I. Introduction

It is in the nature of institutional arbitration that institutional arbitration rules provide the respective institution with a number of important powers they are required or may be called to exercise and on the basis of which certain decisions may be imposed both on the parties to the arbitration and on the arbitral tribunal. In view of the recent coming into effect on 1 January 1998 of the new ICC Arbitration Rules (hereinafter the 'ICC Rules'), it is predictable that the powers vested by the ICC Rules in the International Court of Arbitration (hereinafter the 'Court') and the underlying interaction between such powers and the rights and obligations of parties and arbitrators shall apply to arbitrations conducted under the ICC Rules during the next decade.

Some of such powers may be directly exercised in furtherance of the general case management function assigned to the Court under the ICC Rules. Among these are the powers of the Court to confirm arbitrators, to decide on challenges against arbitrators, to take the initiative to remove and replace arbitrators or authorize the arbitral tribunal to continue its work and to render the award with less than all of its members or to scrutinize awards. Others, equally addressed at securing the proper case management of the arbitration, however, come into play whenever any of the parties fails to participate in the procedure or the inaction or obstructive tactics of any party negatively affects the normal progression of arbitral proceedings towards their final culmination. Therefore, such powers are normally exercised subsidiarily, i.e., in absence of actions or determinations of the parties, and are in one way or another associated with the general principle, reflected through Article 6(3) of the ICC Rules, that the arbitration is to proceed notwithstanding any failure or refusal of any party to take part in the arbitration or any stage thereof. Among such powers, reference may be made to the appointment of arbitrators, the approval of terms of reference or the fixation of the place of arbitration.

The case management powers of the Court may also be classified as powers aimed at rendering the arbitration more expeditious and cost effective and powers meant to ensure that the proceedings shall be conducted in an impartial way and that they will culminate in a final and enforceable award. Though such classification has a certain descriptive value, it should not be understood as tracing a rigid dividing line between powers seeking to enhance the [Page56:] expeditiousness and cost effectiveness of an arbitration and those purporting to guarantee conditions of fairness and impartiality in the proceedings or related to the quality of the award. Rather, such powers should be viewed from the uniform perspective of the case management function of arbitral institutions, which is oriented in an undivided way towards procuring, within the limitations inherent in the merely administrative functions assigned to them, rapidity, cost efficiency and impartiality in the conduct of the proceedings and contributing to the effectiveness of the award, that is to say, towards enhancing the inherent quality of the arbitration and its procedure for ensuring the voluntary or compulsory compliance with their outcome. Thus, the exercise of any such powers normally simultaneously affects the efficiency and rapidity of the arbitration and impact on the fairness of the proceedings and the quality of the award or awards. In fact, one can speak of functions more directly (though not exclusively) concerned with the rapidity and cost efficiency of the proceedings and of functions primarily (but not exclusively) addressed at ensuring that the proceedings are conducted with impartiality and fairness or are oriented towards furthering the intrinsic excellence of the award.

For example, it is undeniable that proper institutional action as to the confirmation, appointment, challenge or replacement of arbitrators will on the one hand resolve issues that if not decided by the institution swiftly and properly would lead to procedural delays and adversarial tactics likely to stall the arbitration and on the other be beneficial to the quality of the proceedings and their outcome by favoring the presence in the arbitral tribunal of individuals with the ability, availability, independence and impartiality appropriate for conducting the arbitration and making the award. In its turn, to the extent that the proper exercise of such institutional powers carries the conviction with the parties that the arbitrators are reliable technically and as to their integrity, it will influence in a positive way the rapidity and swiftness of the arbitration and the effectiveness of its outcome since the parties may be expected to abide by or spontaneously enforce arbitral determinations even if not necessarily favoring positions adopted by any of them in the course of the arbitration.

It is with such caveats in mind that we intend to examine, from the perspective of the 1998 ICC arbitration rules, the different powers of the Court and its Secretariat respectively and primarily concerned with the rapidity and efficiency of ICC arbitral proceedings and with the fairness, impartiality and quality of such proceedings and their outcome.

As a preliminary remark, one should bear in mind that the ICC arbitration system, since its very inception, should probably be considered as the one vesting the arbitral institution with more controlling powers in the arbitral process and its outcome than any other and, from that standpoint, as the one providing the institution with the most far-reaching decisional powers binding on the parties and the arbitral panel regarding the conduct and outcome of the arbitration proceedings governed by its rules.

Nevertheless, such powers are strictly targeted to contributing to the general management of the case and are not intended to interfere or be exercised in a manner which would interfere with the freedom of the parties to fashion legal proceedings within the context permitted by the ICC Rules, nor with the rights and independence of judgement of arbitrators concerning, among other things, the conduct of the arbitration and the making of determinations or awards also within the context of the ICC Rules. As provided in Article 1(2) of the ICC Rules, the Court does not settle disputes. This same provision also establishes that the [Page57:] Court '… has the function of ensuring the application of these Rules'. However, beyond what would be '…necessary for the performance of its own administrative functions …', the Court has traditionally not interfered in the varying interpretations of arbitrators and parties regarding the application of the ICC Rules.1

Another introductory remark to be borne in mind when carrying out this exercise is that however extended the powers of the Court and its Secretariat may be, they are merely of an administrative nature and thus are not aimed to project their influence beyond the self-contained boundaries of the arbitration proceedings themselves. The institution is without jurisdictional powers that would prevent the parties from resorting to courts of law to have matters initially settled imperatively by a court of law in a different way if so permitted under the applicable law.

Finally, the exercise of such powers is premised upon a certain internal allocation of tasks within the arbitration institution in order to provide a more effective service to the users. It will be explained later how such allocation has been effected between the Court and its Secretariat.

