercial disputes are coming forth as parties are finding it difficult to perform their contractual obligations. 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. It is the unprecedented delays that should steer the parties towards alternative dispute resolution (ADR).

 Arbitration allows the cases to be resolved in a hassle-free and timely manner. It offers the parties the flexibility to opt for the methods which are suitable to their conditions and convenient for them. The freedom to choose their arbitrator makes it easier for the arbitrator to communicate and reach an amicable settlement. The process is private, also offers the factor of confidentiality to the parties. It is also in the wake of this crisis that Online Dispute Resolution (ODR) or Virtual ADR has come into play. Virtual ADR allows the cases to be resolved effortlessly and this system there is no need for travel by any party or attorney. All the parties can communicate with each other through video conferencing which makes it possible for them to hear and see each other. In the case of mediation, the mediator can separate the parties and engage in a mutually agreeable settlement. Greater utilization of ADR will result in a quick resolution of cases and will also be time and money-saving. It must be mentioned that despite it being the need of the hour, there are certain challenges in this process. It is no secret that lawyers have always been averse to technology. However, times like these, learning and adopting technology is critical for survival. Rigorous and continuous training will be required for the lawyers to get through the offline to online transition. It is a big task to provide internet connectivity to India Courts since most of them don’t have it and also network in most courts is poor. Adequate security standards will have to be put into place so that the critical data that is stored is not hacked or tampered in any way.

It must be mentioned that in the present circumstances, the parties are also opting for expedited arbitration. Certain arbitral institutions provide for expeditious proceedings. Some organizations provide for the process of arbitration that is designed to help move cases from the appointment of an arbitrator to the 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 is a powerful means of resolving individual disputes in a timely fashion.

 When the parties agree 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. It is inevitable for commercial disputes to arise, therefore, the parties need to consider ADR options (especially expeditious arbitral proceedings). Arbitral proceedings are immune to the government's suspended operations and the outdated formalities implemented in judicial proceedings. In this respect, the COVID-19 crisis has made the benefits of resolving disputes through arbitration rather than judicial proceedings even more pronounced.


  • Arbitration
  • COVID-19
  • Impact of Arbitration

BY : Riya Dani

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