In 2009, ICC's dispute resolution services continued to have a growing appeal for businesses worldwide. Not only did the number of parties using those services expand by over 20%, but their geographical diversity widened to cover two thirds of the world's nations. ICC's strength lies in its ability to cater to today's global marketplace. By offering rules and procedures sufficiently flexible and neutral to accommodate cultural diversity while ensuring legal security and efficiency, and by bringing together dispute resolution specialists from a vast array of professional backgrounds and linguistic traditions, ICC is able to ensure that its solutions are and remain attuned to international business needs. This has won it the trust of an increasing number of private and public corporations seeking remedies to difficulties encountered in their contractual relations. Those remedies may be sought through a variety of dispute resolution methods, all to be found in the dispute resolution services offered by ICC. In addition to arbitration, these include mediation and other techniques of amicable dispute resolution, expertise, dispute boards, and a special procedure for disputes concerning documentary credits, bank-to-bank reimbursements, collections and guarantees.

Arbitration

Arbitration is ICC's flagship dispute resolution service. It mobilizes the combined forces of the ICC International Court of Arbitration, composed of 125 members from almost 90 countries, and a Secretariat including eight case-management teams each with a distinct regional focus. One of these teams is based in the Secretariat's Asia office in Hong Kong, while the others operate from ICC's headquarters in Paris. Most of the world's major languages are spoken within the Secretariat, whose staff includes over 25 different nationalities. The Secretariat stewards cases on a day-to-day basis and prepares the weekly meetings of the Court at which the important decisions punctuating the proceedings are taken collectively after discussion.

A record 817 new cases were filed with the ICC Court during 2009, bringing the number of ongoing cases at the end of the year to 1,461, which represents an increase of almost 50% in ten years. This rapidly expanding caseload has placed new pressures on the administration of proceedings, to which the Court and its Secretariat have responded by recruiting new case management staff and streamlining internal procedures. A number of significant changes were made in Court practices in the course of the year to help achieve greater efficiency. These included a simplification in the handling of arbitral tribunal expenses, the introduction of a new form requiring prospective arbitrators to make disclosures on their availability as well as their independence, the abandonment of rigid three-month time extensions, and measures to facilitate the presentation of documentary evidence to the Court. At the same time, work began in earnest on the revision of the ICC Rules of Arbitration, with the creation of a Drafting Sub-Committee within the ICC Commission on Arbitration Task Force specially established for this purpose.

Parties

For the first time in the Court's history, the total number of parties involved in the cases filed during a calendar year exceeded 2,000. The figure reached at the end of the year was 2,095, which represents a 20% rise from the previous year and reflects the similar rise in the number of cases.

Geographical origins of parties

These parties came from a wider range of countries than ever before. The 128 countries and independent territories represented covered all regions of the world. Almost half of the parties originated from outside Europe: some 20% were from the Americas, a similar proportion from Asia and the Pacific, and 6% from Africa. [Page6:]

Origins of parties: regional breakdown

AFRICA

The number of parties from North Africa rose by 65% from the previous year, due to a large increase in the number of Egyptian parties and a rise in the number of Moroccan parties. The spread of nationalities in Sub-Saharan Africa was wider than in recent years: a total of 23 countries in Sub-Saharan Africa were represented in the new cases filed in 2009.

AMERICAS

The US continued to be the most frequent of all nationalities worldwide. The number of parties from Latin America and the Caribbean grew by 30%, chiefly due to an unprecedented rise in the number of Brazilian parties. [Page7:]

ASIA & PACIFIC

There was widespread growth in the number of parties from South and East Asia and the Pacific, with increases recorded for all major nationalities in the region. India was the most frequently represented country, followed by China, then South Korea, Singapore, Japan and Malaysia.

* 33 from Mainland China (15 claimants, 18 respondents); 15 from Hong Kong (7 claimants, 8 respondents); 1 from Macau (claimant).

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EUROPE

As in previous years, French and German parties were by far the most numerous of all European nationalities. The number of Turkish parties rose, to be almost on a par with those from Italy, the Netherlands, Spain, Switzerland and the United Kingdom. Growth in Central and East Europe was proportionally greater than in North and West Europe (respectively 30% and 18%).

