Arbitration In IndiaVirtual Reality in Arbitration: An Emerging Phenomenon in the Post-Pandemic World

February 17, 20220


The COVID-19 pandemic brought with it an unprecedented reliance on the use of technology in every sector. Courts all over the world moved to virtual modes of hearing, in light of the looming threat to health and public safety. Tribunals and other quasi-judicial forums also followed the lead. Similarly, Arbitration institutions came up with new rules, or amended the existing ones, to facilitate the virtual Arbitral process in a smooth, efficient and digitally-enabled manner.

However, this positive shift towards the use of technology in adjudicatory processes has been a response to the pandemic induced restrictions, arising as a necessity, and not a choice. While Courts are gradually moving back to physical hearings as the situation eases, Arbitration proceedings still continue to be conducted online.

This brings forth the question that whether the Arbitration community would move back to the ‘pre-pandemic normal’, or has the increased use of technology become the ‘new normal’. This Blog attempts to discuss the scope of Virtual Reality in Arbitration, and its legal implications on the parties and Arbitral Tribunal.


The concept and scope of Virtual Reality (‘VR’) is wider than what we understand by the use of technology in Arbitration today. VR encompasses the creation of a digital experience that mimics the experiences we as humans have in the real world. It is much more than videoconferencing, online case management, e-evidence, and virtual testimonials of parties and witnesses.

To put it simply, VR aims at offering real-life experiences in a digital format. It allows the creation of immersive virtual environments, which are artificial, interactive, computer-created scenes combining high-resolution projections and 3D computer graphics that give the user the experience of being present in a virtual world.

As the Arbitration community shows inclination towards the use of technology going forward, VR is likely to arise as the soon-to-emerge mode of Arbitration, with some Arbitration institutions conducting mock Arbitrations through VR set-ups. While the widespread use of VR in litigation and Arbitration is still distant, there are few VR-based tools catered towards the legal community.

For instance, VR technology is used as a tool for hearing presentation strategy and producing demonstrative evidence in the tribunal setting.. VR technology is also used in the form of Exhibit Manager, which stores links to PDF files, which can be inserted into legal submissions where they are automatically numbered and formatted as per specifications. It then creates a list of exhibits, stamps and bundles them, thereby reducing manual filing work to a large extent. Hearing room technologies, such as videoconferencing, multimedia presentations and real time electronic transcripts in Arbitration proceedings also utilise VR tools.

The 2021 International Arbitration Survey on Adapting Arbitration to a Changing World conducted by White & Case LLP presents a detailed statistical analysis of the use of technology and VR in Arbitration. The survey indicates that hearing room technology and videoconferencing are the most commonly used forms of technology within the Arbitration community. There has been an ‘explosion’ in the use of virtual hearing room technology, with 72% of the Respondents using virtual hearing rooms at least a few times.

Prime advantages of VR-based hearings include potential for greater availability of dates for hearings, greater efficiency through use of technology, greater procedural and logistical flexibility, and lesser environmental impact as compared to in-person hearings.

Apart from these, VR-based hearings may encourage greater diversity within and across Arbitral Tribunals by making physical location of Arbitrators immaterial, thus facilitating neutral Arbitrators.

On the other hand, the disadvantages include difficulty in accommodating multiple time zones, difficulty for clients and Arbitrators to confer during hearing sessions, technical malfunctions, concerns regarding confidentiality of proceedings and cybersecurity, difficulty of controlling witnesses and in assessing their credibility, disparity in access to and affordability of similar levels of technology between the parties and the Tribunal.

These issues pose challenges and legal grey areas, which have to be resolved to increase the use of VR tools in Arbitration in a way that does not lead to an upheaval from the legal viewpoint.


Use of technology in general, including VR in particular, for the conduct of Arbitration raises several questions on the legal frontier. While their use does seem to make the process efficient, the Arbitration community and parties would be able to adopt such technology for conducting proceedings when certain legal implications concerning VR and virtual hearings are kept in mind and answered accordingly.

1. Fair and Equal Treatment of Parties

One of the key considerations of any Arbitration and the primary duty of any Arbitrator is to ensure fair and equal treatment of parties. It is necessitated by the Principles of Natural Justice, as well as all international instruments and national legislations pertaining to Arbitration.

The UNCITRAL Model Law on International Commercial Arbitration (‘the Model Law’) in Article 18 mandates the fair and equal treatment of parties, and provides that each party has to be given a full opportunity of presenting its case. The New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (‘the New York Convention’) also impliedly includes this requirement under Article V.

