Disputes in business are normal, however, efficient ways to resolve them can sometimes be difficult to find. There are a lot of options, but there seems to always be a disconnect between what is provided and what is needed.
In a fragmented industry with lots of options vying to be the chosen one by business owners, digital arbitration is slowly gaining popularity. With digital arbitration, business disputes can be handled efficiently and effectively.
In this Justice Talk, we interviewed international commercial arbitration specialist Sebastian Mejia to discuss how businesses can leverage the power of digital arbitration for their disputes.
Sebastian Mejia: The practical application of digital arbitration
Our guest, Sebastian Mejia, is an international arbitration specialist in the truest sense of the world. He is an international arbitration lawyer qualified to practice law in New York and Madrid.
Sebastian is also a Fellow of the Chartered Institute of Arbitrators (FCIArb).
In terms of his professional background, Sebastian has almost a decade of experience handling multiple cases in the financial, construction, sports, insurance, technology, and energy sectors. His experience in arbitration has immensely grown during the COVID era after having been part of a multi-billion dollar dispute that was handled through digital arbitration.
Sebastian believes that as digital technologies evolved, businesses of all kinds in all industries and all sizes also adapted to the change. With his international outlook and first-hand experience with digital arbitration, Sebastian shares his valuable insight about the direction of the arbitration industry as a whole, and how this will affect businesses worldwide.
Tools of the trade: How digital arbitration can be good for business
To understand how digital arbitration works in business disputes, we must first learn what are the features of this up-and-coming dispute resolution method in facilitating better justice practices that benefit entrepreneurs.
The main factor contributing to digital arbitration helping businesses is the cost reduction it brings in dispute resolution. Sebastian agrees with this and says: “With emerging digital technologies, it’s possible to have a more transparent arbitrator selection process which when combined with the ability to automate and reduce bureaucratic tasks can contribute to cost savings.”
“For me, arbitration which uses any type of digital tool is just a way to further boost those advantages,” he quips, noting how digital arbitration essentially enhances what arbitration can already do from the get-go.
“I think there are features of digital arbitration that benefit every single dispute and business,” Sebastian says, who proceeds to provide us with a few examples of how digital arbitration facilitates this boost in efficiency, starting with digital documents management.
“So you have technologies that let you have a common repository of all the documents, communications, procedural orders, evidence, and submissions,” he says, “And those kinds of technologies let you access them wherever and whenever in a secure environment.”
Sebastian tells us how these kinds of technologies even push the boundaries further by not only managing documents, but also sorting them based on the relevance to the dispute: “These AI-assisted and technology-powered review tools helped us identify the key documents, and I’m pretty sure that within the 10,000-something documents that we had, we didn’t miss a single important document. And I’m 100% confident that the reason for that was not only the great people that were working on it but also the tools [that helped us] do it,” he shares.
This boost in efficiency is a great feature for businesses who want to use digital arbitration in settling their dispute as it helps cut down the time, therefore, reducing the cost of arbitration.
Virtual hearings is another example Sebastian discussed where he outlined how it helped in the efficient use of time. As for his experience with it, this is what he has to say: “The virtual hearing process went very well. What impressed me the most was how lawyers worked more effectively and efficiently.”
“In a physical hearing, you normally have the main hearing room and each party has their breakout rooms,” he explains, “But when you’re in a virtual hearing, you probably have your whole team there. Whoever was doing the advocacy at the time had a camera on their face with an open mic, while everyone else was to the side with closed mics working in the background.”
With all these cost savings brought by efficiency, arbitration becomes a win-win situation for businesses and arbitrators alike: “What we want from digital arbitration is not for the arbitrators and lawyers to be paid less,” Sebastian boldly explains, “but for everyone to be more efficient.”
Leveling the playing field
“Small businesses don’t have to have an internal legal team,” notes Sebastian, “A lot of times, it’s just the owners or CEOs who are negotiating and signing a contract. Because of that, dispute resolution clauses are almost always the last thing they negotiate, if at all.”
This reality could then be rectified by leveraging digital arbitration to positively affect smaller businesses who may not have the resources necessary to conduct arbitration to resolve issues, “To a degree, it also levels the playing field, because large companies and firms already have access to all of this. However, if anyone can access arbitration from anywhere, smaller firms who don’t have those kinds of tools get a fighting chance,” Sebastian explains.
“Companies should not be paying for their own learning experiences, and just writing off costs because they cannot pursue their rights — and that’s where I think arbitration helps,” says Sebastian.
“In the end, an important element of arbitration is a due process — making sure that everyone’s being heard, and everyone has the opportunity to be heard,” he says.
Big impact for big businesses
With all that’s been said so far, it does not mean that digital arbitration is exclusively for small business disputes. On the contrary, large companies with multi-million and even billion-dollar value disputes are also using digital arbitration.
Sebastian has shared with us an experience he’s had in handling a high-value dispute amidst the pandemic, through the power of digital arbitration. In this case, he was able to see for himself the documents management system and virtual hearings in action.
“Through AI-technology, documents were sorted properly and it helped us tell a coherent story,” he shares, “Because this was a case that had tens and thousands of documents, we needed to find a way to focus the story. Through technology, we were able to identify the key point of the piece regardless of how massive it was.”
With regards to how they operated, Sebastian shared how their hybrid system of online and offline work environments helped optimize their time: “We organized hubs. So for example, on our side, we had a hub in one of our European offices. And the others were in different parts of the world. It was not the first, but it was definitely the largest [and most complex] virtual hearing I had been in.” Sebastian recalls.
Through this method, Sebastian says that they were able to collaborate more efficiently and effectively. The one doing the advocacy had their camera and microphones on, thus having everyone’s focus. Meanwhile, everyone else’s mics were closed and they got to do work in the background.
“Digital procedures are now much more acceptable to all the parties, which again, is good because it reduces costs, it makes things more efficient,” Sebastian says, sharing how regardless of how small or large a company is, people nowadays have become more accepting of digital arbitration.
“No business, however big, will say ‘Oh, I’m happy spending and sending a team of five lawyers halfway across the world for today,’” he says when we asked how big businesses respond to the cost savings of digital arbitration. “For large companies, it’s probably just a drop in the barrel, but it’s still money, time, and inefficiency.”
“You don’t have to book three full days for a one-day hearing anymore. You can just book the six or the four hours in a day for the hearing and you’re good to go,” he explains. Sebastian also noted how this reduction in travel time also reduced carbon footprint which he believes to be important in the grander scheme of things.
“There’s always some element of digital arbitration that may benefit every single dispute and every single business,” says Sebastian. “Digital arbitration is not tailored for specific types of disputes. I wouldn’t say ‘Oh, only small disputes, only large disputes, only contractual disputes, or only disputes where you have documents’. As I said, the flexibility of online hearings, automated document processing, transparency in appointments, and other features allow anyone to have a good procedure for any dispute.”
Finally, Sebastian reveals how third-party providers became pivotal in ensuring that digital arbitration was successfully conducted: “In a lot of hearings, they say that ‘We can manage this, this is just like another video call. I will just share my screen and show the documents — however that’s not the case,” he explains, “The providers we had helped in making sure that there were no glitches in the procedure and the arbitration process would be delightful for us all.”
We agree with Sebastian as we believe that digital arbitration should be handled with utmost care. Fortunately, the Jur Arbitration Platform is here to deliver unparalleled arbitration services built to leverage digital arbitration for business disputes.