Parties in brief: most frequent nationalities

State and parastatal parties

The number of cases involving one or more States or parastatal entities rose to 78 in 2009, representing 9.5% of all cases filed during the year. The two regions with the greatest concentration of State parties were Sub-Saharan Africa and Central and East Europe. [Page9:]

The total number of States and parastatal entities involved in these cases was 86, of which 83% were respondents and 17% claimants (this compares with a breakdown of 54% respondents and 46% claimants amongst parties in general).

Almost two thirds of the cases involving States and parastatal entities were disputes relating to construction projects. The other cases related to energy, finance, transport, telecommunications, general trade, agriculture and national security.

Five cases were filed pursuant to bilateral investment treaties in 2009. In two of the cases, ICC arbitration was chosen from various dispute resolution procedures contemplated by the treaty. In the other three cases, ICC was designated as the appointing authority for the constitution of the arbitral tribunal.

Multiparty cases

The number of cases involving more than two parties rose in keeping with the rise in the number of cases generally and continued to account for slightly less than a third of all cases. The average number of parties in multiparty cases was four, with 88% of these cases involving between three and five parties and 12% six or more parties. The largest number of parties in any one case was 19.

Single-nationality cases

The proportion of cases involving parties of the same nationality remained stable at 16% of all cases filed during the year. A total of 53 different nationalities were represented in single-nationality cases; the most common, in decreasing order of frequency, were cases involving Turkish, French, Brazilian, German, US, Czech, Greek, Spanish, Jordanian and Mexican parties.

Arbitral tribunals

The number of appointments and confirmations of arbitrators in ICC cases rose by 13% from the previous year to 1,305. The size of this increase was slightly less than the rise in the number of cases and parties due to a slight fall in the proportion of three-member tribunals and the time gap between the filing of a case and the constitution of the arbitral tribunal. In many of the cases filed in 2009, the constitution of the arbitral tribunal will take place in 2010.

Constitution of arbitral tribunals

Arbitrators in ICC cases are either nominated by the parties or the other arbitrators (in the case of three-member tribunals), or appointed by the Court. Nominations by parties and other arbitrators have to be confirmed by the Court or its Secretary General. Appointments are made either on the basis of a proposal from an ICC national committee, or directly by the Court. Below is a breakdown of nominations and appointments made in 2009, which followed a similar pattern to previous years.

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Before their appointment or confirmation, arbitrators are required to sign a statement of independence and disclose any facts or circumstances that might be of such a nature as to call into question their independence in the eyes of the parties. If disclosures are made, the statement of independence becomes 'qualified'. 177 (13.6%) of the 1,305 appointments and confirmations recorded in 2009 were made on the basis of qualified statements of independence.

In 2009, the Court refused to confirm 22 nominations, 15 of which had given rise to qualified statements of independence.

Incidents affecting the composition of arbitral tribunals after their constitution

Challenges 'for an alleged lack of independence or otherwise' (ICC Rules of Arbitration ('the Rules'), Art. 11(1)) were introduced in 34 cases against a total of 57 arbitrators. Five of the challenges were accepted by the Court.

Resignations were tendered by arbitrators on 32 occasions. On all but one occasion, the resignation was accepted by the Court and led to the arbitrator's replacement.

In addition to replacements made following a challenge or a resignation, 2 replacements were made due to the death of an arbitrator, and 2 at the request of all parties pursuant to Article 12(1) of the Rules.

Article 12(2) of the Rules allows the Court to initiate replacement proceedings of its own accord if an arbitrator fails to fulfil his or her functions. It took this initiative twice in 2009.

Geographical origins of arbitrators

The arbitrators appointed and confirmed in 2009 came from 73 different countries (see list below). In 2009, Swiss arbitrators shared their traditional lead with UK arbitrators: together, these two nationalities represented 30% of all appointments and confirmations. Amongst other nationalities, Greek, Jordanian and New Zealand arbitrators were more numerous than previously. Also, a larger number of African arbitrators from a wider range of countries were appointed or confirmed.