It should be already noted, however, that an internal allocation of tasks exists within the Court itself. Articles 4 of Appendix I to the ICC Rules and 1(1) and 4 of their Appendix II provide that the Court meets in plenary and Committee sessions. Plenary sessions take place once a month. Committee sessions normally take place three times each month. Each Court's Committee consists of a Chairman (normally the Chairman of the Court, or if absent, one of the Court's Vice-Chairmen) and two other members of the Court (Art. 4(2) of Appendix II). Article 4(5)(a) of this latter Appendix provides that the Court will determine the decisions that may be taken by a Court Committee. In that respect, the Court has recently issued guidelines pursuant to which a Court Committee session may make any type of decision entrusted to the Court by the ICC Rules except for the approval of awards which raise particular problems or difficulties, and any decision regarding the challenge, recusation, replacement of an arbitrator or the authorization to an arbitral tribunal to render an award by less than all its members, all of which correspond exclusively to the plenary sessions of the Court.2 Also, the ICC Rules permit the acceleration of the Court's decision-making procedures when it would be warranted in view of the needs and expectations of the parties. In this connection, when the parties have agreed on fast-track arbitral proceedings, the different decisions that would normally be required to be taken in a Court session may be immediately made single-handedly by the Chairman of the Court, or in his absence, or otherwise at his request, by one of the Court's Vice-Chairmen, provided any such decision is reported to the Court at its next session (Article 1(3)).

II. Institutional powers primarily regarding expeditiousness

When reviewing institutional powers regarding the expeditious handling of the proceedings vested in the Court and its Secretariat, it should not be forgotten that rapidity is not an absolute principle and must be adapted to the needs of the specific arbitral proceedings at stake as well as to the basic and paramount [Page58:] principle that the expeditious handling of the proceedings should not be allowed to affect the parties' proper opportunity to present their case and exercise their right to be heard, or to affect fairness in the handling of the proceedings; the arbitral tribunal and the Court must have sufficient time to exercise their different functions. Also in this respect expeditiousness is subordinated to what may be characterized as the intrinsic quality of the proceedings in terms of fairness and the granting of a just decision. Such principle generally underlies the ICC arbitration system, and though only explicitly set out in Article 15(2) of the ICC Rules providing that arbitrators should act fairly and impartially and give the parties sufficient opportunity to be heard and therefore-addressed only to the arbitrators and not the institution -it may be considered as expressing a principle embedded in the ICC Rules and belonging to their underlying spirit, which also affects the exercise of powers vested by the ICC Rules in the Court and its Secretariat, so that both should exercise such powers in a way permitting and facilitating the endeavors of an arbitral tribunal acting under the ICC Rules to carry out its duties in a way consistent with the principles of fairness and impartiality and with the need of allowing the parties to have sufficient opportunity to be heard arising out of Article 15(2) of the ICC Rules.

The Court or its Secretariat take or may take a number of binding decisions affecting the parties and the arbitrators at an early stage of the proceedings for the setting in motion of the arbitration, that is to say, for leading such proceedings to the point where the file shall be ready to be sent to an already -constituted arbitral panel for it to commence to perform its duties. From this perspective, one should consider the Court's and its Secretariat's respective roles in the confirmation of arbitrators, the determination of the number of arbitrators, the place of arbitration, the advance on costs and the arbitral fees and expenses of the arbitral tribunal as well as the fixation of the administrative costs payable for the services of the Court and its Secretariat. It should be noted that the ICC Rules respond to the principle that institutional powers related to the setting in motion of an arbitration may be better exercised on the basis of a certain degree of decentralization or repartition of tasks regarding this aspect of the proceedings between the Court and its Secretariat and within the context of the latter's role of assisting the Court in its work (Art.2, Appendix I). In this like other areas of human life, division of labor improves efficiency and contributes to the saving of time.

For those reasons, the ICC Rules have notably expanded the powers of the Secretary General of the Court regarding the setting in motion of the arbitration with the ultimate purpose of favouring the expeditiousness of arbitral proceedings by accelerating the transmission of the file to the arbitral tribunal.

In the first place, at the inception of the arbitration, the Secretariat of the Court has to make sure that the claimant has made the US$ 2 500 advance payment on the administrative expenses (Appendix III, Article 1(1)) and submitted one copy of the arbitration request for each respondent, arbitrator and the Court's Secretariat, also prior to transmitting the request to the respondent. Should any of such requirements not be satisfied, in his first communication to the claimant acknowledging receipt of the arbitration request, the Court's Secretary General fixes a time limit for the claimant to comply, upon the expiry of which the file shall be closed without prejudice to the right of the claimant to submit the same claims at a later date in another request (Art. 4(4)). The Secretariat's practice under the ICC Rules is to fix a ten-day period to cure any such omission in the letter acknowledging receipt of the arbitration request. [Page59:]

Secondly, the Court's Secretary General has been vested with special powers relating to the confirmation of arbitrators and the fixation of a provisional advance covering arbitration costs. Under the previous text of the ICC Rules, any powers related to the confirmation of arbitrators and the fixation of cost advances lay exclusively with the Court and thus required awaiting a Court session where decisions on such matters were needed. Also with the purpose of accelerating the transmission of the file to the arbitral panel, the ICC Rules make it possible for the Secretary General of the Court to take such decisions at an earlier stage of the arbitral proceedings than was the case under the previous text of the ICC arbitration rules according to which only the Court could adopt them.

Under Article 9 (2) of the ICC Rules, the Court's Secretary General confirms arbitrators proposed by a party or pursuant to proceedings agreed upon by the parties if they submit a statement of independence without qualifications or, if qualified, it has not given rise to objections of any of the parties as to the independence of the prospective arbitrator. Thus, in the hypothesis of a three-member arbitral tribunal, if the claimant nominates its arbitrator in the arbitration request and before answering it the respondent proposes his, and both such arbitrators and the chairman nominated by the parties or pursuant to the parties' agreements file unqualified statements of independence or qualified statements not giving rise to objections, one can expect to see the arbitral tribunal constituted through the action of the Secretary General of the Court within a reasonable delay after the filing of the arbitration request and normally well before the expiration of the thirty-day period to answer the arbitration request or the longer period that may have been granted by the Secretariat to that effect. If one bears in mind that according to the 1997 statistics of the Court, only 96 arbitrators filed qualified statements of independence and that only a fraction of those gave rise to objections, and that in that very same year 452 new ICC arbitration cases were filed with the Court's Secretariat,3 one will realize that in a majority of cases the Secretary General is called upon to exercise his functions to confirm arbitrators with the beneficial effect that the setting in motion of the arbitration is thereby considerably accelerated.

