Today, COVID-19 has already spread across more than 200 countries and regions in the world. The number of the confirmed cases exceeds 4 million at the time of writing, and it continues to rise globally.[1] On 11 March 2020, the World Health Organization declared COVID-19 a pandemic.[2]

Tribunals, parties and counsels are facing greater challenges to mitigate the adverse effects of the COVID-19 pandemic on arbitration such as delay of arbitral proceedings and obstacles to initiate new arbitration cases.

In order to proceed with arbitration actively and properly, protect the parties’ legitimate interests, and uphold social fairness and justice, on 28 April 2020, China International Economic and Trade Arbitration Commission (“CIETAC”) issues its Guidelines on Proceeding with Arbitration Actively and Properly during the COVID-19 Pandemic (Trial) (“Guidelines”), providing detailed guidance to tribunals, parties and counsels to conduct arbitration effectively during the COVID-19 pandemic.

This article will firstly elaborate on the challenges in CIETAC arbitration proceedings during the pandemic. Then, it will examine the Guidelines by analyzing its legal status and fundamental principles, and the specific measures provided therein.

I. Challenges brought by the COVID-19 Pandemic to CIETAC Arbitration

In 2019, CIETAC accepted 3,333 new arbitration cases, including 2,716 domestic cases and 617 foreign-related ones, of which 66 were between non-Chinese parties. The total amount in dispute was about RMB 122 billion (around USD 17.25 billion), marking a record high in its history. The parties involved were from 72 countries and regions. There were 3,146 cases concluded in 2019.[3] By 7 May 2020, the number of cases in process was 2,539.

With the outbreak of the COVID-19 pandemic, measures have been taken to contain the spread of the virus worldwide, which covers almost all the places that the arbitrators and parties live in.[4] Anti-epidemic measures such as lockdown, self-isolating, social distancing and travel restrictions not only effectively limit the spread of the virus, but also disrupt international arbitration, including CIETAC arbitration, in every regard, which can be briefly summarized from the following aspects.

A. Case Filing

Previously, some parties prefer to submit their application for arbitration on site to CIETAC. CIETAC could receive dozens of parties at most for case filing service at the same time. However, ever since the outbreak of the COVID-19, on-site submission was strictly restricted and the office facilities of CIETAC were not open to the public.[5] All these measures prevent CIETAC from providing on-site case filing services to satisfy the parties’ need.

B. Service of Documents

Service of documents can be of consider-able importance in arbitration, especially the service of the request for arbitration upon the Respondent, which has a direct connection to the subsequent annulment, non-recognition or non-enforcement proceedings.[6] Service by courier is a default service of process in CIETAC arbitration. Usually, domestic mails can be delivered by courier within 3 days, while international mails can be delivered by courier within 7 days, depending on its distance to Beijing.

Yet service by courier are impeded by the COVID-19 pandemic. Many enterprises have stopped working. In some cases, courier service companies even stopped delivering mails, and no recipients can be expected to be present at the place of business which is probably the only mailing address the Claimant can provide. Additionally, the control and cancellation of international flights on account of epidemic prevention unavoidably prolongs the delivery of international courier. The time spent for delivery has multiplied, resulted in severe delay of the arbitral proceedings.

C. Oral Hearing

Oral hearings are mandatory in virtually all international arbitration cases.[7] Cases managed by CIETAC normally need to be examined with oral hearings conducted at CIETAC hearing rooms with the physical presence of all the participants. However, subject to travel restrictions and social distancing policy, the COVID-19 pandemic made it impossible to arrange physical oral hearings for a certain period. Actually, CIETAC and its sub-commissions/centers cancelled 360 oral hearings in total from February to April in 2020.

D. Appraisal

Appraisal is considered to be complicated, time-consuming with a potential high cost. With multiple parties to participate, the same dilemma is present in the appraisal proceedings, which has resulted in the delay of arbitral proceedings in a certain number of arbitration cases.

The above-mentioned aspects only cover some of the disruption caused by the COVID-19 pandemic. Given the above, traditional practice is not sufficient during this special period, and guidance is needed to deal with the challenges.

