ARBITRATION

A total of 759 new filings were received by the ICC International Court of Arbitration ('the Court') in 2012. At the end of the year, the Secretariat's eight case-management teams were administering a total of 1,476 ongoing procedures.

Parties

Geographical origins

The 2012 filings involved a total of 2,036 parties from 137 countries and independent territories. The breakdown by region shows a small rise in the proportion of American and Asian parties at the expense of African and European parties.

Africa

The number of parties from Sub-Saharan Africa was higher than in previous years, due notably to an increase in Tanzanian parties resulting from a number of multiparty cases. The number of North African parties returned to a level more consistent with pre-2011 figures following a peak in multiparty cases in 2011.

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Americas

The USA continued to be the most highly represented nationality in ICC arbitration not only in the Americas but worldwide. In Latin America, where the number of nationalities represented rose to 16, Brazil confirmed its recent ascension, accounting for 37% of all parties from the region. In the Caribbean, the overwhelming majority of parties came from the British Virgin Islands and the Cayman Islands.

Asia & Pacific

The increased presence of parties from Asia and the Pacific (which exceeded 20% of all parties for the second successive year) was due in particular to the frequency of parties from China, India, Singapore and South Korea and the continuing rise in the number of parties from the United Arab Emirates. India took over as the most frequent nationality in the region owing to several cases involving multiple Indian parties, including one with as many as 24. Qatari parties also increased to almost double the number in 2011. The number of Asian nationalities represented remained at 34, confirming the increase recorded in the preceding years.

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* 28 from Mainland China (10 claimants, 18 respondents); 26 from Hong Kong (13 claimants, 13 respondents), 1 from Macau (1 claimant).

Europe

The number of countries and territories from which the parties originated rose to 45. German, French, Spanish and Italian parties remained the most numerous, between them representing almost a third of all European parties. Romanian parties for the first time overtook Turkish parties as the most frequent nationality in Eastern Europe. This rise is explained at least in part by five cases involving more than two Romanian parties, including one with as many as 12 and another with nine.

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In brief: most frequent nationalities worldwide

Single-nationality cases

The number of new cases between parties from the same country remained stable at 18% of the total caseload. They concerned 52 of the 137 countries and territories represented in cases filed in 2012. Some regional fluctuations were observed, with the number of single-nationality cases from Latin America and the Caribbean exceeding previous figures. The countries with the greatest concentration of domestic ICC arbitrations are listed below.

Multiparty cases

Almost a third of the cases registered in 2012 involved more than two parties. While the average number of parties in these 233 cases was four, they included eight cases with more than ten parties and one with as many as 25 parties. 57% of the cases involved one claimant and more than one respondent, 26% one respondent and several claimants, and the remaining 17% several claimants and several respondents.

State and state-owned parties

A total of 75 new cases in 2012 involved one or more states or parastatals (9.9% of all new cases). This remains consistent with previous years. The total number of state and parastatal parties involved in these cases was 85, of which 13 were claimants and 72 respondents. They came from 41 different countries, including three (two in Latin America and one in West Asia) from which ICC arbitration had not previously attracted any state/parastatal parties. A noteworthy regional development was the sharp increase in the number of Latin American states and parastatals, which rose from single figures in each of the previous three years to 23 in 2012. All but two of those parties were involved as respondents. The changes introduced in the 2012 Rules to address the special needs of cases involving states and state entities are intended to encourage the involvement of more states and state entities as claimants. These changes are described in the Commission on Arbitration report States, State Entities and ICC Arbitration (ICC Publication 862).

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Arbitral tribunals

Constitution

ICC arbitral tribunals are constituted through the appointment or nomination of arbitrators. Appointments are made by the Court, whereas nominations are made by the parties, co-arbitrators (when required to nominate the president of a three-member tribunal) or in accordance with an alternative selection process agreed between the parties. Nominations are subject to confirmation by the Court or its Secretary General. Appointments are made either on the basis of a proposal from an ICC National Committee or Group, or directly by the Court. The total number of appointments and confirmations of arbitrators made in the course of 2012 was 1,301, of which 939 were confirmations and 362 appointments, showing that the arbitrators were chosen by the parties in the great majority of cases. Where the Court was required to make an appointment, it did so on the basis of a proposal from an ICC National Committee or Group in 85% of cases and directly in the remaining 15% of cases. Although the 2012 Rules give the Court greater powers to appoint arbitrators directly, its use of those powers remained limited as there were only 11 more direct appointments than in 2011, and the total number of direct appointments continued to represent less than 5% of all confirmations and appointments.

