The International Chamber of Commerce (ICC) is streamlining its arbitration process to reduce the length and cost of arbitrations and has released amendments to its Rules of Arbitration (ICC Rules), which will come into force on March 1, 2017. Among the most notable changes is a new expedited procedure for resolving disputes in which the amount claimed is less than US$2-million, which the ICC is implementing in response to concerns raised by businesses using institutional arbitration to resolve international commercial disputes.
FAST-TRACK RULES: WHAT YOU NEED TO KNOW
The new ICC Expedited Procedure Rules (Expedited Rules) will automatically apply to all ICC arbitrations where the underlying arbitration agreement was concluded after March 1, 2017, the amount in dispute is under US$2-million and the parties do not expressly opt out of the Expedited Rules in their arbitration agreement. Over the past decade, at least 30 per cent of the ICC’s new cases each year involved claims for less than US$2-million. This number may increase with the improved transparency and efficiency of the Expedited Rules’ streamlined procedure. Further, parties may, if they agree, opt to have disputes that exceed US$2-million decided under the Expedited Rules.
The Expedited Rules reflect a number of important changes, such as:
- The ICC court may now appoint a sole arbitrator even if the arbitration agreement provides otherwise.
- The parties may nominate the sole arbitrator within a specified time but, if they do not, the ICC court will appoint one within as short a time as possible.
- The arbitral tribunal is not required to draw up terms of reference, which was traditionally a significant feature of ICC arbitrations.
- After the arbitral tribunal has been constituted, parties cannot make new claims unless they are first authorized to do so by the tribunal.
- The arbitral tribunal has the discretion to “adopt such procedural measures as it considers appropriate”. It may, after consulting with the parties, decide the case on a documents-only basis, with no oral hearing, no requests to produce documents and no examination of witnesses or experts. If a hearing is held, it may be held by video or telephone conference.
- The arbitral tribunal must render its final award within six months from the initial case management conference. That conference will occur no later than 15 days after the date on which the file is sent to the arbitral tribunal.
- A reduced fee scale will apply for administrative expenses and arbitrator’s fees.
The ICC’s initiative to streamline and increase arbitration efficiency is consistent with similar fast-track rules now used by other arbitral institutions, including the International Centre for Dispute Resolution, Singapore International Arbitration Centre, Stockholm Chamber of Commerce and Hong Kong International Arbitration Centre.
To the extent that parties have concerns about the integrity of a final award issued by a sole arbitrator under the Expedited Rules, it is noteworthy that the ICC court and its secretariat will continue to maintain their existing quality control protocol over awards. Moreover, departures from the aforementioned rules are permitted in many instances based on the parties’ agreement or the sole arbitrator’s decision.
CHANGES TO ICC STANDARD PROCEDURE RULES
The ICC Rules that apply to matters that are not subject to the Expedited Rules have also been amended with a view to increasing transparency and efficiency. Some of the notable changes include:
- Terms of reference must be established within one month from when the file is transmitted to a tribunal, down from two months (though the ICC court retains the right to extend the time limit as needed, such as in more complex arbitrations).
- The ICC court is now allowed to provide reasons for its decisions made on challenges, such as jurisdictional decisions and challenges to arbitrators, without having to seek parties’ consent as under the previous rules.
The new ICC Rules will be of interest to arbitration practitioners and parties who use ICC arbitration or are considering providing for institutional arbitration as the dispute resolution mechanism in their commercial agreements but want a process that provides for improved transparency, efficiency and lower costs. It is significant however, that after March 1, 2017, the Expedited Rules will apply as a default to all cases where the amount in dispute is less than US$2-million. Despite the numerous benefits offered by the Expedited Rules, parties entering into arbitration agreements after March 1, 2017 will need to carefully consider whether to expressly opt out of the Expedited Rules, particularly if the disputes they might encounter in the future are expected to be complex disputes notwithstanding that they are below the US$2-million threshold or if the parties do not want to risk having changes made to their arbitration agreement that they never consented to because of contradictions or inconsistencies between the parties’ agreement and the Expedited Rules.