The International Chamber of Commerce (ICC) has launched a much-anticipated revised version of its Rules of Arbitration (ICC Rules). According to the ICC, its revised ICC Rules aim at better serving the existing and future needs of businesses and governments engaged in international commerce and investment.
The revised ICC Rules came into force on 1 January 2012 and apply to all ICC arbitrations commencing on or after that date, unless the parties agree otherwise. According to the ICC, a case from Spain was the first to be filed under the new ICC Rules, followed by six other cases involving parties from Brazil, Hong Kong, Egypt, India, Jordan, Peru, South Korea and USA. The revised ICC Rules take into account current requirements and developments in arbitration practice and procedure, as well as developments in information technology, since their last revision in 1998.
Some of the more notable revisions include new provisions i) in respect of multi-party and multi-contract disputes; ii) for the appointment of an emergency arbitrator to order urgent interim or conservatory measures; and iii) to facilitate the handling of disputes arising under investment treaties and free trade agreements. Other amendments, in the form of new or improved case management procedures and requirements in relation to information to be provided by the Claimant in his Request and by the Respondent in his Answer, aim to make the arbitral process more expeditious and cost-effective.
The following is a brief overview of the more notable changes.
1. ICC arbitration
Some of the changes seek to provide clarification on the respective roles of the International Court of Arbitration of the ICC (ICC Court), its Secretariat and arbitral tribunals.
New Article 1 makes it clear that the ICC Court is the only body authorised to administer arbitrations under the ICC Rules, including the scrutiny and approval of awards rendered in accordance with the ICC Rules. Further, new Article 6 makes it clear that, by agreeing to arbitration under the ICC Rules, the parties have accepted that the arbitration shall be administered by the ICC Court. These clarifications aim at preventing parties from adopting so-called hybrid arbitration clauses, pursuant to which the arbitration is to be governed by the ICC Rules, but administered by an institution other than the ICC.
The revised ICC Rules also clarify that ICC arbitration is not only available for international commercial arbitration but also for a full range of disputes, including treaty investment arbitrations. Changes have been made so as to recognise the specifics of treaty investment arbitrations.
2. Request for arbitration and answer
Requirements for the Claimant's Request for Arbitration (Article 4) and the Respondent's Answer to the Request (Article 5) have been revised. A Claimant, who intends to make claims under more than one arbitration agreement, is now required to include in his Request an indication of the arbitration agreement under which each claim is made. In addition, in the Request, a Claimant must now describe not only the nature and circumstances of the dispute giving rise to the claim, but also the basis upon which his claims are made. The Request must also now include not just comments (as previously required), but all relevant particulars and any observations or proposals for the place of the arbitration, applicable rules of law and language of the arbitration. Similarly, a Respondent is now also required to state in his Answer (and any Counterclaim), the basis upon which his claims are made and include any observations or proposals in relation to the place of arbitration, applicable rules of law and language of the arbitration.
3. Notifications and communications
Changes have been made with regard to written notifications and communications to reflect changes in technology and modes of communication. Provision is made in the new rules for notifications or communications from the Secretariat and arbitral tribunal to the parties or their representative, to be made by email.
4. Emergency arbitrator provisions
New Article 29 allows a party to seek the appointment of an emergency arbitrator, to order, against signatories to the arbitration agreement or their successors (but not third parties), urgent conservatory or interim measures, which cannot await the constitution of the arbitral tribunal. The Emergency Arbitrator Rules are contained in a separate Appendix V to the revised ICC Rules.
The appointment of an emergency arbitrator has been previously introduced into the Arbitration Rules of the Singapore International Arbitration Centre and the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce and it is not surprising that the revised ICC Rules follow this trend.
The revised ICC Rules permit a Claimant to make an application for interim relief before he has filed his Request for Arbitration, although the Claimant is required to submit his Request within 10 days after his application for relief, unless a longer period is granted by the emergency arbitrator. Failure to do so results in termination of the emergency arbitrator proceedings.