Consistently with the principles of fairness underlying the ICC Rules referred to above, if one of the party arbitrators has been confirmed or appointed by the Court, the Secretary General of the Court will see that the other party arbitrator's confirmation be considered and decided by the Court even when such arbitrator has filed an unqualified statement of independence or, even if qualified, if it has not given rise to objections. Accordingly, also in this respect, the parties receive equal treatment. The Secretary General of the Court has not otherwise resorted so far to his right under Article 9(2) of the ICC Rules to submit the confirmation of arbitrators-even when their statements of independence are unqualified or if qualified not subject to objections-to the decision of the Court, for instance because he would have doubts as to the ability or availability of the prospective arbitrator (see Article 9(1)).

Under Article 30(1) of the ICC Rules, the Secretary General of the Court may, after receipt of the arbitration request, request the payment by the claimant of a provisional advance to cover the costs of the arbitration until the terms of reference have been drawn up. Thus, it is no longer necessary-as it was the case with the previous text of the ICC arbitration rules-to await the answer to the request to take care of the economic aspects conditioning the setting in motion of the arbitration. [Page60:]

In practice, the Secretary General of the Court, on the premise that there is no scenario in which a reasonable estimate of the provisional advance may not be made, has opted for always fixing it and requesting its payment, even in situations where the existence of an ICC arbitration agreement may be deemed to be doubtful, the number of arbitrators is not determined in the arbitration clause or through an ulterior agreement of the parties, the arbitration request is unquantified or the place of arbitration has not been agreed or fixed. The Court's Secretary General has also occasionally increased or decreased the provisional advance originally fixed whenever additional information (for instance, the agreement of the parties on having a sole arbitrator rather than three) has been called to his attention to that effect. Finally, in most cases not much time will lapse before the Court shall fix the advance on costs for the entire arbitration (under the ICC Rules, the Court is to provide for such advance '... as soon as practicable') and therefore will be able at that stage to make any corrections in the amount to be advanced deemed necessary.

The ICC Rules provide that when fixing the provisional advance, the Secretary General of the Court shall normally not exceed a maximum amount obtained by adding together the administrative expenses that would result from applying to the amounts claimed the fee scale in Article 4(A) of Appendix III of the ICC Rules, the minimum of the fees arising from the application of the scale in Article 4(B) of Appendix III of the ICC Rules, also based on the amount of the claims and the expected reimbursable expenses of the Arbitral Tribunal incurred with respect to the drafting of the terms of reference (Art. 1(2) Appendix III). Thus far, the Court's Secretary General has not judged that there have been special circumstances indicating that it would be appropriate for him to fix the provisional advance above such ceiling. Also consistently with a prudent application of the ICC Rules and an attitude conducive to taking into account the expectations of the parties, when determining the provisional advance the Secretary General of the Court normally fixes the component corresponding to administrative expenses and arbitral fees at, respectively, 50 % of the amount of the administrative fees resulting from the application of the scale set out in Article 4(A) of Appendix III and 50 % of the minimum applicable under the scale in Article 4(B) of Appendix III in respect of arbitral fees. However, in certain cases the Secretary General of the Court may decide to fix the arbitral fees component of the provisional advance at a level close to the minimum of arbitral fees provided in the arbitral fee scale for the claimed amounts. This may happen, for example, in a situation in which the claimant has requested the nomination of only one arbitrator when the amount in dispute or the complexity or other aspects of the case would require, according to the usual practice of the Court, the constitution of a three-member arbitral tribunal.

In case of unquantified claims, according to the Court's guidelines in such respect, the Court's Secretariat would normally consider that the advance on costs for the entire arbitration would be US$ 120 000 in case of an arbitration involving a three-member arbitral panel and US$ 60 000 in the case of an arbitration involving a sole arbitrator. In such circumstances, the provisional advance would be in the range of US$ 30 000 for a three-member panel and of US$ 18 000 for a sole arbitrator. However, the ICC Rules give ample discretion to the Secretary General of the Court to fix the provisional advance when the claims are not quantified, and the Secretary General has flexibility to depart from such guidelines if the circumstances would so require, for example, inter alia where the claims are partially unquantified (Art. 1(2), Appendix III). [Page61:]

The powers of the Court and its Secretariat concerning the fixation, monitoring, or extension of delays may also be viewed from this perspective. The ICC Rules provide that the terms of reference have to be drawn up within a period of two months after the date the file was transmitted to the arbitral tribunal (Art. 18(2)). The Secretariat of the Court follows up closely the progress of the work of the arbitral tribunal in this respect and brings the case to the attention of the Court if any extension of this time period would be appropriate. It is for the Court to decide on its own initiative and on the basis of information supplied by its Secretariat, or pursuant to a reasoned request from the arbitral tribunal, whether it would be necessary or not to extend such time period.

According to Art. 24(1) of the ICC Rules, the arbitral tribunal must render its final award within a period of six months after the date of the last signature by the arbitral tribunal of the terms of reference or, should one of the parties fail to sign this document, after the date of the notification to the arbitral tribunal by the Court's Secretariat of the approval of the terms of reference by the Court. Unlike the previous text of the ICC arbitration rules, under the ICC Rules neither the coming into effect of the terms of reference nor the beginning of the post-terms of reference stage, nor the date from which the six-month period will start running, depends on the payment of cost advances to cover arbitral and administrative costs. Also on the basis of information conveyed by the Secretariat to the Court in the course of its activity regarding the monitoring of the case, the Court may on its own initiative or pursuant to a reasoned request from the arbitral tribunal decide whether it would be appropriate or not to extend this time limit.

