On October 6, 2020, the International Court of Arbitration to the International Chamber of Commerce (ICC) adopted updates to its Rules of Arbitration, which will come into force on January 1, 2021. Among other things, the 2021 ICC Rules shall provide greater efficiency and flexibility in arbitrations held under the 2021 ICC Rules.
A summary of the changes implemented by the 2021 ICC Rules is as follows:
- Remote Hearings: An arbitral tribunal, after consulting with parties to the arbitration and examining the facts and circumstances of the case, may decide to conduct the arbitration hearing remotely by videoconference, telephone or other appropriate means of communication.
- Paperless Filing: The 2021 ICC Rules remove the requirement to provide multiple hard copies of documents to the ICC. Parties to an arbitration may still be required to submit paper copies of documents if another party requests "delivery against receipt, registered post or courier."
Updates to Increase Flexibility and Efficiency
- Greater Access to the Expedited Arbitration Process: The ICC's Expedited Arbitration Process allows for a quicker and more cost-effective arbitral process compared to the default arbitral process under the ICC Rules. Previously, the upper financial limit for disputes that would qualify for the Expedited Arbitration Process was US$2 million; however, this limit has been increased to US$3 million, which will allow more arbitrations to be eligible for the Expedited Arbitration Process. Note, however, this increase will only apply to arbitration agreements concluded on or after January 1, 2021.
- Adding Parties to an Arbitration (Joinder): Under the previous ICC Rules, once an arbitrator had been appointed, a new party could only join the arbitration if all existing parties to the arbitration agreed. The 2021 ICC Rules now permit joinder if the joining party agrees to the existing make-up of the arbitral tribunal, which will provide greater flexibility to join parties to an ongoing arbitration without the agreement of all parties to the arbitration. However, the arbitral tribunal must agree that the proposed joinder is appropriate, by examining:
- the arbitrator's jurisdiction over the party to be joined;
- potential conflicts of interest;
- the timing of the joinder; and
- the impact of the joinder on the arbitral tribunal procedure.
- Consolidating Arbitrations Under Multiple Arbitration Agreements: Under the 2021 ICC Rules, the ICC may, at the request of a party to an arbitration, consolidate two or more arbitrations, even where the arbitrations are being conducted pursuant to multiple arbitration agreements. This update provides clarity to the previous ICC Rules and allows arbitrations to be consolidated, even if the disputes are under separate agreements, which do not include mirror arbitration clauses.
Updates to Promote Fairness, Transparency and Neutrality
- ICC's Discretion to Override Certain Arbitration Agreements: In exceptional circumstances, the ICC may now override an agreement between parties to the arbitration regarding the make-up of the arbitral tribunal. The ICC may use this power to avoid a significant risk of unequal treatment or unfairness, which could affect the validity of an arbitral award.
- Nationality of Tribunal Members: When an arbitration arises from an international treaty, no arbitrator may have the same nationality as the parties to the arbitration without the parties' unanimous consent.
- Disclosure of Third-Party Funding Arrangements: Parties to the arbitration must promptly inform the ICC, arbitral tribunal and other parties of the existence of a non-party funding arrangement, if:
- the third party is funding the claims or defenses of a party to the arbitration; and
- the third party has an economic interest in the outcome of the arbitration.
- Tribunal Power to Exclude New Party Representatives: Parties to the arbitration must promptly inform the ICC, arbitral tribunal and other parties of any changes in representation or legal counsel. To avoid any resulting conflict of interest, the arbitral tribunal may exclude any new representatives or legal counsel.
The 2021 ICC Rules follow closely on the heels of comparable updates, particularly with regard to virtual hearings and paperless communication, that have been enacted by the London Court of International Arbitration (LCIA).
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.