The 1998 ICC Rules maintain the basic features that have made the ICC business arbitration system a success story since its very inception in 1923. Such features include the universality and flexibility of the ICC Arbitration Rules, which permit the administration of arbitral cases in any country or language and against the backdrop of any national legal system or tradition, and the central role played by the International Court of Arbitration of the International Chamber of Commerce (the 'ICC Court') and its Secretariat in administering arbitrations under the ICC Arbitration Rules with the objective of creating conditions permitting arbitral proceedings to develop and the ensuing awards to be made in agreement with high standards of excellence.

Innovations introduced by the 1998 ICC Rules may be classified under two broad categories. The first one refers to innovations primarily aimed at rendering the operations of the ICC Court and of its Secretariat more expeditious, transparent and efficient by, among other things, reducing as much as possible unnecessary delays; and at introducing a certain degree of discipline in the conduct by arbitrators of arbitral proceedings under the ICC Arbitration Rules. The second category canvasses innovations aimed at filling lacunae in the ICC Arbitration Rules in light of the experience gained and the practice developed by the ICC Court and its Secretariat since the last major overhaul of the ICC Arbitration Rules some twenty years ago and of developments in comparative arbitration law over that period. This presentation will focus on such innovations insofar as they affect the functions of the ICC Court's Secretariat (the 'Secretariat'). In this respect, it will be useful briefly to review the functions of the Secretariat and to indicate the ways in which the 1998 ICC Rules affect the Secretariat's role.

Since such role is primarily to assist the ICC Court in the performance of its functions, which have not been qualitatively modified under the 1998 ICC Rules, the logical conclusion is that the role played by the Secretariat under the current Rules has remained fundamentally the same under the 1998 ICC Rules. However, under the new Rules, the ICC Court is vested with additional powers, a matter that also affects the functions of the Secretariat. In this respect, one should bear in mind that each time the ICC Court has to take a decision in the exercise of its powers under the ICC Arbitration Rules, it does so on the basis of an agenda prepared by the Secretariat, which provides the ICC Court with the legal and factual context of the decision. Often, such agendas include recommendations as to the decision to be taken or the course of action to be adopted by the ICC Court in connection with the issues at stake. Inter alia, such agendas have dealt traditionally with the prima, facie existence of an arbitration agreement referring to ICC arbitration, the confirmation or appointment of arbitrators, the determination of the advances to cover arbitration costs, the confirmation or fixation of the place of arbitration, the challenge or replacement of arbitrators, the approval of Terms of Reference, the determination of the costs of the arbitration, and the approval of awards subject to the scrutiny of the ICC Court. Under the 1998 ICC Rules, in view of new powers vested in the ICC Court, such Secretariat's agendas will also have to deal with additional issues such as, for example, the appointment of arbitrators by the ICC Court in the case of multiple party claimants or defendants when the dispute is to be referred to three arbitrators (Art. 10, 1998 ICC Rules), truncated tribunal situations (Art. 12 (5), 1998 ICC Rules) or situations in which the correction or the interpretation of an award is at stake (Art. 29, 1998 ICC Rules). Consequently, the Secretariat, following on the trail of the ICC Court, will see its duties expanded under the 1998 ICC Rules proportionately to the ICC Court needs to deal with new issues raised by these new provisions.

The Secretariat also provides the interface between the Arbitral Tribunal and the parties to an ICC arbitration, on the one hand, and the ICC Court on the other. The ICC Court, as explicitly set forth in the 1998 ICC Rules (Art. 1 (2)), does not itself settle disputes. Its main function is to ensure the application of the ICC Arbitration Rules, with the assistance of its Secretariat. As a result, the parties to an ICC arbitration are not heard by the ICC Court, nor do arbitral proceedings take place before the ICC Court. Nevertheless, the Secretariat is, from the beginning of the case, in direct contact with the parties, the arbitrators and the National Committees of the International Chamber of Commerce. In general terms, the Secretariat is a source of information for parties and arbitrators in respect of matters related to the understanding of the ICC Arbitration Rules and the way they operate. It does so either through direct exchanges with the parties or the arbitrators, or through notes and other documents issued by the Secretariat with the approval of the ICC Court for the information of the parties and the arbitrators or as necessary for the proper conduct of arbitral proceedings (Art. 15(2) of Appendix II to the 1998 ICC Rules).