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* 1 co-arbitrator from Mainland China; 3 sole arbitrators and 1 co-arbitrator from Hong Kong.

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Arbitrators in brief: most frequent nationalities

Choice of law

88% of the contracts underlying the disputes filed with ICC in 2009 contained choice of law provisions. In all but a handful of cases, the parties had chosen State laws. Their choices covered the laws of 91 different States. The most popular choice was English law (14.3% of contracts), followed closely by Swiss law (13.1% of contracts), then French law (7.2% of contracts), US laws (7.1% of contracts), German law (6.0% of contracts) and Brazilian law (2.6% of contracts). Twice as many African State laws were chosen as in the previous year.

In those contracts where parties had chosen US laws, the law of the state of New York was the most frequent choice (44% of contracts), followed by Delaware (14% of contracts) and California (9% of contracts). The parties' choices covered a total of 14 different US states.

In 10 contracts the parties had chosen anational rules of law. These included the United Nations Convention on Contracts for the International Sale of Goods (CISG), the UNIDROIT Principles of International Commercial Contracts and ICC's Incoterms® rules. There were also some isolated references to 'principles of international law', ex aequo et bono, and European legislation.

The above figures reflect the positive choices made by parties when drafting their contracts. They do not take account of the decisions on the applicable law made by arbitrators after the proceedings have begun. Nor do they include negative choices, whereby parties exclude the application of certain rules of law.

Places of arbitration

A total of 101 different cities in 53 countries were selected as places of arbitration in 2009. The tables below show the most frequently selected cities and countries, plus a complete list of countries in which cities were selected as the seat of an ICC arbitration, showing whether the selection was made by the parties or the ICC Court. The great majority of places of arbitration (88.4%) were chosen by the parties. In the remaining 11.6% of cases, the Court's role was sometimes limited to simply selecting a city within a country already intimated by the parties.

A breakdown by region shows that 72.4% of all cases commenced in 2009 were seated in Europe, 14.5% in Asia and the Pacific, 10.9% in the Americas, and 2.2% in Africa. It may be noted that the range of African countries in which arbitrations were seated was wider than ever before.

In the USA, ICC proceedings were seated in 8 different states: New York (17 cases), California (5 cases), Florida (4 cases), Texas and Washington D.C. (3 cases each), Pennsylvania (2 cases), Maryland and Minnesota (1 case each).

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Places of arbitration in brief: most commonly selected cities and countries

* All Hong Kong.

Countries in which places of arbitration were located

* Number of cases in which the place was chosen by the parties.

** Number of cases in which the place was fixed by the Court.

*** All Hong Kong

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Nature of the disputes

Economic sectors

Disputes from all sectors of the economy were referred to ICC arbitration in 2009. Construction and engineering disputes continued to represent the lion's share, accounting for some 15% of cases. Energy disputes were the next most frequent, closely followed by disputes from the finance and insurance sector (each representing almost 10% of cases). Other prominent sectors included minerals and metallurgy (8.4% of cases), telecommunications and information technology (7.7% of cases), transport (6% of cases), general trade and distribution (5.6% of cases) and industrial equipment (5.3% of cases).

Amounts in dispute

The trend towards high-value disputes observed in 2008 continued in 2009, with 29.4 % of cases involving amounts in dispute in excess of 10 million dollars, as compared with 19.9% in 2007. For the first time, less than 25% of the cases filed during the year were valued at under one million dollars.

Amounts in dispute (US dollars)

Awards

A total of 415 awards were approved in 2009, comprising 265 final awards, 111 partial awards and 39 awards by consent.

Making of the award

Some 90% of the awards rendered by three-member tribunals were unanimous decisions. The decision was given by a majority in the remaining 10% of awards. In one case, on the basis of Article 25(1) of the Rules, the chair of the tribunal decided alone on one aspect of the dispute while a majority decision was reached on the remaining aspects.

Scrutiny

Awards made by ICC arbitral tribunals are submitted to the Court for approval pursuant to Article 27 of the Rules. In 2009, the Court laid down modifications as to the form of the award and/or drew the arbitral tribunal's attention to points of substance when approving 382 awards, leaving 33 awards approved without commentary by the Court. On a further 34 occasions, the Court requested that the tribunal resubmit its award for approval.