Despite the fact that if the parties so agree these time periods may also be extended or shortened, it remains that the ICC arbitration system is probably the only truly international one that provides for limitations introducing time constraints on the activity of the parties and the arbitrators. Other such constraints derive from the requirement under the ICC Rules that when drawing up the terms of reference or shortly thereafter the arbitral tribunal shall establish in a separate document a provisional timetable that it intends to follow in the conduct of the arbitration that it will communicate to the parties and the Court (Art. 18(4)). Also, from the fact that when the arbitral tribunal declares the proceedings closed because it deems that all the necessary evidence has been produced and the parties have been sufficiently heard, it must indicate to the Secretariat of the Court the approximate date by which the draft award shall be submitted to the Court for approval (Art. 22). Both provisions are not only aimed at inducing the arbitral tribunal to organize rationally and efficiently its work but also at facilitating the monitoring by the Court and its Secretariat of the utilization of time by the panel bearing in mind the complexity and other difficulties related to the case at stake and eventually, on the basis of such monitoring, to permit the Court to decide whether or not to provide for the extension of the period for rendering the award.

The monitoring powers of the Court regarding the temporal aspects of ICC arbitrations are further enhanced through Article 32(2) of the ICC Rules empowering the Court, on its own initiative, to extend any time limit in such rules shortened by the parties if the Court decides that it is necessary to do so in order for the arbitral tribunal or the Court to fulfil their responsibilities in accordance with the ICC Rules. This important feature emphasizes the central and pro-active role played by the Court in the monitoring of the arbitration and in ensuring the fairness and effectiveness of the proceedings even when the [Page62:] parties, for lack of experience or otherwise attempt to expedite them in a way that may jeopardize their opportunity to be heard, deprive the arbitrators of sufficient time to hear and decide the case or negatively affect the carrying out of the Court's functions on the proper fulfilment of which largely depend the quality and efficacy of the arbitral proceedings and the ensuing award.

The Court's Secretariat also plays an important role in the fixation and administration of time limits. As indicated above, the Secretariat of the Court provides for the time limits to cure any omission regarding the payment of the filing fee or the supply of copies that must accompany the arbitration request (Art. 4(4)). The Court's Secretariat is entitled to grant the respondent an extension for filing its answer to the request provided that the respondent has applied for such extension and the application contains, as the case may be, the respondent's comments on the number of arbitrators and their choice on the nomination of an arbitrator (Art. 6(2)). The Court's Secretariat is also authorized to grant extensions of the period for claimant to answer any counterclaims introduced by defendant (Art. 5(6)). It is also the Secretariat of the Court that fixes the time limit for the parties to comment on facts or circumstances which may call into question the arbitrator's independence in the eyes of the parties (Art. 7(2)). The Court's Secretariat may grant additional time for the parties to agree on the nomination of a sole arbitrator if the parties have agreed that the dispute shall be settled by a sole arbitrator (Art. 8(2)). The Court's Secretariat is also entrusted with the responsibility of granting the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal the opportunity to comment in writing on any challenge introduced against such arbitrator and to fix 'a suitable time' to submit such comments. It is also the task of the Court's Secretariat to ensure that such comments be communicated to the parties and the arbitrators (Art. 11(2)). Similarly, when the Court considers replacing an arbitrator, the Secretariat of the Court must afford the parties and any other members of the arbitral tribunal sufficient opportunity to comment in writing, within a suitable period of time also fixed by the Court's Secretariat, on the circumstances being considered which might lead to such replacement (Art. 12(3)). Such time period has normally been fifteen days. It is also to be expected that the time limit for the remaining arbitrators and the parties to express their views when the Court is considering to allow such arbitrators to continue the arbitration in a truncated tribunal scenario (Article 12(5)) will be fixed by the Court's Secretariat.

The Secretariat of the Court also fixes or extends time limits in situations where the ICC Rules say nothing about who is to fix this or that delay. For example, it is the Court's Secretariat that fixes the time limits for the payment of the provisional advance on costs on which the transmission of the file to the arbitral tribunal depends (Art. 13) (the Court's Secretariat normally provides for a time limit of thirty days to that effect) and the time limit for paying the advance on costs corresponding to the entire arbitration (Art. 30 (2)), such advance being normally determined by the Court when the respondent has answered the arbitration request, or when the time limit for doing so has expired and the file is transmitted to the arbitral tribunal for it to start drafting the terms of reference. The Court's Secretariat would normally grant a period of sixty days for the parties to make such payment, since it is estimated that by the expiration of such period the terms of reference shall have been finalized and therefore the provisional advance already paid by a claimant would be insufficient to cover additional work of the arbitral tribunal beyond such point. Nevertheless, the Secretariat of the Court may be expected to fix a shorter time for making such [Page63:] payment (possibly thirty days) when the circumstances indicate that otherwise the provisional advance would be insufficient to cover the arbitration expenses through the finalization of the terms of reference (e.g., an unexpectedly substantial counterclaim was introduced by the respondent) or when the provisional advance has not been paid.

An important function vested by the ICC Rules in the Secretary General of the Court is to set a time limit of not less than fifteen days to pay for an advance on costs that has not been complied with. If such payment is not made within the required time-span, the '...relevant claims or counterclaims shall be considered as withdrawn' (Art. 30(4)). Since this provision does not make any particular differentiation, it may be applied by the Court's Secretary General in respect of both provisional advances fixed by him and advances fixed by the Court for the entire arbitration. In the first case, the consultation with the arbitral tribunal prior to fixing such delay will obviously not apply, since such tribunal will not yet have been constituted, or if so, the file shall not yet have been transmitted to the tribunal. When this provision applies to the advance for the entire arbitration, the claims or counterclaims that will be considered withdrawn if payment is not made within the time-span fixed by the Secretary General of the Court are those of the party having failed to pay its share of the advance. Article 30(4) also provides that a party wishing to object to the measure adopted by the Court's Secretary General must, within the time period fixed by the latter to make the payment, request that the matter be decided by the Court. In any case, as such provision also indicates, any ensuing withdrawal of claims or counterclaims shall not prevent such party from re-introducing them at a later date in another proceeding.