II. Legal Status and Fundamental Principles The Guidelines are adopted on the basis of the existing CIETAC Arbitration Rules (“Arbitration Rules”).

A. Legal Status

The Guidelines are not binding, and do not constitute a part of the Arbitration Rules.[8] The Guidelines are not legal provisions and do not override any applicable national law or arbitration rules chosen by the parties. The arbitral tribunal and the parties may follow the Guidelines subject to any applicable mandatory rules, in their discretion or agreement, to deal with obstacles that may possibly appear in arbitral proceedings during the COVID-19 pandemic.

The Guidelines are temporarily in force.[9] The Guidelines are tailored to facilitate CIETAC arbitration during the COVID-19 pandemic, which are time-based in nature. The Guidelines are effective during the COVID-19 pandemic, and will cease to have effect when the pandemic is over.

B. Fundamental Principles

It is of vital importance that the basic principles of the Arbitration Rules are upheld. By taking effective measures outlined in the Guidelines, which strictly follow the basic principles embodied in the current Arbitration Rules, arbitral tribunals, parties and CIETAC are able to actively proceed with arbitration to the greatest extent possible.

i. Arbitral Tribunal shall proceed with arbitration fairly and efficiently.

The Guidelines lay emphasis on the tribunal’s extensive procedural discretion granted by Article 35.1 of the Arbitration Rules, which allows the arbitral tribunal to conduct the arbitration proceedings in any way it deems appropriate.[10] The Guidelines further emphasize that, while taking such measures, the arbitral tribunal still bears the responsibility to proceed with the arbitration efficiently, which is stipulated in the Arbitration Rules and is not changed by the pandemic.

Moreover, the duties of independence and impartiality are inherent and vital aspects of arbitrator’s adjudicatory role,[11] which are expressly set forth in Article 35 of the Arbitration Rules. The Guidelines further strengthen the importance thereof, according to which, no matter what measures are taken, the arbitral tribunal shall make sure that the parties are given full opportunity to present the case, so as to protect the arbitral awards against potential challenges.

ii. Parties shall participate in the arbitral proceedings in good faith.

The Guidelines require the parties to participate in the arbitral proceedings in good faith in accordance with Article 9 of the Arbitration Rules. The Guidelines further illustrate the “good faith” principle under the background of the pandemic, which request the parties to “try their best to mitigate the effects of the pandemic on the arbitral proceedings and avoid abuse of rights, and shall not pursue unreason-able and unfair procedural rights with the pandemic as an excuse or impede the arbitral proceedings in bad faith.”[12]

iii. Arbitration Institution shall provide necessary service and guarantee.

Arbitration institution shall guarantee the stability and functioning of arbitration proceedings for the foreseeable future,[13] which plays an important role to facilitate the arbitral proceedings. To be more specific, it is necessary for CIETAC, as the administrating arbitration institution, to assist the tribunals, parties and counsels by all means to proceed with the arbitration efficiently.

CIETAC, therefore, is expected to act promptly to communicate with the arbitral tribunals and the parties, and facilitate the exchange of opinions regarding the arrangement of arbitration proceedings. Where it is necessary, CIETAC shall provide the arbitral tribunals, parties and counsels services and guarantee for the arbitration to be conducted in an efficient manner.

iv. Techniques applied shall be of functional-equivalence and technology-neutrality.

The adverse consequences of the COVID-19 pandemic make it more critical than ever that tribunals, parties, and counsels give due consideration to case management techniques designed to make arbitration fair and efficient.[14] In light of this, techniques with higher efficiency such as online filing system, electronic service of documents, virtual hearings are introduced to mitigate the effects. However, techniques are merely mechanisms to facilitate the arbitral process, the application of which shall only be considered as a way to cater for “functional equivalence” between physical means and electronic means.[15]

No matter what techniques are applied, it is essential to assure that the utilization thereof is neutral so as to protect the legitimate rights and interests of the parties in accordance with the applicable law.