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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
International Court of Arbitration
The Court is a unique body of international dispute resolution specialists who oversee arbitration proceedings and take the decisions necessary for their progression. Over 80 countries were represented among the Court's 130 members in 2013. The Court is supported by a Secretariat, which handles the day-to-day administration of cases. Recent years have seen an enormous expansion in the Court's caseload. As 2013 drew to its close, the number of cases administered by the Court since its creation in 1923 was fast approaching 20,000. These cases have involved parties from almost 200 countries and independent territories worldwide. The organization and structure of the Court and its Secretariat have developed in keeping with the increasingly global scope of is activity. 2013 saw the opening of an office administering ICC arbitrations in New York, under the name of SICANA, to serve the large constituency of ICC arbitration users in North America. SICANA operates alongside the Secretariat's headquarters in Paris and its office in Hong Kong. Changes have been necessary to allow the administration of ICC arbitration cases in three different time zones. The Court began holding Committee sessions twice rather than once a week, at different times to allow the participation of staff in New York, Hong Kong and Paris. The core of the Secretariat lies in its case management teams, each of which has a regional focus and brings appropriate linguistic, cultural and legal knowledge and expertise to the administration of cases. Including support services that provide training and documentation, the Secretariat's staff rose to almost 90 in 2013, encompassing more than 30 nationalities.
Arbitration is the principal service provided by the Court and its Secretariat. It takes place within the framework of the ICC Rules of Arbitration, the latest version of which dates from 2012. 2013 was the first year in which the full effect of this new version of the Rules began to be seen, including several applications for emergency arbitrator proceedings. Under a separate set of rules, the Court also acts as an appointing authority for constituting arbitral tribunals in ad hoc proceedings.
Arbitration
During 2013, the Secretariat of the Court registered 767 new cases, bringing the total number of ongoing cases at the end of the year to a record 1,511.
The new cases filed in 2013 involved a total of 2,120 parties. Although most cases involve one claimant and one respondent, the proportion of cases involving more than two parties rose to 33%, from 31% in 2012. The majority (85%) of the multiparty cases involved between three and five parties. Of the 38 cases with more than five parties, one had as many as 35 parties. In keeping with recent trends, 54% of multiparty cases were due to the presence of three or more respondents, 29% due to two or more claimants and 17% due to both multiple claimants and multiple respondents.
Geographical origins
The 2,120 parties involved in the cases registered in 2013 came from 138 countries in all parts of the world. The regional breakdown below shows that an increasing number of parties in ICC proceedings come from outside Europe.
Africa
The 174 African parties in cases filed in 2013 came from a record 35 countries - six in North Africa and 29 in Sub-Saharan Africa. They included parties from several countries seldom or never previously represented in ICC arbitration, including Botswana, Djibouti and Niger. The exceptionally high number of Algerian parties was due to nine multiparty cases, one with as many as eight and two with five Algerian parties.
Americas
US parties are traditionally the most frequent nationality in ICC arbitrations, and they extended their lead in 2013 to represent 8.2% of all parties, 1.6 percentage points ahead of German parties, the next most frequent. Brazilian parties accounted for 41% of all Latin American parties and consolidated their position as the fourth most frequent nationality worldwide.
Asia & Pacific
The number of parties from Asia and the Pacific exceeded 500 for the first time. Chinese parties increased by 56% from 2012 to represent 30% of all parties from South and East Asia. In the Middle East, parties from the United Arab Emirates continued to increase: in nine years they have risen almost tenfold and represented over 35% of all parties in new cases involving West Asian parties in 2013. Saudi Arabian parties were also strongly present in 2013, more than doubling their 2012 figure.
* 58 from Mainland China (18 claimants, 40 respondents); 28 from Hong Kong (16 claimants, 12 respondents).
Europe
German parties remained the most numerous in Europe, closely followed by French parties. Alone, these two nationalities accounted for some 25% of all European parties, as they have done for several years. Over a quarter of European parties were from countries in Central and East Europe, with Turkey maintaining its lead there. The increasing involvement of parties from Cyprus was further confirmed in 2013.
