This report provides statistical information on the activity of the ICC International Court of Arbitration and the cases submitted to it in 2004. It also includes a final section on ICC's other dispute resolution services, which in 2004 were enlarged with the launch of the ICC Dispute Board Rules and the creation of the ICC Dispute Board Centre. Although it is too early to include statistics on this new service, there has already been a flurry of interest from businesses considering incorporating one of the three standard ICC Dispute Board clauses in their contracts.

In 2004, the ICC Court again showed itself to be a truly international arbitration institution. ICC arbitrations were commenced in a record number of countries across the world and involved an unprecedented number of parties from over 100 countries. The Court itself grew and is now more international than ever before, with 124 members from 86 different countries. Many of these members meet in Paris for the monthly plenary sessions, while a committee of the Court with a rotating membership meets on a weekly basis. A total of 47 committee sessions and 12 plenary sessions were held in the course of 2004. The day-to-day management of cases is handled by the Secretariat of the Court, whose staff, of some 25 different nationalities representing diverse legal traditions, speaks a total of some 20 languages. The Court continued to be strongly committed to educational and scientific activities, which it organizes and supports throughout the world, often in collaboration with its regional representatives in North and South America, Asia and the United Kingdom.

A total of 561 new requests for arbitration from a wide range of economic sectors were filed with the ICC Court in 2004. Construction/engineering and energy continue to be the leading sectors, accounting for approximately a quarter of cases. Other prominent sectors in 2004 were information technology, finance and insurance, health and pharmaceuticals, industrial equipment and transport, closely followed by the food industry.

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Parties to ICC arbitration

The cases registered with the ICC Court during 2004 involved a total of 1,682 parties. This is the highest number ever recorded in a year and marks an increase of over 50% in ten years.

Geographical origins of parties

Parties from 116 different countries and independent territories were involved in the cases registered in 2004. There was a notable increase in the number of parties from Asia, especially Central and West Asia, due in particular to a rise in the number of parties from Iran, Jordan, Lebanon and Saudi Arabia. In South and East Asia, the increase was mainly due to more parties from China, Malaysia and the Philippines.

The USA remains the most frequent nationality amongst ICC arbitration users. The second position was held by the United Kingdom in 2004, due to an increase of 85% in the number of British parties compared to 2003. The number of Swiss parties reached 100 for the first time.

The table below gives a detailed breakdown of the geographical origins of parties by continent and by country/independent territory.

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Multiparty cases

Multiparty cases continue to represent almost a third of the Court's caseload. 173 of the 561 cases filed in 2004 involved more than two parties. As shown below, most of these cases involved between three and five parties. The largest number of parties in a single case was 82, of which 81 were respondents. The largest number of claimants in a single case was 34. The average number of parties per case in multiparty cases increased in 2004 to over five (5.24), from an average of 4.31 for the preceding three years.

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States and parastatal entities

The proportion of cases involving a State or parastatal entity rose slightly to 11.6%. Although the number of States and parastatal entities involved as parties in these cases remained stable overall at 79 (as compared to 78 in 2003), there were some regional fluctuations, with the number from North and West Europe rising from 5 in 2003 to 10 in 2004 and from South and East Asia from 13 in 2003 to 20 in 2004.

The arbitral tribunal

Arbitrators may be nominated by the parties - in which case they are subject to confirmation by the Court or its Secretary General - or appointed by the Court. Appointments of arbitrators by the Court are most often made on the basis of a proposal from an ICC national committee.

A total of 952 arbitrators were appointed or confirmed during 2004, 172 to serve as sole arbitrators and 780 as members of a tribunal comprising three arbitrators (257 as chairmen, 523 as co-arbitrators). An additional 24 arbitrators were not confirmed.

47 (27.3%) of the <i>sole arbitrators</i> were nominated by the parties and confirmed by the Secretary General or the Court; 120 (69.8%) were appointed by the Court upon the proposal of an ICC national committee; and 5 (2.9%) were appointed directly by the Court.

