Mahbub & Company | The Future of Commercial Dispute Resolution: M&C Webinar Report
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The Future of Commercial Dispute Resolution: M&C Webinar Report

The Future of Commercial Dispute Resolution: M&C Webinar Report

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On 16th July 2020, Mahbub & Company organised a webinar titled “The Future of Commercial Dispute Resolution” which focussed on the current technological response by the institutions of commercial dispute resolution to the global pandemic and its sustainability in the future, as well as the prospect of growth of institutional arbitration as a form of alternative dispute resolution (ADR).

The webinar panel featured four esteemed speakers who have extensive experience in commercial dispute resolution and was moderated by Saqeb Mahbub, Partner at Mahbub & Company. Mustafizur Rahman Khan, Advocate of the Supreme Court of Bangladesh; Shyam Divan, Senior Advocate of the Supreme Court of India; Muhammad A. Rumee Ali, Chief Executive of Bangladesh International Arbitration Center (BIAC); and Shwetha Bidhuri, Head (South Asia) of Singapore International Arbitration Centre (SIAC) spoke at the event.

The discussion was opened by Mr. Mahbub as he contextualised how the courts of Bangladesh were not prepared for the standstill caused to their operations by the pandemic, and how during May, the judiciary redeemed itself by introducing e-filing and virtual courts. He stated that Bangladesh was able to effect drastic transition and expressed his optimism for further growth in this regard. Mr. Mahbub identified that while it has been a great leap forward that the virtual courts in the Supreme Court Appellate Division have been functioning in full swing, the courts are still operating on a very limited basis. He further pointed out that arbitration is failing to develop in the same manner. On this premise, Mr Mahbub invited Mr. Mustafizur Rahman Khan to share his insight on the long-term impact of technology in commercial dispute resolution in Bangladesh.

Mustafizur Rahman Khan, Barrister-at-Law, Advocate, Supreme Court of Bangladesh

Mr. Khan pointed out that a longstanding problem in the process of commercial litigation at the national level was inefficiency. The outbreak of Covid-19 and the consequent and sudden introduction of indefinite lockdowns have simply compounded the problem. He opined that the new virtual court system reclaimed the legal system of the Bangladeshi courts from the pandemic-induced standstill as a stopgap, albeit for limited purposes. He identified the hurdles posed by the “new normal” in terms of mass digital exclusion but went on to identify how it can be a blessing in disguise for the development of our justice system as a whole. He stated that the advancement of the Bangladeshi legal system had lain dormant for over a century until it was forced in a position where it has had to incorporate modern technology in order to function.

Mr. Khan further stated that the revolutionary impact has gone beyond shaping the mere functionality – the change has put into perspective for all stakeholders how the identity of any justice system is not connected to its place of operation but to its provision of service. He opined that this is only the beginning of incorporation of technology into the court and out-of-court systems of Bangladesh and how he is optimistic for the future. Mr Khan spoke about how to make arbitration in general more attractive in Bangladesh. He addressed how to make arbitration less costly by opting more for institutional arbitration as opposed to ad hoc arbitration.

Mr. Mahbub then conducted a virtual poll regarding whether virtual courts are a temporary solution or whether they would be abolished after the pandemic is over with. While no one voted for their likelihood of being abolished, 76% voted for their functionality on a limited basis.

Before inviting the next speaker, Mr. Shyam Divan, Mr. Mahbub pointed out how India has dealt with the issue of standstill in court functioning in a similar manner as there is now virtual courts at Indian High Courts and that they commenced doing so a few weeks before Bangladesh. He also explained how currently courts are dealing with interlocutory matters which are urgent in nature only and probed the prospect of witness examination in the future where it is essential to look at the body language and the demeanour of the witness. Mr. Mahbub invited Mr Divan to consider whether the quality of witness examination deteriorate in the virtual courts and whether junior lawyers would be deprived of the opportunity to attend court hearings to learn from and network with other lawyers. Mr. Mahbub also invited him to speak on whether the adaptation to the demand of virtual saviness is likely to grow further in the future and whether virtual reality has had the same effect and integrity as physical establishments for dispute resolution in India.

