E-mails vis-à-vis traditional means of communication
There are several distinct types of electronic transmission used to conclude an arbitration agreement. Much more often than by letters, telegrams, faxes or teleprinters, the parties want to enter into agreements either by an exchange of e-mails or even by a simple mouse click. Paradoxically, while there is no doubt about the validity of an arbitration agreement concluded by telegrams, we face a challenge to prove the same with regard to e-mails, for the simple reason that the major documents of international arbitration law do not provide for the currently most popular means of data transmission.
The authors of some writings published in the nineties (that is before or shortly after the adoption of the recent laws referring electronic commerce and signatures) argued convincingly that an exchange of e-mail messages containing an arbitration clause satisfies the formal requirements of Article II (2) of the NYC, because an exchange of e-mails can be equated to an exchange of telegrams.32 Although the newest regulations on electronic commerce make this discussion – in a sense – outdated and needless, given that e.g. numerous countries have not adopted e-commerce laws yet, this argumentation is worthy to be outlined here.
The main thesis was that though there are important technical differences between telegrams and e-mails33, the essential features of an exchange of telegrams could be reproduced through appropriate use of e-mail.34 Hill argued that, from a technical point of view, it is difficult to see much difference between not only telegram and e-mail, but also telex, facsimile, and e-mail. For each technology, a message is converted to a digital format, then transmitted over a telecommunications network, and finally converted again to a human-readable form. At transmission, both e-mails as well older means of telecommunication are not readable by the naked eye35. It is true that e-mails are printed only rarely, but it is not necessary to print a received fax and a sent telex message either. The argument that there is a greater risk of fraud with e-mails than with telegrams or telexes is not persuasive, because security procedures (encryption, intervention of a third-party certification body or even “common-sense business practices”36 for verification of the identity of the sender, being fairly simple acts that should be done in the regular course of business and do not require more due diligence than when corresponding by faxes or letters) can give the e-mail an equivalent degree of security. Hard-copy documents can also be subject to fraud, arguably, to no less extent than electronic messages. It is reasonable to conclude that the risk of fraud cannot be put forward as a valid argument against granting the status of written agreement to an arbitration agreement stipulated and accepted by e-mail.37 On the contrary, there seems to be agreement in the scholarship that the potential shortcomings of e-mail communication, compared to traditional means of telecommunication, can be effectively overcome38.
Another thesis was put forward that there is not so much difference between modern electronic communication and traditional writing. This suggests that an exchange of e-mails could be equated to ‘an exchange of letters’ as provided for in Article II (2) NYC. Hill argued that e-mail communication is neither "immaterial" nor "not physical". On the contrary, like any form of human communication it requires the physical, material alteration of a physical, material medium (the electrical state of a copper wire). A transfer of matter characteristic for conventional writings (ink molecules deposited on paper), which is not the case for electronic communications, has its counterpart in a transfer of energy (magnetic fields altered). To return to traditional means of telecommunication, there is also no transfer of matter when thermal-paper-faxes are created, only a transfer of energy.39 Even if not printed, allegedly transient electronic communications, if properly backed-up, may have longer life spans than most paper records. Indeed, the use of traditional paper documents in international trade has been sharply criticized:40 “Not only do paper documentation and procedures represent as much as 10 per cent of goods value, they are slow, insecure, complicated and growing.”41 On the other hand, electronic mail communication is praised to have several advantages over other forms of communication: it is cheaper, faster and more convenient.42 As a result, from the prospective of Internet users, the difference between electronic and traditional letters is diminishing or even gradually disappearing. An opinion pool among them might indicate the e-mail as a regular mail, distinguished from the old “snail-mail”. In consequence, an analogy between an exchange of e-mails and an “exchange of letters” within the meaning of the NYC does not seem ridiculous.
Seeking such analogies is not necessary under the MAL, since it explicitly provides that an agreement is in writing if it is contained in an exchange of “other means of telecommunication which provides a record of the agreement”. Although a few years ago numerous lawyers argued that e-mails in general did not constitute a means of telecommunications providing a record that satisfies the rules for legal evidence, such scepticism currently seems unjustified. Even before the adoption of specific regulations on e-commerce and e-signatures, it was argued that if only proper operating procedures are used, e-mail could provide “a record that is as reliable as physical letters, fax, or any other methods of transmission”43. Today, there can be little doubt that e-mail messages are admissible as evidence, although appropriate precautions need to be taken – as in the case of other means of communication – in order to satisfy considerations of evidentiary integrity and reliability.
Electronic mail, said to be by far the most important use of the Internet, that has fundamentally altered both personal and business communications44, has been, in a sense, “overlooked” by major sources of arbitration law. While there is little doubt about admissibility of concluding an arbitration agreement by an exchange of e-mails under the MAL (and the national laws that follow the MAL), some problems arise from the narrow definition of “in writing” in the NYC. To overcome those difficulties the scholarship explored the differences and similarities between electronic mail and older means of telecommunication listed in the NYC. There seems to be agreement that the differences do not appear to be of sufficient importance to differentiate between these electronic media for what concerns the NYC. An analogy between an exchange of e-mails and ‘an exchange of letters’ is also interesting, however, requires more in-depth research. The above conclusions make us wonder whether the same is true when the parties want to conclude an arbitration agreement by other means of electronic transmission.