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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
The growing complexity of international arbitration is clearly illustrated by the increasing number of cases submitted to the ICC International Court of Arbitration (the 'Court') that involve multiple parties and multiple contracts. In 2002, almost a third of the new cases filed with the Court were multiparty proceedings. 2 This represents a significant increase compared to ten years ago, when approximately a fifth of the cases were multiparty disputes. 3 Similarly, an increasing number of multicontract cases are being submitted to the Court. 4
The numerous issues raised by these cases have led not only to theoretical discussion but also to changes in the practice of the Court. Indeed, when the ICC Rules of Arbitration (the 'Rules') were revised in 1998, several modifications were carried out to take into account developments related to arbitrations involving multiple parties and multiple contracts. 5
This article aims to present briefly certain aspects of the Court's recent experience with multiparty (I) and multicontract (II) cases.
I. Multiparty arbitration
When the Court administers multiparty proceedings, it must often deal with issues relating to the setting in motion of these matters (I.1), the constitution of the arbitral tribunal (I.2) and various cost issues (I.3).
I.1 Setting in motion of the proceedings
In multiparty arbitration, it is often the case that one or more of the parties named in the request for arbitration has or have not signed the contract or contracts containing the arbitration agreement on the basis of which that request has been filed. Consequently, issues relating to the existence or the scope ratione personae of the arbitration agreement may arise (I.1.1). Also, from time to time, a respondent party may request that a new party be joined to the arbitral proceedings. The Court's recent experience with this kind of request will be mentioned (I.1.2).
Article 6(2) of the Rules provides:
If the Respondent does not file an Answer, as provided by Article 5, or if any party raises one or more pleas concerning the existence, validity or scope of the [Page8:] arbitration agreement, the Court may decide, without prejudice to the admissibility or merits of the plea or pleas, that the arbitration shall proceed if it is prima facie satisfied that an arbitration agreement under the Rules may exist. In such a case, any decision as to the jurisdiction of the Arbitral Tribunal shall be taken by the Arbitral Tribunal itself.
It should be noted that, as stated at the beginning of Article 6(2), the Court carries out a prima facie analysis only in cases where respondent has not filed an answer to the arbitration request or where one of the parties has raised objections regarding the arbitration agreement. Its decision is based on the information provided by the parties. No investigation is carried out by the Court itself. Furthermore, in the event that all parties are participating and no objection is filed, the Court will not carry out such an Article 6(2) analysis, even if it could have been argued that, prima facie, an arbitration agreement might not exist under the Rules. 6
In many ICC multiparty cases, the claimant addresses its request for arbitration against multiple respondents, at least one of whom has not signed the contractual document containing the arbitration agreement on the basis of which the arbitration request has been filed. Here again, the Court applies the provisions of Article 6(2) to determine whether, prima facie, an arbitration agreement under the Rules may exist (I.1.1.1). Recently, the Court has taken negative Article 6(2) decisions with respect to claimants in cases where a respondent contended that a claimant that had not signed the arbitration agreement should not be admitted as a party to the arbitral proceedings (I.1.1.2).
In cases involving multiple respondents, the claimant will often argue that a respondent that has not signed the arbitration agreement should be included as a party to the proceedings, on the basis of various theories linking the non-signatory to a signatory party, often a co-respondent. These theories include, inter alia, agency, assignment, succession of companies, group of companies or alter ego. The claimant also frequently alleges that the non-signatory respondent participated in the negotiation, execution, performance or termination of the contract containing the arbitration agreement.
In many cases, the Court has been satisfied, prima facie, that a non-signatory respondent should be included in the proceedings for having participated in an aspect of the underlying contract. For example, in a recent case, two claimants introduced a request against four respondents. The claimants alleged that all four respondents were members of the same group of companies and should be included as parties, even though only two of the respondents had signed the arbitration agreement. The Court found that the claimant parties had demonstrated on a prima facie basis that the non-signatories had participated in the negotiation and performance of the agreement, and therefore, the matter proceeded against all four respondents.
In another recent case, in which there were four respondents, the Court allowed the arbitration to go forward against a non-signatory respondent based on prima facie elements showing a transfer of assets and assignment of the agreement containing the arbitration clause.
In one matter, the claimant filed its request for arbitration against a company and its parent company, alleging that the parent company had provided a [Page9:] guaranty for the performance of its subsidiary. The parent company had not signed the agreement containing the arbitration clause. The Court decided that the matter would proceed against both respondents.
However, in a number of cases, the Court has come to a negative decision under Article 6(2) with respect to respondents that had not signed the arbitration agreement. In such cases, the proceedings went forward only with the remaining parties, as in the following examples.
A request was introduced against two respondents based on two related contracts. Respondent 1 had signed both contracts. Respondent 2 had not signed either contract, but had signed a third agreement which did not include an ICC arbitration clause. The Court considered that respondent 2 had not taken part in the negotiation, execution, performance or termination of the first two contracts and therefore decided that the arbitration would not proceed against respondent 2.
An arbitration was started against two respondents based on an agreement that had not been signed by respondent 2. However, respondent 2 had executed a guaranty with the claimant, which clearly indicated that respondent 2 guaranteed the payment of any award that would be rendered between the claimant and respondent 1. Unlike cases in which there was a performance guarantee for an agreement containing an arbitration clause, for which the Court has decided that the guarantor may be deemed to have agreed to arbitrate the claims, the payment guarantee for an award in this case was not considered to allow respondent 2 to be pulled into the proceedings.
As regards the group of companies theory, a request for arbitration was introduced on the basis of a sales agency agreement entered into between the claimant and respondent 1. The claimant also filed its request against respondents 2 and 3, alleging that they were members of the same group of companies as respondent 1. The claimant argued that it was for respondents 2 and 3 to prove that they did not share respondent 1's rights and responsibilities. The Court found that there were insufficient prima facie grounds for letting the matter go forward against respondents 2 and 3.
Similarly, in a case in which the claimant sought to bring in various offices and branches of the respondent company or its group without showing prima facie the involvement of these various entities in the agreement in question, the Court decided that the case would not proceed.
Traditionally, in keeping with the idea that it is for the claimant side to identify the parties to arbitration proceedings, the Court would not make negative Article 6(2) decisions with respect to one of several claimants. Rather, if the Court found that one of the claimants should be dismissed on a prima facie basis, it was decided that the matter could not proceed. As an illustration, in one case, the request for arbitration was introduced by two claimants against one respondent. The Court found, on a prima facie basis, that an agreement might exist between claimant 1 and the respondent. However, the Court was not satisfied that an agreement might exist between claimant 2 and the respondent. Consequently, the Court decided that the entire matter could not proceed. [Page10:]
Recently, however, the Court seems to have modified this traditional approach by making negative Article 6(2) decisions with respect to one or more of the claimant parties while allowing the matter to proceed between the other parties.
In one case, three claimants introduced a request for arbitration against one respondent party. The respondent raised jurisdictional objections on the ground that claimant 3 was not a party to the agreement. The claimants alleged that they all belonged to the same group of companies and that they were all located at the same address. Furthermore, according to the claimants, the respondent would not be prejudiced by the inclusion of claimant 3 in the proceeding. The Court decided that claimant 3 should be dismissed from the proceedings, as it had not signed the agreement nor participated in its negotiation, execution, performance or termination. The matter proceeded between claimants 1 and 2 and the respondent party only.
In another recent case introduced by three claimants, the respondent objected that it had not signed an agreement with claimant 2. It asserted that claimant 2 had signed a different agreement, not containing an ICC arbitration clause, with a subsidiary of the respondent. The respondent specifically requested that the arbitration be allowed to proceed only with claimants 1 and 3. The Court decided as requested, letting the matter go forward only between claimants 1 and 3 and the respondent.
One of the most controversial topics regarding multiparty scenarios in ICC arbitration is the possibility for a respondent to request successfully from the Court the joinder of a new party to the arbitral proceedings. In this respect, the Court maintains a conservative approach (I.1.2.1). However, such an approach has recently been moderated (I.1.2.2).
The Court has generally considered that, under the Rules, only the claimant is entitled to identify the parties to the arbitration.
This position appears consistent with Article 4(3)(a) of the Rules, which states that '[t]he Request [for arbitration] shall, inter alia, contain the following: a) the name in full, description and address of each of the parties'.7
Furthermore, no provision of the Rules expressly allows a respondent to determine the parties to the arbitration, that is, to request the joinder of a new party not mentioned by the claimant in its arbitration request.
It can be argued, however, that the traditional approach gives a clear advantage to the party commencing the arbitral proceedings. Furthermore, it may make it necessary to initiate multiple proceedings, to the detriment of procedural efficiency and at greater cost. Also, if the respondent is allowed to join a new party that has signed the arbitration agreement, this may be thought to respect the parties' intention as expressed in their arbitration agreement. Consequently, the conservative approach summarized above has recently been moderated.
In three recent cases, the Court joined a new party to the arbitral proceedings at the request of a respondent. Based on those three decisions, as well as the [Page11:] numerous decisions where the Court has refused such joinder, it would appear that the Court may allow a new party to be joined in the arbitration at the respondent's request, if and only if two sine qua non conditions are met.
First, the third party must have signed the arbitration agreement on the basis of which the request for arbitration has been filed. Hence, by deciding to join the new party, the Court is simply following the parties' intention and will, as expressed in their arbitration agreement. In the three cases referred to above, the Court concluded that, since the new party had signed the arbitration agreement, it could be considered to be the parties' intention that such party would participate in the arbitral proceedings. On the other hand, the Court has on numerous occasions refused the joinder of a new party where that party had not signed the arbitration agreement on the basis of which the request for arbitration was filed.
It should be noted that the Court's position remains conservative when the new party that the respondent seeks to join has not signed the arbitration agreement but, according to the respondent, has purportedly participated in the negotiation, execution, performance or termination of the contract containing that agreement. In such cases, the Court has decided not to join the new party to the arbitration.
Second, the respondent must have introduced claims against the new party. In one of the cases where the Court accepted the joinder, the respondent made the same claim against the new party as had been raised against it by the claimant. In the other two cases, the respondent introduced a counterclaim against the claimant and against the new party. Even if the new party has signed the arbitration agreement, the Court has in the past decided against joining it in the proceedings when no claims have been raised against it by the respondent.
It is clear that a request for the joinder of a new party must be made before the arbitrators have been appointed or confirmed, unless all parties agree to such joinder. This is to ensure that all the parties have had an equal opportunity to participate in the constitution of the arbitral tribunal.
What is the Court's position when (i) the respondent reserves its right to file claims against the new party or (ii) the claims made by the respondent against the new party may be alleged to be frivolous? With respect to the first issue, in a recent case the Court decided not to join the new party to the arbitration because the respondent had not stated an actual claim against the new party, despite the fact that the respondent had expressly reserved its right to introduce such claims at a later stage. As far as the second question is concerned, it may be noted that in a recent case, in which the claim made by the respondent against the new party could have been thought frivolous at first sight, the Court joined the new party (which had signed the arbitration agreement) at the respondent's request. Given that the Court is an administrative body and does not have jurisdiction to settle disputes,8 it is not for the Court to determine whether a claim is well-founded.
I.2 Constitution of the arbitral tribunal
When entering into multiparty agreements, parties will sometimes include specific provisions as to how the arbitral tribunal should be constituted. Several interesting clauses have been seen in recent multiparty cases (I.2.1). When the parties have not agreed upon a method for constituting the arbitral tribunal, the Court may decide to apply the provisions of Article 10 of the Rules (I.2.2). [Page12:]
Article 7(6) of the Rules specifically provides that the parties can agree on a method for constituting the arbitral tribunal other than that set forth in Articles 8, 9 and 10 of the Rules.9 This provision is often given effect in multiparty settings.
In three recent cases, the arbitration clause, in respect of the constitution of a three-member arbitral tribunal in a multiparty scenario, stated the following:
If an attempt at settlement has failed, the Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce in Paris (Rules) by three arbitrators appointed in accordance with the Rules. If there are two or more defendants, any nomination of an arbitrator by or on behalf of such defendants must be by joint agreement between them. If such defendants fail, within the time limit specified by the Rules, to agree on such joint nomination, the proceedings against each of them must be separated.10
It is to be noted that, in these cases, the parties felt that the possibility for potential respondents to nominate a co-arbitrator was crucial and decided that, if the respondent parties were unable to nominate jointly a co-arbitrator, different arbitration proceedings should be commenced against each of the respondents.
In another recent case, the pertinent part of the arbitration clause read as follows:
Appointment of Arbitrators: . . . In the event of an arbitration involving more than two Parties hereto, there shall be three arbitrators who shall be jointly nominated by the Parties. If the Parties fail so to nominate the arbitrators within 30 days from the date when the claimant(s)' notice of arbitration is communicated to the respondent(s), at the request of any Party the arbitrators shall be appointed by the ICC Court within 30 days of such request.11
In this case, the parties decided that, failing a joint nomination by the parties of all arbitrators, it would be for the Court to appoint the entire arbitral tribunal.
When the Rules were revised in 1998, one of the important modifications was the inclusion of Article 10 concerning the constitution of the arbitral tribunal in multiparty cases involving three arbitrators. Article 10(2) of the Rules provides that where either multiple claimants jointly, or multiple respondents jointly, fail to nominate an arbitrator, and where the parties have not agreed on a method for constituting the arbitral tribunal,'the Court may appoint each member of the Arbitral Tribunal and shall designate one of them to act as chairman'.
As the parties' participation in the choice of the arbitrators often leads to their having greater confidence in the arbitral tribunal, Article 10(2) of the Rules is treated by the Court as a fallback procedure and will be applied only when possible issues of equal treatment of the parties may arise. The Court takes into account the national law at the place of arbitration and possible places of enforcement. There have therefore been cases in which, despite the respondents' failure to nominate a co-arbitrator jointly, the Court decided to confirm the arbitrator nominated by or on behalf of the claimant while appointing the other co-arbitrator.
It should be noted that before the Court decides to apply Article 10(2) of the Rules, the parties are put on notice. In practice, once the parties have been informed [Page13:] that the Court may resort to Article 10(2), a joint nomination is often forthcoming. Therefore, the inclusion of Article 10(2) in the Rules has had a very positive, persuasive effect.
A recent case involving four respondents illustrates the use of Article 10(2). Respondents 1 and 4 did not participate in the proceedings. Respondents 2 and 3 indicated that, as they had different interests, they could not agree on the nomination of a co-arbitrator. The Court decided to apply Article 10(2) and appointed all three arbitrators.
Pursuant to Article 10(2), when the Court decides to appoint all three arbitrators, it is free to decide upon the method to be used for the appointment. It should be emphasized that when so doing, the Court does not appoint an arbitrator on behalf of the claimants and respondents, but rather appoints all three members and chooses one to act as chairman. The Court will not appoint an arbitrator that has been nominated by any of the parties. However, it may take account of proposals made by the parties when deciding upon nationalities. For example, in a case where the claimants had consistently put forward Singaporean nationals and the respondents had consistently put forward Indonesian nationals, the Court appointed co-arbitrators of those two nationalities when it appointed all three arbitrators.
In another case, the claimants could not agree on the nomination of a co-arbitrator. As they came from different countries, the Court decided to appoint the co-arbitrator directly, on the claimants' behalf, as well as the chairman. It appointed the respondent's co-arbitrator upon a proposal from the ICC national committee in the respondent's country.
An interesting question, which the Court has not yet had to confront, concerns the application of Article 10 in cases where the respondent has requested the joinder of a new party and the Court has accepted such joinder. This has not been an issue in the three cases in which a joinder has taken place. In one of the cases, the clause provided for a sole arbitrator. In the other two cases, where there were three-member tribunals, all parties reached an agreement on the constitution of the arbitral tribunal. However, if a party were joined and it was not identified as either a claimant or a respondent,12 it is likely that, failing an agreement among the parties as to the method for appointing the arbitral tribunal, the ICC Court would appoint all three arbitrators.
I.3 Cost issues
An issue that may arise in multiparty ICC arbitration is the payment of the advance on costs to cover the fees and expenses of the arbitrators and ICC's administrative expenses.
Article 30(3) of the Rules sets forth the principle that '[t]he advance on costs fixed by the ICC Court shall be payable in equal shares by the Claimant and the Respondent'. According to Article 2(ii) of the Rules, the term 'Claimant' as used in the Rules 'includes one of more claimants' and the term 'Respondent' 'one or more respondents'. Hence, when multiple claimants and/or multiple respondents are involved, each side has to pay half of the advance on costs.
However, the Court is from time to time contacted by a single claimant or respondent from amongst multiple claimants or respondents in order to ask [Page14:] whether, in light of its interest in the dispute, it could pay, say, 20% of the claimants' or respondents' share of the advance on costs. The Court's position generally is that each side should pay its share in full, and that one side's share should not be divided to take account of the interests or number of the parties involved. This said, claimants or respondents are of course at liberty to agree among themselves upon a specific division of their share of the advance on costs.
Two exceptions should be mentioned.
First, the principle quoted above might not apply to those cases where the Court has decided to join a new party at the request of a respondent. It is not always clear whether the new party is a claimant or a respondent. For instance, in one of the three cases referred to above, the new party could not be considered as either a claimant or a respondent since it was not making any claims itself and the claimant was not raising any claims against it. How should the advance on costs be paid in such a tripartite situation? In the case in point, in view of the particular circumstances of the matter, the parties themselves agreed that the claimant and the new party would pay half of the advance on costs and the respondent the other half. It should be pointed out that in that case the claimant was the insurer of the new party joined, so it was logical to put both parties on the 'same side'.
Second, in a recent case, the claimant filed its request for arbitration against two respondents, which in turn both filed counterclaims. On the basis of the aggregate amount in dispute, the Court fixed a global advance on costs. Considering the disproportion between the amount of the claims and the counterclaims, the claimant requested that the Court fix separate advances on costs for the claims and the counterclaims. In accordance with Article 30(2) of the Rules,13 the Court fixed an advance on costs for the claims and a separate advance on costs for the aggregate amount of the counterclaims. Thereafter, it became clear that respondent 2 did not intend to contribute in any manner towards the payment of the respondents' separate advance on costs for the counterclaims. Consequently, respondent 1, alleging that the two counterclaims were distinct and related to different interests, requested that the Court fix separate advances on costs for the counterclaims of each respondent. The Court did as requested, noting that the two counterclaims were truly distinct and represented different interests.
II. Multiple contracts
As with multiparty arbitration, when the Court administers proceedings involving multiple contracts, it frequently has to deal with issues relating to the setting in motion of these matters (II.1), the constitution of the arbitral tribunal (II.2) and various cost issues (II.3).
II.1 Setting in motion of the proceedings
In a multicontract situation, either a single request for arbitration may be filed on the basis of two or more contracts (II.1.1) or several requests for arbitration may be filed and a request for consolidation made to the Court (II.1.2). [Page15:]
From an analysis of numerous recent ICC cases, one may conclude that, for the Court to decide that a single arbitration shall proceed on the basis of multiple contracts, three criteria should be fulfilled.
First, all contracts must have been signed by the same parties. Exceptionally, the Court has decided to set a single arbitration in motion on the basis of multiple contracts signed by different parties in a case where it was absolutely clear that the signatory parties belonged to two 'groups of companies'. In the case in question, because of the special characteristics of the economic transaction, a framework contract had been signed by the parent companies and two additional implementing contracts had been signed by their affiliates operating in the field to which the dispute related.
Second, all contracts must be related to the same economic transaction. For instance, they should relate to a common construction project or a common distribution strategy.
Thirdly, the dispute resolution clauses contained in the contracts must be compatible. When has the Court considered that the dispute resolution clauses contained in the contracts were not compatible?
In one recent case, the Court decided that a single arbitration would not proceed on the basis of two contracts, given that one of the contracts contained an ICC arbitration clause and the other submitted all disputes to the jurisdiction of the Paris courts.
In another case, the Court decided that a single arbitration would not proceed on the basis of two arbitration agreements contained in different contracts, one of which referred to Paris and the other to Geneva as the place of arbitration. In addition, one of the arbitration agreements specified English as the language of the proceedings and the other French.
Lastly, the Court decided that a single arbitration would not proceed on the basis of two arbitration agreements referring to different methods for constituting the arbitral tribunal. One of the arbitration agreements stated that the dispute had to be submitted to one or more arbitrators, while the other provided that a three-member arbitral tribunal was to be constituted, the chairman of which was to be jointly nominated by the coarbitrators. In the first case, if either the parties or the Court were to decide that a three-member arbitral tribunal should be constituted, its chairman would be appointed by the Court upon the proposal of an ICC national committee, as set forth in the Rules, whereas in the second case the chairman was to be jointly nominated by the co-arbitrators.
The three examples described above all show that, when making such decisions, the Court endeavoured to respect and follow the parties' intentions as expressed in their arbitration agreements. Hence, separate proceedings were called for in each case.
It should be noted, however, that there has been one arbitration which the Court allowed to proceed on the basis of multiple contracts, despite the fact that the contracts provided for different applicable substantive laws. [Page16:]
Article 4(6) of the Rules states that, 'when a party submits a Request in connection with a legal relationship in respect of which arbitration proceedings between the same parties are already pending under these Rules, the Court may, at the request of a party, decide to include the claims contained in the Request in the pending proceedings provided that the Terms of Reference have not been signed or approved by the Court'.
Before the Court can consider including the claims of a new arbitration request in pending ICC proceedings, two requirements must at least be fulfilled, namely (i) the two cases must pertain to the same legal relationship and (ii) the parties must be the same. For the purposes of Article 4(6), 'same legal relationship' would appear to mean the same economic transaction.
However, the mere fulfilment of these two requirements is in itself not necessarily enough. In a case where one of the parties requested the consolidation of two cases on the basis of Article 4(6) and the opposing party objected to such consolidation, the Court decided not to consolidate the cases because, even though the requirements of Article 4(6) were met, each arbitration agreement involved referred to a different place of arbitration, one to Paris and the other to Amsterdam. It was therefore clear that the parties intended separate arbitrations to be conducted in different seats relating to the different contracts involved.
In most related cases brought before ICC, the parties themselves reach an agreement on consolidation, in order to save costs and avoid the risk of conflicting decisions. For this reason, the Court has not often been requested to make a decision on the consolidation of cases in accordance with Article 4(6).
The Court did, however, apply Article 4(6) in two recent cases. In one, although the requirements of Article 4(6) were met and the claims all resulted from the same contract, the respondent objected to consolidation of the related matters, purporting that in the first matter the opposing party claimed loss of profits and in the second matter the reimbursement of sums due for services that had been rendered. One might justifiably wonder why the claimant introduced two different arbitration requests and thereafter requested consolidation, instead of commencing a single arbitration. In the second case, the claimant introduced two requests for arbitration directed against the same respondent and concerning a common economic transaction. In this case, the claimant's strategy was understandable since it based each request on a different contract and might well have had doubts over the notion of 'legal relationship' contained in Article 4(6).
II.2 Constitution of the arbitral tribunal
It is clear that the consolidation of two or more matters makes for procedural and cost efficiency, since a single arbitral tribunal will decide all issues. Consolidation also eliminates the risk of having contradictory decisions rendered in different proceedings. However, in the event that the parties do not agree to consolidation, and the ICC Court is not able or decides not to apply Article 4(6) of the Rules, the constitution of the arbitral tribunal in related matters becomes a vital question.
In several cases where, for various reasons, the parties did not agree to consolidation, the parties themselves chose to have the same arbitral tribunal in the parallel proceedings. In reality, such proceedings are often run together. [Page17:]
Where parties have not agreed to have the same arbitral tribunal in parallel proceedings and one side decides to nominate an arbitrator already acting in a related matter, to which the opposing party objects, the Court must decide whether to confirm that arbitrator. To this end, it will take into account various factors including whether the parties, the counsel and the issues to be decided are identical and the stage the arbitral proceedings have reached. The Court assesses whether the arbitrator in question would have access to information that would not be available to the other members of the arbitral tribunal. It also considers whether a decision has been rendered in one of the matters that might cause the arbitrator to prejudge the related case.
In deciding whether to confirm an arbitrator in related proceedings, the Court assesses each case individually. Decisions can therefore go either way, depending on the circumstances. Examples of recent Court decisions on this matter are given below.
In one case, the respondent nominated an arbitrator acting in a related case. The claimants objected to his confirmation on the ground that he would have access to information not available to the other members of the arbitral tribunal. In the case in question and the related case, the counsel were identical, the claimants were the same and the respondents were related companies. No award had been rendered in the related case, and there were no overlapping issues between the two matters. The Court decided to confirm the co-arbitrator and also refrained from making a decision about the co-arbitrator nominated by claimant, so as to keep open the possibility of having the same arbitral tribunal in the two cases. In the end, in light of the Court's decision, the claimant changed its mind and decided to nominate the same co-arbitrator in the second case as it had nominated in the first case.