However, it is for the Court to fix the time period for the parties to object to the appointment of a sole arbitrator or chairman from a country where there is no national committee of the ICC (Art. 9(4)) or to comment on whether the parties would agree on having a sole arbitrator or chairman of the nationality of any of the parties (Art. 9(5)). It will be also for the Court to determine the time limit within which an arbitral tribunal is to submit to the Court its draft decision regarding the correction or interpretation of an award if the Court deems that the thirty-day period provided in the ICC Rules is not appropriate (Art. 29(2)).

As indicated above, any decision by the Court or its Secretariat regarding the confirmation, appointment, replacement or challenge of arbitrators, though having an impact on the pace or celerity of the proceedings (since the very fact that such matters are decided swiftly and efficiently by the institution without resorting to state courts and within the self-contained sphere of the arbitration is by itself conducive to saving time and money and to reducing future obstructions in the proceedings or in the enforcement of the award by eliciting the confidence of the parties as to the way the arbitration proceedings are being conducted), may be seen as primarily aimed at ensuring the quality (for instance, by dispelling doubts that may exist as to the independence or impartiality of arbitrators) of the proceedings, not only in terms of the way they are handled but also as to the intrinsic quality of the award.

Nevertheless, there are certain decisions that the Court may take on its own initiative in connection with the constitution of the arbitral tribunal, the replacement of the arbitrator or the mission of the arbitrators that may indeed be imposed on parties and arbitrators and that affect the celerity and normal progress of the proceedings at least as much as the intrinsic procedural and substantive legal aspects of an ICC arbitration. [Page64:]

The first such decision is the appointment by the Court of the three members of an arbitral panel when the parties' stipulations provide for a tribunal composed of three arbitrators and there are multiple parties involved in the dispute. Article 10 of the ICC Rules-which however may be contracted out by the parties (Art. 7(6))-enables the Court to appoint the three members of the arbitral tribunal in such situation if it comes to the conclusion that-as it happened in the famous Dutco case decided by the French Cour de Cassation4-permitting the single-party side of the dispute to choose its party arbitrator while imposing one party arbitrator on the multiple-party side when such side would not agree on having one or the same arbitrator appointed on its behalf may infringe mandatory legal rules or principles applying, for instance, at the place of the arbitration, which could lead to the non-enforcement or the setting aside of the award. The Court is further entitled pursuant to this provision not to follow the ICC Rules or the original mechanisms provided for the selection and appointment of arbitrators in order to appoint the three members of the panel. The Court may choose any person to act as arbitrator whom it regards as suitable. It is clear that in such scenario the Court is vested with exceptional powers to make such appointment without having to go, for instance, through the process of requesting and receiving proposals of prospective arbitrators' names from national committees of the ICC.

The Court may also replace arbitrators in case of death, upon acceptance by the Court of an arbitrator's resignation, upon acceptance by the Court of a challenge or upon the request of all the parties (Art. 12(1)). On the Court's own initiative, an arbitrator may be also replaced by the Court when it decides that such arbitrator is prevented de jure or de facto from fulfilling his functions, or that he is not fulfilling his functions in accordance with the ICC Rules or the prescribed timelimits (Art. 12(2)). In such instances, though the final decision is clearly in the hands of the Court with binding effect within the context of the arbitration on the parties and arbitrators, it may only be taken after the arbitrator concerned, the parties and any other member of the arbitral tribunal have had an opportunity to comment in writing within a suitable period of time and after the communication of such comments to all parties and arbitrators (Art. 12(3)). In 1997, the Court considered only four replacements, of which three were ordered.5 In the period from 1 January to 31 August 1998, only one arbitrator was replaced by the Court.

An important feature of the current ICC Rules which did not exist in previous versions of the ICC arbitration rules is that when the Court is to replace an arbitrator, it has discretion to decide whether or not to observe the previous nominating process. This provides the Court with ample leeway to appoint a new arbitrator who in principle should not be exposed to the same situations or difficulties negatively affecting the fulfilment of his functions that led to his replacement. For example, if the reason for replacing a party arbitrator of the same nationality as that of the party having nominated him, is that he is subject to an injunction issued by a court of law in his country of origin or residence enjoining the stay of the arbitration, it would not be productive to replace him by necessarily following the normal procedure under the ICC Rules (asking the party who originally designated the arbitrator being removed to nominate a new one and, if such party failed to do so, asking the national committee of the country of such party to make a new nomination (Art. 9(6) of the ICC Rules)), since in all likelihood the new nominee would be exposed to the same or a similar injunction issued by the judiciary of such country. [Page65:]

Even under the previous ICC arbitration rules, the same solution was attained at least in one recent case. When removing a party arbitrator who was unable to fulfil his functions as a result of an injunction ordering the stay of arbitral proceedings issued by a state court able to assert its jurisdiction on such arbitrator, the Court clearly indicated that the new arbitrator to be proposed as a replacement by the party which had originally nominated the arbitrator being removed or, should such party fail or refuse to do so, by the national committee of the ICC in the country of such party, should be able to handle the dispute at stake, that is to say able to participate in the conduct of the arbitration notwithstanding the court order providing for the stay of the proceedings. Neither such party, nor the relevant national committee was able to propose arbitrators who would not be under the jurisdiction of the national court having issued the injunction. In such situation, the Court directly appointed a party arbitrator who on account neither of his nationality nor of his place of residence was under the jurisdiction of such court of law or any court of law in such jurisdiction.

