ICC Bulletin

Message from the President

a) Complex arbitrations

The proposed changes will, first of all, introduce into the Rules a new Article 7(5) by allowing the arbitral tribunal, upon the request of any party, to join a consenting additional party to the arbitration after the constitution of the arbitral tribunal.

The joinder of a consenting additional party at this stage of the proceedings will therefore no longer require the consent of all parties. It will be decided by the tribunal based on all surrounding circumstances, including whether the tribunal has prima facie jurisdiction over the joined party, possible conflicts of interests and the impact of the joinder on the arbitral procedure.

This change will increase the efficiency of the procedure when the participation of the additional party – which was not initially a named claimant or respondent – appears to be in the interest of an efficient resolution of the dispute.

While, under the current Rules, absent an agreement between all parties in both arbitrations, consolidation is only possible either between the same parties (Article 10(c)) or when all claims in both arbitrations are made under the same arbitration agreement (Article 10(b)), the proposed rules will now also allow consolidation to take place when the parties in the different arbitrations are different and all claims in both arbitrations are made under the same arbitration agreements.

For instance, consolidation of an arbitration involving parties 1, 2 and 3 to a Share Purchase Agreement with a second arbitration involving parties 3 and 4 to a related Shareholders Agreement may now be possible if both contracts include the same arbitration agreements, while it would have not been possible under the current Rules.

b) Conflicts of interest and party equality

Three new provisions are noteworthy.

First, under the new Article 11(7), each party must promptly inform the Secretariat, the arbitral tribunal and the other parties of the existence and identity of any non-party having entered into a funding agreement granting it an economic interest in the outcome of the arbitration.

The scope of this new provision is to assist the arbitrators or prospective arbitrators in fulfilling their own disclosure duties. In certain circumstances, relationships between an arbitrator and a third party funder may in fact objectively affect his or her independence and impartiality. While that is not necessarily the case, it is important that these relationships be disclosed.

Second, in case of a change in party representation in the course of the arbitration, Article 17(2) of the Rules will now expressly empower the arbitral tribunal to exclude a newly introduced party representative, in respect of which one of its members would have a conflict of interest, from participating in all or part of the proceedings in order to safeguard the integrity of the proceedings.

Third, new Article 13(6), which application will be limited to treaty-based arbitrations, provides that no arbitrator shall have the same nationality of any party to the arbitration. This provision acknowledges the specific nature of investor-State arbitration, where the public interest and the validity of regulatory or legislative measures under international law may be at stake and the necessity to ensure a complete independence and impartiality of the arbitral tribunal.

Finally, the Rules will include a new Article 12(9), allowing the Court, in exceptional circumstances, to appoint each member of the arbitral tribunal if the application of the arbitration agreement would lead to a manifest risk of unequal treatment of the parties and likely affect the validity of the award. This may be the case when the clause grants a unilateral power to one of the parties to appoint the sole arbitrator or the presiding arbitrator, or a majority of the tribunal, while such a clause would not be allowed by the law of the place of arbitration. Although this power already exists under Article 42 of the Rules, the proposed addition will provide a clearer basis to the Court’s power to disregard, in such a scenario, the arbitration agreement. Article 5 of Appendix I will provide that any such decision will be subject to the provision of reasons upon the request of any party.

c) Time and cost efficiency

The Expedited Procedure Rules were introduced in the 2017 ICC Rules of arbitration, and have proved to be extremely successful. After three and a half years of application, 90 final awards were made under said rules, 65 of which within six months from the case management conference (73%) or with a short delay of less than three weeks. Twenty-four final awards were made with a delay of more than four weeks (27%) with a resulting fees reduction applied by the Court in five instances, the delay being agreed by the parties (in one case) or justified by objective circumstances in the remaining cases.

It is also noteworthy that, amongst these 90 Expedited Procedure cases, two rounds of submissions took place in 21 instances (23%) and hearings took place in 51 cases (57%), either physically or remotely. The quality of these Expedited Procedure awards, which were approved by the Court within three to four weeks, was in all respects comparable to that of awards made under non expedited proceedings.

Overall, the experience shows that in the vast majority of cases, the Expedited Procedure Rules do not diminish or alter the quality of the proceedings and of the award, and offer to the parties a significant advantage in allowing the resolution of their dispute in a much shorter timeframe with reduced costs.

The threshold for an opt-out application of the Expedited Procedure Rules will now increase from 2 to 3 million USD. The Court, however, is mindful that a one-size-fits-all is never fully satisfactory and will consider, with care, requests made by a party under Article 1(4) of Appendix VI for the Expedited Procedure Rules to be disapplied. In addition, the parties’ right to opt-out from the Expedited Procedure Rules at any time will be maintained.

The amendments will also reflect the increased use of electronic means of communication in arbitration.

While the Court will soon offer a new interactive platform for the electronic filing of submissions and exhibits, the amendments to Articles 3, 4 and 5 of the Rules will reflect the fact that, in a large number of cases, the request for arbitration and the answer are served electronically, with no paper copies. Article 26 of the Rules will also clarify that whenever a hearing is to be held, the arbitral tribunal has the power, after consulting the parties and considering all relevant circumstances, to decide whether it should take place physically or by electronic means of communication.

d) Emergency arbitration

Two of the amendments reflect the practice and policy of the Court concerning Emergency Arbitration.

First, the requirement that the parties did not agree to another pre-arbitral procedure for the Emergency Arbitrator provisions to apply will be removed. That provision, which had been included to avoid a conflict between the ICC pre-arbitral referee procedure in force since 1990 and the Emergency Arbitrator provision, has in fact never been applied and is no longer relevant. In addition, it could cause unnecessary objections in construction-related contracts providing for recourse to a dispute board.

Second, the practice of the Court not to apply the Emergency Arbitrator provisions in arbitrations arising from a treaty will be codified in Article 29. It is justified by the fact that the very short time-limits that are imposed on the parties in the context of emergency arbitration would not be compatible with the time needed by the relevant State administrations to select counsel, if any, and to organize its defense.

e) Additional awards

The amendments introduce a new provision allowing the arbitral tribunal to make an additional award on claims it omitted to decide. The Court’s practice has so far been to admit additional awards when the law at the seat of the arbitration recognizes such power. That addition will avoid the need to initiate a new arbitration in absence of such a provision in the lex arbitri.

f) Liability, governance and functioning of the Court

Finally, some of the proposed changes go to the organization and functioning of the Court.

First, a governing law and choice of forum clause will be introduced applying to the administrative activities of the Court.

Second, Appendix I to the Rules will now provide in express terms that the President of the Court is elected by the ICC World Council based on the proposal of an independent selection committee including highly distinguished arbitration practitioners. The existence and role of the Bureau of the Court, which is composed by the Court’s President and Vice-Presidents, will also be reflected in Appendix I, as well as the current procedure for the appointment of Court members.

Appendix I (Article 5) will introduce added flexibility in the work of the Court, by providing that matters currently dealt with in Plenary sessions, such as challenges, awards involving a State or a State entity, or awards in the presence of a dissenting opinion, may now be decided in Special Committees consisting of a president and at least six other Court members. Finally, Appendix I (Article 6) will provide that awards made under the Expedited Procedure Provisions may be scrutinized in Single-member Committees.

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