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International commercial arbitration: the ICC revises its rules

by Luke Lofthouse on 28 Mar 2017

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Effective 1 March 2017, the International Chamber of Commerce (ICC) revised its international arbitration rules ("ICC Rules"). The ICC Rules will apply to any ICC arbitrations commenced on or after the effective date unless the parties have agreed to submit to the rules in force at the date of their arbitration agreement (ICC Rules, art 6(1)).

Deciding not to undertake a complete overhaul of its rules, the ICC instead opted for a more focused approach, the most noteworthy change being the introduction of an expedited procedure for claims of below US$2m. The following commentary summarises the latest changes and should be of use to anyone interested in international commercial arbitration.

The new expedited procedure - analysis and comparison

The ICC's decision to include a new expedited procedure for smaller claims brings it in line with other arbitral institutions that provide mechanisms for fast-track resolution of smaller claims.

The expedited procedure will apply automatically to cases where the amount in dispute is below US$2m. By comparison, other institutions apply expedited procedure rules to disputes greater than US$2m: the Singapore International Arbitration Centre's threshold is US$4.28m, for example. Parties subject to the new procedure will be informed upon the ICC's receipt of the answer to the request for arbitration (the Answer), or upon the expiry of the deadline for filing the Answer.

Further, the new procedural rules are mandatory insofar as a party may not unilaterally decide to opt-out - however, the parties are allowed to jointly agree to opt-out of the new provisions - ICC Rules art 30(3)(b). This is consistent with the positions adopted by the ICDR, SCAI and CIETAC.

In relation to case management, under normal ICC proceedings, a case management conference is convened when the tribunal is drawing up the Terms of Reference. Under the new expedited proceedings, the case management conference must be convened within 15 days of the file being transmitted to the tribunal.

Moreover, under the new rules, there can only ever be a sole arbitrator, with the said arbitrator being afforded considerable discretion to manage the case as he or she sees fit. He or she can, for example, limit the parties' document production, the length and scope of expert evidence and witness submissions, and even decide the dispute solely on the documents in hand – with no hearing and no factual and/or expert evidence. This contrasts in part with the ICDR, SIAC, HKIAC, CIETAC and SCAI rules that allow a multiple-member tribunal to be appointed in an expedited case either by party agreement or decision of the institution.

When considering the award itself, there are a number of comparisons that can be made between the ICC's established procedure and the new expedited rules. Under ordinary ICC rules the award must generally be given within six months of the last signature of the Terms of Reference. Conversely, under the new rules, the award must be rendered within six months of the case management conference.

When compared against other institutions' expedited rules on awards, the time for rendering is usually calculated from the date of the tribunal being constituted or receiving the file (with the notable exception of the ICDR, which provides that the award must be made within 30 days of the closing hearing). Finally, the new ICC Rules require that any award made must be reasoned. This is distinct from most other expedited rules that allow for an award to be in summary form unless the parties have specifically agreed otherwise.

JAMS International's approach to expedited procedures

JAMS International's approach to expedited proceedings differs with the ICC's in several salient ways. Parties are not automatically subject to an expedited procedure when the aggregate amount in dispute meets a certain threshold. Indeed Article 22.1(a) of the JAMS International Arbitration Rules stipulates an amount in dispute of less than US$5m, at which point a party may then apply to the Administrator (prior to the full constitution of the tribunal) in writing for the arbitral proceedings to be conducted as such (expedited).

Conversely, the Rules also give the tribunal the scope and discretion to decide – like the ICC – the dispute in its entirely solely on the basis of documentary evidence only (Rule 22.3(b)). This contrasts again with Rule 22.3(a): enabling the tribunal to shorten any time limits at all under the entire applicable Arbitration Rules.

By comparison, as mentioned above, the ICC's expedited rules require a maximum of 15 days before the case management conference is to be convened; JAMS' expedited procedure therefore affords decision makers much latitude and flexibility where the shortening of time limits are concerned. Moreover, within the ICC's revised expedited rules, what the arbitral tribunal can do with regard to specific procedural measures aimed at accelerating proceedings is rather left to the imagination.

Contrastingly, the JAMS rules adopt a more codified position. For example, at rule 22.3(c):

"The Tribunal shall have the discretion to hold hearings or hear witnesses by remote means in order to avoid the expense and time of convening hearings in a single location."

Nevertheless, there are several correlations, with other – not just the ICC's – institutional approaches to expedited proceedings. For instance, like many other expedited rules, the JAMS International Arbitration Rules require any award to be rendered within six months of the tribunal's constitution – as opposed to (discussed in the above) six months post-case management conference under the ICC's new regime.

Practical approaches to take

The automatic application of the new expedited proceeding rules to ICC arbitration agreements may take some parties by surprise. It might, therefore, be advisable to consider whether an opt-out would be agreeable for all the parties: enabled through an express exclusion in the agreement prior to a dispute. If jointly opting out is not an option (this would usually crop up because a dispute has already arisen), the parties can request that the Court finds that ICC expedited proceedings no longer apply to the case.

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Topics: International Arbitration, ADR, Arbitration

Luke Lofthouse

Written by Luke Lofthouse