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The New International Chamber of Commerce Rules of Arbitration

September 15, 2011

 

The International Chamber of Commerce (“ICC”), one of the world’s leading providers of institutional arbitration services to international commercial parties, recently published a revised version of its Rules of Arbitration (the “2012 Rules”). The 2012 Rules enter into force on January 1, 2012 and apply to any ICC proceedings commenced on or following that date.

The 2012 Rules include numerous additions and modifications intended to enhance the speed and cost-effectiveness of ICC arbitration while preserving the principle of party autonomy and ensuring transparency, efficiency and fairness in the dispute resolution process. Among other changes, the 2012 Rules include new provisions designed to provide procedural standards for complex arbitrations involving multiple parties or multiple contracts, supplement arbitrator disclosure requirements, enhance case management procedures, provide for the appointment of an emergency arbitrator to order urgent interim measures, and expand the scope of the Rules to facilitate the handling of disputes arising under investment treaties and free trade agreements. A brief summary of the key changes reflected in the 2012 Rules is provided below.

A. Procedural Rules for Complex Arbitrations

The 2012 Rules establish clear procedures for the joinder of parties and assertion of claims in multi-party or multi-contract arbitrations. The new Article 7 now permits parties to seek joinder of additional parties to an arbitration by filing a Request for Joinder with the ICC Secretariat. Articles 8 and 9 articulate procedural standards for bringing claims in arbitrations involving multiple parties or multiple contracts. Additionally, Article 10 permits the ICC Court of Arbitration, at the request of a party, to consolidate two or more pending arbitrations into a single arbitration, including in circumstances where claims are brought under more than one agreement.

B. Arbitrator Disclosure Requirements

Allegedly inadequate arbitrator disclosures have been the subject of numerous challenge proceedings in recent years, and arbitrator scheduling conflicts are a potentially significant source of delay. In response to concerns over these developments, the 2012 Rules provide for enhanced disclosure requirements designed to reduce the risks of a challenge to an arbitrator’s appointment and of the delays arising from arbitrator unavailability.

Notably, the new Article 11(2) requires that a prospective arbitrator must sign a statement of acceptance, availability, impartiality and independence, whereas the previous rules only required a statement of independence. Moreover, under new Article 11(3), the prospective arbitrator now must also disclose any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality.

C. Cost-Effective and Expeditious Case Management

The 2012 Rules place a heavy emphasis on cost-effectiveness and expediency in arbitral dispute resolution. Jurisdictional challenges can constitute a source of delay in ICC arbitration proceedings, and the 2012 Rules have attempted to remedy this problem. Under the current rules, the ICC Court was required to make a determination that there was prima facie evidence of jurisdiction whenever there was a jurisdiction challenge at the outset of the proceedings. The new Article 6(3) of the 2012 Rules requires that the ICC Secretary General perform an initial screening function, so that only those jurisdictional challenges that have a significant chance of success will proceed to the ICC Court for determination. Where the Secretary General determines that the jurisdictional challenge has no significant chance of success, the case will be sent directly to the tribunal, which then makes its own decision on jurisdiction.

Article 24(1) mandates that the tribunal hold a case management conference with the parties when drawing up the Terms of Reference or as soon as possible thereafter. The purpose of the conference is for the tribunal to consult with the parties on potential procedural measures. The tribunal has the discretion to adopt such measures as it considers appropriate, provided that they are not contrary to the agreement of the parties. Appendix IV of the 2012 Rules sets forth recommended case management techniques to be applied by the arbitral tribunal, including bifurcating the proceedings, rendering partial awards on key issues, identifying issues that can be resolved by agreement or decided solely on the basis of documents, and limiting the production of documentary evidence and the length and scope of written submissions. While the tribunal must first consult the parties, it may adopt further procedural measures following the case management conference in order to ensure effective case management.

At the close of the proceedings, Article 27 of the 2012 Rules obligates the arbitral tribunal to communicate to the ICC Secretariat and the parties the date by which it expects to submit its draft award to the ICC Court. Additionally, Article 37(5) provides that the tribunal is permitted to take into account whether each party has conducted the arbitration in an expeditious and cost-effective manner when making decisions as to the allocation of costs.

D. The Emergency Arbitrator Procedure

Following similar innovations by the Stockholm Arbitration Centre and the Singapore International Arbitration Centre, the ICC has added an emergency arbitrator procedure to the 2012 Rules. Pursuant to Article 29, a party that needs interim or conservatory measures prior to the constitution of the arbitral tribunal may apply for the appointment of an emergency arbitrator with the capacity to issue an order granting such measures in accordance with the rules set forth in Appendix V. While the parties are required to comply with the emergency arbitrator’s order, that order is not binding on the tribunal once it is constituted.

Importantly, a party can seek interim relief through this procedure even if it has not yet filed its Request for Arbitration, provided that the party does so within 10 days of its application for an emergency arbitrator. It should be noted, however, that the emergency arbitrator procedure is inapplicable to disputes arising from arbitration agreements concluded prior to January 1, 2012. In addition, parties maintain the right to seek interim relief from the arbitral tribunal once it has been constituted, or from competent judicial authorities.

E. Disputes Arising from Investment Treaties or Free Trade Agreements

According to ICC statistics, approximately 10% of the ICC’s 2010 caseload involved a State or a para-statal entity, including claims brought under international investment treaties. Accordingly, the 2012 Rules include provisions that are designed to better accommodate international dispute resolution under investment treaties or free trade agreements. In Article 1(2), the ICC has replaced its previous reference to “the settlement of business disputes of an international character” with the broader term “disputes,” without any indicated limitation as to type. Article 13(4) of the 2012 Rules provides that the ICC Court, rather than obtaining a proposal from a National Committee or Group, may directly appoint an arbitrator where one or more of the parties to the dispute is a state or claims to be a state entity.

F. Conclusion

The 2012 Rules reflect the continual development of international arbitral practice and procedure, as well as the increased sensitivity of commercial parties to the speed and cost-effectiveness of international dispute resolution. The revisions reflected in the 2012 Rules are designed to preserve the core values of procedural flexibility and party autonomy, while further enhancing the reputation of international commercial arbitration as the preferred means of expedient, cost-effective dispute resolution for sophisticated commercial parties. Parties that have selected the ICC Rules of Arbitration in their arbitration agreements should benefit from the increased clarity, speed and cost-effectiveness of proceedings conducted under the 2012 Rules.