Turkey: Greener Arbitration, Greener World

Fighting climate change around the world has become an undisputed political priority and an environmental necessity. This priority is reflected in the common response of setting strict environmental sustainability goals, with many large companies and government agencies recently pledging to become carbon neutral. The legal community is also eager to reduce its environmental impact, including in dispute resolution activities, and particularly, in the world of international arbitration.

One such initiative is the Campaign for Greener Arbitrations, which seeks to raise awareness of the significant carbon footprint created by the arbitration community. In this article, we will briefly discuss the campaign, the suggested framework, and six protocols for greener arbitrations, as well as recent developments in the arbitration community and the measures taken by arbitration institutions in this regard.

Campaign for Greener Arbitrations

The Campaign for Greener Arbitrations (“Campaign”) is an initiative set to reduce the environmental impact of international arbitrations. The Campaign was founded by the international arbitrator Lucy Greenwood in 2019 with the goal of significantly reducing the carbon footprint of the arbitration community.[1]

The need for such an initiative is understandable considering that the work the international arbitration community does has a significant environmental footprint. An initial study conducted by the Campaign concerning a large-scale international arbitration projected that just under 20,000 trees could be required to offset the total carbon emissions resulting from just one arbitration.[2]

The Campaign’s work indicates that practitioners can substantially reduce this carbon emission by focusing on just three areas: (i) adopting clean forms of energy, (ii) reducing the use of long–haul travel, and (iii) reducing waste.

Green Pledge

At the core of the Campaign is the green pledge (“Green Pledge”) – a general commitment to greener practices endorsed by over 1,500 individual practitioners, arbitrators, law firms, arbitral centers, arbitration service providers, and corporations.

The guiding principles of the Green Pledge ask the arbitration community to commit to: (i) creating a workspace with a reduced environmental footprint by looking for opportunities to reduce energy consumption and waste; (ii) corresponding electronically, unless hard copy correspondence is expressly needed under the circumstances; (iii) encouraging the use of video-conferencing facilities as an alternative to travel (including to conduct fact finding or interviews with witnesses); (iv) avoiding printing, requesting the use of electronic documents rather than hard copies, and promoting the use of electronic bundles at hearings; (v) using suppliers and service providers who are committed to reducing their environmental footprint when possible (including for the arrangement of arbitration hearings); (vi) considering and/or suggesting that witnesses and experts provide evidence through video-conferencing facilities rather than attend hearings in person when appropriate; (vii) avoiding unnecessary travel and using video-conferencing facilities as an alternative; and (viii) considering and questioning the need to fly at all times and offsetting carbon emissions for any arbitration–related travel.[3]

Green Protocols and Framework for their Adoption

Following a public consultation period, the Campaign has been developed and launched its suggested Framework for the Adoption of the Green Protocols (“Framework”) and six associated protocols (“Green Protocols”) to encourage fellow stakeholders to adopt more sustainable practices and reduce their carbon emissions. The Framework provides guidance on the adoption of the Green Protocols, and each Green Protocol is to be read together with the Framework and can be adopted individually or in combination as appropriate. [4]

In addition, it is worthy to mention that the Framework and the Green Protocols are not binding and are not intended to displace the applicable rules or derogate from preexisting arbitration agreements, unless and to the extent the parties so agree (either in the arbitration agreement or subsequently) or the tribunal so orders. The Framework and the Green Protocols do not establish liability or a liability standard for legal or regulatory purposes.

The Promotion of Green Arbitration by the Arbitration Community

Prior to the COVID-19 pandemic, technology was already a hot topic in the arbitration community due to climate change and there were ongoing discussions about digitizing arbitration procedures and documents to save significant amounts of paper. However, integral to the fight against climate change, the dispensation of hard copies has for a number of reasons largely increased during the COVID-19 pandemic. In this regard, arbitral institutions have also adapted their rules and guidance to reflect the reality of electronic submissions and virtual hearings.

ICC

In its Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic (“Guidance Note”) released in April 2020, the ICC prompted all parties and arbitral tribunals to resort to electronic submissions.[5] Following suit with the Guidance Note, the 2021 ICC Arbitration Rules confirmed this trend by removing the presumption of paper filings. Article 3/1 now provides that all submissions, notifications, and communications "shall be sent" electronically instead of "supplied in a number of copies." Several provisions confirm that the parties must expressly request transmission by hard copy (Articles 3/2, 4/4(b), 5/3), and Article 1 of Appendix V).

Furthermore, the 2021 ICC Arbitration Rules brought a major change to virtual hearings by empowering arbitral tribunals to decide between conducting hearings in-person or remotely. The decision is subject to two requirements: (i) as a preliminary step, the parties must be consulted and (ii) "the relevant facts and circumstances of the case" must be taken into account. In addition to video and telephone conferences, an evolution in technology is anticipated in this new article with reference to "any appropriate means of communication."

ISTAC

On the official website of the Istanbul Arbitration Centre (“ISTAC”), it is stated that both the statement of claim and the statement of defense, together with their annexes, may be submitted via e-mail to arbitration@istac.org.tr.

In addition, considering the right to be heard, ISTAC published the Online Hearing Rules and Procedures, which enable participants to hold hearings through teleconference or video conference without the need to physically come together in order to minimize the risk of spreading COVID-19.^[6] Accordingly, it has been envisaged that the ISTAC Secretariat will provide support to arbitrators and parties in order to aid healthy and efficient hearings.

