What Could Post-Pandemic Arbitration In The Caribbean Look Like?

When COVID-19 erupted on the global scene, Caribbean countries had been engaged in intensifying ongoing decades-long efforts, to attract arbitration business.[i] Primarily, the jurisdictions had been improving or augmenting their arbitration infrastructure by building a supporting legal framework via ratification of the New York Convention, adopting modern arbitration legislation and promoting a CARICOM model arbitration law to update and harmonise the regional legal infrastructure. Additional selling points included the ease of travel to the region and the unbeatable beauty of the proposed seats. Effectively, contrasted with the hustle and bustle of larger, more recognised centres, the arbitration centres in the Caribbean asserted the beauty and ease of work in the region, the geographic neutrality, and mix of legal systems as a way to attract arbitration business. The balance of work and play, relatively easy access by way of travel to the region, and a supporting legal framework for arbitration all came together in a sun-sand-and-sea-filled package.

Then came the pandemic and with it, mandatory lockdowns and travel restrictions. This forced an abrupt end (at least in the short term) to travel to and within the Caribbean region. Courts were shut down and citizens and visitors alike were denied regular access to the beach and other leisure activities. In short, in one fell swoop, large swaths of the marketing package for Caribbean jurisdictions seeking to attract arbitration business became almost irrelevant.

Practitioners and dispute resolution specialists saw the opportunity for the pivot to arbitration.[ii] However, during the time of crisis and an era of uncertainty, recognised centres posted a record number of new cases seeking arbitration and other alternative dispute resolution (ADR) services. For example, the Singapore International Arbitration Centre (SIAC) achieved record new cases in 2020,[iii] the first time its caseload crossed the 1,000-threshold. In fact, the number of new cases handled by SIAC in 2020 more than doubled to 1,080 from the previous year. Parties from 60 jurisdictions, including other arbitration centres like Hong Kong, India, the USA and Switzerland, arbitrated US$8.5bn in disputes. In addition, the International Chamber of Commerce (ICC) announced record requests for arbitration and ADR services.[iv] According to the ICC, the ICC International Court of Arbitration recorded a total of 946 new arbitration cases in 2020, with a record 929 of those cases having been requested under the ICC Rules of Arbitration. This was noted to be the highest number of cases registered since 2016.

As parties sought certainty in uncertain pandemic times, it is not altogether unsurprising that the recognised centres saw this dramatic uptick in caseloads. Regrettably, there is very little data to suggest similar record shifts in the Caribbean. Parties may have sought alternatives, but not in the droves seen in the recognised centres. So the question remains: what could arbitration in the Caribbean and Caribbean centres’ efforts to make arbitration mainstream in a post-pandemic world look like?

First, it is not likely that parties seeking arbitration will suddenly flock to the Caribbean after the pandemic if they didn’t do so during the throes of the crisis. However, the pandemic has undeniably disrupted how we view business and facilitation of business. There has been an almost universal recognition that alternatives must be sought if we cannot have business as usual. The slowdown in the Court systems has shone a spotlight on the adage that justice delayed is justice denied; commercial parties have shown less patience during the pandemic with delays and backlogs. That alone has resulted, at least in my practice, in diverse parties increasingly seeking alternatives to court at both the deal-making level and even after a dispute has arisen. In the Caribbean after COVID-19, it is very possible that we will see slow but steady increase in the number of arbitrations, as trust grows in the alternative systems of dispute resolution.

Secondly, it might be insightful or even astute for Caribbean centres to reduce their heavy focus on venue as a means of attracting arbitration business in light of the pandemic. In addition, several Caribbean nations are now home to arbitration centres, which means that they effectively compete against each other - both in the region and internationally - with more recognised centres.[v] As trust grows and parties continue to shy away from litigation as a quick and effective means of resolving disputes, we could possibly witness one or two of these centres emerging as centres of choice, becoming almost synonymous with the Caribbean region, offering seamless arbitration services unconnected from the actual jurisdiction. Mergers may also occur, as the less recognisable regional smaller centres merge with others, possibly offering cost-effective solutions, including itinerant in-person hearings in the participating jurisdictions, if such hearings are preferred.

