Hearings in International Arbitration

The Initial Hearing

The initial hearing is often portrayed as an important moment in the arbitration process. During this hearing, the parties involved express their preferences regarding how the case should proceed and how decisions are made.

It sets the stage by bringing together the arbitration tribunal and the involved parties. It is also a crucial time for procedural planning, determining key aspects like the arbitration’s location, language, applicable law, and timeline. The initial hearing shapes the entire framework of the case.

When determining the location for the hearing, it’s essential to differentiate between the seat of the arbitration and the venue of the evidentiary hearing. The “seat” refers to the legal location agreed upon by the parties where the arbitration will be based. This determines the governing law for the arbitration process. The “venue,” on the other hand, is where the actual evidentiary hearing or proceedings take place. These two concepts are distinct, and it’s important to make a clear distinction between them when organizing arbitration proceedings.

Allocation of Time

The tribunal, working together with counsel, sets out a formula for dividing the allotted time between the parties for presenting their respective cases. While there is no specific written law or institutional rule that dictates how time should be allocated, the underlying principle is that parties should be treated equally and given a full opportunity to present their cases.

This however does not mean that each party can demand an unlimited amount of time. Instead, there is a need for a balance to ensure that the arbitration process remains efficient and does not lead to undue delays or excessive use of time by either party.

In practice, tribunals determine the time allocated to each party by considering the total time spent by a party’s legal representatives on various activities during the arbitration process. This includes the time taken for oral submissions and the cross-examination of the opposing party’s witnesses. Once the time allocation is established, each party is granted the freedom to decide how they wish to use their allotted time.

For instance, a party’s legal counsel can choose to allocate more or less time for cross-examination as they see fit. However, it’s important to bear in mind that the right to present one’s case will expire at the end of the allocated time, even if cross-examination or other activities are ongoing at that moment, unless the tribunal decides to grant an extension.

Additionally, time is also set aside for the tribunal to ask questions, and the duration of these questions and the answers received is subtracted from the tribunal’s allocated time. Sometimes, rather than pre-allocating a specific amount of time for its questions, the tribunal may opt to deduct the time spent on questioning equally from the time allocated to both parties. To ensure fairness and transparency in this process, either the parties themselves or a tribunal assistant will keep track of the time used by each party throughout the proceedings. At the conclusion of each hearing day, the tribunal will provide all parties with information about the hours that have been utilized and the hours remaining within their allocated time.

This systematic approach to time allocation in arbitration safeguards the principle of equal opportunity for each party to present their case and cross-examine witnesses while allowing the tribunal to manage the proceedings efficiently.

 Oral Submissions

 Oral opening statements are an important tool for parties and their legal counsel in arbitration proceedings. A well-crafted opening statement should be delivered similar to a final closing statement, thereby bringing together all the key arguments and presenting a comprehensive and cohesive case. This helps provide a strong foundation for the subsequent cross-examination of witnesses.

Essentially, the oral opening statement is an opportunity for parties to make a strong, persuasive, and well-organized presentation of their case to the arbitral tribunal, laying out the key points and arguments in a compelling manner.

It is important to not only present your own case but also anticipate and address the arguments the opposing side is likely to make, whether they have already presented these arguments or are likely to do so in the future. The claimant must prepare for both repeated and new arguments, while the respondent can adjust their strategy based on the claimant’s opening submission.

Evidence in Chief

In many international arbitration cases, the typical procedure for presenting evidence involves the submission of written witness statements, with minimal or no direct examination-in-chief. However, there are exceptions to this practice.

For instance, when witness statements are filed simultaneously, and a witness wishes to respond to another statement they had not seen when filing their own, supplementary evidence-in-chief may be allowed. Another exception arises when the arbitral tribunal wants to gain a better understanding of a witness before the cross-examination phase. In such cases, witnesses might be asked supplementary questions or given the opportunity to provide a brief summary of their witness statement.

This is especially relevant for expert witnesses who may need to explain the principles and assumptions underlying their reports.

Oral Questions

The arbitral tribunal has the right to ask questions of witnesses at any point during the proceedings. However, arbitrators need to be mindful of the nature and purpose of their questions. There is a distinction between asking questions to seek clarification on a witness’ answers and asking questions that aim to expose flaws or inconsistencies in the witness’ prior statements.

Some potential problems could arise if the tribunal asks questions that are more focused on exposing flaws or inconsistencies in a witness’ statements. These problems include:

• If the tribunal’s questions stray too far into challenging a witness’ credibility or statements, it may interfere with the carefully planned sequence of questions that the cross-examining party had prepared.
• Excessive or hostile questioning by the tribunal can give the appearance that the tribunal is taking a biased or hostile stance toward a particular witness.

