Canada: Amendment To ICC International Arbitration Rules Adding Expedited Procedures

For decades the Rules of Arbitration of the International Chamber of Commerce (the "Rules") have been used by companies as a means for resolving disputes — particularly in international transactions. On November 4, 2016 the ICC announced an amendment to these Rules in order to incorporate a procedure for resolving cases on an expedited basis (the "Expedited Procedure Rules"). This amendment is of interest to any entity that uses the Rules as a means for resolving its disputes.

The Expedited Procedure Rules will come into effect on March 1, 2017.

When will the Expedited Procedure Rules apply?

The Expedited Procedure Rules are aimed at cases with a relatively (in terms of ICC cases) low value. They will apply in cases where the value in dispute does not exceed US$ 2 million or where the parties have agreed that they should apply.

The Expedited Procedure Rules will also apply only to contracts that are made after they come into force i.e. after March 1, 2017.

The application of the Expedited Procedure Rules is not automatic. The normal procedure when starting an arbitration is that a claimant will file a Request for Arbitration and then the respondent will file an Answer. After the filing of these two documents, the Court of Arbitration (an independent arbitration body of the ICC) will decide whether the Expedited Procedure Rules should apply to that case or not.

Interestingly, the Rules have not been amended to provide for the parties to give their input into this decision through the Request and the Answer, but prudent parties and counsel should nevertheless include their comments in these documents.

The reason for the "non-automatic" application of the Expedited Procedure Rules is because there are some cases that might fit the requirements but that might nevertheless not be suitable for an application of those rules. For example, some disputes might have a relatively low monetary amount in dispute, but might seek other non-monetary relief (e.g. enforcement of intellectual property rights) that is significant to one of the parties.

The Expedited Procedure Rules are "opt out" rather than "opt in" so they have the potential to apply to all contracts (that choose ICC arbitration) that are made on or after March 1, 2017, even if the parties do not mention the Expedited Procedure Rules. However, parties can agree to "opt out" once a dispute has arisen but before the case is put into the Expedited Procedure track. It is unclear whether parties can "opt out" of the Expedited Procedure Rules after the ICC Court has determined that the Expedited Procedure Rules will apply and the Tribunal has been constituted.

What do the new Expedited Procedure Rules do?

Key features of the Expedited Procedure Rules are:

  • There shall be a sole arbitrator, except in exceptional circumstances.
  • There shall be no "Terms of Reference". The Terms of Reference are a signature feature of ICC Arbitrations, but they would not apply in Expedited cases.
  • No new claims (without permission) after constitution of the tribunal. Normally, new claims can be brought without permission until the signing of the Terms of Reference.
  • The default procedure is that the arbitration shall be based on documents only, with no hearing. However, the tribunal may (after consulting the parties) decide to hold a hearing.
  • The tribunal has the discretion to structure a procedure so as to resolve the case quickly. The Expedited Procedure Rules specifically mention that parties might not be permitted to request production of documents from the other side, that such requests might be severely limited or that there may be limits on the scope and breadth of written submissions.
  • The final award must be rendered within six months from the date of the constitution of the tribunal. This may be extended by the Court in exceptional circumstances, but the clear message from the ICC is that awards should be rendered within six months in almost all cases. The time limit for "normal" cases is six months from the conclusion of the Terms of Reference, but in practice this is extended almost as a matter of course.
  • The reasons for the award may be stated in short form.
  • The fee schedule for the tribunal is lower than for a non-expedited case.

These features are aimed at reducing the time and cost of ICC arbitration.

What do these new rules mean for my company?

As indicated above, these rules will only apply to contracts made on or after March 1, 2017, so they will not affect any existing contracts.

If you like the idea of an Expedited Procedure for cases where the value in dispute is below US$ 2 million (and you choose ICC arbitration for dispute resolution) you can use the existing model ICC arbitration clause.

However, these rules may not be appropriate for every company or every contract. For some companies, a 1.9 MUSD case might be a "bet-the-company" type case — a case that could make the difference between the company surviving or disappearing. There may be other reasons that a company might not want its disputes referred to arbitration through the Expedited Procedure Rules.

In these cases, it will be important to modify the applicable arbitration agreement. If the parties want to opt out, language like the following could be used: "The Expedited Procedure Rules shall not apply." However, as with the drafting of any arbitration agreement, advice of experienced counsel should be sought to ensure that your company's rights are properly protected.

Reduced time, reduced cost – that sounds pretty good! Should we "opt in" and use Expedited Procedure for all disputes?

As mentioned above, advice should be sought before deciding whether to opt in or exclude the Expedited Procedure Rules.

The Expedited Procedure Rules are intended to give swift results in cases that are — as far as the ICC is concerned — relatively low in value. Many of the procedural rights and safeguards that are taken for granted in a "standard" ICC arbitration are likely to be dispensed with, e.g.: the possibility of three arbitrators (with each party choosing one); Terms of Reference; production of documents; a full evidentiary hearing; cross-examination of witnesses; and a fully reasoned award.

These "shortcuts" might be acceptable to large companies that are dealing with relatively small disputes. The savings in time and cost, coupled with a relatively quick determination of the dispute might outweigh the reduction of some of the procedural steps that come with a full ICC arbitration procedure.

However, the short time frame and reduced procedural steps could make it logistically difficult if not impossible for one party (or both parties) fully to present their case(s). It is easy to imagine two parties being attracted to the idea of reduced time and costs promised by adoption of the Expedited Procedure Rules, only to find that a particular dispute is worth US$ 300 million and is very complex. However, if the parties have already agreed to use them, the ICC Court may feel compelled to hold the parties to their bargain. Once a dispute has arisen, it is usually much more difficult for parties to agree to any modifications to the arbitration agreement set out in their contract.

Accordingly, the safer route may be to avoid opting in to the Expedited Procedure Rules in the arbitration agreement, particularly for large contracts, given that the rules already apply to cases below US$ 2 million, and the parties can opt in by agreement in appropriate circumstances if they so choose.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.