International arbitration in times of Covid-19

Covid-19 and the dramatic measures taken to control it around the world have impacted virtually all sectors of the global economy.

The current crisis finds international arbitration institutions, arbitrators and parties drawing on the global arbitration community’s decades of experience managing arbitral proceedings involving participants situated in different jurisdictions and regions, taking advantage of the latest in information and communication technologies.

The leeway that arbitration affords users to tailor the procedure to their needs in the first instance and the flexibility given to arbitrators and parties to make adjustments as appropriate in the course of the proceedings—features that have made international arbitration a preferred means of dispute resolution for many actors in international commerce—are helping many pending arbitrations move forward and new arbitrations begin even in times of restricted movements.

At the same time, parties to high-value and complex cross-border contracts, ventures and projects, including those of long duration, are amongst the most regular users of international arbitration and are likely to already be facing or soon face issues and disputes resulting from the Covid-19 crisis. Contractual and legal doctrines of force majeure, hardship and the like may be prominent subjects of debate, depending on the relevant provisions of the contract and/or applicable law. A number of entities and individuals with important foreign operations and other foreign investments may moreover be suffering adverse impacts from decisions and measures taken by host states in respect of the crisis in possible contravention of investor protections in treaties or customary international law.

Recognizing that there are currently more questions than answers about how the crisis will play out in the future, Linklaters’ arbitration team in Paris discusses in the attached briefing note (click here) some key questions being asked by users and potential users of international arbitration, notably on the crisis’ impact on the conduct of arbitration, remedies likely to be debated in disputes resulting from the crisis, sectors and types of contracts for which arbitration of such disputes may be preferred, and potential recourse to investor-state arbitration for redress.

Roland Ziadé and Andrew Plump were assisted in the preparation of the attached briefing note by Jessica Madesclair (Managing Associate) and Suleyman Wellings-Longmore (Associate).