Cross-Examinations

 Rule 25.3 of the Singapore International Arbitration Centre (“SIAC”) Rules grants the tribunal and the parties the power to question witnesses during the arbitration process. Because cross-examination is a critical phase of the arbitration process where parties can question witnesses to test their credibility and gather relevant information, it is important to be aware of the types of questions that should be avoided during this process. Here are some types of questions to be avoided:

• Avoid asking witnesses about their unexpressed or unspoken intentions, such as, “What did you mean when you wrote this letter?” Stick to what is explicitly stated in the documents or testimony.
• Avoid delving into the motives behind a witness’s actions or omissions, like asking, “Why did you insert this clause in the agreement?” Focus on the observable facts and events.
• Avoid asking witnesses to interpret the meaning of contractual documents unless it directly impacts their subsequent actions or decisions.
• Don’t ask questions that aim to show what is or isn’t in a document, such as, “Where in this document does it say X?” Concentrate on established facts.
• Avoid asking questions that are solely meant for dramatic impact and don’t contribute to the tribunal’s understanding of the case.
• Avoid asking questions to make the witness concede facts that are already apparent from the record and not denied. This is often considered unnecessary.
• Steer clear of questions that primarily aim to undermine the witness’s credibility or character and are not directly relevant to the case’s issues.
• Refrain from asking witnesses to provide legal opinions or interpretations, especially when they are not qualified to do so.
• Avoid questions that heavily rely on subjective descriptors like “unreasonably,” as they can be vague and lead to subjective responses.
• Don’t inquire about a witness’s personal beliefs or intentions when entering into a contract unless it directly pertains to the issues in the case.
• Ensure that questions are clear and end with a question mark, as questions should prompt the witness to respond rather than presenting a comment or argument.

Sequestration of Witnesses

Expert witnesses are typically allowed to stay in the hearing room for the duration of the proceedings. This is because their opinions may need to be adjusted if new or different facts emerge during the hearing. Individual parties involved in the case have the right to be present throughout the hearing.

Corporations may be represented by designated corporate representatives who can attend the proceedings. However, the situation becomes more complex when a designated corporate representative is also a witness with factual information to share. In such cases, the tribunal overseeing the proceedings may request that these witnesses provide their testimony at the beginning of their side’s presentation. Once they’ve given their testimony, they are often sequestered until they are needed again.

This sequestration practice is in place to prevent witnesses from being influenced by the testimony of others, ensuring that their statements remain unaffected by external factors.

 Non-Production of Documents or Non-Attendance of Witnesses

If a witness does not attend the hearing, the tribunal has the authority to dismiss any evidence or statements the absent witness was supposed to provide. The tribunal may weigh factors such as the reasons for non-attendance, the level of controversy around the witness’s statements, the inability to attend via video conferencing, and the importance of the statements to the arbitration’s issues.

Additionally, if a party fails to produce documents as ordered by the tribunal, the tribunal can draw adverse inferences, such as assuming that the missing documents would not support the party’s case. This suggests that the tribunal has the authority to use its judgment and make decisions based on specific considerations relevant to the situations it is dealing with.

Breach of Confidentiality

Sometimes complaints may arise when one party discloses confidential information related to the case to external parties, such as the media. Those accused of breaching confidentiality may try to justify their actions by invoking legitimate exceptions to the confidentiality principle. The tribunal overseeing the proceedings will then be tasked with the responsibility of determining whether a breach has indeed occurred.

The tribunal may either make a ruling on the breach or defer the decision to a separate arbitration or a court dedicated to addressing this specific question. Notably, if a party takes the step of publicly sharing information about the ongoing hearing on platforms such as online blogs or websites, the tribunal is likely to respond by issuing an interim injunction.

Virtual Hearings

 After the COVID-19 pandemic, virtual hearings have become more commonplace. Considering the unique aspect of virtual settings, arbitration practitioners are advised to adapt their approach not only in terms of practical arrangements but also in their hearing strategy and advocacy approach.

One disadvantage for virtual hearings is the reduced human interaction. For example, witnesses may find isolation from their legal teams to be a dispiriting and lonely experience. Counsel, particularly during cross-examination, may face challenges without the usual in-person support from their client’s legal team and their own experts.

In-person hearings also provide informal opportunities for parties to discuss and potentially settle disputes during breaks. In-person interactions may be superior for fostering settlement.

Another challenge is the issue of different time zones, particularly in international and cross-jurisdictional matters. Conflicting time zones can be a significant downside, making it necessary for participants to log in at inconvenient hours. It is important to carefully consider these issues in the preparation and conduct of virtual hearings in arbitration.

In such cases where keeping time and cost low are of crucial concern, virtual hearings are seen as playing a significant role. Even as physical hearings are expected to resume in international arbitration proceedings, virtual hearings will not be phased out entirely.