The International Chamber of Commerce (the ICC) published the 2021 ICC Arbitration Rules (the Rules) on December 1, 2020. The Rules apply to all arbitrations filed with the ICC after January 1, 2021.
The ICC has also updated its “Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration Under the ICC Rules of Arbitration” (Guidance Note) to assist parties with the application of the Rules.
The purpose of the Rules is to ensure greater efficiency, flexibility and transparency in ICC arbitrations. In particular, the Rules address conflicts of interest, consolidating arbitrations and the cost-effective resolution of claims. This article does not examine all of the Rules but instead focusses on certain amendments only.
Conflicts of interest
Article 11(7) requires any party entering into an arrangement for the funding of claims or defences with a non-party economically interested in the outcome of the arbitration to disclose the existence and identity of that non-party to the Secretariat, the arbitral tribunal and other relevant parties. The purpose of this Rule is to ensure that arbitrators are able to maintain their independence and impartiality by complying with their disclosure requirements under Articles 11(2) and 11(3) of the Rules.
Article 17(1) requires parties to promptly notify the Secretariat, the arbitral tribunal and other parties to the arbitration of any changes in representation. Article 17(2) gives the tribunal the authority to take steps to avoid conflicts of interest for an arbitrator arising from a change in representation, including the authority to prevent new representatives from participating in part or all of the proceedings.
Joinder and consolidation of arbitrations
Article 7(5) allows an arbitral tribunal (once constituted and upon a party’s request) to join a third party to an arbitration without the consent of all parties provided that the tribunal considers all relevant circumstances. Those circumstances may include: (i) whether the tribunal has prima facie jurisdiction over the party to be joined; (ii) the timing of the request; (iii) possible conflicts of interest arising from the joinder; and (iv) the impact of the joinder on the arbitral proceeding. Prior to this amendment, an arbitral tribunal could only join new parties subject to the consent of all parties to the arbitration.
Article 10 has been amended to replace the term “agreement” with “agreement or agreements”, with the effect that claims arising from multiple separate agreements may be consolidated. For example, two arbitrations between distinct parties under separate agreements may be consolidated in circumstances where the claims arise from identical arbitration agreements included in separate contracts, pursuant to Article 10(b).
Under Article 10(c), the International Court of Arbitration (the Court) may consolidate arbitrations where the same parties are involved in separate arbitrations arising from different arbitration agreements, but in connection with the same legal relationship. In such cases, the Court will consider all relevant factors, including whether the arbitration agreements are compatible.
Fairness in constituting tribunals
Under Article 12(9), the ICC may, in exceptional circumstances, reject agreements between the parties regarding the method of appointing arbitrators if such agreement results in a significant risk of unequal treatment and unfairness that may compromise the validity of any award. One such example is where one party has the contractual authority (conferred upon it by the arbitration agreement) to unilaterally appoint all members of the arbitral tribunal. If the procedural laws of the seat of the arbitration prohibit such appointments and the ICC considers there to be a risk of invalidating any award, then the Court may appoint each member of the arbitral tribunal.
Cost-effective resolution of claims and expedited procedures
The change from “may” to “shall” in Article 22(2) imposes a positive duty on the tribunal to use the case management techniques set out at Appendix IV of the Rules to ensure conduct of the arbitration in an expeditious and cost-effective manner. In particular, case management technique (h) now requires arbitrators to encourage settlement rather than simply informing the parties of the option to do so. Of course, the specific techniques a tribunal chooses to use from the list at Appendix IV are within the arbitrator’s discretion.
Parties now have 30 days from receipt of an award to make an application to the Secretariat for an additional award pursuant to Article 36(3). An additional award is an award as to claims made during the arbitration but in relation to which the arbitral tribunal did not rule.
The monetary threshold for expedited procedures referred to in Article 30(2) (and set out in Article 1(2) of Appendix VI) of the Rules has been increased from US$2 million to US$3 million. Although the Rules apply to all arbitrations filed after January 1, 2021, this monetary threshold only applies to arbitration agreements concluded under the Rules after January 1, 2021. Arbitration agreements concluded under the 2017 ICC Rules (between March 1, 2017 and January 1, 2021) but filed after January 1, 2021, remain subject to the former threshold of US$2 million.
Electronic submissions and virtual hearings
Having regard to COVID-19 protocols and the cost-effective resolution of claims, all hearings may now proceed virtually pursuant to Article 26(1). In deciding whether to hold a hearing in person or virtually, the arbitral tribunal will confer with the parties and make a determination on the basis of the relevant facts and circumstances of the case.
The author wants to thank Mark Robinson, articling student, for his contribution to this article.