Institutional rules such as the International Chamber of Commerce (ICC) Rules of Arbitration, 2021 (‘the ICC Rules’) in Article 22, the London Court of International Arbitration (LCIA) Arbitration Rules, 2020 (‘the LCIA Rules’) in Article 14, and the Singapore International Arbitration Centre (SIAC) Rules of Arbitration, 2016 (‘the SIAC Rules’) in Article 19, also provide for fair and equal treatment of parties by mandating the Arbitral Tribunal to “act fairly and impartially”.

The Arbitration and Conciliation Act, 1996 (‘the A&C Act’) adopts Article 18 of the Model Law in its entirety, and makes an express provision regarding fair and equal treatment of parties in Section 18 of the A&C Act.

Application of this principle to the use of VR in Arbitration raises important questions. For ensuring fair and equal treatment of parties, it is important that all the parties involved have access to similar, if not the same, technology being used.

This comes with its own challenges regarding accessibility and affordability of technology. If the technology is accessible, the parties may not be equally versed with its usage, that is, there might be a gap in the technical know-how of the parties. Further, the issue of technical glitches also arises.

Thus, the question arises that whether the Arbitral Award is liable to be set aside, or its enforcement be denied, if one of the parties claims to be treated unfairly on such grounds. If yes, by whom and through what means would the veracity of such claims be determined. Questions also arise regarding the onus and burden of proof for such claims.

While most Arbitration Rules place in-person hearings and virtual hearings at the same level, the aforesaid questions which arise in virtual hearings exclusively, remain unanswered.

2. Virtual Identity of Parties

Party autonomy is the cornerstone of the concept of Arbitration. It means that the parties are free not only to decide the laws applicable to the Arbitration, but also the procedure to be followed. Article 19 of the Model Law embodies the principle of party autonomy, and the same is also recognised in national legislations on arbitration worldwide. Section 19(2) of the A&C Act makes a similar provision. However, the contours and limitations of party autonomy with respect to use of VR technology in Arbitration and identity of parties is undefined.

The use of VR technology in Arbitration at the current stage is limited only to virtual hearing rooms and use of file management tools. However, considering the advancements in VR technologies and onset of the age of the ‘Metaverse’, there is a possibility of the conduct of Arbitration purely through VR based tools on the Metaverse.

This could potentially entail the parties using virtual ‘avatars’ in Arbitration proceedings. Not only this, the parties may even enter into contracts through their virtual ‘avatars’. This, coupled with the increasing use of blockchain technology, can give rise to a host of issues that the Arbitration law is not equipped for.

The first question to arise is whether the parties are allowed to use their virtual ‘avatars’ in adjudicatory processes. Additionally, till what extent would the law permit Arbitration of disputes arising from a contract executed by the virtual identities of parties, and whether such contracts would be considered valid and enforceable before the law.

It may be noted that party autonomy does appear to take a back seat in this regard. The questions become more complicated when the use of cryptocurrency is factored in. Before the Arbitration community decides to move further with the use of VR in Arbitration, it is imperative for such questions to be answered with legal footing.

3. Virtual Identity of Arbitrators

Issues which arise due to the use of virtual identity of parties are equally applicable on the use of virtual identity by Arbitrators. However, potential use of virtual ‘avatars’ by Arbitrators also poses questions regarding the eligibility criteria for appointment, and determination of conflict of interest of the Arbitrator(s).

Article 11 of the Model Law does not prescribe any qualifications necessary to be appointed as an Arbitrator, unless anything in that regard is mentioned by the agreement between the parties. The basic requirement is that the Arbitrator must be impartial and independent.

Article 12 of the Model Law casts a duty upon a person who is approached to be an Arbitrator to disclose any circumstances which would question his impartiality or independence. Further, it empowers the parties to challenge the appointment of an Arbitrator if there are circumstances which give rise to justifiable doubts regarding his impartiality or independence.

To determine conflict of interest, the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration (‘the IBA Guidelines’) are considered, which consist of general standards as well as specific circumstances divided into the non-waivable Red List, waivable Orange List, and Green List.

Section 11 and Section 12 of the A&C Act are based on Articles 11 and 12 of the Model Law, and India has adopted the IBA Guidelines in the form of the Fifth Schedule and the Seventh Schedule to the A&C Act.

The basic principle of deciding whether there is a conflict of interest, or possibility that the Arbitrator might not act impartially and independently, is to judge his previous relationship with the parties to the dispute. However, if the Arbitrator and the parties use their virtual identities in Arbitration, determination of conflict of interest becomes difficult.

Additionally, it is challenging to determine the credibility of disclosures made by the Arbitrator through VR. Even if it is assumed that the Arbitrator has not willingly engaged himself in a conflicting Arbitration, the entire Arbitral proceedings are at risk of being set aside owing to lack of impartiality and independence of the Arbitrator.

