What has changed in the ICC Rules? | In Principle

Amendments to the Rules of Arbitration of the International Chamber of Commerce in Paris entered into force on 1 March 2017. The amendments were inspired by the desire to provide additional transparency and improved efficiency in international arbitration proceedings based on the ICC Rules. The new features respond to calls from the arbitration community to establish a more tailor-made arbitration procedure.

Expedited procedure

Most importantly, the new provisions introduce an expedited procedure which will apply to all arbitrations where the amount in dispute is below USD 2 million (referred to as “small cases”). In addition, parties may agree to the expedited procedure on an opt-in basis irrespective of the amount in dispute.

The expedited procedure is covered by Art. 30 of the ICC Rules and Appendix VI: Expedited Procedure Rules, which reflect the rules adopted by other international arbitration institutions such as the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), the Swiss Chambers’ Arbitration Institution (SCAI), the London Court of International Arbitration (LCIA), and the Singapore International Arbitration Centre (SIAC).

Pursuant to the newly adopted Art. 30 of the ICC Rules, the expedited procedure will not apply if:

• The arbitration agreement was concluded before the expedited procedure came into force, i.e. before 1 March 2017
• The parties have agreed to opt out of the expedited procedure, or
• Upon the request of a party before the constitution of the arbitral tribunal or on its own motion, the ICC Court determines that it is inappropriate in the circumstances of the case to apply the expedited procedure.

While introducing the expedited procedure, new wording for arbitration clauses was promulgated reflecting the parties’ desire to allow or exclude the use of the expedited procedure. Importantly, early in the parties’ dealings, for example when drafting a cooperation agreement, the parties should consider the consequences of following the expedited procedure for a potential dispute that may arise between them. Pursuant to the ICC Rules, if the parties wish to exclude the expedited procedure for small cases, they must expressly opt out by adding the following wording to the arbitration clause: “The Expedited Procedure Provisions shall not apply.”¹

Under the expedited procedure, the dispute will be submitted to a sole arbitrator, irrespective of any contrary provision of the arbitration agreement. This issue is not further addressed by the ICC Rules, but other international arbitration institutions as the Swiss Chambers have developed relevant practices and rules in this respect. Thus under Art. 42.2(c) of the Swiss Rules on International Arbitration, the institution should invite the parties to modify their agreement calling for three arbitrators and refer their case instead to a sole arbitrator, but if the parties do not change their view, the dispute will be resolved by three arbitrators under the expedited rules.²

The ICC Rules provide that the parties will have an opportunity to appoint a sole arbitrator within the time limit set by the ICC Secretariat. The sole arbitrator will not prepare terms of reference (as referred to in Art. 23 of the ICC Rules).

In addition, the parties will not be able to submit any claims after the constitution of the arbitral tribunal, unless the court, after examining the nature of the claim, the stage of the proceedings and the time and cost efficiency, allows the party to present its claim.

Under the expedited procedure, the time limit for the arbitral tribunal to render its final award is six months. This period begins to run from the date of the case management conference, which should be held within 15 days after the case file is transferred to the arbitration tribunal. Extensions of this period should be granted only in limited and justified circumstances. (Under the regular procedure, the arbitral tribunal has 6 months to render an award after the terms of references have been approved.)

In the expedited procedure, the arbitral tribunal’s powers are strengthened. The tribunal has the discretion to adopt such procedural measures as it considers appropriate. In particular, after consultation with the parties, the tribunal may decide not to allow requests for document production or to limit the scope of written submissions and written witness testimony (App. VI, Art. 3(4)). Further, after consulting the parties, the arbitral tribunal may decide the dispute solely on the basis of the documents submitted by the parties, with no hearing and no examination of witnesses or experts. If the parties and the arbitrator decide that a hearing should be held, it may be conducted by “smart” means such as a videoconference or teleconference.

The costs of the expedited procedure are to be determined on the basis of a new cost schedule, which should reduce the costs in expedited arbitration proceedings.

Further amendments to the ICC Rules

Further changes are aimed at enhancing the efficiency of non-expedited proceedings and ensuring the full transparency of arbitration proceedings.

First, the time for approval of the terms of reference has been shortened from two months to one month in order to increase the time and cost efficiency of the first stage of arbitration (Art. 23(2) of the ICC Rules).

Second, the ICC Rules have been amended to allow the arbitral tribunal to present reasons for its decisions, including decisions relating to appointment, confirmation, challenge or replacement of arbitrators. Previously, under Art. 11(4), the tribunal could not communicate to the parties the reasons behind such decisions. It was the only provision of the ICC Rules directly prohibiting the communication of reasoning to the parties. With regard to the issue of challenges to arbitrators, divulging the reasoning should help the arbitration community better understand issues related to the independence of arbitrators and the basis for their removal.

Marta Kozłowska, Dispute Resolution & Arbitration practice, Wardyński & Partners