In brief: most frequent nationalities worldwide
International vs domestic cases
Some two thirds of cases filed in 2013 involved parties from different regions of the world, confirming users' confidence in the Court's capacity to handle disputes that bestride different cultures and legal traditions. 81% of cases were cross-border disputes, leaving 19% of cases between parties of the same nationality. These cases covered 64 different countries. Those countries with the highest proportions of domestic cases are listed below.
State and state-owned parties
The involvement of states in ICC arbitration increased in 2013. The number of cases in which at least one of the parties was a state or under state control rose to 86, from 75 in 2012. Almost half of those parties were states and the remainder parastatals (hereinafter, collectively referred to as state parties). As shown in the table below, they were concentrated in certain regions, above all Africa and Central and East Europe.
In Sub-Saharan Africa state parties were spread fairly evenly over 18 different countries, averaging 1.4 state parties per country. In Central and East Europe, on the other hand, 15 of the 29 state parties came from just two countries, with the remaining 14 spread over seven further countries. Similarly, in South and East Asia one country alone accounted for over half of all state parties from the region. These trends are consistent with patterns observed over recent years, suggesting that in certain countries there is a strong tradition of public sector use of ICC arbitration, which has yet to develop in others.
Sub-Saharan Africa was the region with the greatest concentration of states as opposed to parastatals as parties, with the former outnumbering the latter by more than two to one. In West and Central Asia, too, there were almost twice as many states as there were parastatals as parties. In all other regions, parastatals outnumbered states, especially in South and East Asia.
Five (6%) of the cases involving states were introduced on the basis of a bilateral investment treaty that listed ICC arbitration as one of the dispute resolution options available to the parties. The states concerned were situated in Central and East Europe and Africa. A further request was received pursuant to a bilateral investment treaty providing for the President of the ICC Court to act as appointing authority.
Constitution
ICC arbitral tribunals are constituted through the appointment or confirmation of arbitrators.
Arbitrators are confirmed by the Court or its Secretary General upon nomination 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.
Arbitrators are appointed by the Court or, on very rare occasions, by an appointing authority named by the parties such as the President of the Court or the President of ICC. When making appointments, the Court may seek a proposal from an ICC National Committee or Group, or make the appointment directly.
A total of 1,329 appointments and confirmations were made in 2013.
Below is a breakdown of these appointments and confirmations by category of arbitrator (sole arbitrators, co-arbitrators, tribunal presidents) and method of designation.
Exercising the powers given to it under the 2012 Rules, the Court made more direct appointments than previously: 114 in 2013, compared with 48 in 2012 and an average of less than 30 per year prior to 2012. However, the majority of appointments (70%) continue to be made on the basis of a proposal from an ICC National Committee or Group.
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. A disclosure does not necessarily disqualify a candidate from office, as shown by the confirmation or appointment of arbitrators who had made disclosures on 292 occasions. The Court withheld confirmation on a further 46 occasions, and did so for lack of the required independence or impartiality on 37 of these. The Court also refused seven proposals made by ICC National Committees or Groups, two of which for reasons of independence or impartiality.
Challenges and replacements of arbitrators
Incidents affecting the composition of an arbitral tribunal in the course of the proceedings occurred in a small proportion of cases in 2013. On 46 occasions an arbitrator was replaced: 37 of these replacements were made pursuant to Article 15(1) of the Rules due to an arbitrator's death, resignation, a successful challenge or at the request of all parties; the remaining nine replacements were made by the Court on its own initiative pursuant to Article 15(2) due to the arbitrator's being prevented de jure or de facto from fulfilling his or her functions or not fulfilling his or her functions in accordance with the Rules. The Court used its power to replace an arbitrator on its own initiative more frequently than in previous years, when the number of replacements made on these grounds averaged two per year.
During 2013, 66 challenges were introduced against arbitrators in 43 different cases. Only four of the challenges were accepted, so in only 0.3% of ongoing cases was it necessary to replace an arbitrator due to a challenge.
The arbitrators appointed and confirmed in 2013 came from 86 countries worldwide. Never has the range of nationalities been so wide. This expansion was due above all to more nationalities than ever before from Sub-Saharan Africa and Central and West Asia.
The following chart shows how the regional breakdown of arbitrators has evolved over the last five years, while the table below gives a breakdown country by country. It is followed by a list of the nationalities most frequently selected. As in 2012, British arbitrators head the list, slightly increasing their lead over Swiss arbitrators.
