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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
ARBITRATION
The number of new filings received by the Secretariat of the Court rose to 791 in 2014, from 767 in 2013, bringing the total number of ongoing cases at the close of 2014 to 1,523.
Parties
The 2014 filings involved a total of 2,222 parties, a third of them being multiparty cases. The proportion of multiparty cases involving in excess of five parties increased from 15% in 2013 to 18% in 2014, with one case involving as many as 36 parties. Another interesting development in 2014 was an increase in the number of cases involving both multiple claimants and multiple respondents (up to 23% of all multiparty cases, from 17% in 2013).
The global reach of ICC arbitration was once again illustrated by the wide range of nationalities found among parties. The 791 filings in 2014 involved parties from 140 countries and independent territories, matching a record previously set in 2010. Particularly noteworthy was the increase in the number of parties from the Americas, who accounted for over 28% of all parties in ICC proceedings.
Africa
The cases filed in 2014 involved a record number of parties from Sub-Saharan Africa, rising by almost 18% from the previous year. South Africa and Nigeria were the two most frequent nationalities, followed by Mauritius and Togo, a country hitherto rarely represented in ICC proceedings.
Americas
The number of US parties, traditionally the most frequent nationality in ICC arbitrations, soared by an unprecedented 28%, rising from 174 in 2013 to 223 in 2014. This increase was almost matched by a 23% rise in the number Brazilian parties, from 91 in 2013 to 112 in 2014, becoming the third most frequent nationality worldwide.
Asia & Pacific
The number of parties from South and East Asia and the Pacific remained stable. China maintained its position as the most frequent nationality in this region, due to continuing growth in the presence of parties from Mainland China. Parties from Central and West Asia were present in similar proportions to previous years.
* 62 from Mainland China (21 claimants, 41 respondents); 11 from Hong Kong (6 claimants, 5 respondents).
Europe
North and West Europe continued to be the region that made most use of ICC arbitration, although the total number of parties fell slightly in 2014. Parties from Central and East Europe, on the other hand, rose to a record level, due notably to growth in the number of Bulgarian, Hungarian, Romanian and Russian parties.
Three quarters of the disputes filed in 2014 were between parties from different countries. The remaining quarter were domestic cases between parties of the same nationality. The number of single-nationality arbitrations has never been so high, rising by 36% compared with 2013. The regions most affected by this increase were the Americas, North and West Europe, and Sub-Saharan Africa. The country with the highest number of single-nationality cases was the USA, with 21 domestic cases being filed in 2014, compared with seven in 2014. However, this remained a relatively small proportion (16%) of all cases involving one or more US parties. The number of domestic cases involving Brazilian parties also remained high. The range of countries from which single-nationality cases were filed expanded to 66, from 64 in 2013. The table below lists those countries with the highest concentration of domestic cases.
Although the number of 2014 filings in which states or entities under state control were parties remained stable at 11% of the total caseload, the range of states involved was wider than previously. The regions most affected by this expansion were Latin America and the Caribbean and North Africa. The table below shows the regional distribution of the 98 states and parastatals in 2014 filings.
The number of states and state entities that initiated arbitration proceedings as claimants remained much smaller than the far larger number that acted as respondents. However, regional variations were observed, with 37% of states and state entities acting as claimants in Asia and 24% in Central and East Europe, compared with 8% in Sub-Saharan Africa and 7% in Latin America and the Caribbean.
Six cases were filed in 2014 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 in these cases were from Central/East Europe, Latin America and North Africa. In addition, two requests were filed for the President of the Court to act as appointing authority in ad hoc arbitration proceedings based on a bilateral investment treaty. These eight filings and the six BIT filings received in 2013 are significantly higher than the yearly average of 1.8 cases during the preceding thirteen years.
Arbitral tribunals
The arbitrators comprising ICC arbitral tribunals are either appointed by the ICC Court (or, occasionally, by an appointing authority named by the parties such as the President of the Court or the President of the ICC), or nominated 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 must be confirmed by the ICC Court or its Secretary General.
The table above provides a breakdown of the 1,327 appointments and confirmations made in 2014 by type of arbitrator (sole arbitrators, co-arbitrator, tribunal president) and method of designation. It shows the prominent role parties play in the constitution of ICC arbitral tribunals, by choosing arbitrators directly themselves or entrusting the choice to arbitrators they have chosen.
The ICC Court exercised its powers to appoint arbitrators chiefly in cases where the tribunal consisted of a single arbitrator or to select presidents of tribunals. Most appointments by the Court were made on the basis of a proposal from an ICC National Committee or Group. As in 2013, the proportion of direct appointments was higher than in previous years (2014: 23%, 2013: 27%, 2012: 13%, 2011: 8%, 2010: 7%). This progression is explained by the wider powers to make direct appointments conferred upon the Court in the 2012 Arbitration Rules. 38% of direct appointments were made in cases involving states or state entities. In five multiparty cases the Court appointed all members of the tribunal pursuant to Article 12(8) of the Rules, failing agreement between the parties.