Finally, a more technologically-savvy court system supporting arbitration is also likely. Rule of law is fundamental to the operation and success of arbitration. Parties to an arbitration often seek the aid of the court of the seat to enforce preliminary or interim measures ordered by the arbitration tribunal. Courts also assist with enforcing an award. All of this depends on a functioning and effective court system. Although in the aftermath of COVID-induced lockdowns in 2020, Caribbean courts – like many others – have stumbled, they have not failed altogether. Courts in the Caribbean launched virtual hearings for civil and commercial matters almost immediately, with detailed practice directions having been issued to guide the process. While use of technology was not unheard of, the court system grappled with and achieved the conversion to virtual hearings as the default hearing method within a number of days or weeks. Many courts have not returned to in-person hearings at all.

In many ways, the courts have been playing catch-up with arbitration on the use of technology. The Courts’ virtual operation is not altogether seamless. Court administrators struggle to adapt paper procedures to virtual procedures to ensure that the system still functions amid the impositions of lockdowns and restrictions on movement, or with abrupt closures caused by potential exposure and the resulting isolation and quarantine which impact staff and users alike. However, these are not challenges that are particularly unique to the Caribbean. Indeed, given the prevailing pandemic and the disruption that it has caused, the idea of a smoothly functioning virtual system that makes all users and stakeholders happy is likely utopian.

It is not yet known how the Courts will adjust their policies in the post-pandemic world to incorporate increased use of technology but the fact is that they have shown the ability to do so in crisis. It is also likely that the technology will play an integral role in shaping the judiciary and civil justice system of the future, making it more efficient. This is positive indication for the rule of law and the future of arbitration using the regional infrastructure.

Finally, in my view, from all this, it is certain that the opportunity to pivot to arbitration continues to exist. The backlog in the court system created by the pandemic will not be easily resolved without alternative dispute resolution. Out of this crisis and its enduring effects comes the chance to convert many stalled or prolonged court matters into arbitration matters. Going forward, Caribbean jurisdictions should place emphasis on how the infrastructure continues to be resilient, ensuring certainty and predictability for parties seeking arbitration. In a post-pandemic world, the Caribbean remains poised to capitalise on the opportunity to bring arbitration to the fore, give justice to parties, and to help facilitate commerce in the region.

Footnotes:

[i] https://globalarbitrationreview.com/review/the-arbitration-review-of-the-americas/2022/article/international-arbitration-in-the-caribbean

[ii] https://www.ifcreview.com/articles/2020/june/when-opportunity-knocks-will-arbitration-become-the-preferred-means-for-resolving-offshore-commercial-disputes/

[iii] https://www.ft.com/content/5e647e8a-be1c-4145-9cb4-83e6296d9921

[iv] https://iccwbo.org/media-wall/news-speeches/icc-announces-record-2020-caseloads-in-arbitration-and-adr/#:~:text=The world’s preferred arbitral institute%2C the ICC International,disputes effectuated a marked increase in the statistics.

[v] For example, the Bahamas, Barbados, British Virgin Islands and Jamaica.

Tammi C. Pilgrim
Tammi C. Pilgrim is an arbitration and dispute resolution specialist, and the lead partner for arbitration at Lex Caribbean. She is admitted to practice in Barbados, St. Lucia, New York and St. Kitts and Nevis and holds and LL.M in International Legal Studies (with Distinction) from the Georgetown University Law Center, Washington D.C. Her practice focuses on arbitration (domestic and international), as well as commercial litigation in contract disputes, shareholders’ and investment disputes, construction disputes, insurance and restructuring matters, finance disputes, and cross-border relief/assistance matters. She has participated in investment treaty and commercial arbitration proceedings under the ICSID, ICC, LCIA and LMAA arbitration rules. Tammi also advises in commercial mediation matters, including those conducted under the Court-annexed Mediation Rules of the Barbados Supreme Court. She recently spearheaded the first virtual Court-annexed mediation in Barbados, ending almost a decade of litigation.