Arbitrators: leading nationalities
The arbitrations commenced in 2013 were seated in 104 different cities in 63 countries. These cities were chosen by the parties in 88.5% of cases. In the remaining 11.5% 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 frequency with which places were chosen followed a similar pattern to previous years, with the great majority of arbitrations being seated in Europe. The six most popular cities remained unchanged for the fourth successive year. Stockholm reappeared in the top ten for the first time since 2007. An increase was also recorded in the number of arbitrations seated in Sub-Saharan Africa, Latin America and Oceania.
Places of arbitration: top ten cities selected in 2013
Hong Kong was the place of arbitration in all 14 cases seated in China.
Of the 38 cases seated in the USA, 24 were seated in the State of New York, five in California, three in Florida, two in Texas, one in each of the states of Massachusetts, Pennsylvania and Virginia, and one in Washington D.C.
In 90% of the cases registered in 2013 the parties had included a choice-of-law clause in the contracts out of which the disputes had arisen. 97% of those clauses specified a state law. The parties' choices covered the laws of 93 different nations and independent territories. The most popular choices were as follows:
Where US laws were chosen, the parties' choices covered the laws of 15 states. The most common choice was New York law (52%), followed by the laws of the states of California and Texas (13% each), Missouri and Pennsylvania (3% each), and Arizona, Florida, Kansas, Massachusetts, Michigan, Minnesota, Nevada, Ohio, Tennessee and Wyoming (2% 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. 14 of these contracts referred to the United Nations Convention on Contracts for the International Sale of Goods, six to international law(s), two to the UNIDROIT Principles of International Commercial Contracts, one to amiable composition, one to European Union law and one to the ICC's Incoterms® rules.
Disputes from an extremely wide range of economic sectors were submitted to ICC arbitration in 2013. As in previous years, those relating to construction and engineering were the most numerous (18% of all cases filed during the year), closely followed by energy-related disputes (15% of cases filed). The next most frequent kinds of disputes were those relating to finance and insurance, general trade and distribution, industrial equipment, and transport (each representing approximately 6% of the year's filings).
The value of the disputes was equally varied, ranging from less than USD 50,000 to over USD one billion. The proportion of disputes valued at less than US$ one million shrank slightly to 22% of the total caseload. The upward trend in high-value disputes observed in 2012 continued in 2013, with the percentage of cases in which the amount in dispute exceeded USD 10 million rising to 36% from 33% in 2012. The average amount in dispute consequently rose to USD 81 million, and the aggregate value of all disputes pending before the Court at the end of the year to almost USD 153 billion.
Amounts in dispute (US dollars)
A total of 471 awards were issued during the year. They comprised 327 final awards, 104 partial awards and 40 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 to draw attention to points of substance. It increasingly exercises these powers. Only five draft awards received the Court's unqualified approval in 2013. The remaining 466 awards were approved subject to observations of the aforementioned kind, which are intended to enhance the quality and enforceability of the award. 40 draft awards were not approved, but sent back to the tribunal to be reworked and resubmitted.
A total of 13 languages were used to draft the 471 awards rendered in 2013. English was the predominant language, used for over 80% of the awards. Some 7% of awards were drafted in French, 5% in Spanish, 3% in German and 2% in Portuguese. Other languages used more occasionally were Arabic, Bulgarian, Italian, Norwegian, Romanian, Russian and Serbian. Two bilingual awards were rendered: one in English and Portuguese, the other in English and Chinese.
Of the 431 partial and final awards issued during the year, 256 were rendered by tribunals composed of three arbitrators. 214 (84%) of those awards were rendered unanimously and 42 (16%) 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 2013, the minority arbitrator expressed a dissenting opinion in the award in 17 cases and in a separate document in 19 cases. In the remaining six cases, there was no dissenting opinion, but the award was described as being rendered by a majority of the tribunal. In the 31 cases where the dissenting arbitrators were identified, all but two had been nominated by the parties. In two cases, failing a majority, the president of the arbitral tribunal ruled alone on some or all of the matters decided in the award, in accordance with Article 31(1) of the Rules.