Mr. Shyam Divan, Senior Advocate, Supreme Court of India

Mr. Divan began his speech by establishing that modern technology had been integrated in the Indian court system on a limited scale even before the compelling situation created by the pandemic. He stated that, similar to Bangladesh, the impact of the sudden and significant shift to virtual means of dispute resolution in India has been that there is a limited scale of operation. He identified the sources of the problem as wide-scale inaccessibility to the internet by legal personnel and clients and poor internet connectivity. However, he opined that arbitration as a means of dispute resolution has been thriving in the same circumstances since it is relatively less formal and more flexible a process. He foresees that the domain of commercial dispute resolution would require drastic improvements in technological support in order to become functional in the virtual domain which, to him, appears unlikely. Mr. Divan, echoed other speakers in opining that institutional arbitration is the way forward. He further stated that people need to change their “judicial mindset” and identified that litigation is an expensive process, and arbitration provides a good alternative relief where young minds have a chance to grow.

Mr. Mahbub then invited Mr. Muhammad A. Rumee Ali to address how BIAC changed under his leadership and how BIAC has adapted to the pandemic and the future of BIAC from here. Mr. Mahbub further pointed out that recently BIAC has targeted the banking sector and manufacturing and export sector, and in that context inquired the likelihood of mediation developing in Bangladesh.

Mr. Muhammad A. Rumee Ali, Chief Executive, BIAC

Mr. Ali addressed the present and future operations of BIAC. As a banker who has had dealt with banking laws for over two decades, Mr. Ali added valuable observations to the discussion from a non-lawyer perspective. He believed that the pandemic has paved the way for the growth of alternative methods of dispute resolution, particularly mediation and arbitration, as the courts have taken a logistical backseat. He stated that globally mediation was conducted virtually even before the outbreak of the pandemic which has allowed the process to adapt quickly to the new normal. As the garments industry of Bangladesh fell out with several international buyers due to the pandemic, he stated that he is trying to convince the Bangladeshi parties to the dispute that, unlike the litigation process, the alternative dispute resolution (ADR) processes are more flexible in terms of selection of venue and time which is a significant benefit in these cross -border disputes.

He further stated that ADR would appeal to companies concerned about bad publicity because of the confidential nature of the proceedings. He added that institutional arbitration is not very popular in Bangladesh, and so if the garments industry resorts to institutional arbitration, it would raise awareness of the process. He shed light upon the oversubscribed nature of the court system, and that now, of all times, people are being forced to look for alternative means of resolving their commercial disputes which in turn would allow ADR to grow as ADR much quicker.  Furthermore, he stated that Bangladesh should not try to replicate the physical court but should try to focus on creating an improved and innovative model which is the virtual court. He strongly believes that the Bangladeshi legal system cannot be resistant to innovation, clarifying that Bangladesh cannot and should not wait for certain technological barriers to be overcome in order to start using virtual courts.  He believes that even if it is difficult, Bangladeshi legal system has to demonstrate itself as credible in order to become credible. He stated that the arena of commercial dispute resolution has to adopt technology not to survive the pandemic but assuming that this is the future.

Mr. Mahbub concurred with Mr. Ali that the change was not practically as difficult as it was apprehended before the change was effected as a simple Practice Direction from the Supreme Court and an Ordinance from government a few days later enabled a quick transition to the virtual reality.

Mr. Mahbub then invited Ms. Shwetha Bidhuri to speak about how to enable clients to move towards institutional arbitration which offers more efficiency and how SIAC has responded to the pandemic.

Ms. Shwetha Bidhuri, Head (South Asia), SIAC

She opined that out of all ADR mechanisms, arbitration has been able to respond most efficiently because arbitration has long incorporated virtual hearings, particularly for international commercial arbitration where the hassle of visa requirements can be evaded. She stated that steps need to be taken now so that nothing comes as a surprise in the future. In the second round, Ms. Bidhuri explained that in order to bypass high expenses in arbitration, institutional arbitration is the way to go about.

The webinar followed a structural process of information exchange amongst the speakers and viewers via an engaging Q&A session. It ended on a resounding consensus that concerned institutions must be more accommodating to the use of new technologies in order to further the advancement of the domain of commercial dispute resolution and the importance of institutional arbitration in today’s world. It was further agreed that barriers need to be closely identified and overcome in order to ensure effective current and future use.

Report prepared by Mohua Morshed, Associate, Mahbub & Company