Below is a breakdown of 2012 appointments and confirmations by category of arbitrator (sole arbitrators, co-arbitrators, tribunal presidents).

Prior to confirmation or appointment, arbitrators are required to disclose any facts or circumstances of such a nature as to call into question their independence or give rise to reasonable doubts as to their impartiality. Disclosures of this kind were made before 281 confirmations and appointments (21.6% of all confirmations and appointments), leaving almost 80% unaffected by issues of independence and impartiality. The Court decided not to confirm an arbitrator on 33 occasions: the arbitrator's independence or impartiality was at issue 0n 29 of those occasions.

Challenges and replacements of arbitrators

Occasionally, the composition of an arbitral tribunal may change in the course of proceedings as a result of a challenge, a resignation or a replacement for other reasons such as at the request of all parties, on the Court's own motion or upon the death of an arbitrator. A total of 47 replacements were made during 2012.

The number of challenges made against arbitrators rose slightly in 2012 to 61, from 39 in 2011. 13 (or 21%) of the challenges were successful, as compared with an average success rate of approximately 8% over the previous ten years. [Page12:]

Geographical origins

Arbitrators of 76 different nationalities were confirmed or appointed in 2012. There was a 37.5% increase in the number of confirmations and appointments of arbitrators from South and East Asia and a 19% increase in those from Latin America. The range of nationalities represented among South and East Asian arbitrators rose from 11 in 2011 to 14 in 2012. In Latin America, Brazilian, Mexican, Argentinian and Colombian arbitrators continued to be the most frequently chosen, with Peruvian arbitrators taking the fifth position for the first time. As in previous years, British, French, German, Swiss and US arbitrators remained the most frequently chosen worldwide, between them accounting for 48% of all confirmations and appointments. British arbitrators unseated Swiss arbitrators as the most popular choice in 2012. Also, for the first time, Turkish arbitrators joined the top 15 most frequent nationalities. The regional breakdown was very similar to 2011 with European arbitrators accounting for 65.7% of all confirmations and appointments, arbitrators from the Americas 19.6%, Asian/Pacific arbitrators 12.8% and African arbitrators 1.9%. The latter included for the first time an arbitrator from Zambia.

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Arbitrators: top 15 nationalities in 2012

Choice of law

In 88% of the cases registered in 2012 the parties had included a choice-of-law clause in the contract that gave rise to their dispute. 97% of those clauses specified a state law. The parties' choices covered the laws of 91 different nations and independent territories. The ten most popular choices were as follows:

Where US laws were chosen, the parties' choices covered the laws of 14 states. The most common choice was New York law (57%), followed by the laws of the states of Delaware (10%), California (8%), Florida (7%), Texas (6%), Illinois, Indiana, Kansas, Massachusetts, Miami, Missouri, Oklahoma, Oregon and Pennsylvania (1% each).

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.

Parties had chosen anational rules or principles in 3% of contracts. 11 of these contracts referred to the United Nations Convention on Contracts for the International Sale of Goods, four to EU law, three to the UNIDROIT Principles of International Commercial Contracts, three to amiable composition or ex aequo et bono, and one to the laws of the Dubai International Financial Centre.

Nature of the disputes

Although ICC arbitration is used to resolve disputes from all sectors of the economy, its presence in the construction and energy sectors has always been particularly strong. This was again the case in 2012 with almost a third of the cases filed during the year originating from these two sectors (17% construction/engineering, 15% energy). The next most frequent kinds of disputes were those relating to telecommunications and information technology (8%), closely followed by those relating to finance and insurance (8%), general trade (6%) and industrial equipment (6%).