The percentage of arbitrators who were confirmed or appointed despite having made a disclosure in relation to their independence or impartiality remained stable at 22%. The Court refused to confirm the nomination of 48 arbitrators, 37 of whom had made disclosures and 11 not. The Court also refused two proposals made by ICC National Committees or Groups. In neither case had the arbitrator made a disclosure in relation to his or her independence or impartiality.
The number of challenges introduced in 2014 fell slightly to 60, from 66 in 2013. The reasons put forward to justify the challenges included the arbitrator's lack of impartiality or independence, misconduct through inefficiency or an incorrect application of the law, and attributes inappropriate to the case (e.g. nationality, qualifications). Only five of the 60 challenges were upheld by the ICC Court, all for reasons of impartiality or independence.
On 34 occasions it was necessary to replace an arbitrator. On one occasion the replacement was initiated by the ICC Court pursuant to Article 15(2) of the ICC Arbitration Rules (arbitrator 'prevented de jure or de facto from fulfilling the arbitrator's functions' or 'not fulfilling those functions in accordance with the Rules or within the prescribed time limits'). The other 33 replacements were caused by the death or resignation of an arbitrator, a successful challenge, or made at the request of all of the parties.
The arbitrators appointed and confirmed in 2014 came from 79 countries worldwide. A 27% increase in the number of appointments and confirmations of British arbitrators kept them at the top of the list of most frequent nationalities for the third consecutive year. An even larger increase of 41% brought US arbitrators into second position for the first time since 2006. In both cases the growth was due above all to a steep rise in the number of appointments and confirmations of co-arbitrators.
Places of arbitration
The arbitrations commenced in 2014 were seated in 110 different cities in 57 countries. These places were agreed by the parties in a greater number of cases than ever before, leaving less than 7% of places to be fixed by the ICC Court, and even in these cases the Court sometimes relied on a preference for a particular country expressed by the parties.
Although the majority of arbitrations continued to be seated in Europe (65%), there was a notable rise in the frequency of US seats, up 53% from 38 in 2013 to 58 in 2014. These seats were spread over a record fourteen states: New York, California (12 cases each), Texas (10 cases), Florida (9 cases), Pennsylvania (three cases), Arizona, Delaware, Georgia (two cases each), Colorado, Illinois, Massachusetts, Minnesota, New Jersey and Wyoming (one case each).
In 2014, the five most frequently chosen cities worldwide were the same and in the same order as in the previous seven years, while Vienna returned to sixth position after five years, ousting New York. Although in most countries the number of different cities chosen was rarely greater than one or two, exceptions included the USA (22 different cities) and Germany (11 different cities). Hong Kong was the place of arbitration in all cases seated in China.
Choice of law
In 84% of the disputes referred to ICC arbitration in 2014 the parties had included a choice-of-law clause in their contracts. These clauses provided for the application of national laws in 98% of cases and anational rules or international conventions in the remaining 2%. The latter included the UN Convention on Contracts for the International Sale of Goods (seven contracts), the UNIDROIT Principles of International Commercial Contracts (one contract), EU law (one contract) and principles of international law (five contracts).
The number of different national laws chosen in the parties' contracts rose to over one hundred for the first time. The most popular choices are listed below.
Where US laws were chosen, they covered 14 different states, the most common choices being New York law (44%), followed by the laws of the states of Texas (16%), California (14%) and Delaware (9%).
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.
Nature of the disputes
The disputes submitted to the ICC Court in 2014 came from a wide range of industries. Use of ICC arbitration in the construction and energy sectors remained particularly strong. The number of energy-related disputes grew by 31% to account for 19% of the total caseload, while construction and engineering disputes increased by 22% to represent 21% of the total caseload. Other sectors accounting each for over 5% of the total caseload were finance and insurance, general trade and distribution, industrial equipment and telecommunications.
The size of the disputes varied widely too, ranging from small claims of less than USD 50,000 to claims in excess of USD one billion. The number of cases at each end of the scale increased slightly compared with 2013, although the overall breakdown, as shown below, remained similar to previous years. The amount in dispute in 2014 filings averaged USD 63 million, while the aggregate value of all disputes pending before the Court at the end of the year rose to just over USD 200 billion.
Awards
A total of 459 awards were approved by the ICC Court during the year. They included 316 final awards, 105 partial awards and 38 awards by consent. The number of awards rendered by sole arbitrators was 175, while 284 awards were rendered by tribunals composed of three members.
