Due Process Rights in Arbitration in the light of the Austrian Supreme Court’s Decision: Remote Hearings During the Pandemic

Avusturya Yüksek Mahkemesi Kararı Işığında Tahkimde Adil Yargılanma Hakkı: Küresel Salgında Online Duruşmalar

Erman EROĞLU

The limit of the arbitral tribunal’s power has been a controversial subject. There is an ambiguity about whether due process rights are violated if the arbitral tribunal conducts a virtual hearing contrary to one of the parties’ objectives. In particular, virtual hearings have come to the fore during the Covid-19 pandemic. In this study, by the evaluating the Austrian Supreme Court’s ground- breaking decision regarding due process rights during the global pandemic, the framework of due process rights in arbitration and the power of arbitrators in holding remote hearings are examined, and solutions are proposed in light of current developments of international arbitration.

Due Process Rights, International Arbitration, Virtual Hearings, The Power of Arbitrators, Impartiality and Independence of Arbitrators.

Tahkim yargılamasında hakem heyetinin yetkilerinin sınırlarının belirlenmesine ilişkin tartışmalar güncelliğini korumaktadır. Bu bağlamda hakem heyetinin bir tarafın talebinin hilafına online duruşma yapması durumunda ilgili tarafın adil yargılanma hakkının ihlal edilip edilmediğine ilişkin belirsizlik söz konusudur. Özellikle Covid-19 küresel salgını ile birlikte tahkim yargılamasında online duruşmaların etkin kullanılmasıyla bu sorunun daha da belirginleştiği görülmektedir. Bu makalede, Avusturya Yüksek Mahkemesi’nin küresel salgın sırasında yapılan tahkim yargılamasında adil yargılanma hakkına ilişkin vermiş olduğu özgün karar değerlendirilerek, tahkim yargılamasında adil yargılanma hakkının kapsamı bağlamında hakem heyetinin online duruşma belirleme konusundaki yetkilerinin sınırları incelenmekte ve uluslararası ticari tahkimdeki güncel gelişmeler esas alınarak bu belirsizliği gidermek için çözüm önerilerinde bulunulmaktadır.

Adil Yargılanma Hakkı, Uluslararası Ticari Tahkim, Online Duruşma, Hakem Heyetinin Yetkileri, Hakemin Tarafsızlığı ve Bağımsızlığı.

INTRODUCTION

In a society ruled by law, no one should be deprived of her life, liberty or property without due process rights, which is a chance to be heard and to introduce a case as stated in rules set forth by authorities. The concept of due process has been a controversial and a vital subject of procedural law.¹ Because once the award is rendered, a new marathon begins: procedural issues to set aside the award.² In particular, due process in arbitration is a critical subject because of its nature. Arbitration is a gift and a curse³ in terms of due process rights protection. In this framework, the Austrian Supreme Court (Oberster Gerictshof, OGH), recently, held a case⁴ in context of due process in arbitration during the pandemic. The court evaluated the application regarding the violation of due process rights based on a virtual hearing in arbitration proceedings, and delivered a remarkable verdict. Before analysing the OGH’s decision, for a better understanding, the underlying justification for the measurement of due process in arbitration and the limits of arbitrators’ power are briefly examined in terms of the scope of due process rights and its dimensions. In order to properly understand the question at stake, certain fundamentals should be established from the outset.

This study focuses on due process in arbitration during the pandemic. The remainder of this paper is divided into three sections. The first section presents the concept and effectiveness of due process in arbitration. The second section considers the ground-breaking case of the Austrian Supreme Court’s decision on due process during the pandemic. Finally, the third section provides concluding remarks and makes some proposals for future research.

I. DUE PROCESS AS A PRINCIPAL OF LAW IN ARBITRATION

Due process is a set of criteria that protects people having relations with the State and authorities.⁵ To more specify, due process is such a shield which protects parties against unfairness; therefore, due process rights are protected under constitutions. It is commonly known that it is related to criminal matters; but actually, it is an inseparable part of civil matters. Within civil matters, arbitration in commercial matters must meet the certain requirements of due process rights; ergo, it would likely to be considered due process as a principal of law.⁶ Arbitration being an alternative dispute resolution method to court trials is not contrary to lex proceduralia,⁷ which covers due process requirements even if arbitration agreement draws the line of accessing to courts. Whilst arbitration is a private dispute resolution method, in which parties are not required to be protected against States, parties’ due process rights in arbitration are protected.⁸ The main reason why due process rights are protected in arbitration lies in finality and binding features of arbitration.⁹ In this context, even though arbitration agreement depends on parties’ autonomy stemming from the concept of freedom of contract, the result of arbitration, i.e. arbitral award, is directly related to states’ powers.¹⁰ Therefore, in arbitration procedure, arbitral tribunal must consider due process rights in accordance with due process standards in courts.¹¹

The key conditions of fair trial and arbitrators’ autonomy are equal treatment of parties and providing the opportunity to present parties’ cases.¹² The arbitrators must ensure that each party has a sufficient opportunity to present its case.¹³ The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (New York Convention)¹⁴ sets three essential standards for international arbitration: (1) the arbitration must be in conformity with the arbitration agreement; (2) fair and equal treatment, i.e. international due process, must be applied to all parties; and (3) the international public policy must be respected in the arbitral award.¹⁵ With reference to the enforceability of arbitral awards in light of the New York Convention, arbitral tribunal must meet the stated international quality standards, which concerns procedural rules.¹⁶ That is to say, it is commonly accepted that due process rights are opportunity to be heard, procedural fairness, access to justice, and equal treatment.¹⁷ In universal legal sphere, there are standards of measurement in terms of due process. According to Article 18 of UNCITRAL Model Law,¹⁸ ‘the parties shall be treated with equality and each party shall be given a full opportunity of presenting his case.’ Also, according to ICC Article 22(4),¹⁹ ‘...in all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case.’ British perspective on due process is the same as others. According to English Arbitration Act:²⁰

The tribunal shall (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.