The use of arbitration continues to rise

Arbitration continues to be a popular method for resolving commercial disputes. The cases registered in 2019 involved 2,498 parties from 147 countries and independent territories worldwide, breaking the previous record of 142 countries in 2017. A total of 869 new cases were registered with the ICC in 2019, the second highest number of newly registered cases behind only 2016 (966 new cases). In 2019, the ICC Court approved 586 awards (145 partial awards, 397 final awards, and 44 awards by consent), coming close to the record number of awards (599) approved in 2018. Other highlights include:

• Disputes within the sectors of construction/engineering (211 cases) and energy (140 cases) generated the largest number of ICC arbitration cases in 2019 and, as in previous years, accounted for approximately 40 percent of the ICC caseload.

• The number of state or state-owned parties involved in ICC arbitration continues to increase steadily, with a 67 percent increase over the past five years. There were 212 state and state-owned parties from all regions of the world participating in ICC arbitrations in 2019. The proportion of state and state-owned parties varied across regions: 20 percent of state or state-owned parties were from Africa, while fewer than 5 percent from South and East Asia, the Pacific, North and West Europe, or North America.

• The average amount in dispute in cases filed in 2019 was $52 million. At year’s end, the aggregate value of all pending disputes was $230 billion.

Global reach

The ICC has continued its efforts to reach potential parties around the world, and ICC arbitration continues to expand globally. Arbitrations initiated in 2019 were seated in 116 cities across 62 countries, with London being selected most frequently.

The involvement of Asian parties increased significantly in 2019. Efforts initiated in 2018 – such as the ICC’s Belt and Road Commission which focuses on disputes arising out of China’s Belt and Road development initiative – have produced results. In 2019, as a result of the ICC’s efforts to become the “go to” arbitration institution for Belt and Road disputes, the ICC Court’s caseload involving Chinese parties increased by more than 50 percent compared with the Court’s average caseload involving Chinese parties over the past 10 years. The number of Chinese parties rose from 59 to 105, moving up from eleventh position in 2018 to fifth position in 2019.

The number of Indian parties tripled to 147. India ranked 15th in 2018 with just 47 parties but now ranks second worldwide. Half of the cases involving Indian parties are being administered by the Secretariat’s fourth overseas case management office in Singapore, established in April 2018.

The number of parties from South and East Asia and the Pacific increased from 309 parties in 2018 to 484 in 2019, and parties from this region now make up approximately 20 percent of parties worldwide. For the first time, a case involved parties from Myanmar.

Moreover, there has been an increased awareness of the strategic importance of arbitration in the dispute resolution process in Africa since the ICC Africa Commission was created. It has continued to coordinate the ICC’s expanding range of activities on the continent and to identify areas of cooperation with the Belt and Road Commission.

Arbitration continues to be more inclusive

Arbitrators confirmed or appointed in 2019 came from 89 jurisdictions – the highest number of jurisdictions to date – reflecting the continuous efforts of the ICC Court towards increasing arbitrator diversity.

• New states represented included Azerbaijan, Botswana, Haiti, Malawi, the Palestinian Authority, and Saint Kitts and Nevis. The top three nationalities for ICC arbitrators remain British, Swiss, and French, with the United States in fourth place.

• In line with the significant increase of Indian parties, the number of Indian arbitrators increased from 16 arbitrators in 2018 (ranked 21st of arbitrators’ top nationalities) to 34 arbitrators in 2019 (ranked 13th).

• Statistics on gender diversity in arbitrator appointments show that 21 percent of more than 970 arbitrators appointed or confirmed by the ICC in 2019 were women, up from 18.4 percent in 2018.

• In 2019, the average age of ICC arbitrators was 56.7. As in 2018, younger arbitrators – under age 50 – continue to hold just over one third of appointments.

Efficiency of proceedings

The 2019 statistical report shows positive movement in efficiency of ICC arbitration proceedings. The average duration of proceedings in cases that reached a final award in 2019 was 26 months, compared with 28 months in 2018. The median duration of proceedings was 22 months, compared to 24 months in 2018.

At the end of 2019, 146 cases had been or were being conducted under the ICC’s Expedited Procedure Provisions. Of the 50 final awards rendered in expedited proceedings, 37 were rendered within the six-month time limit.

The timely submission of draft awards by arbitrators offers another metric to judge efficiency. The number of late draft awards has fallen over the years, showing a downward trend – from 54 percent in 2016 to 38 percent in 2018, though it ticked up slightly (40 percent) in 2019. Most delays in the submission of draft awards ranged from a few days to less than three months.

Initiatives for the future

The ICC is looking to the future and equipping itself to resolve climate change-related disputes, an area expected to grow in the coming years. The ICC issued a report on Resolving Climate Change-Related Disputes through Arbitration and ADR and a practical toolkit to equip users and practitioners working on these specialized cases.

Recently, the ICC has moved toward favoring electronic-only submission of requests for arbitration and other initiating documents. As a result of the pandemic and environmental concerns, the ICC is expected to roll out its own electronic case management platform in the near future, offering an online case management and communication platform for ICC-administered arbitrations. The ICC’s Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic encourages parties, counsel and arbitral tribunals to mitigate potential delays by utilizing audio- or video-conferencing for hearings whenever feasible and appropriate. Through its guidance, the ICC has set clear considerations for determining whether to proceed with a virtual hearing, reaffirming the broad discretionary power of arbitral tribunals in determining hearing modalities.

The 2019 statistical report describes another year of growth and change for the ICC, with improvements continuing in important areas like diversity and efficiency. With the COVID-19 pandemic testing business relationships across the globe, it is already clear that 2020 presents unique challenges for arbitration institutions.