Although this seems like a far-fetched issue, but given the pace at which technology is inculcated in Arbitration, and the general ambiguity of International Arbitration laws, issues like these are bound to arise sooner or later.

4. Virtual Testimony of Experts and Witnesses

In Arbitration proceedings, it is common place for the parties to call upon their experts and witnesses. The international guidelines dealing with this matter are the IBA Rules on the Taking of Evidence in International Arbitration, 2020 (‘the IBA Evidence Rules’).

The witness statements and expert reports submitted by parties serve as direct examination, and during the hearings, the witnesses and experts are cross examined by counsel of the opposite party in an attempt to refute their statement or report, and question its credibility.

Additionally, Article 8.2 of the IBA Evidence Rules allow evidentiary hearing to be conducted remotely, as well as establishment of a Remote Hearing protocol to address the technology to be used and its advanced testing or training, determining the time of evidentiary hearing keeping in mind difference in time zones of the participants, manner of placing documents before a witness or the tribunal, and measures to endure that witnesses who are giving oral testimony are not improperly influenced or distracted.

The A&C Act, under Section 26, empowers the Arbitral Tribunal to appoint expert witnesses, and Section 27 enables the Arbitral Tribunal to apply to the court for assistance in taking evidence and examination of witnesses. However, the Indian law on the matter is bereft of specific provisions for taking testimony of witnesses and experts virtually. It should be noted that while Section 19 of the A&C Act declares that the application of the Indian Evidence Act, 1872 is not mandatory upon the Arbitral Tribunal, the broad rules of evidence are applicable.

However, certain practical and legal difficulties are inherent in taking evidence virtually. Regardless of the number of times a test hearing is conducted, there is no guarantee of the actual evidentiary hearing going smoothly. Due to the virtual set-up, counsel for the opposite party and the Arbitral Tribunal may find it difficult to observe the body language of the witness, which is key during cross-examination to determine the credibility of his evidence.

5. Confidentiality and Data Privacy

In Arbitration, confidentiality of proceedings and Award are of prime importance. The UNCITRAL Arbitration Rules, in Article 28, impliedly inculcate the principle of confidentiality of proceedings, and Article 34 embodies the confidentiality of Arbitral Award.

Article 30 of the LCIA Rules makes an express provision regarding maintaining confidentiality which binds parties, as well as Arbitrators. Most other institutional rules regarding Arbitration contain similar implied or express provisions regarding confidentiality.

Section 42A of the A&C Act mandates the Arbi0trator, the Arbitral institution and the parties to maintain confidentiality of Arbitral proceedings, except for that of Award where its disclosure is necessary for enforcement.

However, in virtual hearings, maintaining confidentiality is difficult as compared to in-person hearings. This is because data is constantly shared between the parties, the Arbitral tribunal, witnesses and experts.

Arbitral proceedings, which are otherwise kept confidential, may be improperly recorded by any one attending them in a virtual set up. The files shared between the parties may be subjected to a data breach. Even with the use of end-to-end encryption, issues of confidentiality and data privacy are not completely mitigated.

Additionally, the standards of data privacy vary across jurisdictions. While the Draft International Council for Commercial Arbitration (ICCA)-IBA Roadmap to Data Protection in International Arbitration (‘the IBA Roadmap’) published in 2020 provides guidelines regarding data privacy and confidentiality, it is important to note that it is based on the European Union’s General Data Protection Regulation (‘the GDPR’).

Standards laid down in the GDPR are considerably high when compared to the data protection laws of other jurisdictions. Hence, practical applicability and enforcement of the IBA Roadmap in the national laws for data privacy and confidentiality of different countries may be difficult and cannot be assured.


The use of VR in Arbitration is at a nascent stage presently. It comes with its set of advantages and disadvantages, which have to be weighed against each other to decide whether the Arbitration community should move ahead with its use, or go back to the traditional ways of conducting Arbitration.

The global Arbitration rules have undergone changes to embrace the shift towards technology brought by the pandemic, but they are nowhere near sufficient to answer all the questions and issues which are likely to arise with the use of VR in Arbitration.

With the development of more dynamic and cutting-edge VR tools for Arbitration, these questions are bound to get complicated. Thus, it is imperative that the use of advanced VR tools in Arbitration should be done only after due consideration and assessment of the basic technology and technical know-hows of the parties, along with ensuring that all the essential principles of Arbitration are complied with by all the parties and Arbitral Tribunal.

Team AMLEGALS, assisted by Ms. Gazal Sancheti (Intern)

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