In the first place, the arbitration request is directly filed with the Secretariat by the Claimant. The Secretariat is always available, without compromising its strict neutrality, to explain to prospective claimants the requirements, both formal and financial, to be met upon filing an arbitration request. Should any of such requirements not be met (e.g., the payment of an advance on costs has not been made or the request is not accompanied by the required number of copies), the Secretariat's personnel will draw the attention of the relevant party for it to comply with all requirements. The 1998 ICC Rules now make it explicit that, should a claimant fail to submit the required number of copies (one for each defendant, one for each member of the arbitral panel, and one for the Secretariat) (Art. 3 (1)) or to make the initial payment to cover administrative costs (US$ 2500 as from 1 January 1998), the Secretariat may fix a time-limit within which the Claimant must make such payment, failing which the file shall be closed without prejudice (Art. 4 (4)). It is also important to note that under the 1998 ICC Rules, arbitration requests must be filed directly with the ICC Secretariat in

Paris; under the current Rules (Art. 3 (1)), it would also be possible to initiate an ICC arbitration by submitting the request to the National Committee in the country of the Claimant for its transmission to the Secretariat. However, since this path was in practice rarely utilized and could compromise the confidentiality of arbitral proceedings, it is no longer contemplated in the 1998 ICC Rules. Once the requirements regarding payment and documents have been met, the Secretariat will send a copy of the arbitration request and of the documents annexed thereto to the Respondent for his answer.

At this early stage of the proceedings, a number of important issues may be raised which will affect the setting in motion of the arbitration, i.e. the constitution of the Arbitral Tribunal and the transmission of the file to the arbitrators for them to begin performing their functions.

One of the requirements relating to the setting in motion of arbitral proceedings is the appointment of arbitrators by the ICC Court or the confirmation by the ICC Court of arbitrators nominated by the parties or through some other mechanism agreed by the parties or applicable under the ICC Rules. Under the ICC arbitration system, all panel members, including party-nominated arbitrators, must be independent from all parties involved in the arbitration, including the party that has nominated them. For that reason, under the current Rules, all nominations of arbitrators must be submitted to the consideration of the ICC Court in one of its sessions for it to decide if the proposed arbitrator satisfies the independence requirements imposed by the ICC Rules. Under the 1998 ICC Rules (Art. 9 (2)), the Secretary General may confirm arbitrators, co-arbitrators and chairmen provided they have filed a statement of independence without qualifications or a qualified statement of independence that has not given rise to objections from the other party or parties to the arbitration. This provision is aimed at saving time, since under the new Rules it is no longer required to wait for a session of the ICC Court to confirm arbitrators whose independence is not subject to doubts or objections. Should the Secretary General consider-even in such cases-that the relevant arbitrator or arbitrators should not be confirmed, it will submit the matter to the ICC Court for decision.

Another important preliminary requirement to be met prior to the setting in motion of arbitral proceedings under the current Rules is the payment to the ICC of an advance on costs to cover the arbitrators' fees, their expenses and the administrative costs for the handling of the arbitration by the ICC Court and the Secretariat. On the basis of the claims and counterclaims of the parties, the ICC Court will fix a global advance (subject to readjustment) that would cover such costs throughout the arbitration. Prior to the setting in motion of the arbitration, one-half of such global advance will have to be paid in equal shares by the parties to the arbitration. Should one of the parties fail to pay its share, the other party is entitled to substitute for such payment. In practice, it is by no means unusual to see a respondent applying for an extension of time for making such payment. Should such party fail to pay its share, it would still be necessary to grant additional time for the Claimant to make the payment. The current system gives rise to a number of delays in view of the need of having to wait for a Court session to have the global advance determined and communicated to the parties and to give them sufficient time to make such payments.

Under the 1998 ICC Rules (Art. 30 (1)), once the arbitration request has been received at the Secretariat, the Secretary General may require the Claimant to pay a provisional advance to cover just the costs expected to be incurred until the Terms of Reference have been drawn up. As set forth in Article 1 (2) of Appendix III of the 1998 ICC Rules, such provisional advance shall normally not exceed the aggregate of the reimbursable expenses of the Arbitral Tribunal incurred in relation to the drafting of the Terms of Reference and the minimum of the fees (both administrative and arbitrators' fees) calculated on the basis of the amount of the claim and applicable according to the scale attached to such Appendix.

