The International Centre for Dispute Resolution ("ICDR") issued amended rules (the "ICDR Rules") that took effect on March 1, 2021. Following a year-long review of the ICDR Dispute Resolution Procedures, these changes relate to both the Arbitration and Mediation Rules. The Arbitration Rules were last revised in 2014, while the Mediation Rules have not been revised since 2008.
These revisions are timely and were prompted by a changing dispute-resolution landscape, including an increase in third-party funding, growing concerns over cybersecurity, privacy and data protection considerations, and the use of video communications as a result of the ongoing COVID-19 pandemic.
Overview of Key Changes to the ICDR Rules on Arbitration
Here are the key highlights of the changes to the Arbitration Rules by topic.
Conduct of Proceedings, Promoting Mediation, and Early Disposition
- Article 2 - Notice of Arbitration Requirements
Previously, a party only had to state whether it had any interest in mediating the dispute. Article 2(3)(g) now provides that a party is required to state in the Notice of Arbitration whether it is willing to mediate the dispute prior to or alongside the arbitration.
- Article 3 - Answer and Counterclaim Requirements
Article 3(1) now explicitly states that the 30-day period for filing of a counterclaim is commenced on the date that the Administrator confirms the Notice of Arbitration has been received. Additionally, similar to the requirement for the claimant in Article 2(3)(g), Article 3(4) requires that the respondent state whether they are willing to mediate the dispute prior to or alongside the arbitration.
- Article 22 (formerly Article 20) - Conduct of Proceedings
"Preparatory conference" has been renamed "procedural hearing" in the new Article 22. This emphasizes its importance to advocates and users.
- Article 23 - Early Disposition Permitted
Article 23 promotes efficiency by permitting the early disposition of issues. A party who seeks early disposition of an issue must request leave to file an application for early disposition of the issue. The tribunal may allow the application to be filed if it determines that it is reasonably possible the application will succeed, that it will dispose of or narrow at least one of the issues in the case, and that the consideration of the application is likely more efficient or economical than leaving the issue to be determined.
Article 23(2) specifically allows both parties to be heard on whether leave to file the application should be granted and if so, whether early disposition should be granted.
Article 23(3) also allows the tribunal to make an order or award for the application. If an award is made, reasoning must be provided.
Emergency Measures, Joinder and Expedited Procedures
- Article 7 (formerly Article 6) - Emergency Measures of Protection
Article 7(1) expands what a party seeking emergency relief must detail in its application. The applicant must now specifically state what injury or prejudice will be suffered by a party if relief is not provided.
Article 7(3) also provides that the emergency arbitrator has jurisdiction to rule on its jurisdiction.
- Article 8 (formerly Article 7) - Joinder Permitted
Article 8(1) now permits joinder of an additional party after constitution of the tribunal. However, the tribunal must decide that the joinder would be in the interests of justice and the additional party must consent.
- Article E-5 - Expedited Procedures
Previously, expedited procedures were provided for where no disclosed claim or counterclaim exceeded $250,000 USD. The applicable amount is now $500,000 USD.
Appointment and Challenge of an Arbitrator
- Article 5 - International Administrative Review Council as Decision Making Authority
Article 5 clarifies that the International Administrative Review Council may act as the decision making authority for the Administrator in determining arbitrator challenges, continuing service of an arbitrator, determining disputes around number of arbitrators, place of arbitration and whether administrative requirements to initiate arbitration have been fulfilled.
- Article 9 (formerly Article 8) - Appointing a Consolidation Arbitrator
Article 9(1) states that the Administrator may appoint a consolidation arbitrator on its own initiative. Previously, the Administrator only appointed a consolidation arbitrator at the request of a party. Consolidation is now permitted when arbitrations involve "related" parties, while the previous Rule required the "same" parties.
- Article 13 (formerly Article 12) - Appointment of Arbitrators
Article 13(4) provides that the Administrator may make a direct appointment or present a list of potential arbitrators to the parties.
- Article 14 (formerly Article 13) - Additional Obligations on Arbitrators
Under Article 14(1), arbitrators must now act in accordance with The Code of Ethics for Arbitrators in Commercial Disputes.
- Article 15 (formerly Article 14) - Challenge of an Arbitrator
Article 15(1) provides a mechanism by which an arbitrator can be challenged for failing to perform their duties.
- Article 16 (formerly Article 15) - Replacement of an Arbitrator
Article 16(3) allows the parties to object to arbitration continuing with two arbitrators if the third arbitrator does not participate.
- Articles 17 and 41 (formerly Article 38) - Arbitral Tribunal Secretary
Article 17 permits a tribunal to appoint a tribunal secretary if there is consent from both parties and it is in line with any ICDR guidelines. Article 41 also extends the exclusion of liability to arbitral tribunal secretaries.
- Article 21 (formerly Article 19) - Arbitral Jurisdiction
Article 21(1) confirms that the tribunal has jurisdiction to determine objections to arbitrability without court involvement. Previously, under former Article 19(3), it was clear that the tribunal had the power to rule on an objection to the jurisdiction of the tribunal or the admissibility of a claim, but there was no explicit reference to court involvement.
