UK: Arbitration: Out With The Old In With The New Icc Rules

Last Updated: 10 January 2012
Article by Guy Pendell and Juliette Huard-Bourgois

Overview

On 1 January 2012, following a three-year review exercise, a new version of the Arbitration and ADR Rules of the International Chamber of Commerce (the "2012 ICC RULES") came into force (available here). Unless parties expressly provided for the 1998 ICC Rules in their agreement, the 2012 ICC Rules will apply to any ICC arbitration commenced after 1 January 2012, regardless of the fact that parties could not contemplate them at the time they agreed to ICC arbitration.

Many of the changes are cosmetic or just amount to a codification of current practice of the ICC Court of Arbitration and Secretariat since 1998. Others are more innovative and bring in new procedural mechanisms and principles including case management techniques focused on time and costs. The changes are meant to improve the efficiency of the ICC arbitral procedure and adapt it to the contemporary and foreseeable needs of international arbitration users.

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Full Article

Overview

On 1 January 2012, following a three-year review exercise, a new version of the Arbitration and ADR Rules of the International Chamber of Commerce (the "2012 ICC RULES") came into force (available here). Unless parties expressly provided for the 1998 ICC Rules in their agreement, the 2012 ICC Rules will apply to any ICC arbitration commenced after 1 January 2012, regardless of the fact that parties could not contemplate them at the time they agreed to ICC arbitration.

Many of the changes are cosmetic or just amount to a codification of current practice of the ICC Court of Arbitration and Secretariat since 1998. Others are more innovative and bring in new procedural mechanisms and principles including case management techniques focused on time and costs. The changes are meant to improve the efficiency of the ICC arbitral procedure and adapt it to the contemporary and foreseeable needs of international arbitration users.

These 2012 ICC Rules are not revolutionary. They maintain the main characteristics of ICC arbitration such as the terms of reference; the scrutiny of draft awards by the ICC Court and the involvement of national committees involved in arbitrators' appointment. Nonetheless, the 2012 ICC Rules contain innovative changes, described below following the chronological order of the arbitral process: jurisdictional issues; conduct of the proceedings; and the award.

1. Jurisdictional issues

A more detailed request for arbitration. New article 4(3)(c) requires that the Request for Arbitration includes, in addition to a description of the nature and circumstances of the dispute, information concerning the basis of the claim. New article 4(3)(d) further requires a "statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims". New article 5.5 contains similar requirements for counterclaims. Old article 4(3)(c) only required "a statement of the relief sought, including to the extent possible, an indication of any amount(s) claimed".

Efficient treatment of jurisdictional objections. Under the old Rules, where there was a challenge to arbitral jurisdiction at the outset of the proceedings, the ICC Court was required to make a prima facie assessment of the existence of the arbitration agreement. In practice, most of the jurisdictional challenges decided by the ICC Court occured in complex cases (multi-party or multi-contract) and would usually proceed to a decision of the arbitral tribunal. The new rules on complex arbitrations are now codifying this practice. Under new article 6(3), the ICC Secretariat will effectively filter which jurisdictional objections should, exceptionally, be referred to the ICC Court, as they should normally be decided by the arbitral tribunal itself. For ICC arbitrations seated in Paris, this change aligns ICC practice with the reinforcement of the principle of competence-competence operated by the new 2011 French Law on Arbitration. In France, the courts will automatically refuse to rule on such jurisdictional challenges, unless in exceptional circumstances.

The ICC Court's power to speed up the appointment of arbitrators. One of the traditional complaints made against ICC arbitration was the time taken by national committees to appoint arbitrators. New article 13 now empowers the ICC Court to appoint arbitrators directly in circumstances justifying such direct appointment, including arbitrations involving state parties.

Recourse to an "emergency arbitrator" to order interim measures before the constitution of the arbitral tribunal. Under new article 29 and Appendix V, the ICC introduces the concept of an "emergency arbitrator", thus following the lead of the SCC and SIAC, which introduced similar emergency arbitration rules in 2010 (the LCIA tackles the same issue by a provision for the expedited formation of the tribunal). Appointed upon the application of a party by the President of the ICC Court "within as short a time as possible, normally within two days from the Secretariat's receipt of the Application", the emergency arbitrator can order urgent interim or conservatory measures that cannot await the constitution of the tribunal. These provisions apply only to parties that are either signatories of the relevant arbitration agreement or successors to such signatories. An emergency arbitrator cannot rule on a measure directed towards a third party. An exception to the rest of the 2012 ICC Rules, these provisions will apply strictly to arbitration agreements entered into after 1 January 2012.