The value of the disputes ranged from less than US$ 50,000 to over US$ one billion. The proportion of disputes valued at less than US$ one million remained stable at 24% of the total caseload. A rise in the number of high-value disputes was observed, with the amount in dispute exceeding US$ 100 million in 8% of cases. As a result, the average amount in dispute rose to US$ 43.5 million, from US$ 31.5 million in 2011. The aggregate value of all disputes pending before the Court at the end of the year was almost US$ 110 billion.

Amounts in dispute (US dollars)

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Places of arbitration

Proceedings commenced in 2012 were seated in 92 different cities in 59 countries. These cities were chosen by the parties in 90% of cases. In the remaining 10% of cases, the place of arbitration was fixed by the Court, sometimes within a country for which the parties had already expressed a preference. The number of different European cities selected as places of arbitration shrank from 52 in 2011 to 40 in 2012, while the number of Latin American cities expanded from eight in 2011 to 12 in 2012.

The frequency with which places were chosen was broadly similar to previous years. 68.8% of cases were seated in European cities, 15.2% in cities in North and South America, 15% in Asian cities and 1% in African cities. The most popular cities have remained unchanged for many years, although with some variations in their order of popularity.

Places of arbitration: top ten cities selected in 2012

Country-by-country breakdown: number of arbitrations seated in each country

Of the 12 cases seated in China, one was seated in Mainland China and the other 11 in Hong Kong. Of the 41 cases seated in the USA, 22 were seated in the State of New York, nine in Florida, three in California, two in Texas and one in each of the states of Colorado, Georgia, Hawaii and Indiana, and 1 in Washington D.C. [Page15:]

Awards

A total of 491 awards were issued during the year. They comprised 341 final awards, 119 partial awards and 31 awards by consent.

Prior to being issued all awards drafted by ICC arbitral tribunals are submitted to the Court for scrutiny and approval. When approving an award, the Court is empowered to lay down modifications as to form and draw attention to points of substance. It did so when approving 483 (98%) awards in 2012. This process enables improvements to be made to enhance the enforceability of the award. On a further 59 occasions, the Court requested that the arbitral tribunal resubmit its award for approval.

Although, as the lingua franca of international commerce, English was the language in which the great majority (76.4%) of awards were drafted in 2012, awards were also drafted in 13 other languages. They included (in decreasing order of frequency): French (8.4%), Spanish (6.3%), German (3.3%), Portuguese (2.4%), Italian (0.8%), Mandarin (0.6%), Norwegian (0.4%), Polish (0.4%), Czech, Dutch, Japanese, Swedish and Turkish (0.2% each).

Of the 460 partial and final awards issued during the year, 273 were rendered by tribunals composed of three arbitrators. 221 (81%) of those awards were rendered unanimously and 52 (19%) by a majority of the arbitrators comprising the tribunal. Majority awards are sometimes accompanied by dissenting opinions expressed by the member in the minority, either in the award itself or in a separate document. In 2012, the minority arbitrator expressed a dissenting opinion in the award in 14 cases and in a separate document in 28 cases. In the remaining ten cases, there was no dissenting opinion, but the award was described as being rendered by a majority of the tribunal. On no occasion was it necessary for the president of an arbitral tribunal to make an award alone, for want of a majority among the tribunal members.

EMERGENCY ARBITRATOR

In 2012 the Secretariat received two applications under the new Emergency Arbitrator Provisions of the 2012 Rules, which allow parties to request urgent interim and conservatory measures prior to the constitution of the arbitral tribunal. The measures requested in these applications were, in the first case, an order for the amount in dispute to be deposited in an escrow account and, in the second case, an anti-suit injunction.

In the first case, involving parties from the United Kingdom, an emergency arbitrator, also of British origin, was appointed on the day following the receipt of the application. The emergency arbitrator issued his order rejecting the application within 12 days of being seized of the matter.

The second case involving US and Mexican parties was inadmissible as the contract containing the parties' arbitration agreement had been made before the entry into force of the 2012 Rules instituting the emergency arbitrator procedure and no subsequent agreement on its use had been made.