Languages

The great majority of awards rendered in 2009 were drafted in English. Other languages included (in decreasing order of frequency): French, Spanish, German, Portuguese, Italian, Czech, Polish, Dutch, Japanese, Russian, Serbian and Turkish. Two awards were bilingual: one was drafted in English and Polish and the other in English and Chinese.

Correction and interpretation

If, after an award has been rendered, it proves necessary to correct or interpret any part of the award, the tribunal may draw up an addendum pursuant to Article 29 of the Rules. During 2009, 28 addenda were issued by ICC arbitral tribunals correcting and/or interpreting an award. On 31 occasions, arbitral tribunals issued decisions rejecting an application for correction and/or interpretation.

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Pre-Arbitral Referee Procedure

One pre-arbitral referee procedure was initiated in 2009. The case was brought in the context of a shipbuilding contract between Algerian and Spanish parties and its purpose was to obtain an urgent order appointing an expert to evaluate alleged defects and to order any conservatory measures necessary to safeguard evidence.

ICC as Appointing Authority

Parties involved in ad hoc proceedings may call upon ICC to assist in constituting the arbitral tribunal. ICC offers a special set of rules for this purpose, entitled the Rules of ICC as Appointing Authority in UNCITRAL or Other Ad Hoc Arbitration Proceedings. The functions carried out by the Court under those rules cover not only appointments but also challenges and other services upon which the parties may agree.

In 2009, 15 requests were filed for ICC to act as appointing authority. Of these requests, 8 concerned UNCITRAL and 7 non-UNCITRAL ad hoc proceedings. The former involved parties from Bermuda, the British Virgin Islands, the Czech Republic, Germany, Greece, Iran, Mauritius, Slovakia, Switzerland and the United Kingdom; and the latter parties from China, Cyprus, Gibraltar, Indonesia, Italy, Lebanon, the Netherlands, Norway, Pakistan, the Philippines, Qatar and Tanzania.

ADR

ICC ADR, which stands for Amicable Dispute Resolution, embraces various methods of dispute resolution that seek a settlement by consensual means. Most parties filing requests under the ICC ADR Rules opt for mediation proceedings.

In 2009, 24 requests for ADR were filed with ICC, which was more than twice as many as averaged over the previous seven years. These requests involved a total of 51 parties from 25 different countries (see below) and included 3 State parties. Approximately half of the parties were from Europe (49%), 29% from the Americas, 18% from Asia and 4% from Africa. The languages used in the proceedings were English, French, Spanish, German and Polish.

ADR: geographical origins of parties

Of the 24 cases filed in 2009, 4 were withdrawn upon agreement between the parties and 5 at the request of the initiating party or parties due to the other side's failure to participate, leaving 15 to proceed with all parties. In 5 of these, the neutral was selected by the parties and in the remaining 10 by ICC. A total of 8 different nationalities were represented amongst these neutrals (Australia, Canada, Israel, Poland, Spain, Switzerland, the United Kingdom and the United States of America).

The flexibility of the ICC ADR Rules allows parties to choose the settlement technique or techniques they would like to use for their specific procedure. The options range from mediation and conciliation to neutral evaluation and adjudication. In most cases, the parties agree on the settlement technique to be used either in their dispute resolution clause or prior to the appointment of the neutral. Otherwise, once he or she has been designated or appointed, the neutral will determine with the parties what technique(s) to use. As in previous years, mediation was the overriding preference in 2009, accounting for almost 90% of cases. [Page16:] Other techniques chosen included conciliation and neutral evaluation.

ICC ADR was used to settle disputes of various kinds in 2009. A wide range of sectors were involved, including telecommunications, pharmaceutics, energy, banking, insurance, construction, sport and the car industry. The size of the disputes, in financial terms, likewise ranged widely from some 100,000 US dollars to almost 250 million US dollars and averaged just less than 17 million US dollars. See below for a breakdown of the value of ADR cases filed in 2009.