492 (94.1%) of the <i>co-arbitrators </i> were nominated by the parties and confirmed by the Secretary General or the Court; 14 (2.7%) were appointed by the Court upon a proposal from an ICC national committee; and 16 (3.1%) were appointed directly by the Court.

30 (11.7%) of the <i>chairmen </i> were nominated by the parties and subsequently confirmed by the Secretary General or the Court; 111 (43.2%) were nominated by the two co-arbitrators already appointed or confirmed; 106 (41.2%) were appointed by the Court upon the proposal of an ICC national committee; and 10 (3.9%) were appointed directly by the Court.

When making the appointments referred to above, the Court took proposals from 39 ICC national committees.

In 2004, 37 challenges were introduced against serving arbitrators for an alleged lack of independence or otherwise. Only two of these challenges were accepted by the Court.

The Court accepted 25 resignations by arbitrators and refused two. It decided to replace 8 arbitrators on its own initiative.[Page9:]

Geographical origins of arbitrators

The arbitrators confirmed or appointed in 2004 came from a total of 61 countries throughout the world. They included for the first time in the history of ICC Court statistics arbitrators from Moldova, Monaco and Nicaragua. There were more arbitrators than ever before from Latin America, South and East Asia and Oceania. In Europe, the number of Spanish arbitrators appointed or confirmed in 2004 more than tripled compared to 2003.

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Place of arbitration

The parties had chosen the place of arbitration in 86% of the cases submitted to the Court in 2004. In 74% of cases they had indicated their choice in the arbitration clause and in 12% of cases in a subsequent agreement. The ICC Court fixed the place of arbitration in the remaining 14% of cases.

The places of arbitration chosen or fixed in 2004 were situated in a record number of 49 different countries. In almost 10% of cases the place of arbitration was in Latin America, now equally popular as a venue for ICC arbitration as South and East Asia. Jamaica was chosen as the place of arbitration for the first time in the history of ICC Court statistics.

Of the 42 cases in which the place of arbitration was situated in the USA, 13 were in the State of New York, 6 in Texas, 5 in Florida, 5 in Washington D.C., 4 in California, 2 in Illinois, and one each in Colorado, Connecticut, Georgia, Louisiana, Massachusetts, New Jersey and Ohio.

Applicable rules of law

In accordance with the principle of party autonomy underlying the ICC Rules of Arbitration, the parties are free to agree upon the rules to be applied to the merits of the dispute. This they had done in 80.4% of the contracts giving rise to disputes referred to ICC arbitration in 2004. National laws had been chosen in 79.1% of the contracts, with the laws of England and Switzerland being the most frequent choices, followed by those of France, Germany, the State of New York and Spain. In 1.3% of the contracts, the parties had chosen rules other than national laws. These included the United Nations Convention on Contracts for the International Sale of Goods (four contracts), international commercial law (two contracts), general principles of law (one contract) and international rules for the interpretation of trade terms (one contract). The parties' choice of a national law does not necessarily cover that law in its entirety: parties have been known to exclude certain substantive areas of law, specific instruments, or provisions relating to conflicts of law, for example.

The above analysis reflects the choices made by parties in their contracts before a dispute arises. It does not take account of the decisions made by arbitral tribunals with respect to the applicable law, pursuant to Article 17 of the ICC Rules of Arbitration.

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Amounts in dispute

The year 2004 saw fewer cases involving sums under 50,000 US dollars than in previous years (1.4% as compared to 4% in 2003 and 4.9% in 2002). Conversely, the proportion of cases in which the amount in dispute was between 1 million and 50 million US dollars increased (52.4% as compared to 47.9% in 2003 and 48.4% in 2002).

The table [above] shows the percentages of cases in which the amount in dispute fell within the ranges indicated. The far right-hand column indicates the percentages when the cases involving unquantified amounts are disregarded.

Types and dates of contracts

The disputes referred to ICC arbitration in 2004 arose out of a wide variety of contracts. Almost one half (47%) of the underlying contracts related to goods (e.g. concessions, construction and engineering, distribution and franchising, leasing, sale and purchase); 20% related to services (e.g. agency, consultancy, factoring, insurance, loans and guarantees, maintenance, management, marketing, sponsoring, transport); 19% to business structures (e.g. consortia, joint ventures, shareholder agreements, share transfers); and 6% to intellectual property (e.g. know-how, licensing, patents, trademarks).

