1 Introduction
The covid-19 pandemic recently brought various sectors of our lives to a standstill and sped up the process of digitalization. In dispute resolution, there was a shift to the electronic filing of documents and consequently limited face-to-face contact between parties. The digitalization process is inseparably linked to the future of the arbitration courts worldwide. Such digitalization (collecting e-evidence, conducting online hearings, etc.), driven by the needs created by the global pandemic, will have an impact and create a new framework for the functioning of the global arbitration system.
Digitalization is seen as a potential solution to the inefficiency of traditional courts, the weakness of judicial credibility, as well as the inconveniences to the parties.1 The emergence of different models of online courts is worth analyzing and this chapter focuses on the so-called “smart courts” in China. The Chinese experience and accomplishments in the digitalization process offer insights that may be useful in times of crisis and thereafter.
In our view, the traditional, classic mode of functioning of courts and arbitral tribunals is becoming a thing of the past. The development of online courts will take place on many levels and involve not only the national justice systems, but also the international frameworks and alternative dispute resolution mechanisms, including arbitration. The aim of this chapter is to outline the new landscape of arbitration stemming from the digitalization process. It provides an analysis of recent changes in dispute resolution in China, presenting the overall approach to the digitalization of courts (including but not limited to arbitration courts). It touches upon the different examples of digitalization already undertaken in arbitration institutions worldwide and offers final considerations regarding the arbitration landscape after the covid-19 pandemic.
2 Chinese Smart Courts and the Establishment of Online Courts
Most models of online courts came from Common Law jurisdictions. Several factors led to their development, such as increased access to justice, reduced cost, more efficient use of litigants’ time, and reduced reliance on attorneys. Some models of online courts function within the public sphere but outside the judiciary system, while others, such as “smart courts” in China, function as an integrated part of a centralized court system.2
In addition to the emergence of online courts, there is a new global phenomenon known as the online dispute resolution mechanism (“odr”). This global shift towards odr has led to developments in technology and opened new possibilities, such as Chinese “smart courts”. “Smart courts” are part of a global Chinese strategy to restructure the judiciary system, and the Chinese government plays a vital role in the promotion of information and communication technologies (“ict”) that fuel the advancement of odr.3 These technological advances are especially significant given judicial reform conducted in China; reforms intended “to build a judicial mechanism that is open, dynamic, transparent, and convenient and improve public understanding, trust, and supervision of the judicature”.4
In recent years in China, the process of digitalization of courts has been widely discussed not only in theory but also in practice. Digitalization of courts should be understood as all proceedings relating to litigation being conducted online, including activities such as filing cases, court trials, executions of judgement, etc. Today, with the development of new technologies, it is inevitable to use big data, cloud computing, and even artificial intelligence more frequently in online court proceedings. Digitalization seems to be a natural
China took the first steps towards informatization in the 1990s. Those first steps were treated as the foundation to create infrastructure for the functioning of e-government and further the emergence of e-courts. The first step was to provide courts with computers. Next, government information was digitalized. There was a need to not only design algorithms, but also to create a tool used for their collection, archival, streamlining and analysis. Based on this, it was inevitable for China to make use of the whole range of innovative technologies (including both artificial intelligence and blockchain) to create “smart courts”.
This development of new technologies allowed the entire court system to become more digitalized. The Supreme People’s Court in China (“spc”) plays a crucial role in this field. The spc created large-scale databases providing information to the public about the judicial process and court management. As a result, “China Judicial Process Information Online (中国审判流程信息公开网), China Court Documents Online (中国裁判文书网), China Judgements Enforcement Information Online (中国执行信息网), China Open Trials Online (中国庭审公开网), China Justice Big Data Service Platform (中国司法大数据服务网), and Legal Information: Data Network Service Platform on Application of Chinese Law (Faxin, 法信—中国法律应用数字网络服务平台)”6 were introduced. In addition to these national databases, each local court provides its own database. There are three principal purposes of these online platforms: first, they provide judicial transparency in China, resulting in open trials and hearings that are available for the public; second, they are seen as instruments crucial in the view of judicial management that allow the improvement of judicial efficiency; lastly, they are useful in terms of big-data analysis.7
It is worth adding that the term “intelligent court” was first defined by the Annual Working Report of the spc in China. According to this report, an “intelligent court system” should aim to “make full use of technologies such as [the] Internet, cloud computing, big data, artificial intelligence and so on, to promote the modernization of [the] trial system of judgment capability, so as to achieve the highly intellectualized operation of [the] management of the people’s court”.8 Considering this definition, it is possible to distinguish three key
