Notes on Digital Arbitration under New Regulations

Following the initial suspension of time periods and proceedings at arbitration and mediation centers in Ecuador due to the COVID-19 state of emergency, in the past few days several arbitration and mediation centers have resumed their activities by providing digital or virtual services to ensure access to justice for their users.

Specifically, on April 14, 2020 CAM approved an amendment to the Regulations for Operation of the Arbitration Center, and on April 22 it published Regulations for the Use of Telematics in Arbitration and Mediation Proceedings.  We see this as a great initiative by CAM and good news for domestic arbitration.  Once again, this reflects the flexibility and adaptability that characterize alternative dispute resolution mechanisms, including in difficult times such as these.

The amendment incorporates four new articles into CAM’s Regulations: article 30 on virtual mediation hearings, articles 56 and 57 on email filings and virtual arbitration hearings, and a final Transitory Provision establishing Regulations for the Use of Telematics.

1. Article 30 on virtual mediation hearings

• permits the conduct of mediation hearings through any information and communication technologies available;
• requires the parties to prove their identities before the start of the hearing;
• prohibits the recording of mediation hearings to ensure confidentiality;
• provides for the possibility of (i) a mediation settlement agreement electronically signed by the mediator and the parties, or (ii) an electronic statement of inability to agree or evidence of impossibility of mediation;
• authorizes notices of mediation hearings to be electronically signed and sent by email.

2. Article 56 on email filings

• provides for the possibility that if an event of force majeure occurs or if CAM so directs, demands for arbitration, answering statements, counterclaims and changes of claim may be filed by email, for which purpose:
• such documents must contain the electronic or scanned handwritten signatures of the parties and their attorneys;
• annexes must be scanned and properly (digitally) numbered;
• requires that hard copies that exactly match the electronic documents be eventually delivered at CAM.

It is interesting to note that the idea is conceived as an extraordinary mechanism that, in the absence of CAM’s authorization, is not intended to be used after the cessation of the event of force majeure.  This is evidenced by the requirement of eventual submission of hard copies.  This requirement should be discussed because, since the hard copies must exactly match the electronic documents, the scanned copies should be of certified documents or otherwise meet all the requirements for validity at the time they are sent by email, which could be difficult due to the reduced working hours of notaries’ offices during the pandemic.

3. Article 57 on virtual arbitration hearings or proceedings

• permits the conduct of hearings or proceedings through telematic systems at the request of a party or the tribunal;
• permits the signing of electronic minutes of hearings by both persons who are physically present at the hearing and are able to sign and other participants attending remotely, who must confirm their identities at the beginning of the hearing and whose attendance must be certified by the arbitration secretary; if all the participants attend remotely, they must confirm their identities at the beginning and the arbitrators and secretary must certify their attendance in the minutes of the hearing.
• Minutes may also be electronically signed.
• Electronic records, recordings or other evidence must be added to the file so as to keep a complete record of the hearing.
• Any decisions or procedural orders issued by the arbitrators and/or CAM’s management may be electronically signed and notified by email.

For virtual hearings, the rules seem more general and not necessarily restricted to cases of necessity or force majeure.  It may be interesting to discuss whether a party may refuse to participate in a virtual hearing or proceeding.

It should be noted that there is no change in the provision concerning physical service of process as set forth in article 52 of the Regulations.  Therefore, despite the possibility of making email filings and conducting virtual hearings, proceedings may be delayed during the service of process.

4. New Transitory Provision – Regulations for the Use of Telematics.

CAM has issued new regulations on the use of authorized telematic systems, which we regard as a positive development that will be useful for both new and ongoing proceedings.  The regulations provide details on how to make filings, pay CAM’s fees, conduct hearings, select and install arbitrators, as well as general guidelines on the equipment required, such as microphones and cameras, and recommended software.