Six Applications for Emergency Measures were filed in 2013. They were all deemed admissible under Articles 29(5) and 25(6) of the ICC Arbitration Rules, which restrict application of the Emergency Arbitrator Provisions to parties that (i) are signatories or successors of signatories of the arbitration agreement relied upon for making the Application; (ii) concluded the arbitration agreement on or after 1 January 2012; (ii) have not opted out of the Emergency Arbitrator Provisions; and (iv) have not agreed to another similar pre-arbitral procedure.
The proceedings conducted on the basis of these six Applications involved 19 parties of 12 nationalities in Africa, Europe and the Americas; they included two multiparty cases. An emergency arbitrator was appointed within 24 hours in four of the cases and within 48 hours in the other two cases. One case was completed within 13 days following receipt of the file by the emergency arbitrator, one within 14 days, three within 15 days and one within 16 days. In the latter case, the expiry of the 15-day time limit for rendering an order coincided with a weekend.
Two of the Applications concerned payment obligations, two sought orders to refrain from action and two requested anti-suit injunctions. Three of the Applications were granted at least in part, two were denied, and the emergency arbitrator declined jurisdiction over the remaining Application.
For further information on these and other ICC emergency arbitrator proceedings, see A. Carlevaris & J. Ricardo Feris, 'Running in the ICC Emergency Arbitrator Rules: The First Ten Cases' in this issue of the Bulletin.
Services in ad hoc arbitrations
In addition to administering entire arbitrations, 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 International Court of Arbitration is the sole body empowered to carry out the functions of appointing authority under these Rules
In 2013, 22 requests to appoint arbitrators in ad hoc arbitration proceedings were filed with the Secretariat of the Court. Of these, 10 were for appointments in proceedings conducted under the UNCITRAL Arbitration Rules and 12 for appointments in other ad hoc proceedings, one of which was made on the basis of a bilateral investment treaty.
The Rules of ICC as Appointing Authority also offer parties the possibility of requesting the Court to provide additional services. In 2013, two requests were made for the Court to administer the costs of an ad hoc arbitration conducted under the UNCITRAL Arbitration Rules.
The 61 parties in these proceedings came from 24 countries in all parts of the world. Ten of the cases were between parties of the same nationality, and seven cases involved state entities.
International Centre for ADR
The work of the Centre is performed by a multinational team of lawyers and administrators based at ICC headquarters in Paris. The Centre's staff was reinforced in 2013 to handle a caseload more than twice as large as in 2012 due to the filing of objections to new generic Top-Level Domain names, which the Internet Corporation for Assigned Names and Numbers (ICANN) had commissioned the Centre to administer. Eight nationalities were represented among the Centre's staff. A standing committee composed of dispute resolution specialists from Croatia, Egypt, France, Germany, Spain, Sweden, the United Kingdom and the USA assisted the Centre with the selection of experts and review of expert decisions. In addition to the day-to-day management of cases, the Centre ran an intense programme of educational events. In February, the annual International Commercial Mediation Competition brought together 66 teams from universities in 31 countries and, as adjudicators, over 100 mediation professionals from 26 countries for the largest event of its kind in the world. The year ended with a conference launching the new ICC Mediation Rules in anticipation of their entry into force on 1 January 2014, superseding the ICC ADR Rules.
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.
The number of new ADR cases filed in 2013 rose to 32 from 21 in 2012. Mediation was the settlement technique used in 17 cases, conciliation was chosen in three cases, and the remaining 12 cases were withdrawn before the parties decided on the settlement technique.
Half of the cases were initiated pursuant to a dispute resolution clause providing for ICC ADR followed in most cases by ICC arbitration if no settlement was reached. The other half were initiated by a unilateral request in the absence of prior agreement between the parties to refer their disputes to the ICC ADR Rules.
A total of 71 parties of 33 nationalities were involved in the 32 cases filed. Seven (22%) of the cases were between three or more parties. The parties to two of the cases included a state: one in Sub-Saharan Africa and one in West Asia.
The neutrals who acted in the 20 cases that proceeded came from Belgium, Canada, France, Germany, Israel, Italy, the Netherlands, New Zealand, Spain, Switzerland, the United Kingdom and the USA. Five of the neutrals were designated by the parties and the other 15 were appointed by the Centre. One of the neutrals designated by the parties was selected from a list proposed by the Centre.
The disputes concerned a wide variety of business activities. The highest proportion (22%) came from the telecommunications industry, while 16% related to construction contracts. The value of the cases varied, too - from USD 256,000 to USD 223 million.