Some 90% of awards rendered by three-member tribunals were decided unanimously, leaving just 10% decided by a majority of the tribunal's members. There were no cases in which it was necessary for the president of a tribunal to render an award alone due to a lack of consensus among at least a majority of the tribunal's members.
Dissenting opinions were expressed in 24 of the 29 cases decided by a majority. Two thirds of the dissenting opinions were recorded in a document separate from the award, whereas the others formed part of the same document as the award. All but two of the dissenting arbitrators whose identities were revealed had been nominated by a party.
Some 80% of the 2014 awards were written in English. The other four most frequently used languages were French (7% of awards), Spanish (5% of awards), Portuguese and German (2% of awards each). Other languages used were Italian, Chinese, Serbian, Czech, Greek, Romanian, Turkish and Ukrainian. In two cases bilingual awards were rendered, in English and Chinese.
Prior to being approved, awards undergo scrutiny by the ICC Court, which, as part of this process, may lay down modifications as to form and draw the tribunal's attention to points of substance. Scrutiny is a unique feature of ICC arbitration, whose importance is reflected in the fact that only seven awards (1.5% of the total) were approved without any comment from the Court on form or substance, while 44 awards were returned to the arbitral tribunal for resubmission. Scrutiny aims to enhance the quality and enforceability of an award and reduces the risk of corrections having to be made once the award has been issued. In 2014, the number of addenda that were issued to correct or interpret an award that had previously been issued fell to 22, from an average of 38 per year over the previous four years.
EMERGENCY ARBITRATOR
In 2014, six filings were received under the ICC's 2012 Emergency Arbitrator Provisions designed for the purpose of obtaining urgent measures ahead of an arbitration. In two of the cases the emergency measures requested were partly granted and in two other cases refused. In the fifth case, the application was withdrawn prior to the completion of the procedure and the sixth case was inadmissible as the parties' arbitration agreement pre-dated the entry into force of the 2012 ICC Arbitration Rules.
The time taken for the emergency arbitrator to make his order averaged 11.5 days, and in one case was as little as 10 days. In two cases, a challenge was brought against the emergency arbitrator, but caused no delay to the proceedings.
The parties involved in the emergency arbitrator applications in 2014 came from Africa, the Americas, Asia and Europe, and from diverse economic sectors, and included states and public entities as well as private companies and individuals. Several of the cases involved multiple parties. The applications were decided by emergency arbitrators from Asia and Europe. The diversity of the cases demonstrates the breadth of appeal this procedure has rapidly acquired.
SERVICES IN AD HOC ARBITRATION
The ICC offers a service for the constitution of arbitral tribunals in UNCITRAL and other ad hoc proceedings. Administered by the ICC Court, this service is regulated by a special set of rules entitled Rules of ICC as Appointing Authority in UNCITRAL or Other Ad Hoc Arbitration Proceedings.
In 2014, 15 filings were received under the Appointing Authority Rules. Nine of these were for appointments in UNCITRAL arbitrations and four for appointments in other ad hoc arbitrations. The remaining two filings were requests for the ICC Court to decide on a challenge against an arbitrator previously appointed in an ad hoc arbitration (one UNCITRAL, the other non-UNCITRAL). In one case, the Court was also asked to administer funds as an ancillary service.
All filings were international cases, involving parties from 21 countries and independent territories. Five of the cases involved states or entities under state control, two of which were based on bilateral investment treaties.
MEDIATION
2014 was the first year of entry into force of the ICC's new Mediation Rules. During the year, the Centre received 25 filings for amicable dispute resolution, all but one of which were handled under the new Rules. The exception was a case in which the parties maintained their choice of the ICC ADR Rules, predecessor to the Mediation Rules.
The Mediation Rules provide that disputes filed under these Rules will be settled by mediation unless the parties choose otherwise. Mediation was the settlement technique chosen in 15 of the 25 cases filed; conciliation was chosen in one case; and in the remaining nine cases the disputes were withdrawn before a choice was made.
Cases brought under the Mediation Rules, as under the ADR Rules, are initiated either on the basis of a prior agreement between the parties to use the Rules, or by a unilateral request by one or more parties accepted by the other(s). 72% of the 2014 cases were filed on the basis of a prior dispute resolution agreement providing for ICC mediation or ADR, followed in most cases by ICC arbitration. Such agreements provide parties with the security of knowing how disputes will be approached ahead of their occurrence, and their widespread use reflects their usefulness in practice.
All but four of the mediation and ADR filings in 2014 were international cases involving parties from two or more countries. The four single-nationality cases involved parties from France, Germany, Peru and the USA. 28% of the 2014 filings were multiparty cases, involving three or more parties. The largest number of parties in any one case was six. Altogether, 62 parties from 30 countries were involved in the cases filed in 2014, as detailed below. They included three state entities, all from Asia.