Another scenario where the Court is vested with important powers to overcome situations which may lead to the paralysis of the arbitration is Article 12(5) of the ICC Rules, permitting to remedy what is commonly designated as a 'truncated tribunal' situation. If once arbitral proceedings have been closed, an arbitrator is removed and his replacement would be considered by the Court as inconvenient because, for example, it would give rise to costs or delays (since it could be expected that substantial parts of the proceedings would have to be replayed before the new arbitrator for him to be able to participate effectively in the deliberations and the making of the award) or when there is good reason to believe under the situation at stake that any new arbitrator that could be possibly named would be exposed to the same sort of problems that led to his predecessor's removal, the Court may authorize the two remaining panel members to continue the deliberations and make the award. It should be noted that the Court shall only take such decision after hearing the remaining arbitrators and the parties '...and such other matters that it considers appropriate in the circumstances'. Among the latter, the Court is likely to consider insofar as practicable whether such solution is or not incompatible with mandatory rules and principles of the place of the arbitration, and those of the predictable place of enforcement of the award.

The Court is thus vested with an important power not normally vested by other institutional arbitration rules in their respective institutions. Nevertheless, the fact that under the ICC Rules such decision is taken by a neutral body which is furthermore in charge of the current administration of the entire arbitration procedure rather than by the remaining panel members is aimed at guaranteeing the total neutrality and fairness on the basis of which it is to be adopted. On the other hand, such circumstance should expedite the decision-making process in this respect which could suffer should it be entrusted to the remaining arbitrators themselves, who may be reluctant to do so either on account of the responsibilities that the adoption of that kind of decision may entail or out of the fear of exposing themselves to a challenge.

However, the parties should be deemed to be entitled to have the ICC Rules govern the arbitration and yet to be able to contract out of Article 12(5). This should be the reasonable conclusion not only because the parties may believe that vesting the institution with such powers goes beyond what they foresee as reasonably acceptable under the circumstances, but also because they may judge that the exercise of such powers would not be valid under the law of either the [Page66:] place of arbitration they have selected or of the foreseeable place of enforcement of the award. In any case, the Court has not so far exercised such power, nor is it likely to do so frequently, since the very fact that the ICC Rules enable its exercise should deter parties or arbitrators from manoeuvering in a way that may prompt the Court to resort to it.

The Court has the power under Article 6(2) of the ICC Rules to decide that the arbitration shall not proceed if it is not prima facie satisfied that an arbitration agreement under the ICC Rules may exist. It may take such decision either when a party has raised pleas concerning the existence, validity or scope of the arbitration agreement or when the respondent has not filed an answer to the arbitration request.

Such power is clearly related to the expeditious and cost-effective management of the arbitration by permitting the Court to decide-without state court intervention and at an early stage-whether procedural activity under the ICC Rules may be validly and effectively undertaken. It is clear that the current provision of the ICC Rules grants larger leeway to the Court to allow or not the arbitration to proceed since the test for making such determination primarily depends on a subjective evaluation by the Court in this respect. Actually, this provision better reflects the trend of Court decisions in recent years generally favoring the referral of decisions regarding existence (beyond the prima facie existence), validity and scope of the arbitration clause to the arbitral tribunal not only when the prima facie existence of the arbitration agreement could be assessed objectively but also when such existence could be, in the eyes of the Court, reasonably argued. So far, the practice under the ICC Rules seems not to have contradicted this trend, since as from 1 January 1998-the date on which the ICC Rules came into effect-the Court has refused to set in motion only one arbitration on the basis of Article 6(2).

Under Article 4(6) of the ICC Rules, at the request of a party the Court may decide to incorporate the claims included in a new ICC arbitration request in pending arbitration proceedings under the ICC Rules between the same parties and in connection with the same legal relationship provided that the terms of reference have not been signed or approved by the Court. If the latter would have occurred, the consolidation permitted under this provision may still take place in compliance with Article 19 of the ICC Rules, i.e., when the arbitral tribunal in the pending case would have authorized, as permitted in such article, to have the claims incorporated to the pending reference. In the past the Court usually chose not to consolidate arbitrations under the equivalent provision existing in the previous version of the ICC arbitration rules if the party introducing the second arbitration would propose a party arbitrator different from the one confirmed in the pending arbitration by such party. It is yet to be seen how the Court will apply Article 4(6) of the ICC Rules and whether it will or not decide on the consolidation irrespective of whether or not a party to the new request will object to have the same arbitrator chosen by such party as a member of the panel acting in the pending case.

The Court is also empowered to approve the terms of reference should any of the parties to the arbitration refuse or fail to do so (Art. 18(3)). Such power is also primarily aimed at preventing the arbitration from stalling as a result of the tactics of a recalcitrant party or the non-participation of a party in the arbitration. The efficient management and progress of the proceedings would certainly be jeopardized if such decision were left to national courts, not only because of the inevitable delays that would ensue, but also because it would create opportunities for a recalcitrant party to disrupt the arbitration by [Page67:] triggering court action likely to interfere unduly in the arbitration. Very different may be the circumstances prompting the Court not to approve terms of reference that are not signed by one of the parties to the arbitration. Of course, the Court is likely not to grant such approval when it would find that imperative aspects of the ICC Rules would be infringed if the terms of reference at stake were approved 'as is'. But the Court may also decide not to approve terms of reference if by not doing so certain basic procedural features normally requiring the consent of both parties would be imposed on the non-participating party, such as, for instance, that the arbitrators shall decide ex æquo et bono or as amiable compositeur or that, though the arbitration was initiated prior to 1 January 1998, the ICC Rules coming into effect as from such date shall apply. Even when terms of reference signed by the arbitral tribunal and the parties are transmitted to the Court, the latter may return such terms of reference to the tribunal in situations in which it would find them incongruous or in blatant contradiction with the ICC Rules. Such could be the case if the terms of reference would exclude the powers of the Court to scrutinize awards or the application of rules or the exercise of functions of the Court included in or under the ICC Rules regarding the remuneration of the arbitrators. In a recent case, the Court returned terms of reference signed by all parties which, though providing for the application of the ICC Rules, contained specific references to provisions of the previous 1988 version of the ICC arbitration rules.

