Revised ICC Arbitration Rules Go into Effect

by Proskauer - Minding Your Business
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On March 1st, the revised Arbitration Rules of the International Chamber of Commerce (ICC) took effect. The revised Rules seek to enhance time and cost efficiency as well as transparency, and will apply to all arbitrations initiated on or after that date.

An expedited procedure for smaller cases

The major innovation is that the Rules now provide for an expedited procedure that applies automatically to smaller disputes. The expedited procedure rules will apply only to arbitration agreements entered into after March 1, 2017.

The expedited procedure provisions, set forth at Article 30 and Appendix VI of the Rules, apply to all arbitrations in which the amount in dispute is $2 million or less, unless the parties opt out of the procedure. Parties can also agree to opt in to this procedure in cases with higher stakes.

When triggered, the essential features of the expedited procedure are as follows:

  • Generally, a sole arbitrator will be appointed by the ICC Court, even if the arbitration agreement provides for three arbitrators;
  • There will be no Terms of Reference (a formal document usually drawn up early in an ICC proceeding to, inter alia, define the scope of the arbitration);
  • The arbitral tribunal has the power to decide the dispute on the basis of documents only without any hearings or witness examination;
  • The arbitral tribunal has express discretion not to allow requests for document production and to limit the number, length and scope of written submissions and written witness evidence;
  • The arbitral tribunal must convene an initial case management conference within only fifteen days of receiving the file;
  • The arbitral tribunal has only six months to render the final award from the date of the case management conference. (The ICC Court has the power to extend that time limit if necessary.)

According to ICC Court President Alexis Mourre, “disputes will now be resolved on a very expeditious and cost-effective manner, providing an effective answer to the legitimate concerns of the business community as to time and costs.”

Parties wishing to opt out of the expedited procedure must do so expressly. Importantly, the ICC indicates that such an intention will not be implied simply because “the parties have referred in the arbitration agreement to a three-member arbitral tribunal, or have adopted time limits that depart from those provided by the Expedited Procedure Provisions.” It is recommended that parties wishing to opt out of the expedited procedure provisions in their arbitration agreement do so by following standard clauses proposed by the ICC.

Enhanced Efficiency and Transparency

With regard to arbitrations that do not follow the expedited track, the revised Rules reduce the time limit for establishing the Terms of Reference from two months to 30 days. This time limit may be extended by the ICC Court if necessary.

The revision further enhances transparency by allowing the ICC Court to provide the parties with reasons for its decisions on arbitrator challenges and on jurisdictional issues. In the past, the ICC Court made those decisions without providing its reasoning, unless both parties requested otherwise. The request of one party will now be sufficient.

Alongside the entry into force of the new Rules, the ICC has released the latest version of its Note to Parties and Arbitral Tribunals, which provides detailed guidance on the application of the new rules, and the expedited provisions in particular. Mr. Mourre comments that the “Note is an important step towards the implementation of our new policies to foster the efficiency and the transparency of ICC arbitrations. The possibility for any party to seek the provision of reasons for a wide range of Court decisions is a landmark change as well as a message of accountability to our users.”

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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