Mediators and neutrals are either nominated by the parties and confirmed by the Centre or, if the parties fail to agree, appointed by the Centre. Eleven of the 19 mediators and neutrals selected in the cases filed in 2014 were chosen by the parties and the remaining eight were appointed by the Centre. In six cases the nomination or appointment was made on the basis of an initial list of potential candidates drawn up by the Centre, sometimes with the aid of proposals from ICC National Committees and Groups. Mediators and neutrals of nine different nationalities were selected in 2014.
The disputes that gave rise to the mediation and ADR cases filed in 2014 were highly diverse, ranging in value from USD 200,000 to over USD 130 million and relating to a vast array of industries and economic sectors. A third of the disputes concerned industrial installations and equipment, while energy and construction disputes between them accounted for a fifth of the caseload. The remaining cases came from sectors as diverse as the defence, food, pharmaceutical, chemical and metal industries, finance, telecommunications, media and sport.
Ten of the cases filed in 2014 were settled within the year. The average duration of cases from start to finish was around three months, and the average time taken to reach a settlement after the first meeting between the parties and the mediator/neutral one month. ICC mediations would appear to be fulfilling the expectations of greater efficiency and rapidity raised by the new Rules.
EXPERTS
The Centre received 19 requests for services relating to experts in 2014. The majority (68%) of these requests were for the proposal of one or more experts by the Centre, while the remaining 32% were equally divided between requests for the appointment of an expert by the Centre and requests for the Centre to administer expert proceedings. The administration of expert proceedings includes, apart from appointing an expert or confirming an expert agreed upon by the parties, 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.
Around half of the requests for the proposal of experts were made by tribunals in ICC arbitrations, for which this service is provided free of charge. One request was received by an arbitral tribunal in non-ICC proceedings. All other requests came directly from parties.
The 19 filings, which included five multiparty cases, involved a total of 49 parties from 21 countries (see below). Of these 49 parties, 43 were private companies, five were international organizations, and the remaining party was an African state, which requested the Centre to appoint an expert.
The requests led to the proposal or appointment of a total of 35 experts from 12 countries (Austria, Belgium, Canada, China, France, Germany, Ireland, the Netherlands, Romania, Sweden, the United Kingdom and the USA). In addition to drawing on the pool of experts known to it, the Centre may seek assistance from its Standing Committee and from ICC National Committees and Groups. In ten cases ICC National Committees put forward names of possible candidates for consideration by the Centre before it made a proposal or an appointment. Proposals and appointments were made by the Centre on average within two months of receiving the request.
Two thirds of requests were for technical experts, with the remaining requests split between financial and legal experts. Expertise was sought in a wide variety of fields, including energy (32% of cases), construction, telecommunications (each 11% of cases), as well as the health and leisure industries and the transport sector.
The Expertise Rules under which the 2014 cases were administered have since been superseded by the ICC's new Expert Rules, composed of three distinct sets of rules relating respectively to the proposal of experts and neutrals, the appointment of experts and neutrals and the administration of expert proceedings. By dividing these services into three separate sets of rules responding to current needs and practices, the ICC seeks to provide a clear framework for the efficient administration of cases in the future.
DOCDEX
DOCDEX is a specialist expert service for trade finance disputes. The procedure is regulated by the ICC DOCDEX Rules, which were created in 1997 for disputes over documentary credits, then revised in 2002 to extend their scope to demand guarantees and collections. Their scope has been further extended in 2015 to cover a much wider range of trade finance instruments. The 11 DOCDEX cases filed with the Centre in 2014 were all administered under the 2002 version of the Rules and all concerned documentary credits, ranging in value from USD 100,000 to USD 9 million.
The users of ICC DOCDEX in 2014 were spread widely throughout the world. The 2014 filings, which included one multiparty case, involved 23 parties from 15 countries. Over a half of parties were from Asia and a third from Europe.
The DOCDEX procedure leads to a decision by a panel of three experts. The panels appointed in the 2014 cases were made up of experts from 14 countries. A third of appointees were from Asia and two thirds from Europe. The three experts on each panel were of different nationalities and, in many cases, from different regions.
DISPUTE BOARDS
The 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 that do not need such assistance are free to use the ICC Dispute Board Rules without recourse to the ICC.
Four requests relating to dispute boards were filed with the Centre in 2014. Three were for the appointment of dispute board members and the fourth requested the Centre to decide on a challenge against a dispute board member. All of the cases concerned dispute boards established for construction projects. They involved nine parties (eight private companies and one public entity) from Europe, Latin America and North Africa. In three of the cases the parties were of the same nationality, showing that the ICC Dispute Board Rules lend themselves both to domestic and international construction contracts.