In 2009, ICC ADR once again proved to be a highly efficient dispute resolution mechanism, both in terms of time and cost. The average duration of the proceedings, from the filing of the request for ADR to the completion of the case, was 117 days (i.e. less than four months), while the cost of the proceedings, including the neutral's fees and expenses and ICC's administrative costs, averaged less than 20,000 US dollars (i.e. approximately 0.1% of the average amount in dispute).

Expertise

For situations in which the opinion of an expert with specialist knowledge and skills is required, the ICC International Centre for Expertise offers a range of services including the proposal and appointment of experts and the complete administration of expertise proceedings.

ICC received 11 requests for the proposal of experts, 3 requests for the appointment of experts, and one request for the administration of expertise proceedings, making a total of 15 new cases during the year. In 4 of these cases, the parties sought a person to act as an expert on an adjudication or dispute board, rather than to carry out a specific mission leading to an expert report. One of the cases required the International Centre for Expertise not only to appoint an expert, but also to rule on a subsequent challenge against the person appointed. The challenge was rejected.

The 15 cases filed in 2009 involved a total of 31 parties, from Austria, the British Virgin Islands, China (including Hong Kong), the Czech Republic, Finland, France, Germany, Greece, Italy, the Netherlands, Oman, Poland, Portugal, Russia, Slovenia, Turkey, the United States of America and Venezuela. The experts proposed or appointed came from the Czech Republic, Finland, France, Germany, Switzerland, the United Kingdom and the United States of America.

The areas in which expertise was sought were construction (4 cases), vehicle and railway engineering (4 cases), general engineering (2 cases), technical equipment (2 cases), law (2 cases) and finance (1 case).

DOCDEX

A specific service called DOCDEX is offered for disputes relating to documentary credits, bank-to-bank reimbursements, collections and guarantees. This is a paper-based procedure in which three experts selected from a list maintained by the ICC Commission on Banking Technique and Practice render a prompt and impartial decision to resolve disputes subject to the application of one of ICC's sets of banking rules. These rules include the latest revisions of the Uniform Customs and Practice for Documentary Credits (UCP 600) and the Uniform Rules for Demand Guarantees (URDG 758).

A total of 16 requests for a DOCDEX decision were filed with ICC in 2009. The 36 parties involved in these cases came from Australia, Austria, Bahrain, Bangladesh, Canada, China, Chinese Taipei, Greece, India, Italy, Libya, Malaysia, Monaco, Poland, Qatar, South Korea, Spain, Switzerland, Turkey, Tunisia, the United Arab Emirates, the United Kingdom, the United States of America and Vietnam; while the 39 experts appointed to decide the disputes came from Austria, Bahrain, Belgium, Canada, [Page17:] China (Hong Kong), the Czech Republic, Denmark, France, Germany, Greece, Iran, Italy, Malaysia, Mexico, Pakistan, Singapore, Switzerland, the United Kingdom and the United States of America (3 cases were withdrawn by the parties before the appointment of any experts). The average duration of DOCDEX cases filed in 2009 was 56 days and the cost for most cases no more than the Standard Fee of 5,000 US dollars set in the Appendix to the DOCDEX Rules.

Dispute Boards

Dispute Boards are ongoing bodies set up for the duration of a contract to resolve disputes as and when they arise during the life of the contract. Parties using the ICC Dispute Board Rules may call upon ICC to appoint Dispute Board members, decide on challenges against Dispute Board members and review decisions issued by Dispute Boards. However, if parties do not encounter any difficulties in the course of the proceedings or do not need any additional help from ICC, they are free to use the ICC Dispute Board Rules without recourse to the ICC Dispute Board Centre. In 2009, one request was made to ICC pursuant to the ICC Dispute Board Rules: a decision was sought on a challenge introduced against the chair of a Dispute Board comprising members from Germany, Italy and the United States of America, which had been set up in the context of a construction project between parties from Europe and Latin America. The fact that no intervention was required from ICC in any other contracts subject to the ICC Dispute Board Rules points to the comprehensiveness of these rules and the preventive effect of a permanent dispute resolution structure of this kind.