Complex disputes: multi-party and/or multi contracts.
Coping with the growing number and the procedural complexity of multi-party and multi-contract disputes is one of the most important objectives of the 2012 ICC Rules. By enhancing the precision of its rules, the ICC is effectively codifying its existing practices and offers the most developed system of arbitration for complex disputes.

Joinder of additional parties. Under the 2012 ICC Rules any party can request the joinder of a third party before the arbitral tribunal is constituted. The joinder is ultimately subject to the decision of the arbitral tribunal as to its jurisdiction, but as a preliminary step the ICC Court will determine if it is prima facie satisfied that an arbitration agreement exists between all parties or, in the case of multiple contracts, that the contracts are compatible and that all parties may have agreed that the claims can be determined in a single arbitration. If the arbitral tribunal has been constituted, a party can only be joined with the agreement of all parties involved (including the additional party). The Secretariat may fix a time limit for the submission of a Request for Joinder.

Claims between multiple parties. Under new article 8, in an arbitration with multiple parties, any party may make a claim against any other party in the arbitration, but new claims made after the terms of reference require the authorisation of the arbitral tribunal. Cross-claims based on multiple arbitration agreements are admissible subject to certain conditions.

Claims in a single arbitration based on multiple contracts. Under new article 9, claims based on multiple contracts may be admissible in the same arbitration before the signature of the terms of reference provided that the arbitration provisions of these contracts are compatible and that all parties agree that the claims can be determined in a single arbitration.

Consolidation. The ICC Court is now empowered, at the request of a party, to consolidate two or more pending arbitrations if (1) the parties have agreed to consolidation; OR (2) the claims are made under the same arbitration agreement; OR if there are multiple arbitration agreements, (3) the arbitrations are between the same parties; the disputes arise in connection with the same legal relationship; and the arbitration provisions are compatible. Consolidation after the terms of reference is possible but would require the arbitral tribunal's authorisation.

2. Conduct of the proceedings

Mandatory case management conference. New article 24 requires the arbitral tribunal to convene a case management conference in order to consult the parties on the appropriate procedural measures. The adopted procedural measures may include one or more of the case management techniques described in new Appendix IV which incorporates the ICC's publication "Techniques for Controlling Time and Costs in Arbitration". Under new article 22, the arbitral tribunal is also invited to adopt a proactive and "proportionate" case management approach.

General duty of parties and arbitrators to conduct the arbitration in an expeditious and cost-effective manner. New article 22(1) imposes on the arbitral tribunal and the parties a general duty to make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute. The duty on the parties is reinforced by new article 37(5) pursuant to which the tribunal will be authorised to consider in its cost decision the extent to which each party complied with its general duty. A corresponding incentive for the arbitrators to satisfy this duty lies in the way the ICC Court will set their fees.

3. The award

The 2012 ICC Rules take some steps to deal with the problem of arbitrators taking too long to draft their awards. Under new article 27, arbitrators are now required, at the close of the proceedings, to inform the ICC Secretariat, as well as the parties, of when they expect to submit their draft award for scrutiny by the ICC Court. This increases the transparency of the arbitration process for the parties and should be welcomed. Arbitrators should now be aware that, pursuant to new Appendix III on Costs and Fees, the ICC Court will take into account their "diligence and efficiency", "the time spent" and the "rapidity of the proceedings" when setting their fees.

Amongst the changes introduced by the 2012 ICC Rules, the arbitration rules are published alongside the ADR rules and the new ICC International Centre for ADR was launched in parallel to the 2012 ICC Rules. The Rules of Arbitration and ADR Rules are discrete but complementary, to encourage the efficient resolution of disputes. In new Appendix IV of the 2012 ICC Rules, arbitral tribunals are even encouraged, as a case management technique, to inform the parties that they are free to settle all or part of the dispute either by negotiation or through any form of amicable dispute resolution methods.

For a full copy of the 2012 ICC Rules, please click here

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 05/01/2012.

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