Since the ICC Secretariat serves an application for the appointment of an emergency arbitrator on the other party, the emergency arbitrator procedure is not suitable for ex parte applications (such as Mareva injunctions), which remain a matter for the courts.
The emergency arbitrator's order is binding on the parties but not on the arbitral tribunal, which can therefore modify or annul it.
The availability of relief from an emergency arbitrator may be of less importance in Hong Kong courts, where it may be faster to obtain such relief from the courts. However, the ICC Rules are intended for use worldwide in proceedings conducted in any language and subject to any law and the availability of an emergency arbitrator could be of crucial importance where national courts do not have the jurisdiction or are unlikely to provide such relief to a party involved in an arbitration.
Notably, the revised ICC Rules give parties the option to “opt out” of the emergency arbitrator regime. However, parties should consider possible adverse consequences of doing so. The emergency arbitrator provisions will not apply to arbitration agreements concluded before 1 January 2012.
5. The arbitral tribunal
While under the previous ICC Rules a prospective arbitrator was required to make a statement of independence, new Article 11 extends the requirements to require a prospective arbitrator to make a statement of acceptance, availability and impartiality, as well as independence.
Requiring a potential arbitrator to confirm his availability will help ensure that the arbitrator is able to devote sufficient time to the arbitration.
As part of the revision of the language of the ICC Rules, an arbitral tribunal is now presided over by a “president” rather than a “chairman”, so as to reflect gender neutrality.
6. Improving time and cost efficiency
One of the main aims of the revised ICC Rules is to improve efficiency, and cost control in arbitrations, so as to avoid unnecessary delay and expense.
Accordingly, Appendix IV to the revised ICC Rules gives examples of case management techniques which the arbitral tribunal and the parties can use to control time and costs. Further, new Article 24 introduces a mandatory Case Management Conference (to be convened by the arbitral tribunal when drawing up the Terms of Reference or as soon as possible thereafter) at which the arbitral tribunal shall consult the parties on the appropriate procedural measures to be adopted. Those measures may include one or more of the case management techniques referred to in Appendix IV.
New Article 27 requires the arbitral tribunal to inform the parties at the close of the proceedings of the date by which it expects to submit its draft award to the ICC Court for approval.
The parties' conduct may now have direct costs consequences, as Article 37 expressly empowers the arbitral tribunal, when making a costs award, to take into account the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.
7. Multi-party, multi-contract arbitration and consolidation
New Articles 7 to 10 provide for joinder of additional parties, claims between multiple parties, arbitrations involving multiple contracts and the consolidation of arbitrations.
Article 7 provides that a party wishing to join an additional party to the arbitration shall submit a Request for Joinder against the additional party. However, no additional party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the additional party agree.
In multi-party arbitrations, Article 8 permits any party to make claims or counterclaims against any other party without the authorization of the arbitral tribunal up until the Terms of Reference are signed or approved by the ICC Court. After that, the arbitral tribunal determines the procedure for making a claim or counterclaim.
Where claims arise out of or in connection with more than one contract, Article 9 permits such claims be made in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement under the ICC Rules.
Article 10 provides that the ICC Court, at the request of a party, may consolidate two or more arbitrations pending under the ICC Rules into the arbitration which commenced first, where (a) the parties have agreed to consolidation; or (b) all of the claims in the arbitrations are made under the same arbitration agreement; or (c) where the claims in the arbitrations are made under more than one arbitration agreement, the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the ICC Court finds the arbitration agreements to be compatible.
8. Confidentiality orders
New Article 22(3) expressly provides for confidentiality orders, permitting the arbitral tribunal, upon the request of any party, to make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and to take measures for protecting trade secrets and confidential information.
This is of particular importance where the governing arbitration law does not impose on the parties express confidentiality obligations (for example as they do in Hong Kong, under section 18 of the new Arbitration Ordinance) or implied confidentiality obligations (for example as they do in England).
As well as clarifying and updating some of the existing ICC Rules, the revised rules introduce some innovative changes, which will no doubt speed up the arbitral process and make it more cost-effective.