- Article 14(7) - Third Party Funding
Article 14(7) provides that the tribunal may require the parties to disclose whether a non-party has agreed to pay or contribute to the cost of a party's participation in arbitration. Further, the tribunal may require the parties to identify the person or entity and describe the nature of the undertaking to pay. The tribunal may also require the parties to disclose a non-party who has an economic interest in the outcome of the arbitration and what that interest is.
Cybersecurity and Confidentiality Considerations
- Article 22 (formerly Article 20) - Cybersecurity, Privacy and Data Protection
Article 22 has added language on "Conduct of Proceedings" that requires the tribunal to discuss cybersecurity, privacy and data protection with the parties. This ensures that appropriate security and compliance is provided for each case. Article 22(3) specifically allows for the tribunal and the parties to discuss at the procedural hearing what procedures are necessary to ensure data protection and security.
- Article 40 (formerly Article 30.3) - Confidentiality
Article 40(4) allows for the ICDR to publish awards, decisions, orders or rulings unless a party objects to publication in writing within six months of the award date. The ICDR, however, must conceal the party names and identifying details if they publish. This Rule was previously located under the "Time, Form and Effect of the Award" part of the ICDR Procedures but did not provide a timeline for objection.
Promotion of Electronic Proceedings
- Use of Video, Audio or Other Electronic Means ("Video")
Article 26 (formerly Article 23) provides that all or part of a hearing may be held via Video. Either the tribunal may order the use of Video after consulting with the parties or the parties may agree to the use of Video. However, Video may not be used if it will compromise the rights of a party to fair process.
Article E-9 also acknowledges that hearings may be held via Video.
- Article 26(4) revises the former Article 23(4) by providing that witness statements "should" be used rather than "may" be used in order to promote utilization of witness statements for direct testimony.
Failure of Witness to Appear
- Article 26(5) expands the power of the tribunal to make an order that is deemed appropriate in the circumstances when a witness whose presence has been requested fails to appear without a valid excuse. The tribunal may, for example, reduce the weight given to the witness' testimony or disregard the testimony altogether. Previously, the tribunal could only disregard a written statement by the relevant witness.
- Article 32 (formerly Article 29), under sub-section 4, now allows a tribunal to electronically sign an order or award. The only exceptions are if the applicable law requires a physical signature, the parties both agree that a physical signature is necessary, or the tribunal or Administrator decide that a physical signature is necessary.
- Arbitration Costs
Under Article 37 (formerly Article 34), the definition of "costs" has been expanded to include applicable taxes related to compensation of the arbitrator and any costs related to tribunal assistance.
Article 39 (formerly Article 36) now provides, under sub-section 3, that a failure to pay a required fee or deposit will result in a withdrawal of that party's claim or counterclaim, as it may be. This was enshrined in the former Article 36(5). However, the amended Rule clarifies that the party will be allowed to defend its claim or counterclaim.
- Article 39(4) now also allows the paying party (that paid the deposit for a party that has failed to pay) to request an award for recovery of the payment plus interest from the tribunal. If there is more than one party that Article 39(4) applies to, the tribunal may make multiple separate awards. If no party is willing to pay the deposit for the party that failed to pay, the tribunal (or Administrator if a tribunal has not yet been appointed) may suspend or terminate the proceedings.
Overview of Key Changes to the ICDR Rules on Mediation
Here are the key highlights of the changes to the Mediation Rules by topic.
Use of Video, Audio or Other Electronic Means
- Mediation Rules 1 and 9
These rules acknowledge that all or part of a mediation may be conducted via Video.
- Mediation Rule 9
Mediation Rule 9, in addition to acknowledging the use of Video, sets out an outline for how mediation is to proceed. This may include conducting a preliminary conference with the parties, permitting all or part of the mediation to be conducted via Video, exchange between parties of all documents related to the relief requested and an exchange of memoranda on issues, interests and history of the parties' past negotiations.
Further, the mediator may conduct separate meetings or communications with parties before, during and after scheduled mediation conferences. These communications may be in person, in writing or via Video. The mediator may provide oral or written recommendations for settlement privately or jointly, if all parties agree. If settlement of all issues does not occur during scheduled mediation, the mediator may continue communicating with parties in order to seek a complete settlement.
The mediator and parties must also address the level of protection that is appropriate for their case with regard to cybersecurity, privacy and data protection.
Responsibilities of the Parties
- Mediation Rule M-10 (formerly Rule 8)
Mediation Rule 10 provides that it is each party's responsibility to have a representative at the mediation who has the authority to reach and execute a settlement agreement. Previously, the parties only had to have a representative at the mediation with the authority to consummate a settlement.
Enforcement of Mediated Settlement Agreement
- Mediation Rule M-14 (formerly Rule 12)
Mediation Rule 14(e) provides for enforcement of a mediated settlement agreement. In accordance with Article 4(b) of the Singapore Convention, parties may ask the mediator to sign the settlement agreement, request a document signed by the mediator that indicates the mediation was conducted, or request that the ICDR issue an attestation that the settlement was reached during mediation.
The revised ICDR Rules will be welcomed by the international arbitration community. The changes have addressed the realities of the pandemic by expressly allowing for (1) the use of video, audio or other electronic means to conduct arbitration and mediation, and (2) electronically-signed orders and orders in arbitration, subject to limited exceptions.
Importantly, looking beyond the pandemic, the ICDR Rules also now address issues relating to cybersecurity, privacy and data protection by requiring that the tribunal or mediator discuss it with the parties.
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