SERVICES IN AD HOC ARBITRATIONS

In addition to administering entire arbitrations, the ICC also offers a service for the constitution of arbitral tribunals in ad hoc proceedings conducted under the UNCITRAL Arbitration Rules or pursuant to other rules. This service is provided in accordance with a special set of ICC rules entitled Rules of ICC as Appointing Authority in UNCITRAL or Other Ad Hoc Arbitration Proceedings. The ICC International Court of Arbitration is the sole body empowered to carry out the functions of appointing authority under these Rules

In 2012, nine requests were received for the appointment of arbitrators in ad hoc arbitration proceedings conducted under the UNCITRAL Arbitration Rules and ten requests for the appointment of arbitrators in non-UNCITRAL proceedings. In addition, the ICC Court was requested to decide on one challenge in proceedings under the UNCITRAL Rules and two challenges in non-UNCITRAL proceedings. [Page16:]

ADR

The ICC ADR Rules provide for the settlement of disputes amicably by such means as mediation, conciliation, neutral evaluation or combinations of these and other techniques. Parties are free to choose the settlement technique they wish to use. If they fail to do so, their dispute will be resolved by mediation as the fallback technique.

A total of 21 new cases were filed under the ICC ADR Rules in 2012. Mediation was by far the preferred technique, with 16 of the 21 disputes being settled by mediation, two by conciliation and one by a combination of neutral evaluation and mediation. The remaining two cases were withdrawn before the settlement technique had been fixed.

In 16 of the cases, the proceedings were initiated pursuant to a contractual clause providing for ICC ADR followed by arbitration in the event mediation was unsuccessful. Although preferable, a dispute resolution clause is not indispensable. In three of the 2012 cases the proceedings were initiated pursuant to a subsequent agreement or at the request of one party accepted by the other party. Two mediations were conducted concurrently with an ICC arbitration, which was stayed for the duration of the mediation.

A total of 51 parties were involved in the 2012 filings, which included six multiparty cases (three with three parties and three with four parties). The 51 parties came from 21 countries, as listed below.

A third of the cases filed during the year involved parties of the same nationality.

In three cases the respondent was a state.

The neutral was designated by the parties in three cases and appointed by the ICC in ten cases. In one case a hybrid selection process was followed, with the neutral being designated by the parties from a list of four neutrals submitted to the parties by the ICC. The other cases were settled or withdrawn prior to the designation or appointment of a neutral. The neutrals designated or appointed in 2012 were nationals of Bulgaria, Canada, Croatia, France, Germany, Italy, Mexico, Switzerland, the United Kingdom and the USA.

DOCDEX

DOCDEX is a rapid procedure, conducted entirely in writing, in which a panel of three independent experts decide on a dispute relating to a letter of credit, bank-to-bank reimbursement, collection or guarantee. In 2012, nine cases were filed under the ICC DOCDEX Rules. The 24 parties involved in these cases came from Algeria, China (including Hong Kong), Ethiopia, France, Germany, India, Italy, Poland, Portugal, South Korea, the United Kingdom and the USA. A panel of three experts is appointed to decide each case. The experts in the 2012 cases were of 14 different nationalities (Belgian, Canadian, Danish, French, German, Greek, Lebanese, Malaysian, Mexican, Singaporean, South Korean, Swiss, Syrian and US). The amounts at issue ranged from US$ 50,000 to almost US$ 47 million. [Page17:]

EXPERTISE

The ICC Expertise Rules permit requests to be made for the proposal or appointment of an expert or the administration of expertise proceedings. A total of 19 requests were received under these Rules in 2012. The ICC was asked to propose an expert in ten cases and to appoint an expert in nine cases.

The 19 requests involved a total of 39 parties from 24 countries, as listed below.

The requests registered in 2012 led to the proposal or appointment of experts of 13 nationalities (Chinese Taipei, Denmark, France, Germany, Lebanon, Libya, Netherlands, Norway, Portugal, Switzerland, Turkey, the United Kingdom and the USA). The economic sectors in which experts were sought were highly diverse and included construction, energy, transport, information technology and the health industry. Opinions were required on technical, financial and legal aspects of the activity in question. Other criteria besides professional qualifications specified by the parties for the selection of the experts included language skills, place of residence, professional affiliations, availability and length of experience.