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Austrian Supreme Court Reaffirms Arbitral Tribunal’s Ruling to Schedule Virtual Hearing Despite an Objection from the Respondents.
The COVID-19 pandemic has inevitably affected the in-person court and arbitration hearings because of the social distancing measures. Accordingly, to deal with such problem, the courts and arbitral institutions began using the technology to aid with remote hearings via video conferencing. However, the arbitration must proceed with the consent of the parties. Thus, the respondents’ objection to the virtual hearing had raised the arguments whether the ruling was made in compliance with due process and the right to a fair trial, a fundamental right under various international treaties, such as the European Convention on Human Rights (EUCHR).
On 23 July 2020, the Austrian Supreme Court (Oberster Gerichtshof, OGH) decided on the dispute of possible due process violation by arbitral tribunal’s proceeding to hold the online video conference despite the objection from one party (Case No. 18 ONc 3/20s).[1] OGH has confirmed the arbitral tribunal can make a ruling to hold the virtual hearing even though the respondents objected to it. OGH held that the ruling that, despite the respondents’ explicit objection, the virtual hearing is proceeded within the arbitral tribunal discretionary power and such ruling did not constitute the cause to challenge arbitrators per applicable legal standard.
The challenge arose from the arbitration proceedings administered by the Vienna International Arbitral Centre (VIAC) since August 2017. But the claimants request to postpone the hearing from originally scheduled in March to be scheduled on 15 April 2020 with a starting time at 10:00 a.m. Vienna time. On 19 March 2020, a conference call discussed the impact of COVID-19-related travel restrictions on an upcoming in-person hearing in April. Both parties discussed the possibility of holding the virtual hearing under the circumstance of the COVID-19 outbreak. Still, the respondents refused to agree with this notion and adamantly requested an in-person hearing in the future. Nevertheless, their request was denied, and the remote hearing was scheduled for 15 April 2020.
On 21 April 2020, the respondents challenged the arbitral tribunal by an allegation on the grounds of unequal treatment of the parties and an unfair way of conducting proceedings. VIAC rejected their challenge, so they brought the allegation to OGH.
However, OGH stated that under Austrian law, the challenge could raise against the court only when the court’s proceeding decisions seriously violate the procedural principles or permanently and significantly affect the party’s advantages or disadvantages. OGH confirmed that the remote hearing was not the basis to challenge arbitrators under this legal standard, especially when the remote hearing is permitted under Austrian law. Moreover, the arbitral tribunal has broad discretion to manage arbitral proceedings.
This case gained special interest for many reasons, including the proceedings in compliance with the European Convention on Human Rights (EUCHR) Article 6[2] regarding an access to justice. OGH’s decision relied on Article 6 by reaffirming that Article 6 was outlined to ensure both parties the right to be heard and access justice effectively. Especially in this global pandemic crisis, which rendered the regular proceedings impossible to execute soon. Therefore, the remote hearing is an alternative to assist the arbitral tribunal with the assurance of ongoing access to justice and protect parties’ right to be heard simultaneously. While this decision is only evaluated within the particular context of the arbitral tribunal, it presents broader significance. The standard OGH used to render this decision is whether the court hearing, specifically the remote hearing, violated the fundamental principles, namely, whether it affected the parties’ rights to be heard and receive fair treatments. The OGH’s decision clearly stated that the remote hearing does not violate the fundamental procedural principles even though the arbitral tribunal had ruled against the respondents’ wish. Consequently, this kind of decision will not affect the court or ruling, especially amidst the global COVID-19 pandemic.
Undoubtedly, the COVID-19 will continue to have an impact on daily life. So it is important for everyone, especially the lawyers, to cease relying on the old way heavily and adapt themselves to the new way of conducting the arbitrational or court proceedings. Therefore, OGH’s decision is significant and is the first to lay down the ground to utilize the virtual hearing for the case proceedings. There is a high possibility that the application of virtual hearing in court will influence other arbitrations’ guidelines on the remote hearing and virtual hearing.
Reference:
- https://globalarbitrationnews.com/austrian-supreme-court-confirms-arbitral-tribunals-ruling-to-hold-virtual-hearing-despite-one-partys-objection/
- http://arbitrationblog.kluwerarbitration.com/2020/10/24/in-a-first-worldwide-austrian-supreme-court-confirms-arbitral-tribunals-power-to-hold-remote-hearings-over-one-partys-objection-and-rejects-due-process-concerns/
- https://www.lexology.com/library/detail.aspx?g=d894de3e-30c9-48da-8438-28f0cd315f7a
[1] https://www.ris.bka.gv.at/Dokumente/Justiz/JJT_20200723_OGH0002_018ONC00003_20S0000_000/JJT_20200723_OGH0002_018ONC00003_20S0000_000.pdf.
[2] Article 6 (1) “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly by the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties
