ICC Bulletin

Message from the President

2019 has also seen a significant increase in the average amount in dispute in our pending cases, from 131 to 140 million USD, showing that the Court retains the trust of the parties in the most complex, high-value, multi-party and multi-contract cases.

Moreover, the increasing number of cases involving a State or a State entity, which rose from 14,8% in 2018 to 20% in 2019, reflects that the Court retains – more than any other international commercial institution – the trust of the parties in cases involving significant public interests, whether based on contract or on investment protection treaties.

The continuous success of ICC is a testament to the outstanding quality of the administrative services provided by the Secretariat and the Court, in particular its unique process of quality control on awards. The Court has approved 586 awards last year. Each award has been carefully reviewed, first by the team in charge of the case, then by the Secretary General, Deputy Secretary General or Managing Counsel, prior to being submitted to the Court on the basis of a detailed agenda setting forth the main questions of form and substance on which the draft could be improved. The Court may impose changes as to the form of the award and raise the tribunal’s attention on questions of substance. It is in fact very rare that an award be approved without any comment as to the substance. These comments can relate to questions such as apparent contradictions in the reasoning, portions of the award that may be unclear or insufficiently reasoned, matters that the tribunal may have omitted to deal with or that the parties did not address in their submissions, as well as possible flaws in the legal reasoning or computational errors. The Court may also raise the tribunal’s attention on matters of public policy, such as the possible existence of facts of corruption, that the tribunal may not have addressed, or not addressed properly. As shown by the recent annulment of an ICC award by the court of The Hague, corruption is contrary to international public policy and may lead, in many jurisdictions, to a complete de novo review of the Tribunal’s findings.¹

Although the tribunal retains the last word as far as questions of substance are concerned, in the vast majority of cases the arbitrators do accept to incorporate the Court comments. The ICC scrutiny process aims at improving the quality of the award and preventing that the award be annulled or denied enforcement. In 2019, of the 653 draft awards submitted to the Court’s scrutiny, 72 were not approved, 5 were approved without comments, and 586 were approved with comments as to form or substance.

The success of the Court is also due to our continuous efforts to improve the efficiency of our proceedings. In 2019, the average duration of ICC cases having reached a final award was 26 months (median duration of 22 months), slightly less than the 2018 average duration of 28 months (median duration of 24 months). This statistic however includes the numerous disputes and proceedings that are placed in abeyance by court order or parties’ agreement.

As part of the Court’s efforts to increase the time efficiency of our arbitrations, we have introduced a three months (two in case of a sole arbitrator) time-limit for the submission of draft awards by arbitral tribunals to the Court, running from the last substantive step in the arbitration (generally the evidentiary hearing or the post-hearing briefs). This time-limit is enforced by applying fee reductions in case of delay, according to a scale that is transparently explained in the ICC Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration (the ‘Note’).²

Among the 403 draft final awards scrutinized in 2019, 162 were submitted with some delay. A fee reduction was applied in 68 cases (i.e. in 42% of cases where the FA was submitted late). These figures show that in most cases, the delay was de minimis (i.e. in 55 cases, such delay was less than three weeks), or was justified by objective circumstances as may be the case in particularly complex cases. Figures also show a reduction of the most important delays. Since 2016, when this practice aiming at more efficiency in the submission of draft awards to the court was implemented,³ the number of draft awards delayed by three to six months decreased from 52 (in 2016) to 33 (in 2019), and draft awards delayed by seven months or more went from 18 (in 2016) to 5 (in 2019).

Another important measure taken by the Court aimed at increasing the efficiency of ICC Arbitrations was the introduction in 2017 of the Expedited Procedure Provisions (‘EPP’) that apply, subject to opt-out, to cases involving claims up to two million US$. In accordance with the EPP, the award has mandatorily to be made within six months from the case management conference. When the EPP were introduced, some concerns were raised: on the one hand as to whether the six-month time limit could effectively be met, and on the other, as to the quality of the resulting awards. After three years, the experience shows that the system works perfectly. So far, 50 final awards were rendered under the EPP, of which 37 were rendered within the six-month time-limit, and 13 following an extension of time-limit ranging from one to four weeks. The delay in rendering a final award in EPP cases exceeded one month in 10 instances and resulted in a fee reduction in 3 cases; the parties agreed to a new procedural timetable in 4 cases and delay was due to justified circumstances in 3 cases. The scrutiny of these awards was concluded within the two to three weeks prescribed by the Note, with the same level of care as for any other award. More importantly, awards made by sole arbitrators under the EPP are of no lesser quality than ordinary awards. Although the EPP grant the arbitrator the power to conduct the arbitration as appropriate, and to refuse the production of documents or the examination of witnesses and experts, a document production phase or the conduct of a hearing is by no means incompatible with the making of the award within six months. Out of the 50 EPP awards rendered so far, short hearings were held in 33 cases, limited production of documents occurred in 22 cases, and post-hearing briefs were filed in 21 cases.

The ICC expedited procedure is an effective answer to the legitimate concerns of the business community as to the time and costs of the arbitration, in particular for lower-value disputes. The return of experience shows that the system can and should be applied to a broader range of disputes, and the Court is now proposing to increase the opt-out threshold to 4 million US$.

One of the important innovations introduced in 2019 was the new policy concerning the systematic publication of all ICC awards, save in presence of a confidentiality agreement or of an opt-out exercised by any party. The Secretariat exercises great care in informing the parties at different stages of the arbitration of the new policy, so as to avoid any inadvertent publication. Among the 394 cases where a final award was notified in 2019, 182 cases were covered by a confidentiality agreement (in the contract, in the arbitration agreement or in the terms of reference). Among the remaining 212 awards, objections to publication were received in 86 cases, so that partial and final awards in 126 cases may be published as from 1 January 2021 (subject to a party’s objection at any time before publication or the Secretariat’s decision to exempt the award from publication).⁴ Over time, the new policy will allow thousands of awards to become available to the public, often in industries where virtually all disputes are submitted to arbitration. In addition to increasing the transparency and reinforcing the legitimacy of arbitration, this policy will change the normative value of commercial awards and allow them, as soon as a significant number of awards will have been published, to contribute to the formation and evolution of the law.

The last, but not the least, important lesson from a fruitful 2019 concerns diversity. The Court has appointed or confirmed 312 women in 2019, now representing 21% of all nominations. Although that figure is not yet satisfactory and much remains to be done to promote more women in ICC tribunals, this figure is significantly above the 273 women appointed or confirmed in 2018, and show clear improvement since 2015, when women nominations represented only 10,4% of the total.

As I close this first editorial of a new decade, it remains for me to extend my warmest words of thanks and appreciation to all members of the Secretariat and to all Court members for their relentless efforts and immense dedication, without which none of our remarkable achievements of 2019 would have been possible.

---

---