Should the parties fail to agree on the place of the arbitration, the Court shall fix it (Art. 14(1)). This important power vested in the Court makes it unnecessary to resort to a state court of law to determine this decisive aspect of arbitral proceedings. In this respect, the Court plays a fundamental role affecting not only the conduct of the arbitration but also the fate of the arbitral award after its notification to the parties. The Court will take care that the place of arbitration be neutral not only in view of the nationality of counsel and parties but also in respect of the costs that may be involved because of the choice of a particular venue. More important than that, it is generally recognized that the place of arbitration determines the legal localization of arbitral proceedings and the award. In such connection, Article 25(3) of the ICC Rules provides that the award shall be deemed to be made at the place of the arbitration. The place of arbitration then brings about a number of important legal consequences. It is such place which permits the identification of the courts that will exercise supervisory jurisdiction on arbitral proceedings, that is to say, that will be entitled to interfere with such proceedings in situations in which certain basic procedural principles would be infringed. Those courts shall also normally be the ones resorted to by the arbitral tribunal to obtain the necessary support to have its determinations or orders enforced. Also, the courts of the place of the arbitration will decide on any means of recourse against or for setting aside the award. Finally, the fact that the place of the arbitration is found in a country having ratified the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards will imply that any awards deemed made in such place will benefit from the provisions in such convention regarding extraterritorial enforcement in any of the countries being a party to it. It is then obvious that the correct fixation of the place of arbitration has an immediate impact on the conduct and duration of the arbitral proceedings and on the effectiveness of determinations by the arbitrators, including arbitral awards, and thus on the time that will be needed to finalize arbitral proceedings and enforce the ensuing award. Such decision-like other decisions taken by the Court pursuant to the ICC Rules-may then have effects that project themselves well beyond the termination of the arbitral proceedings. [Page68:]

III. Institutional powers primarily related to the intrinsic quality of the proceedings

It is a truism indeed to say that the arbitration is not better than the arbitrators. Nevertheless, this truth is so basic and important that it is no wonder that the Court under the ICC Rules is called upon to play an important role regarding the confirmation, appointment, challenge, removal and replacement of arbitrators. Reference has already been made to the powers of the Court to remove arbitrators on its own initiative when they are not properly fulfilling their functions. The Court also plays of course an important role in the confirmation or appointment of arbitrators, particularly when any of the parties has raised objections as to the prospective arbitrator's independence. It would not be appropriate to repeat here what has been said many times elsewhere as to the considerations taken into account by the Court when deciding on such issues and the different circumstances that have given rise to such objections as well as the way the Court has dealt with such matters, though of course the Court will prudently review any objections raised against the confirmation of a prospective arbitrator in view of the fact that it is important to assure that from the very onset of the proceedings every party feels comfortable with and relies upon the independence and ability of the arbitrators in charge of the reference. For the same reason, when the Court is called upon to appoint an arbitrator on the basis of a proposal of a national committee of the ICC or directly under Articles 8 and 9 of the ICC Rules, it will carefully consider any qualifications contained in the declaration of independence submitted by the prospective arbitrator.

It should be specially noticed in this respect that the Court's powers are not limited to refusing confirmation or appointment by taking into account matters which may affect the prospective arbitrator's independence concerning the nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals, since the Court is also to evaluate the prospective arbitrator's availability and ability to conduct the arbitration (Art. 9(1)). In that respect, the Court shall not only take into account any qualification brought to the statement of independence but will also carefully examine the curriculum vitae of such arbitrator attached to the declaration of independence as well as the form to be filled out by the prospective arbitrator in which he is called upon to give information on his experience in the field of arbitration, both ICC and non-ICC, related or not to international disputes, as well as the legal areas in which such candidate has particular knowledge or experience.

The Court has occasionally exercised its power not to appoint prospective sole arbitrator's or chairmen proposed by a national committee when it has judged that the candidate did not have the appropriate skills (e.g., language skills) or experience to handle the reference, but so far has not found it opportune not to confirm a proposed party arbitrator or a jointly-proposed sole arbitrator or chairman on the same basis. One reason accounting for such circumstance is that the sole arbitrator or chairman must be particularly able in view of, as the case may be, the lonely or leading role he plays in practice in the conduct of an ICC arbitration. When deciding on such appointment, the Court has in mind that the sole arbitrator is to decide the dispute alone and will be equally alone when making any other determination in the course of the arbitration and that [Page69:] the chairman may be placed in the same situation if there is no majority within a collegiate tribunal (Art. 25(1)). Normally, it will be deemed preferable when being considered for appointment that the sole arbitrator or the chairman shall have had prior experience in handling ICC arbitrations or at least substantive experience in acting as an international arbitrator.

Nevertheless, nothing prevents the Court, when considering the appointment of a prospective party arbitrator, from taking into account his ability and availability. Certain scenarios, such as one where the replacement of a party arbitrator is involved, would require, as indicated before, a very close evaluation by the Court of the ability and availability of the new arbitrator to be appointed.

In any case, as mentioned before, in 1997, 96 qualified statements of independence were submitted to the Court. In such cases, confirmation was denied in 19 cases only and appointment denied in just two cases.6 In 1998, 77 statements of independence were either qualified or gave rise to comments from one of the parties. Confirmation was denied in 19 cases and appointment in six.

Equally important are the powers of the Court to decide on the admissibility and the merits of challenges introduced against an arbitrator (Art. 11), not only because by doing so it shall minimize state court interference, but also because the exercise of such powers concerns the independence and impartiality of arbitrators and accordingly the quality of arbitral proceedings and the award, as well as the degree of trust of the parties in the proceedings. Under the ICC Rules, the Court will decide on any specific challenge after the parties and the arbitrators (including the challenged arbitrator) have had an opportunity to comment on the challenge and such comments have been communicated to all others. In 1997, 21 challenges were submitted, of which only three were accepted.7 In 1998, 24 arbitrators were challenged and only one challenge was accepted.

