Working Group Releases Draft Protocol on Cybersecurity in International Arbitration

Stating that “[i]nternational arbitration in the digital landscape warrants consideration of what constitutes reasonable cybersecurity measures to protect the information exchanged during the process,” a Working Group on Cybersecurity has released a Draft Cybersecurity Protocol for International Arbitration.

The Working Group, consisting of the International Council for Commercial Arbitration (ICCA), the International Institute for Conflict Prevention & Resolution (CPR), and the New York City Bar Association, presented the Draft Protocol at the ICCA Congress in Sydney, Australia, on April 15, local time.

“International arbitration is not uniquely vulnerable to cyber breaches, but the stakes are often quite high,” said Mark Morril, an independent arbitrator who represents the New York City Bar Association along with independent arbitrator Stephanie Cohen and Lea Haber Kuck of Skadden Arps Slate Meagher & Flom LLP. “Like any sector that involves high value data, international transmissions and multiple actors, it will require strong security going forward.”

The Working Group is chaired by Brandon Malone, Chairman of the Scottish Arbitration Centre and the principal of Brandon Malone & Company, and its other members include Olivier André (CPR), Paul Cohen (4-5 Gray’s Inn Square Chambers), Hagit Elul (Hughes Hubbard & Reed), Micaela McMurrough (Covington & Burling), Kathleen Paisley (Ambos Law), and Eva Y. Chan (Skadden, Arps, Slate, Meagher & Flom LLP) as Secretary to the Working Group.

The Draft Protocol reviews the importance of cybersecurity in arbitration, which has become a largely digital process; the high stakes and the risks inherent in international arbitration, including the cross-border nature of the process, which often involves extensive travel and the use of multiple networks; and factors to be considered in developing cybersecurity measures.   “International arbitration has the benefit over other types of dispute resolution of allowing parties to maintain confidentiality in high stakes matters if they wish to do so. Reasonable cybersecurity will enable international arbitration to maintain that advantage,” said Ms. Kuck.

Ms. Cohen noted that the Protocol purposefully avoids specific cybersecurity recommendations.  She said, “We considered but unanimously rejected the ‘one size fits all approach.’ The Protocol guides parties and arbitrators through a risk-based approach to determine reasonable cybersecurity measures that fit each individual matter.”

Further, the Working Group expects that the Protocol “will necessarily evolve over time in light of changing technology, new and prevalent cyber threats, new laws/regulations, any consensus that might emerge as to reasonable measures/arbitration best practices, and new cybersecurity initiatives by institutions or others.” For these reasons, the Working Group suggests that, once the Protocol is finalized, rather than including particular cybersecurity measures in arbitration agreements, simple language like the following may ultimately suffice: “The parties agree that the arbitration shall be conducted in a secure manner as determined by the arbitral tribunal, taking into consideration the views of the parties and the Cybersecurity Protocol for International Arbitration.”

On April 12, at its 8th Annual GAR Awards in Paris, Global Arbitration Review gave its “Best Development 2018” award to the Working Group for its efforts on cybersecurity in international arbitration. 

For its contribution in developing the Protocol, the City Bar’s group consulted its Committees on Arbitration, International Commercial Disputes, and Information Technology & Cyber Law.

The Working Group has set a consultative period from now until the end of 2018, during which it will hold a number of public workshops around the world. Interested parties are also invited to email comments and recommendations to cybersecurity@arbitration-icca.org by September 30, 2018.

The Working Group anticipates that a final version of the Protocol will be released in 2019.

The Draft Protocol may be read here.

About the Association
The New York City Bar Association, since its founding in 1870, has been dedicated to maintaining the high ethical standards of the legal profession, promoting reform of the law and access to justice, and providing service to the profession and the public. The Association, through its 24,000 members, continues to work for political, legal and social reform, while implementing innovative means to help the disadvantaged. Protecting the public’s welfare remains one of the Association’s highest priorities. www.nycbar.org