The ICC has introduced new rules for expedited proceedings that apply to all arbitration agreements entered into from March 1, 2017 onwards. With that step, the ICC is following other leading international arbitral institutions that have introduced similar expedited rules, such as ACICA, DIS, HKIAC, ICDR, SCC, SIAC, and the Swiss Rules.
The new ICC Expedited Rules will apply automatically to all disputes where the amount in dispute does not exceed USD 2,000,000. Hence, the ICC is nudging the parties into the application of the new rules: If you do not want the Expedited Rules to apply, you need to expressly opt out. However, if you think the new rules are a good idea and they should apply even if the amount in dispute exceeds the threshold, then you are free to opt in.
The ICC’s approach of automatic application of the Expedited Rules in the absence of an express opt-out is different from that of some of the other arbitral institutions. For example, the DIS Supplementary Rules for Expedited Proceedings only apply if the parties so agree.*
In a nutshell, the ICC Expedited Rules provide for the following major deviations from the standard ICC rules:
- The dispute will be decided by a sole arbitrator, even if the arbitration clause provides for a panel of three arbitrators (Appendix VI, Article 1.1). Fifteen days after the sole arbitrator has received the files, a case management conference shall take place (Appendix VI, Article 3.3.)
- Once the sole arbitrator has been appointed, the parties cannot introduce new claims into the proceedings without express permission (Appendix VI, Article 3.2).
- No Terms of Reference, a unique feature of the ICC, are required (Appendix VI, Article 3.1).
- The arbitrator has discretion to exclude the parties’ applications for the discovery of documents (Appendix VI, Article 3.4.).
- The arbitrator has discretion to limit the scope and length of the parties’ written submissions, witness and expert Statements (Appendix VI, Article 3.4.). * The arbitrator has discretion to decide without a hearing and without hearing witnesses, that is, exclusively in written proceedings and solely based on documents. If the arbitrator decides that a hearing should take place, he or she can opt to do so by telephone or videoconference (Appendix VI, Article 3.5.).
- The arbitral award must be rendered within six months from the case management conference, unless the ICC Court of arbitration extends the time period (Appendix VI, Article 4.1.)
- The arbitrator fees are reduced in the order of about 20% against the standard arbitrator fees under the ICC regime.
The Court retains control over the use of the expedited rules, since it may not only upon the request of a party, but also in its own initiative, decide that a matter should no longer be dealt with under the Expedited Rules (Article VI, Article 1.4).
While the ICC is often perceived to be the institution of choice for high value and complex disputes, the threshold of USD 2,000,000 actually captures roughly one third of the ICC’s typical annual caseload: In 2015, 32% of the 801 new cases involved claims below the threshold. If you look at the last decade, that share was somewhere between 32% and close to 40%, with a slight decrease of the percentage of claims below the threshold.
It remains to be seen how effective the new rules are going to be. This will depend, on the one hand, on the parties approach, that is, to what degree parties choose to opt out or to opt in. On the other hand, it will depend on how the arbitrators’ approach of the measures that are within their discretion. Here, the cultural background of the arbitrator and of the parties might come into play: arbitrators and parties with a civil law background may more readily dispense with document production and may be familiar with decisions based on documents alone, whereas these ideas may be quite alien to common law lawyers.
In any event, as of now, when drafting an ICC arbitration clause, you should make a conscious decision whether you would like the expedited rules to apply or not.
*Here is a quick overview on how the other institutions approach expedited proceedings:
|Institution||Threshold||Automatic / Opt-out|
|ACICA||No threshold||Opt-in only|
|DIS||No threshold||Opt-in only|
|HKIAC||HK $25,000,000||Now opt-in, rather than automatic as under the previous rules|
|ICDR||USD 250,000||Automatic; opt-in for higher values possible|
|SCC||No threshold||Opt-in only|
|SIAC||S$6,000,000||Opt-in or decision of Registrar under Rule 5.1,. upon application by a party|
|Swiss Rules||CHF 1,000,000||Automatic below threshold, unless court decides otherwise; opt-in for higher values possible|