[vc_row][vc_column][vc_custom_heading text=”Online Arbitration: A New Reality in Honduras”][us_separator size=”small”][vc_column_text]Since the beginning of the pandemic, judicial and arbitration proceedings in the country have been interrupted due to the strict measures decreed by the State. Disputes that existed prior to the Health and Humanitarian Emergency were suspended, and those that arose after the pandemic began have had to wait for a gradual reopening of institutions.
However, although the pandemic continues and there is clear uncertainty as to whether the State, in its effort to contain infections, may need to reinstate strict isolation measures, a new opportunity for conflict resolution has emerged.
Arbitration boasts one of its most notable characteristics: flexibility. The Conciliation and Arbitration Center of the Tegucigalpa Chamber of Commerce and Industries (CCA-CCIT) – which remains the center with the largest number of cases in the country – through Resolution SJD.CCIT.NO-32/2020 published on December 8, 2020 in the Official Gazette La Gaceta No. 35,453, has reformed its regulations so that the conciliation and arbitration process can be conducted via electronic means.
This reform paves the way for a new reality in Honduras: the possibility for the parties, regardless of their location within the national territory, to submit their disputes to a virtual arbitration process, making it more efficient in terms of cost and time, as an arbitration proceeding is typically resolved within a reasonably short period compared to a judicial process. Thus, if the parties have agreed to an arbitration clause under which they resolve their disputes according to the CCA-CCIT regulations, they can do so virtually. Even if such a clause does not exist and dispute resolution is imperative, the parties may agree to submit the dispute to arbitration after signing the contract where an arbitration or dispute resolution clause would have been included. In other words, a dispute can always be submitted to arbitration if the parties agree and if the subject matter of the conflict is amenable to such an alternative method of dispute resolution under the Law.
In this regard, the CCA-CCIT has reformed its regulations so that the submission of filings, evidence, communications, notifications, and hearings during both the conciliation and arbitration phases can be carried out electronically.
To that end, the Center established a period from December 14 to 18, 2020 for Lawyers, Arbitrators, and Arbitration Tribunal Secretaries to register their electronic signatures. Starting January 11 of this year, the Center opened deadlines to resume suspended processes and to submit new Requests for the Formation of an Arbitration Tribunal.
The reforms have been up to the challenge, as one of the general concerns consistently expressed by the arbitration community is the potential violation of due process by holding hearings virtually. However, international practice has shown that, except in exceptional cases, the virtual nature of the proceedings has not jeopardized that principle. Likewise, the amended Article 47 states that
[T]he Arbitration Tribunal shall apply the principle of orality in the arbitration process and will endeavor to ensure that proceedings are conducted accordingly, through the holding of the respective hearings which will be recorded by any digital means. The proceedings in these hearings may also be briefly recorded in minutes, provided that this practice does not compromise the orality of the process, thereby diminishing the agility of the arbitration proceedings.
With the incorporation of these elements, the parties are ensured sufficient backing to safeguard the arbitration process from possible transgressions. Moreover, documents submitted via electronic platforms—that is, digitized documents—will be deemed valid and authentic, notwithstanding any party’s subsequent challenge to their authenticity or validity. In such a case, evidence will be presented at the appropriate procedural moment, and the Arbitration Tribunal will decide accordingly, with that decision being reflected in the Arbitral Award.
Another notable reform is Article 38, which stipulates that for purposes of managing the process, the Tribunal may call on the parties to participate in Pre-Hearing Meetings, which may be held either virtually or in person, with a view to reaching agreements and deciding on the most efficient way to proceed with the process – covering general scheduling matters as well as specialized issues such as establishing the rules and parameters for proposing and presenting evidence.
Similarly, the Center has established in its reforms that the case file will be maintained in either physical or digital form, incorporating all documents, filings, and/or requests submitted, and will be stored in the software designated by the Center, accessible virtually.
Along with the reforms, the following were also published: (i) the Electronic Conciliation and Arbitration Guide; (ii) the Hearing Development Protocol; and, (iii) the Witness or Expert Interrogation Protocol. These documents serve as guidelines that provide the parties with general directions for conducting the procedure at its various stages.
The guides have incorporated the best practices developed and provided by other international centers for conducting arbitration proceedings. For example, the platform used by the CCA-CCIT for hearings is Cisco Webex. This platform has been used – among others – by the International Centre for Settlement of Investment Disputes (ICSID/CIADI/CIRDI). CIADI has a long history of conducting virtual hearings and has always shown a preference for this platform due to its strong security. However, the parties may choose another platform that better fits their needs. These platforms allow hearings to be recorded, thereby providing an official record in accordance with the aforementioned Article 47.
In light of these reforms, as mentioned, a new phase is opening that will allow for greater development of arbitrations in the country, making the process more expeditious, efficient, and flexible. At Lexincorp we have taken the necessary measures to conduct and develop arbitration proceedings via these electronic means. If you need support or advice in these areas, please contact us at fvilleda@lexincorp.com
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