The Australian Centre for International Commercial Arbitration (ACICA) has released its revised Rules on Arbitration (2021 Rules). The 2021 Rules apply to all ACICA arbitrations from 1 April 2021, unless parties have specifically agreed to the application of an earlier edition of the ACICA rules.
The 2021 Rules set out ACICA’s vision for the future of arbitration by focusing on efficiency of the international arbitration process notably on issues of costs and case management, as well as anticipating the needs of parties in multi-contract arbitrations. We summarise the key updates below.
Virtual hearings and online filing
The new rules expressly allow Tribunals to hold conferences and hearings virtually or in hybrid format (Art 25.3, 25.4, 25.5, 35.5), reflecting the recent take up of virtual hearings in conducting arbitration proceedings. The provisions that have been introduced to this end are:
- if a hearing is held virtually, it will be deemed to be held at the seat (Art 27);
- the tribunal is afforded full discretion to establish the conduct of a hearing, including its form, in consultation with the parties (but without requiring their agreement) (Art 35.5); and
- ACICA has adopted the default position of requiring e-filing of a Notice of Arbitration and Answer by email or through its dedicated online portal (Art 6.1).
The 2021 Rules recognise that increasingly data and sensitive information is exchanged electronically, and give express power to the tribunal, in consultation with the parties, and where appropriate ACICA, to adopt any measure to protect information shared in the arbitration and to ensure that any personal data is processed and/or stored in light of any applicable law (Art 26.6).
Joinder and Consolidation
The rule on joinder has been expanded and an additional party can now be joined by the tribunal under the 2021 Rules where all parties expressly agree, even if the additional party is not bound by the same arbitration agreement (Art 17.1(b)). However, prior to a tribunal being constituted, ACICA may only administer a joinder for a party which is bound by the same arbitration agreement as the existing parties (Art 17.8). The tribunal and ACICA are required to give all parties an opportunity to be heard before exercising the power of joinder (Arts 17.1 and 17.8).
With respect to consolidation, ACICA may now consolidate arbitrations regardless of whether the arbitrations are between the ‘same parties’, if there exist common questions of law or facts, the right to relief under the same transaction and the arbitration agreements are compatible (Art 16.1(c)). ACICA can however only exercise this power after consultation with the parties and any confirmed or appointed arbitrators (Art 16.1)
The 2021 Rules allow for claims arising under multiple contracts to be streamlined. Claims arising out of multiple contracts may now be heard in a single arbitration by lodging composite Notices of Arbitration (Art 18), provided the grounds of consolidation are met (Art 18.1).
If a consolidation application is rejected, the claimant must file separate notices of arbitration in respect of all unconsolidated proceedings (Art 18.3). Two or more arbitrations may run concurrently, or one after another, if the parties have been consulted (Art 19), increasing efficiency from a case management perspective.
Third party funding disclosure
In light of the increased attention to third party funding, the ACICA 2021 Rules now require parties to, as soon as practicable, disclose any third-party funding (including the existence and identity of the funder) when it is received or when a third-party arrangement is entered into (Art 54.2).
The tribunal may order, at any time during the proceeding, that parties disclose the existence and identify any third-party funder (Art 54.3). Parties also have a continuing obligation to disclose any changes to the third-party funding arrangements (Art 54).
Early Dismissal Procedure
Under the 2021 Rules the tribunal now has the express power to make an award granting early dismissal or termination of any claim, defence or counterclaim (Art 25.7).
This amendment follows recent trend by institutions to clarify the extent of such powers (for example SIAC Rule 29) rather than relying upon broad discretionary procedural powers (for example ICC Rule 22(1)).
Time Limit for Rendering Awards
The 2021 Rules provide that unless the parties agree otherwise or there is a shorter period specified by law, the final award must be made no later than 9 months from the date the file was transmitted to the tribunal or no later than 3 months from the date the proceedings close (whichever is earlier) (Art 39.3).
The 2021 Rules introduce new provisions on deposits for costs and costs decisions. ACICA must, before proceeding with any arbitration, be in possession of the requisite funds (Deposit of Costs under Art 49). If the deposit of costs remains unpaid, the Tribunal may (after consultation with ACICA) suspend or terminate the arbitration, in whole or in part.
Under the 2021 Rules, on the tribunal’s request, ACICA can make interim payments for tribunal fees and expenses from the parties’ costs deposit (Art 50.1). ACICA alone has the power, at any time during the arbitration, to make a portion of its administration fee payable to account for services already performed (Art 50.2). Before the tribunal issues a final award or a consent award (or an order for termination), ACICA has the responsibility to determine the tribunal’s fees and expenses as well as its own administration fee (Art 50.3).
The tribunal must fix the costs of arbitration by way of a final award or a consent award (or in an order for termination) (Art 51.1). The tribunal can at any time during the arbitration make decisions on costs (other than costs to be fixed by ACICA) and order payment, including by way of an interim award, an interlocutory award, or a partial award (Art 51.2). In the event there is more than one arbitrator, the fees and expenses of each arbitrator must be set out separately (Art 51.6).
The 2021 Rules reflect evolving arbitration practice and align with recent trends and advancements in dispute resolution, in particular online hearings, effective case management and managing the rise in third party funding agreements.
ACICA continues to strengthen its status as the leading arbitral institution in Australia by seeking to create efficiency and transparency for parties in the arbitration process.