Focus: New rules to streamline arbitration process
13 October 2011
In brief: New International Chamber of Commerce Rules of Arbitration will streamline the arbitral process and aid its efficiency. The new rules also take into account the increasing complexity of arbitrations by better accommodating multiple parties and contracts. Partner Duncan Travis (view CV), Special Counsel Nicola Nygh and Law Graduate Edmund Robinson report.
- Multi-party and multi-contract arbitrations
- Emergency arbitrators for urgent interim measures
- Effective case management
- Appointment of arbitrators
- Impartiality of arbitrators
- Administration of arbitration
How does it affect you?
- The new International Chamber of Commerce (ICC) Rules of Arbitration (the 2012 Rules) take effect on 1 January 2012. The changes that have been made to the former rules (the 1998 Rules) reflect the lessons learned and practices established in ICC arbitrations over the past 13 years. When the 2012 Rules come into effect:
- it will be easier to join parties to existing arbitrations and consolidate separate arbitrations;
- parties will be able to seek interim orders from emergency arbitrators in certain circumstances, rather than being required to approach the domestic courts;
- parties and arbitrators will be required to make every effort to conduct the arbitration in an expeditious and cost-effective manner;
- the arbitral tribunal's jurisdiction will ordinarily be determined by the tribunal itself, rather than the International Court of Arbitration (ICC Court);
- arbitrators will have a positive ongoing obligation to raise circumstances affecting their independence or impartiality; and
- the tribunal will have power to make orders concerning the confidentiality of the proceedings or any matters in connection with the arbitration.
- The changes incorporated in the 2012 Rules can be expected to produce more efficient arbitrations.
The 1998 Rules contained no express provision allowing additional parties to be joined to existing proceedings and did not deal with multi-party arbitrations or claims arising out of multiple contracts. Further, claims could only be consolidated into a single arbitration in limited circumstances.
The 2012 Rules provide that:
- a party may join another party to the arbitration at any time before an arbitrator has been confirmed or appointed. After that time, a party may only be joined if all parties, including the party to be joined, agree;
- in an arbitration with multiple parties, claims may be made by any party against any other party until the ICC Court signs or approves the Terms Of Reference, but that after that time additional claims may only be made if authorised by the tribunal;
- claims in connection with more than one contract may be dealt with in a single arbitration, whether or not such claims are made under one or more arbitration agreement; and
- the ICC Court may consolidate two or more arbitrations into a single arbitration in a broader range of circumstances, including – provided certain conditions are met – when the claims are made under more than one arbitration agreement.
The 1998 Rules required a party seeking urgent interlocutory relief before the tribunal was established to approach the domestic courts. The 2012 Rules provide for the appointment of an emergency arbitrator at the request of a party that needs urgent interim measures that cannot await the constitution of an arbitral tribunal. The arbitral tribunal may modify, terminate or annul any order made by an emergency arbitrator.
While the remainder of the 2012 Rules will apply to arbitrations commenced from 1 January 2012, the emergency arbitrator provisions only apply if the arbitration agreement was concluded after 1 January 2012 and the parties have not opted out of the provisions, or agreed to a different pre-arbitral procedure for interim relief.
The emergency arbitrator provisions will bring the ICC Rules into line with other arbitral rules. The Singapore International Arbitration Centre and the Australian Centre for International Commercial Arbitration have both recently introduced similar provisions.
The 2012 Rules expressly require the arbitrator and the parties to make every effort to conduct the arbitration in an expeditious and cost-effective manner that is proportionate to the complexity and value of the dispute. In order to give effect to this general rule, the arbitral tribunal:
- must convene a case management conference when drawing up the Terms Of Reference (or as soon as possible afterwards);
- may, in making decisions as to costs, take into account the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner; and
- must, as soon as possible after the date of the last hearing inform the parties and the Secretariat of the date by which it expects to submit its draft award to the ICC Court for scrutiny.
Examples of case management techniques that may be adopted by the tribunal are listed in Appendix IV of the 2012 Rules. They include requiring parties to include the documents on which they rely with their submissions, limiting document requests and limiting the length and scope of written submissions and witness evidence. While the techniques listed in Appendix IV will be familiar to experienced arbitration practitioners, their inclusion in an appendix to the rules may increase their use by less experienced practitioners and may also legitimise the use of such techniques and help to insulate awards from challenge on due process grounds1 .
Under the 1998 Rules, the ICC Court heard any jurisdictional challenges. The 2012 Rules provide that questions of jurisdiction will be determined by the arbitral tribunal unless the Secretary General refers the matter to the ICC Court. This is consistent with most other arbitral rules and is intended to speed up the hearing of such challenges, consistently with the provisions aimed at increasing expedition and cost-effectiveness.
Ordinarily, when the ICC Court appoints a sole arbitrator or the chairman of a panel, it does so upon the proposal of a national committee or group of the ICC. In order to make the process for appointing arbitrators faster, the 2012 Rules expand the circumstances in which the ICC Court may directly appoint an arbitrator without recourse to the national committee including where:
- a party is (or claims to be) a state entity; or
- circumstances exist that make a direct appointment necessary and appropriate.
Under the 1998 Rules, arbitrators were required to be independent of the parties. Under the 2011 Rules, and consistent with established practice, they must be both independent and impartial. Arbitrators must now sign a statement of acceptance, availability, impartiality and independence. The arbitrator has a positive obligation to inform the ICC Court Secretariat of any circumstances affecting their independence or impartiality, whether arising before or during the arbitration.
Under the 2012 Rules, the ICC Court is the only body authorised to administer arbitration under the ICC Rules. An arbitration agreement providing for arbitration administered by another arbitral body or ad hoc arbitration under the ICC Rules will be ineffective.
Under the 1998 Rules, the tribunal could take measures to protect trade secrets and confidential information. Under the 2012 Rules, tribunals retain this power but may also make orders concerning the confidentiality of the arbitration proceedings or of any matters in connection with the arbitration. This gives the tribunal extended power to structure an appropriate confidentiality regime for the matter at hand.
Arbitration can be criticised for being too expensive and too slow. The amendments introduced in the 2012 Rules should streamline the arbitral process and aid its efficient disposition. At the same time, the 2012 Rules take into account the increasing complexity of arbitrations by better accommodating multiple parties and/or multiple contracts.
- P Friedland, The new ICC rules: Continuing evolution of case management powers to control costs and delays in international arbitration, Kluwer Arbitration Blog, 13 September 2011.
- Duncan TravisPartner,
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