By contrast, the Court decided not to confirm the co-arbitrator in a case in which neither the parties nor their counsel were identical.
Lastly, in two recent cases, the Court decided not to confirm a co-arbitrator, even though the parties and the counsel were the same in the related matters. Two considerations influenced the Court's decision: the advanced stage of the first proceedings and the possibility for the co-arbitrator to obtain and use privileged information in the second proceedings.
II.3 Cost issues
Given the regressive nature of the ICC scales of administrative expenses and arbitrators' fees, one of the main advantages of either introducing a single arbitration request on the basis of multiple contracts or consolidating two or more cases is no doubt that the arbitration costs are lower.
When either the parties or the ICC Court decide(s) to consolidate two or more cases, and the provisional advances fixed by the Secretary General for each of those cases have not been paid in full, the Secretary General may fix a 'consolidated' provisional advance, so as to take advantage of the regressive character of the cost scales. The amount of the 'consolidated' provisional advance will consequently be lower than the sum of the provisional advances previously fixed for the now consolidated cases. Once the 'consolidated' provisional advance has been paid, the consolidated file may be transmitted to the arbitral tribunal in accordance with Article 13 of the Rules. [Page18:]
If related matters are not consolidated and parallel proceedings are conducted by the same arbitral tribunal, when fixing the arbitrators' fees the Court may take into account the fact that some of the work performed by the arbitral tribunal relates to both cases and that the proceedings might be run together.
Conclusion
The recent experience of the Court with respect to multiparty and multicontract cases demonstrates the vital role that an arbitral institution may play in dealing with the increasingly complex issues involved in such cases. Several trends can be highlighted in the Court's practice.
First, it could be considered that there is a tendency to equalize the role of claimants and respondents in ICC arbitration. This can be seen at the stage of setting the proceedings in motion (application of negative Article 6(2) decisions with respect to claimant parties and joinder of new parties) and in connection with the constitution of the arbitral tribunal (application of Article 10).
Second, there seems to be an increasing concern for the efficiency and cost-effectiveness of the arbitral process. This can be seen, for example, in decisions by the Court concerning the joinder of new parties, the consolidation of cases, and the constitution of overlapping arbitral tribunals in related matters.
Finally, the Court's decisions relating to multiparty and multicontract proceedings demonstrate the Court's adaptability to developments in international arbitration law and underline the Court's continuing attention to the enforceability of the awards rendered under its auspices.
1 This article represents the personal views of the authors and should not be interpreted as binding upon ICC or the ICC International Court of Arbitration.
2 In 2002, 185 multiparty cases were filed with ICC. Of these cases, 18.4% involved multiple claimants and multiple respondents, 30.8% multiple claimants and 50.8% multiple respondents.
3 The percentage of multiparty cases filed over the last ten years has increased from 20.4% in 1993 to 31.2% in 2002.
4 Approximately a fifth of the cases presently being administered by the ICC Court are multicontract procedures, with the number of contracts involved in a particular case varying from two to seven.
5 See e.g. Articles 4(6) and 10 of the Rules.
6 Article 6(2) of the Rules further states: 'If the Court is not so satisfied [i.e. prima facie satisfied that an arbitration agreement under the Rules may exist], the parties shall be notified that the arbitration cannot proceed. In such a case, any party retains the right to ask any court having jurisdiction whether or not there is a binding arbitration agreement.' Thus, should the Court decide that a case cannot proceed under Article 6(2), the matter is not sent to the arbitral tribunal. Only a competent state court may review the Court's decision.
7 Emphasis added.
8 See Article 1(2) of the Rules.
9 Article 7(6) of the Rules: 'Insofar as the parties have not provided otherwise, the Arbitral Tribunal shall be constituted in accordance with the provisions of Articles 8, 9 and 10.'
10 Emphasis added.
11 Emphasis added
12 See below.
13 The pertinent part of which states: 'Where, apart from the claims, counterclaims are submitted, the Court may fix separate advances on costs for the claims and the counterclaims.'