Following hot on the heels of SIAC and SCC, the ICC has become the latest arbitral institution to promote a summary procedure for the swift dismissal of unmeritorious claims in arbitrations under its rules.
In its recently updated Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (the "Note"), the ICC makes clear (in Section VI (C)) that, under its rules, tribunals have the power to determine "manifestly unmeritorious claims or defenses on an expedited basis" - i.e. to adopt a summary procedure for the early dismissal of hopeless claims.
Article 22 of the ICC Rules provides that "the arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute" and gives the tribunal the ability to adopt "such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties".
The Note explains that the broad scope of Article 22 encompasses applications "for the expeditious determination of manifestly unmeritorious claims or defenses". It also provides that any party may apply for "expeditious determination" of claims or defences which have been advanced, on the grounds that they are "manifestly devoid of merit or fall manifestly outside the arbitral tribunal's jurisdiction". In terms of procedure for such applications, the Note provides the following guidance:
- Applications "must be made as promptly as possible after the filing of the relevant claims or defenses".
- The tribunal has full discretion to decide whether to allow an application to proceed, taking into account the stage of the proceedings and questions of timing and cost efficiencies.
- The tribunal may adopt the procedural measures it considers appropriate, after consulting the parties.
- Whilst the responding party is to be given a fair opportunity to respond to the application, further evidence will only be allowed exceptionally.
- Hearings can take place if appropriate and can be conducted by video conference or telephone.
- The tribunal is obliged to determine the application as soon as possible and state the reasons for doing so in "as concise a fashion as possible". The decision may be in the form of an order or an award. The tribunal may also decide any issue of costs at that time.
- The ICC Court will scrutinise any award on an expeditious determination application, generally within a week of receipt of the draft from the tribunal.
Is this a new procedure?
Summary procedures in arbitration have received renewed focus recently, with SIAC and SCC both introducing express procedures into the latest editions of their rules, in August 2016 and January 2017 respectively. The ICC's approach is somewhat different - although it updated its own rules in March 2017, it did not include an express summary determination provision. What is clear from the Note though is that the ICC Court considers this a power which has nonetheless been available to tribunals under its rules for some time.
That the ICC has felt it necessary to highlight the availability of summary procedures is interesting. It suggests that tribunals have been reluctant to adopt such procedures in arbitrations to date or that parties have simply been reluctant to make applications, which is perhaps surprising given that there are many manifestly bad claims brought to arbitration. There may have been a concern on the part of the tribunal to use the summary procedures on the basis that a party might later argue it was not given a reasonable or fair opportunity to present its case, and that this might constitute grounds for having an award set aside or challenged at enforcement.
The ICC's confirmation that tribunals have the power to adopt summary procedures to dismiss claims should at least give tribunals the confidence to adopt them where appropriate (and give parties the confidence to apply for them), leading to time and cost savings and increasing the efficiency of proceedings. The fact that any such summary decisions - if made by an award - will also be subjected to the scrutiny of the ICC Court is an important check which should give applicants comfort, and deter to some extent subsequent challenges to awards made on a summary basis.
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