Introduction

It is becoming more and more common for arbitration to be considered the most effective method to resolve business disputes. Indeed, in construction, banking, financial services, intellectual property, energy, insurance and other complex commercial disputes, arbitration is often the procedure of choice. This is because arbitration fits almost all legal systems and cultures and can be tailored to the needs of individual disputes.

The International Chamber of Commerce is one of the world's major institutions for the resolution of international commercial disputes, and its rules of arbitration are one of the most widely used and respected among the international business community (its model arbitration clause is available in 35 languages).

The ICC Rules

On Sept. 12, 2011, the new Rules of Arbitration of the International Chamber of Commerce (the "Rules") were launched. These Rules are the result of a three-year process, which solicited opinions and contributions from arbitration professionals and users located in more than 40 countries.

The new Rules have adapted and revised the previous 1998 Rules to reflect the changing demands of users of international arbitration, address the growing complexity of disputes (and the increasing need for urgent interim remedies), and improve time and cost efficiency. Most practitioners and users will welcome these Rules because they respond to today's business needs (such as the facility to have an urgent interim measure dealt with by an emergency arbitrator and the ability to have disputes involving multiple parties and/or contracts handled), while maintaining the traditional advantages that an ICC arbitration can bring. The new Rules will come into force on Jan. 1, 2012.

The Ma in Changes in the Ne w ICC Rules

1. Administration of Arbitration

The new Rules provide that the ICC Court will be the only entity authorized to administer arbitrations under the Rules and that, by agreeing to arbitration under the Rules, the parties accept that the arbitration will be administered by the ICC.

2. Multiple Parties.

Multiple Contracts and Consolidation There are new provisions that deal with the issue of complex arbitrations (such as where there are more than two parties or there is more than one contract).

The main aspects include:

  • Joinder of Additional Parties (Article 7): Any party may join a third party to the arbitration (by filing a Request for Joinder with the Secretariat), provided that this is done before an arbitrator is appointed or confirmed. Once an arbitrator has been appointed or confirmed, joinder will require the agreement of all parties, including the additional party.
  • Claims Between Multiple Parties (Article 8): In arbitrations involving more than two parties, any party may make claims (or counterclaims) against any other party before the approval of the Terms of Reference (thereafter such claims/counterclaims require permission).
  • Multiple Contracts (Article 9): Claims arising out of or in connection with more than one contract may be made in a single arbitration.
  • Consolidation of Arbitrations (Article 10): Under certain circumstances, the ICC Court may, at a party's request, consolidate arbitrations; this may occur when claims are made under the same arbitration agreement or, although different, there are "compatible" arbitration agreements.

3. Emergency Arbitrator

This is a new provision that can be used when a party requires an urgent interim or conservatory measure that cannot await the constitution of the arbitral tribunal. (This rule will not apply to arbitration agreements signed before Jan. 1, 2012, or when the parties have agreed to opt out or agreed to abide by another pre-arbitral interim measure mechanism). Article 29 of the new Rules (together with the procedure in Appendix V) authorizes the president of the ICC Court to appoint an emergency arbitrator when a requesting party demonstrates that urgent relief is necessary before the arbitral tribunal is constituted. An application for such an order can be made at any time before the file is transmitted to the arbitral tribunal, even before the Request for Arbitration is submitted (although in these circumstances, a request must be submitted shortly thereafter).

Any decision of an Emergency Arbitrator will not bind the arbitral tribunal once appointed, and the tribunal may modify, terminate or annul the orders made by the Emergency Arbitrator.

This rule does not preclude any party from seeking urgent interim relief from a competent judicial authority.

4. Constitution of the Tribunal

Under Article 11, arbitrators will be required to remain impartial as well as independent of the parties involved in the arbitration (the previous rules did not expressly refer to impartiality). Furthermore, arbitrators will have to sign a statement of acceptance setting out, among other things, their availability. They must also inform the Secretariat of the ICC of any facts or circumstances that might call into question their independence and impartiality. Lastly, and following on from the approach previously taken by the Secretariat, arbitrators will need to confirm their availability when accepting an appointment.

The new Rules permit the ICC Court to appoint arbitrators directly in certain circumstances, for example, where the National Committee fails to make an appointment in the time allocated. In addition, as there are an increasing number of arbitrations involving states or state entities, the new Rules provide that the ICC Court can directly appoint as an arbitrator any person whom it considers suitable where one or more parties is a state or claims to be a state entity (Article 13).

5. Procedure to Consider Prima Facie Existence of ICC Arbitration Clause

The new Rules allow objections to the existence, validity and/ or scope of an arbitration agreement to be referred directly to the arbitral tribunal rather than necessarily to the ICC Court (Article 6).

6. Challenges to Jurisdiction

Whereas previously a jurisdictional challenge went to the ICC Court from the Secretary General, the new Rules likely will expedite this process because, by default, any question of jurisdiction will be decided by the arbitral tribunal (unless the Secretary General refers the matter to the ICC Court).

7. Confidentiality

Prospective arbitrators will need to sign a statement of confidentiality before being appointed. In addition, the new Rules envisage the tribunal making confidentiality orders tailored to the specific needs of the case before them. This can include confidentiality as to the existence of the arbitration and/or measures being taken to protect trade secrets and confidential information (Article 22).

8. Communication Technology

To accommodate modern methods of communication (which the ICC has already done in practice), the new Rules reflect the usage of email as a means of communication by both the Secretariat and the arbitral tribunal (the references to telex and telegram have been deleted).

9. Conduct of the Arbitration

Under the new Rules, the parties (and tribunal) are required to make every effort to conduct arbitrations in an expeditious and cost-effective manner, having regard for the complexity and value of the dispute. This general duty is developed in a number of case management techniques set out in an appendix to the new Rules, which include:

  • The obligation of the arbitral tribunal to convene a case management conference and consult with the parties when drawing up the Terms of Reference or shortly thereafter (Article 24);
  • The adoption by the arbitral tribunal and the parties of procedural measures that ensure effective case management (the rules now incorporate the ICC publication "Techniques for Controlling Time and Costs in Arbitration").
  • Notification by the arbitral tribunal to the Secretariat and the parties of the date by which it expects to submit its draft award to the court for review (as opposed to the "approximate" date, under the 1998 Rules). The award must be announced within six months of the conclusion of the Terms of Reference, although the period can be extended (Article 30); and
  • The arbitral tribunal, when deciding on the issues of costs, is to take into consideration the extent to which each party conducted the arbitration in an expeditious and cost-effective manner.

The Future

It is clear that these Rules are designed to modernize the 1998 Rules. By reflecting current business practices while allowing an efficient resolution of disputes, they will ensure that ICC arbitration remains a meaningful option to assist parties in resolving complex commercial disputes. Indeed, the ICC model arbitration clause is becoming more and more frequently adopted in international contracts. It will be interesting to observe how other arbitration centers (such as the LCIA and AAA) respond to the new Rules to help ensure that they too have a future platform for users of international arbitration.

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