Today, the process of digitalization in Chinese courts is a “hot topic” analyzed by academics and legal practitioners. The necessity of developing this field was also highlighted by the President of the People’s Republic of China, Xi Jinping, who said that “there is no modernization without digitalization”.10 A similar stance was presented by the Chief Justice and President of the Supreme People’s Court, Zhou Qiang. He once stated that the entire process of judicial reform, including information construction aimed at the modernization of the judicial system, was “two wheels of cars and a pair of wings of birds”.11 Digitalization is a natural consequence of development and a prognostic of a new age, and it is challenging to modernize a country without benefiting from new technologies. To utilize digitalization, the spc proclaimed the introduction of so-called “smart courts” in 2015–2016. The emergence of “smart courts” is widely considered to be a solution to previous challenges to the court system. “Smart courts” benefit from ict, especially in terms of the Internet, cloud computing, big data, and artificial intelligence. These tools modernize and improve the judicial capability of the entire trial system in China. “Smart courts” are but one of the tools pertaining to the whole range of government initiatives, all of which aim to reduce the shortcomings of the judiciary system in China. These shortcomings restrain economic growth and affect public trust as well as international confidence in the appropriate functioning of Chinese courts. These initiatives together increase the professionalism and transparency of the Chinese judiciary and the accountability of both Chinese courts and judges.12
Notably, the Chinese people are much more aware of their rights than ever before, and although the alternative dispute resolution mechanisms are particularly popular in China, there remains a need to resolve some legal problems by using typical court litigation. However, there are not enough judges for the amount of legal cases presented, creating the need for alternate solutions, such as online courts.13
Due to recent achievements in the legal field, instead of a linear and isolated litigation model, China has adopted an integrated, open, and intelligent model. Thus, judicial activities do not follow a traditional pattern, but combine both online and offline integration patterns.15
Three online courts currently function within the territory of the People’s Republic of China, located in Beijing, Hangzhou, and Guangzhou. In April 2015, the High People’s Court of Zhejiang Province introduced special online e-commerce tribunals, the first online tribunals to operate in China. Those tribunals handle cases mainly relating to online monetary claims, copyright infringement, and transaction disputes. China established the Hangzhou Internet Court in August 2017 and the Beijing and Guangzhou Internet Courts in September 2018. There are currently eight specialized divisions functioning successfully within these Internet courts. Through 31 October 2019, these courts resolved 88,000 Internet-related cases out of almost 120,000 presented. Online litigation sped up the whole process significantly, with the court conducting an average of 45-minutes of online hearings and issuing a decision within an average of 38 days after the hearing. Accordingly, the Chinese judiciary saved three-fifths the time in online hearings and half the time issuing a judgment as compared to the traditional model. Online courts are remarkably effective, with the parties acknowledging first-instance judgments in most cases (up to 98% of cases handled by the online courts). There were very few appeals of judgements issued by the Chinese online courts.16
In sum, these three courts conduct the entire court process online, from filing a lawsuit through issuing a judgment. A special e-litigation platform has been created to provide these services to Chinese citizens, and there is also the so-called “mobile micro court” functioning as an additional tool, which is a mini-program offered on WeChat, a social media platform in China. The
3 Significance of Smart Courts in China during covid-19 Pandemic
The covid-19 pandemic influenced all aspects of our lives, most notably the judiciary system and alternative dispute resolution mechanisms, including arbitration. Chinese authorities were aware of the need to strengthen informatization and digitalization, both of which are vital in a global pandemic. Xi Jinping and Zhou Qiang highlighted the need for improving the effectiveness of “smart courts” across China, and China undertook a range of measures across their judicial system to ensure the safety of Chinese citizens and the public health as a result. Those measures included online case-handling, online payments, and electronic delivery of judgments. By implementing “smart courts”, China was able to minimize the need for in-person courtroom appearances and therefore reduced the number of infected citizens. These solutions aimed to fulfil obligations related to pending cases while also limiting citizens’ exposure to the virus by utilizing China’s previous developments concerning “smart courts”. Litigation participants registered online through available channels such as a mobile micro court, litigation service network, etc., while Chinese courts conducted sessions through remote video to prevent “close and direct contact” between participants, safeguarding the health of Chinese citizens. Chinese courts adjusted their work to the new reality by also changing offline
4 Different Examples of Digitalization in International Arbitration
Numerous examples already exist regarding the digitalization process in international arbitration, but in this section, some innovative solutions will be explored to introduce different approaches to digitalization in global dispute settlement.
There are many approaches to effectively use technology in arbitration. First is the idea of digital case management systems. In 2005, the International Chamber of Commerce (“icc”) introduced NetCase, a document management platform that enabled parties to monitor the online arbitration process, which is no longer used by the icc court.