The table [below] shows that a third of the contracts giving rise to the disputes referred to the ICC Court in 2004 were between one and two years old. However, it also shows that even contracts that have survived for several decades are not immune to difficulties.

Awards

The ICC Court approved a total of 345 awards in 2004, comprising 220 final awards, 94 partial awards and 31 awards by consent. Approximately two thirds of the awards rendered in 2004 were in English, with French, Spanish and German being the next most frequently chosen languages. Awards were also rendered in Czech, Greek, Italian, Portuguese and Turkish.

One of the hallmarks of ICC arbitration is the scrutiny to which the ICC Court subjects all awards before they are rendered. Under the powers conferred upon it by Article 27 of the ICC Rules of Arbitration, the Court laid down modifications as to form and/or drew attention to points of substance when scrutinizing 252 of the 345 awards it approved in 2004. On eleven occasions, the arbitral tribunal was asked to resubmit its award for approval.[Page13:]

Most of the awards rendered by arbitral tribunals comprising three arbitrators were decided unanimously. A total of 32 awards were given by a majority decision. One award was made by the chairman of the arbitral tribunal alone.

A total of 25 addenda correcting and/or interpreting an award were issued in 2004. Eight of these were made upon the initiative of the claimant(s), eleven upon the initiative of the respondent(s), five upon the initiative of both the claimant(s) and respondent(s) and one upon the arbitral tribunal's own initiative. In 2004, arbitral tribunals rejected 18 applications for the correction, interpretation and/or clarification of the award. Ten of these applications were by the claimant(s) and eight by the respondent(s).

ICC as appointing authority

In 2004, the ICC Court was requested to appoint arbitrators in ad hoc proceedings conducted under the UNCITRAL Arbitration Rules on five occasions and in other ad hoc proceedings on seven occasions. In addition, it received two requests to decide on challenges in proceedings conducted under the UNCITRAL Arbitration Rules.

ADR

In 2004, ICC received six requests for ADR from both the industrial and services sectors. These requests involved parties from nine different countries (see table [below]).

The agreement of all parties to submit to the ICC ADR Rules is a prerequisite for the commencement of ICC ADR proceedings. This condition was met in five of the six cases mentioned above and led to the selection of four Neutrals, three of whom were designated by the parties and one appointed by ICC. These Neutrals were from Algeria and the United Kingdom.

ICC ADR is characterized by its flexibility and rapidity. Parties may adopt whatever settlement technique they consider to be appropriate in the circumstances. Mediation was the most frequent choice in the cases filed in 2004. In one case it was combined with neutral evaluation. The average duration of the cases completed within the year was three months.

Expertise

Eight new requests were filed under the ICC Rules for Expertise in the course of 2004. Six of these were for the proposal of an expert and two for the appointment of an expert. Five of the proposals were sought by arbitral tribunals: four by ICC tribunals and one by a tribunal operating under the auspices of another arbitration institution.[Page14:]

The eight cases involved a total of 18 parties from ten countries (see table [below]). Eight experts of six different nationalities (Belgian (2), British (2), Chilean (2), French, Swiss and South African) were proposed or appointed. The matters for which these experts were required were of a technico-industrial nature in six cases, a financial nature in one case, and the remaining case concerned the interpretation of a penalty clause in a contract.

DOCDEX

In 2004, 14 new applications were made for DOCDEX decisions under the ICC Rules for Documentary Instruments Dispute Resolution Expertise. The disputes to which these applications related involved a total of 29 parties from ten countries and the 42 experts appointed (three in each case) came from 24 countries (see tables).

The aim of DOCDEX is to provide an independent and impartial decision rapidly and efficiently. Proceedings are conducted solely in writing. Although respondents are invited to submit a written answer in response to the request made by the initiating party, their failure to do so does not prevent the experts from rendering their decision. Ten of the cases registered in 2004 were conducted without the participation of the respondents. Each of the cases commenced in 2004 was completed within two months.