In the five cases that were settled before the end of the year, the duration of the proceedings between the transfer of the file to the neutral and the reaching of a settlement averaged 70 days.
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 27 requests were received under these Rules in 2013: 16 for the proposal of an expert, seven for the appointment of an expert and four for the administration of expertise proceedings. In addition to appointing an expert or confirming an expert agreed upon by the parties, the services provided when administering expertise proceedings include coordinating between the expert and the parties, monitoring and helping to expedite the conduct of the proceedings, supervising financial aspects, and reviewing the expert's report. The requests were made by ICC arbitral tribunals in 11 cases, by other arbitral tribunals in two cases and by the parties in the remaining 14 cases.
The cases in which the 27 requests were made involved 63 parties from countries in Africa (Rwanda), the Americas (Argentina, British Virgin Islands, USA), Asia (Armenia, Bahrain, Georgia, Japan, Oman, South Korea) and Europe (Belgium, Croatia, Cyprus, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Portugal, Romania, Spain, Switzerland, Turkey, Ukraine). The parties in 56% of cases were of different nationalities. Seven of the cases involved three or more parties, and state entities from Central and East Europe and West Asia were among the parties in four cases.
The requests led to the proposal or appointment of experts from 15 countries (Argentina, Austria, Belgium, Chile, Colombia, Cyprus, Germany, Greece, Italy, Ireland, the Netherlands, Portugal, Romania, Switzerland and the United Kingdom).
The majority of requests were for technical experts. Financial or legal experts were needed in a smaller number of cases. Five cases required a combination of technical, financial and/or legal experts. The Centre's access to a wide network of experts of all kinds makes it well placed to handle mixed requests of this kind. The sectors in which experts were sought covered a wide range of industries. Demand for engineering and construction experts was highest (50% of cases), followed by energy experts (20% of cases).
DOCDEX
DOCDEX is a rapid procedure, conducted entirely in writing, in which a panel of three independent experts decides on a dispute relating to a letter of credit, bank-to-bank reimbursement, collection or guarantee. Six cases were filed under the ICC DOCDEX Rules in 2013. They involved 15 parties from 11 countries (Canada, China, Ghana, India, Iraq, the Netherlands, South Korea, Spain, the United Arab Emirates, the USA and Vietnam) and were decided by experts of an equally wide range of nationalities (from Australia, Bahrain, Belgium, Canada, China (Hong Kong), the Czech Republic, Denmark, France, Indonesia, Italy, Pakistan, Switzerland and the United Kingdom). The amounts at issue ranged from USD 115,000 to USD seven million.
Dispute boards
ICC offers a set of rules for establishing and operating dispute boards and proposes three distinct services in connection with the application of those rules - the appointment of dispute board members, the resolution of challenges against dispute board members and the review of decisions issued by the dispute board. These are optional services; parties who do not need such assistance are free to use the ICC Dispute Board Rules without recourse to ICC.
During 2013 the Centre was requested to appoint members to dispute boards in five cases between parties from seven countries on all continents relating to construction, engineering and energy projects. Three of the cases were between parties of the same nationality and three cases involved state entities. These figures suggest that dispute boards are being used in a variety of situations, covering the public as well as the private sector, domestic and international contracts, and a range of infrastructure projects.
Domain name dispute resolution
As part of a programme to expand the number of generic Top-Level Domain (gTLD) names beyond the limited number of existing extensions such as '.org' and '.com', ICC was named by the Internet Corporation for Assigned Names and Numbers (ICANN) as the dispute resolution provider for two categories of objections made to applications for new gTLD names: limited public interest objections and community objections.
A total of 137 objections were filed with the Centre, some 80% of which were community objections and the remainder limited public interest objections. The names to which most objections were made were: '.health', '.insurance', '.mail', '.med' and '.music'.
The parties involved in these disputes came from 21 countries worldwide. Half of them were from the USA and a third from North and West Europe. Experts of 22 different nationalities were appointed to decide on the objections. 70% were from Europe, 20% from the Americas and 10% from Asia. The experts' decisions are available on the ICC website at: http://www.iccwbo.org/products-and-services/arbitration-and-adr/expertise/icann-new-gtld-dispute-resolution/expert-determination/