LCIA

The London Court of International Arbitration (“LCIA”) released an update to the LCIA Arbitration Rules, which took effect on 1 October 2020. The LCIA Arbitration Rules updates were in the process of finalization as the COVID-19 pandemic took hold. While the pandemic did not necessitate any change of direction or focus, it allowed the LCIA to explicitly address some changes to recent good practice, most notably the increased use of virtual hearings and the primacy of electronic communication across the board. Articles 1, 2, 4, and 26 of the LCIA Arbitration Rules confirm the primacy of electronic communication with both the LCIA and in the arbitration and confirm the facilitation of electronically signed awards, while Article 19 reflects the refinement and expansion of the provisions accommodating the use of virtual hearings while also supporting arbitrations taking place in the new normal.[7]

ICSID

On 24 March 2020, the International Centre for the Settlement of Investment Disputes (“ICSID”) declared that requests for arbitration, petitions, and any kind of post-award applications may be submitted electronically and that the Centre will provide online hearing services and technology. In this regard, as per the statistics published in the official website of the ICSID, from 15 March 2019 until 15 December 2019, 95 sessions or hearings were held by telephone or videoconference. This is equivalent to 61% of all hearings and sessions held within that period for cases administered by the Centre under the ICSID Convention and the Additional Facility Rules. On the other hand, from 15 March 2020 until 15 December 2020, all hearings and sessions (100%) were held by telephone or videoconference in cases administered by the Centre under the ICSID Convention and the Additional Facility Rules.[8] These statistics show that the ICSID provided sufficient services and technology for the organization of online hearings, and therefore, an increase of 39% occurred in hearings and sessions held online from 2019 to 2020.

In 2022, the ICSID took one more step towards greener arbitration. With the new amendments made to the ICSID Regulations and Rules in 2022 which entered into force on 1 July 2022, as per Article 4 of the ICSID Arbitration Rules[9] and the ICSID Institutional Rules,[10] all documents must be filed electronically unless specific circumstances require otherwise. The fact that electronic submission has been made the default method indicates that the ICSID is working to be as environmentally-friendly as possible.

HKIAC

The Hong-Kong International Arbitration Centre (“HKIAC”) Administered Arbitration Rules expressly allow for electronic communications and fillings, including offering an online repository for this purpose (Case Connect), and expressly encourage tribunals to consider using technology to effectively conduct arbitration proceedings without limiting hearings to in-person only. The HKIAC also offers comprehensive virtual hearing services and tribunal secretaries who are aware of how technology can be used effectively in proceedings to support tribunals.[11]

Based on its experience of administering multiple virtual hearings, the HKIAC produced guidelines for conducting virtual hearings which intend to ensure that the participants experience a seamless and effective virtual hearing. The HKIAC’s virtual hearing services may be used for arbitrations administered by the HKIAC as well as those that are not.[12]

In addition, the HKIAC appointed a designated Green Ambassador in cooperation with the Campaign.[13]

The 2020 IBA Rules on the Taking of Evidence in International Arbitration

As a direct consequence of the COVID-19 pandemic, many users of international arbitration (and of the IBA Rules on the Taking of Evidence in International Arbitration) have been grappling with the possibility and peculiarities of remote hearings. With the new 2020 Rules (which were released in February 2021), Article 8.2 now provides that the arbitral tribunal, at the request of a party or on its own motion after consultation with the parties, may order that evidentiary hearings be conducted remotely. In such case, the arbitral tribunal must consult with the parties to establish a protocol for the remote evidentiary hearing in order to conduct such hearing “efficiently, fairly, and, to the extent possible, without unintended interruptions.”[14]

Towards a Greener Arbitration Practice

With the goal of significantly reducing the carbon footprint of the arbitration community and saving significant amounts of paper, coupled with the effective use of technology during the COVID-19 pandemic, electronic submissions and online hearings have become a matter of great importance for the arbitration community as they enable significant cost-savings for clients and interested parties.

However, these quite constructive developments may encounter a certain number of challenges, such as the preference of old-school hard copies over soft copy documentation and face-to-face meetings in person over online hearings. In addition to this, there is an inherent risk that online hearings present new challenges in terms of due process and equal treatment between the parties.

Therefore, although a great arbitration movement has been initiated to strive for greener arbitration, there is a lot on practitioners’ shoulders to deal with the said challenges and create a smooth transition to the new era of international arbitration. Let’s see what the future may hold!

S. Aslı Budak – Seher Elif Köse Özgüç

[1] For more information, see https://www.greenerarbitrations.com/about

[2] For more information, see https://www.greenerarbitrations.com/impact

[3] For more information, see https://www.greenerarbitrations.com/greenpledge

[4] For more information, see https://www.greenerarbitrations.com/green-protocols

[5] For more information, see https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf

[6] For more information, see https://istac.org.tr/uyusmazlik-cozumu/tahkim/istac-cevrimici-durusma-usul-ve-esaslari/

[7] For more information, see https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2020.aspx

[8] For more information, see https://icsid.worldbank.org/news-and-events/news-releases/hearings-and-sessions-held-icsid-cases-march-december-2019-vs-2020

[9] https://icsid.worldbank.org/rules-regulations/convention/arbitration-rules/chapter-i-general-provisions

[10] https://icsid.worldbank.org/sites/default/files/Institution_Rules.pdf

[11] “Green(er) Arbitration” Zoom Conference organized by ISTAC, HKIAC and Campaign for Greener Arbitrations on 10 November 2021

[12] For more information, see https://www.hkiac.org/sites/default/files/ck_filebrowser/HKIAC%20Guidelines%20for%20Virtual%20Hearings_3.pdf

[13] For more information, see https://www.hkiac.org/news/hkiac-and-hong-kong-ranked-third-worldwide

[14] For more information, see https://www.ibanet.org/MediaHandler?id=def0807b-9fec-43ef-b624-f2cb2af7cf7b