16 March, 2020
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Arbitration and litigation in the time of COVID-19 – disruptions ahead?

No industry branch world-wide is likely to escape the negative consequences of the COVID-19 pandemic. However, the pandemic will also disrupt the due course of international commercial and investment arbitrations, as well as litigation before national courts, including those in Serbia.

 

International Arbitration

 As the name suggests, international arbitration is not confined to the territory of a single state. Parties, arbitrators, counsel and witnesses routinely come from different countries. Under normal circumstances, the parties would all meet for hearings at one place, and given the common preference for neutrality, usually at a venue that is foreign to all parties.

However, since many countries – Serbia included – introduced measures restricting travel to and from areas strongly affected by COVID-19 pandemic (e.g. Italy, Spain, China, Iran, Germany and Austria), international arbitration cannot proceed undisrupted. The exact way proceedings will be impacted depends on where arbitration was agreed to take place, as well the locations from which arbitrators, parties, counsel and witnesses come from and whether they are otherwise affected by travel restrictions.

Principal arbitral institutions, such as the ICC, LCIA, SCC, PCA, ICSID, have issued statements on how cases should proceed during the crisis. Participants of ongoing proceedings are generally advised to consult the relevant health recommendations and directives. This means that they should agree if videoconferencing or other remote communication means are appropriate, or if their hearings should be rescheduled. In any case, there is no universal answer to what happens next, and participants of an arbitration should pay attention to how the situation evolves and contact the arbitral institution for further information.

 

Litigation in Serbia

A state of emergency was declared in Serbia on 15 March 2020. While courts in Serbia still officially operate, the Serbian Government is expected to provide a regulation on measures on 16 March 2020, which is supposed to clarify if the state of emergency will affect regular functioning of the courts, or if the courts will be shut down and all litigation suspended. Depending on that decision, there are several scenarios how the pandemic and the state of emergency may affect litigation proceedings in Serbia.

 

Emergency measures affect the courts

The courts will shut down and suspend all litigation in line with Civil Procedure Code (“CPC”). During the suspension, the courts are barred from taking any steps and no procedural actions of one party will produce effect on the other party until proceedings are resumed and the suspension is lifted.

The state of emergency and the closure of the courts will also suspend any preclusive deadlines set for procedural actions, such as submission of claim or appeal. These deadlines will be restarted for the party once litigation is resumed and the court notifies the party of updated deadlines.

 

Emergency measures do not affect the courts

The courts will continue to operate, although they will likely postpone any public hearings in order to implement the public health and safety guidelines and advice issued by the Serbian authorities to reduce the number of people on the courts’ premises. The courts are also likely to postpone all other procedural actions, apart from those which cannot be postponed without harm to the parties (e.g. taking of time-sensitive evidence).

It is important to note that, in this scenario, preclusive deadlines are not suspended, so we advise precaution in this matter.

If a party fails to respect a preclusive deadline, it will not be allowed to exercise its rights afterwards. However, that party may call upon the CPC and ask the court to offset the consequences of preclusion and restore the proceedings to where they were before the party’s omission. In that respect, the court will grant the party’s request if the omission was caused by a justified reason (hospitalization due to COVID-19 infection would certainly be deemed justified), and if the party submitted its request within 8 days after the reason for omission ceased to exist (e.g. the party’s release from hospital), but, in any case, no later than 60 days after the date of omission.

 

For more information, please contact us via covid19@geciclaw.com