There are other similar platforms used by various arbitration institutions all over the world. For example, the American Arbitration Association (“aaa”) uses aaa-icdr service technology to ensure cybersecurity and data protection. To meet this goal, the aaa-icdr requires that all arbitrators undergo special training on the basics of cybersecurity. Through this training, arbitrators can take necessary measures to preserve and protect the integrity and legitimacy of the arbitral proceedings.20 Another example relates to the World Intellectual Property Organization (“wipo”), which introduced online administrative tools. This allows the wipo Arbitration and Mediation Center to provide time- and cost-efficient tools, such as wipo eADR and videoconferencing facilities. With the wipo eADR platform, the parties, as well as the arbitrators and experts, may submit all necessary documentation and communication into a special online docket. Users are notified about any system submission and can easily access and retrieve documentation from the online folder at any time. Considering cybersecurity, the wipo eADR platform is
The International Centre for Settlement of Investment Disputes (“icsid”) decided to take more decisive action to reduce paper-filings of cases. Since 16 March 2020, applicants file cases exclusively electronically (both a request for arbitration and a post-award application, such as a request for a supplementary decision or rectification, as well as an application to the interpretation, revision, or annulment). The e-filing of documents applies as well for requests for conciliation and fact-finding proceedings. In addition, icsid requires parties to provide all necessary documents, including witness statements and expert reports, in electronic format. The same rules apply to arbitrators, conciliators, and ad hoc committee members. This solution is designed to speed up the entire arbitral proceeding and allow the work of icsid to be done in a more efficient and environmentally friendly way. In the view of Meg Kinnear, icsid’s Secretary-General, “[g]iven the state of information technology—and the ease with which participants in icsid cases have adapted to online file sharing in recent years—it made sense to make electronic filing the norm” and “the result will be cost and time-savings to parties”.23 It also limits face-to-face
Finally, the Court of Arbitration for Sport (“cas”) allows for online filing after the initiation of the arbitration proceedings. “[T]his implies the prior filing of a Request for Arbitration (Art. R38 of the cas Code) or a Statement of Appeal (Art. R48) by email, facsimile or courier, within the deadline set out in Art. R49 of the cas Code, as well as the allocation of a case number for the arbitration proceedings in question”.24
Even with the recent developments and accomplishments regarding the digitalization in international arbitration, it is worth noting some challenges ahead. It is obvious that the in-person hearing differs significantly from the online hearing, and there is a need to ensure the right to be heard and the right to equal treatment. Such a goal can be achieved through “bandwidth, access-points, hardware, size and number of screens, monitoring of witnesses, 360-degree cameras; precautions against cybersecurity threats, confidentiality and data protection agreements”.25 Some arbitration institutions worldwide issued a joint statement that aimed to “assure the arbitration community that the arbitral institutions stand ready to assist users and practitioners alike, therefore supporting the use of international arbitration’s potential to provide a stable and foreseeable dispute resolution mechanism in such highly unstable times”. According to this joint statement, the arbitration institutions ensured that the ongoing arbitration procedures would continue and there would be no delay in pending cases.26
5 A Future of Worldwide Arbitration Landscape
Finding solutions to function during a global pandemic was one of the most pressing issues of 2020. The coronavirus has changed our lives and perception of reality, and some of the recently adopted solutions will likely remain with us well into the future.
Travel restrictions and social distancing requirements stemming from the covid-19 pandemic began a new approach to global arbitration and
From this perspective, the Chinese experiences and achievements regarding digitalization of courts are particularly significant during the covid-19 pandemic, and can be widely applied in arbitral proceedings. We should draw solutions from the previous developments in terms of digitalization of the Chinese judiciary and apply them to arbitration. These experiences create new perspectives on digitalization of global arbitration systems that can be used universally, not just in crises such as a global pandemic. The process of digitalization is inseparably inscribed in the future of the arbitration courts, due in large part to the covid-19 pandemic. Thus, digitalization driven by the realities of a global pandemic will create a new framework for the functionality of the global arbitration system. The time of arbitration in a traditional model seems to be a thing of the past, and a new era is coming, led by Internet courts. This development will take place on many levels, and will concern not only domestic but also the international judiciary and alternative dispute resolution mechanisms, including arbitration.
Junlin Peng & Wen Xiang, “The Rise of Smart Courts in China: Opportunities and Challenges to the Judiciary in a Digital Age,” Nordic Journal of Law & Social Research 1, no. 9 (2019): 347.
Veronica Bradautanu et al., “From digitalisation to digital transformation: A case for online courts in commercial disputes?,” European Bank for Reconstruction and Development, October 22, 2020, 10.
George G. Zheng, “China’s Grand Design of People’s Smart Courts,” Asian Journal of Law and Society 7, no. 3 (2020): 561–563.
Mimi Zou, “‘Smart courts’ in China and the Future of Personal Injury Litigation,” Journal of Personal Injury Law (forthcoming, June 2020), 1–2,
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Zheng, supra note 3, at 566.
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Alison (Lu) Xu, “Chinese judicial justice on the cloud: a future call or a Pandora’s box? An analysis of the ‘intelligent court system’ of China,” Information & Communications Technology Law 26, no. 1 (2017): 62).
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Peng and Xiang, supra note 1, at 346; cf. Xi Jinping, “First meeting of the central cyber security and informatization (2014)”, 习近平.中央网 络安全和信息化领导小组第一次会议, 2014.
Peng and Xiang, supra note 1, at 346; cf. Zhou Qiang. National symposium of provosts of high courts (2014), 周强.全国高级法院院长座 谈会, 2014.
Zou, supra note 4, at 2.
Peng and Xiang, supra note 1, at 346.
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