The recent decision of the International Court of Arbitration of the International Chamber of Commerce (ICC Court) to communicate reasons for certain administrative decisions taken under the ICC Rules of Arbitration, including arbitrator challenges, is indicative of and responsive to increasing demand for transparency in international arbitration.

ICC Court may communicate reasons for decisions

The ICC Court announced on 8 October 2015 that, with immediate effect and on request of the parties to an arbitration, it may communicate the reasons for its decisions on:

(a) challenges to, and replacement of, arbitrators under Articles 14 and 15(2) of the ICC Rules of Arbitration, in force as of 1 January 2012 (the ICC Rules);

(b) prima facie jurisdiction under Article 6(4) of the ICC Rules; and

(c) consolidation of arbitration proceedings under Article 10 of the ICC Rules. 

The ICC Court’s new policy is contained in its ‘Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules’, dated 1 October 2015.[1]  The note makes clear that parties must request reasons in advance of the ICC Court making its decision, and that communication of reasons may result in an increase in administrative expenses payable to the ICC, usually not in excess of US$5,000.

Response to growing demand for transparency

The ICC Court has framed its policy change as being responsive to growing user demand for transparency.  This demand was also recognised in the contemporaneously-published 2015 International Arbitration Survey undertaken by the School of International Arbitration, Queen Mary University of London (QMUL Survey).[2]  Respondents to the QMUL Survey indicated concerns with the lack of transparency in institutional decision-making regarding arbitrator challenges and suggested this was a potential area of improvement for arbitral institutions.

The ICC Court’s new policy should provide that further element of transparency in the arbitral process, giving parties comfort that the ICC Court shall record (upon request) reasons for which meritorious challenges to arbitrators are founded and administrative decisions reached.

Previously, the ICC Court made and notified administrative decisions without giving reasons,[3] as is the practice of the majority of arbitral institutions, including the American Arbitration Association’s International Center for Dispute Resolution, the Singapore International Arbitration Centre and the China International Economic and Trade Arbitration Commission.  By contrast, the London Court of International Arbitration (LCIA) Court has given reasons for its decisions on challenges to arbitrators for some time, and published a compilation of decisions on arbitral challenges in 2011.[4]

The ICC Court’s new policy goes further than the LCIA Court’s approach, however, giving parties the right to request reasons for administrative decisions other than arbitrator challenges.[5]

Procedure for recording reasons

At present, the ICC Court makes decisions on arbitrator challenges in its monthly plenary sessions, which at least six ICC Court members must attend.  The ICC Court members decide on whether the challenge should be accepted or rejected, and the ICC Secretariat records the decision taken, and notifies the parties and tribunal. 

It seems logical that going forward, where the parties have asked the ICC Court to provide reasons, the ICC Court member reporting at the plenary session will summarise the reasons for the decision, overseen by the President of the ICC Court (or a Vice-President) and senior members of the Secretariat.  Other administrative decisions of the ICC Court, generally reached in the ICC Court’s weekly Committee meetings (attended by two ICC Court members together with the President of the ICC Court or a Vice-President), are likely to be formalised efficiently amongst the Committee itself, again with the support of the Secretariat.

Implementing a process to record and communicate reasons will enable the ICC Court to increase transparency and party confidence in its decision-making procedure.  Going forward, it will be interesting to see how frequently parties take the ICC Court up on its offer of providing reasons for decisions.

[1] Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the 2012 ICC Rules of Arbitration paras. 20-22, available online at http://www.iccdrl.com/itemContent.aspx?XSL=arbSingle.xsl&XML=\PRACTICE_NOTES\SNFC_0016.xml&CONTENTTYPE=PRACTICE_NOTES&TOC=ltocPracticeNotesAll.xml&TITLE=Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the 2012 ICC Rules of Arbitration http://www.arbitration.qmul.ac.uk/docs/164761.pdf.

[2] QMUL 2015 survey, p. 22, available online at http://www.arbitration.qmul.ac.uk/docs/164761.pdf.

[3] ICC Rules, Article 11(4) provides that reasons for the ICC Court’s decision as to the appointment, confirmation, challenge or replacement of an arbitrator shall not be communicated.

[4] 2014 LCIA Rules, Article 10.6, requires the LCIA Court to give reasons, although the LCIA Court had in fact been doing this in practice prior to the Rules' introduction.

[5] According to 2014 LCIA Rules, Article 29.1, the LCIA Court’s decisions on matters other than arbitrator challenges are treated as administrative in nature and the LCIA Court is not required to give reasons.