After such payment has been made, the file will be sent to the Arbitral Tribunal for it to start performing its functions. It won't be necessary, as it is under the current Rules, to wait for a Court decision fixing a global advance on costs or to await payment by the parties of their respective share in such advance or for one party to pay for a full one-half thereof. Under the 1998 ICC Rules, the global advance is normally fixed by the Court at a later stage, once it has a clearer view of the amounts involved in the dispute, which normally-but not necessarily-happens when the Terms of Reference have been drawn up. In any case, Art. 30 (2) of the 1998 ICC Rules establishes that the ICC Court will fix it 'as soon as possible' (which means that the ICC Court is entitled to determine the global advance even before the Terms of Reference stage if it concludes that it has sufficient information and there is a need to do so). Of course, the global advance may be readjusted when deemed appropriate by the ICC Court. Once the ICC Court has fixed the global advance, it is payable in equal shares by the parties, and any of them is free to pay the global advance in its entirety should the other party fail to pay its share. The provisional advance paid by the Claimant shall be considered as a partial payment of its share of the global advance. In case of non-payment, the Secretary General, after consultation with the Arbitral Tribunal, may direct the latter to suspend its work and set a time-limit of not less than 15 days for such payment to be made, at the expiry of which the relevant claims or counterclaims will be considered as withdrawn (Art. 30 (4) of the 1998 ICC Rules; Art. 1 (3) of Appendix III).

Under the 1998 ICC Rules, if a party raises one or more pleas concerning the existence, validity or scope of the arbitration agreement, or if the Respondent has not fixed an answer to the arbitration request, the ICC Court may decide that the arbitration shall proceed if the ICC Court is prima facie satisfied that an arbitration agreement under the Rules of Arbitration of the ICC may exist, in which case any decision as to the jurisdiction of the Arbitral Tribunal will be taken by the latter (Art. 6 (2)). Under the current Rules, this issue is dealt with in Art. 7. Under the current Rules, however, if the Secretariat finds that such prima facie agreement does not exist, it draws the attention of the Claimant to the provisions laid down in Art. 7, in which case the Claimant is entitled to have a decision on this matter taken by the ICC Court itself. This procedure is provided in Article 12 of Appendix II of the current Rules. In order to reduce delays, the 1998 ICC Rules and Appendices do not entrust the Secretariat with such task; accordingly, any issues under the new Art. 6 (2) shall be directly and immediately

submitted to the ICC Court, which alone shall-albeit on the basis of an agenda prepared by the Secretariat-make decisions or determinations in that respect.

Finally, the Secretariat plays an active role in connection with the constitution of the Arbitral Tribunal. For example, if the Court is called upon to appoint arbitrators under the ICC Arbitration Rules and where required under such Rules, it will be the responsibility of the Secretariat to get in touch with the relevant National Committee of the ICC to elicit and receive proposals of prospective nominees to be appointed by the Court. Also, the Secretariat shall receive the statements of independence of prospective arbitrators, and, should there be any facts or circumstances on the basis of which an arbitrator's independence may be subject to questioning in the eyes of the parties, the Secretariat shall provide such information in writing to the parties and fix a time-limit for any comments they may wish to make (Art. 7 (2) of the 1998 ICC Rules). Where an arbitrator is challenged for an alleged Jack of independence or otherwise once the arbitral proceedings have been set in motion, the ICC Court will decide on such challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the Arbitral Tribunal to comment in writing within a suitable period. An innovation introduced in this respect by the 1998 ICC Rules is that such comments shall be communicated to the parties and the arbitrators in order to make the challenge procedures totally transparent to all the parties and arbitrators involved in the arbitral proceedings (Art. 11 (3)). Proceedings commenced by the ICC Court for the removal of arbitrators prevented de jure or de facto from fulfilling their functions, or because they do not perform such functions in accordance with the Rules or within the prescribed time-limits, will be equally transparent, since, according to Art. 12 (3) of the 1998 ICC Rules, all written comments from the arbitrator concerned, the parties or other members of the Arbitral Tribunal on the basis of which the ICC Court takes its decision shall be communicated to the arbitrators and the other parties.

Since its inception in 1923, the ICC arbitration system has dealt with approximately 9500 cases (about 3500 of them in the last ten years). Recent statistics and projections indicate that about 430-450 new arbitration requests are filed with the Secretariat each year, and that a growing percentage of such cases involve parties from Asia, Eastern Europe, Latin America and North America. Not only is the workload of the ICC Court and its Secretariat increasing, but it is also dealing more than ever before with cases involving new players in the field of international business transactions coming from all corners of the world. The Secretariat is ready to continue assisting the ICC Court in meeting the new challenges posed by the unrelenting increase and diversification of the ICC arbitration system caseload. From 1 January 1998, it will do so within the improved context afforded by the new ICC Arbitration Rules.