Another important power exercised by the Court, which is not often remembered, is to accept the resignation of arbitrators, i.e., the Court has a final say on whether an arbitrator may be allowed on his own initiative to put an end to his functions in a specific case. In view of how decisive the permanence and availability of an arbitrator is for the proper and timely conduct of the reference under the ICC rules of arbitration is, it is not surprising that such principle is specifically enunciated in the ICC Rules. Though of course nobody may be expected to remain perpetually bound to discharge his arbitrator's duties, particularly when proceedings are more protracted than could have been reasonably expected or when the personal and career situation of the arbitrator changes, it still remains that by accepting to arbitrate under the ICC Rules an arbitrator undertakes to fulfill his functions in their entirety and that if he desires to step down before the arbitration has come to an end his resignation must be accepted by the Court. Such undertaking is enshrined in Article 7(5), which provides in its English version that 'By accepting to serve, every arbitrator undertakes to carry out his responsibilities in accordance with these Rules.' It is more clearly rendered in the equally official French version of the ICC Rules providing that those responsibilities provided in the ICC Rules have to be carried out until fully discharged ('jusqu'à son terme'). An ICC arbitrator that resigns may only be replaced after the Court has accepted his resignation (Art. 12(1)). The Court will normally accept the resignation when it can be reasonably concluded that the arbitrator had valid reasons to quit his arbitral functions, for instance because he had accepted some official, public or political position which would be incompatible with exercising arbitral or adjudicatory [Page70:] functions or because he has been appointed to an academic and administrative position which would deprive him of sufficient time to take care of a reference which had been dragging already for a long time without any fault of the resigning arbitrator or because the law firm of the arbitrator merged with the law firm of the counsel to one of the parties, etc. In 1997, the Court accepted 22 resignations out of 23 submitted during such year.8 The following year, the Court accepted 23 resignations out of an equal number of resignations submitted in 1998.

Undoubtedly, one of the main powers of the Court relating to the exercise of adequate controls is the authority given to it by Article 27 of the ICC Rules to scrutinize draft arbitral awards. Article 29(3) of the ICC Rules provides that the powers of the Court related to the scrutiny of draft awards also apply to the scrutiny of any draft addendum issued by an arbitral tribunal for correcting or interpreting an award rendered by it under the ICC Rules.

According to Article 27 of the ICC Rules, the Court examines undated and unsigned draft awards submitted to it by the arbitral tribunal. The Court may lay down modifications as to the form of the award and, without affecting the arbitral tribunal's liberty of decision, may also draw its attention to points of substance. The former, which will normally relate to mathematical, computational or clerical errors, internal inconsistencies in the award, absence of reasons or of adequate reasons, compliance with formal requirements and requirements regarding arbitration costs (Arts. 25, 31 of the ICC Rules) or acting beyond the authority granted to the arbitral tribunal (for instance, when it decides ex aequo et bono when it should have decided ex lege, or when it decides on issues or claims not submitted by the parties for its decision (ultra petita) or when it decides on less than all issues or claims submitted to it (minus petita)), are binding. If the award is not modified accordingly, it will not be approved by the Court and the Secretariat will not communicate it to the parties under Article 28(1) of the ICC Rules. The remarks of the Court related to the way the arbitral tribunal decided on the merits are not binding and the award shall be approved by the Court even if such remarks are not taken into account or followed by the arbitral tribunal.

The exercise of such powers relates not only to the objective of furthering the quality of the arbitral product and prompting the parties voluntarily to abide by the award but also to the obligation of the Court to '...make every effort to make sure that the award is enforceable at law' (Art. 35), i.e., that the award is likely to be enforced through the intervention of national courts, which under this very provision is also binding on the arbitral panel. For that reason, when carrying out its scrutiny functions, Article 6 of Appendix II to the ICC Rules provides that, in the process of scrutinizing draft awards, the Court '...considers, to the extent practicable, the requirements of mandatory law at the place of the arbitration'. Of course, under the same caveat, and to the extent predictable and reasonably applicable, the Court also takes into account insofar as possible the mandatory law of the place of enforcement of the award. Of the 227 awards submitted in 1997 to the scrutiny of the Court, 12 awards were referred back to the arbitrators for reasons of form, six for reasons of substance and 13 awards both for reasons of form and substance. In addition, 43 awards were approved subject to modifications of form, which means that they related to relatively minor aspects not requiring the re-submission of the corrected award to the Court.9 Of the 241 awards submitted in 1998 to the scrutiny of the Court, only 12 were not approved by the Court. [Page71:]

IV. Conclusions

During its 75 years of existence, the ICC arbitration system has evolved and gained international recognition on the basis of certain paradigms upon which a number of functions and related powers vested in the Court are premised. Such general framework has not been altered by the ICC Rules. Rather, in part as a response to recent trends favoring the adoption of a more pro-active attitude towards the administration of arbitration cases, but primarily on the basis of the experience gathered by the Court and its Secretariat-which, by the time the 1998 ICC Rules were adopted, had handled close to 10 000 cases-the ICC Rules have streamlined and expanded the Court's powers and functions and rendered them more efficient, in part through a rational distribution of tasks within the Court and between the Court and its Secretariat, without detracting from such paradigms. It is on this basis that the next decade will see the ICC arbitration system continue its development well into the next millenium.

1
Y. Derains, E. Schwartz, A Guide to the New ICC Rules of Arbitration, pp. 2-5 (1998).

2
R. Briner, 'The Implementation of the 1998 ICC Rules of Arbitration' The ICC International Court of Arbitration Bulletin, December 1997, Vol. 8/No 2, pp. 7-9.

3
'The Application of the Rules by the Court-1997 Overview' The ICC International Court of Arbitration Bulletin, pp. 12-13 (1998).

4
BKMI Industrienlagen GmbH v. Dutco Construction Co (Pvt) Ltd., No. 8928.708Y; Siemens AG v. Dutco Contruction Co (Pvt) Ltd., No. 8918.726Y combined, Cour de Cassation I Civil Chamber, 7 January 1992.

5
See supra, note 3.

6
See supra, note 3.

7
See supra, note 3.

8
See supra, note 3.

9
Ibid.