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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Arbitration
In 2015, for the second time in the history of the ICC International Court of Arbitration, annual filings exceeded 800. The cases came from all sectors of the economy, public as well as private, all regions of the world, and were of all sizes, once again demonstrating the unrivalled reach of ICC arbitration. In an increasingly competitive marketplace, the Court has not only held its own but strengthened its presence, especially in emerging markets.
Parties
The 801 cases filed with the Court during 2015 involved a total of 2,283 parties. The increasing complexity of modern disputes is reflected in the record number of multiparty cases, which rose to 275 in 2015, representing 34% of the total caseload. The average number of parties in multiparty cases was 4. However, 14% of multiparty cases involved over 5 and one as many as 31 parties.
The 2,283 parties in the cases filed in 2015 came from 133 countries and independent territories worldwide. The number of parties from Asia and the Americas was higher than ever before. As far as individual nationalities are concerned, US parties continued to be the most numerous, while Chinese parties rose to rank alongside the most frequent European nationalities.
Africa
While the number of parties from North Africa remained stable, 2015 saw a fall in the number of parties and nationalities from Sub-Saharan Africa as compared with 2014. Nigerian and South African parties remained the most frequent users of ICC arbitration in this region, between them accounting for almost half of the parties from the sub-continent.
Americas
The numbers of both US and Canadian parties rose to record levels in 2015. This increase, which builds on that recorded in 2014, coincides with the establishment of an office administering ICC arbitrations locally. In the two full years since that office has been operational, the number of parties from North America involved in ICC arbitration has risen by 30%. The same period has also seen a 40% rise in the number of parties from Latin America. While Brazilian parties remained the biggest users of ICC arbitration in this region, recourse to ICC arbitration increased in several other countries, particularly Colombia, Panama and Peru. The unprecedented figure for Belize was due to the filing of a series of related cases.
Asia & Pacific
The year saw a 42% rise in the number of parties from Central and West Asia, compared with 2014, owing notably to higher than ever numbers from Oman, Qatar and Yemen. The record involvement of Israeli parties was largely due to a multiparty case involving 27 Israeli claimants. In South and East Asia, while the numbers of most nationalities remained similar to previous years, the presence of parties from China, especially Mainland China, continued to grow. In the Pacific, the number of Australian parties rose steeply to a level previously unseen.
* 64 from Mainland China (18 claimants, 46 respondents); 25 from Hong Kong (13 claimants, 12 respondents); 1 claimant from Macao.
Europe
Use of ICC arbitration in Europe continued to be strong. The country-by-country breakdown remained largely similar to previous years. A fall in Austrian and French parties was offset by a rise in Italian and Spanish parties. Spain's rise to the third most frequent European nationality was due in part to several multiparty cases, one of which involved as many as 14 Spanish parties.
As a neutral dispute resolution procedure, independent of any given country or legal tradition, ICC arbitration is pre-eminently suited to resolving disputes arising from international commerce, which today brings together businesses from distant countries, often with contrasting cultures and legal traditions. 75% of the cases received in 2015 involved parties from different countries and 58% involved parties from different regions. However, ICC also handles many cases involving parties from the same country (domestic cases). The proportion of domestic cases varies from region to region. In 2015, Latin America was the region with the greatest concentration of domestic ICC arbitrations, where they represented 30% of all cases involving one or more parties from the region and covered 13 countries. All cases involving parties from Paraguay and Trinidad and Tobago, all but one of the cases involving Argentinian parties, some two thirds of cases involving Guatemalan and Mexican and around half of the cases involving Brazilian and Uruguayan parties were domestic cases. Elsewhere, all of the cases received from Kosovo and Burkina Faso were domestic cases, as were half of the cases involving parties from Egypt, Kenya, Oman, Pakistan, Qatar and Thailand. A third of cases involving Australian parties were domestic and 16% of cases involving US parties.
Some 13% of the cases filed in 2015 involved a state or a party under state ownership (parastatal). These parties covered 48 different states from all regions except North and West Europe.
The region in which the number of states involved in ICC arbitrations was highest was Sub-Saharan Africa (8 states), followed by Central and West Asia (6 states), Central and East Europe (5 states), and Latin America (3 states). States were involved far more frequently as respondents than as claimants (six respondents for every claimant, as compared with the even split between claimant and respondent parties in 2015 filings overall). In Africa and Latin America, states acted exclusively as respondents and never initiated proceedings. By contrast, in the 2 cases involving states from North America and the Pacific, both states initiated the proceedings.
Parastatals, on the other hand, originated in greater numbers from a wider range of regions, including Central and East Europe, Latin America, Asia and North Africa. There were no parastatals from Europe and North America and only one from Sub-Saharan Africa. Like states, parastatals acted more frequently as respondents than as claimants (five respondents for every claimant).
The table below shows the regional distribution of the 98 states and parastatals in 2015 filings.
Four cases were filed in 2015 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 Asia, East Europe, Latin America and North Africa. In addition, ICC was requested to appoint an arbitrator in ICSID arbitration and in an arbitration conducted pursuant to the UNCITRAL Arbitration Rules under the auspices of the Permanent Court of Arbitration.
Arbitral tribunals
ICC arbitral tribunals are constituted in one of two ways. Either an arbitrator is appointed to office by the ICC Court (or, occasionally, by an appointing authority named by the parties such as the President of the Court), or else the arbitrator is nominated (by one or more parties, by the co-arbitrators (in the case of tribunal presidents), or in accordance with an alternative selection process agreed between the parties) and then confirmed by the ICC Court or its Secretary General.
A total of 1,313 appointments and confirmations were made in 2015. The number of appointments and confirmations has remained consistently at this level since yearly filings have been in the region of 800. The table below shows a breakdown of the 2015 appointments and confirmations by type of arbitrator and method of selection.
Over two-thirds of arbitrators were chosen by the parties, either directly themselves or, in the case of tribunal presidents, indirectly through the co-arbitrators chosen by the parties. The number of tribunal presidents chosen by co-arbitrators fell in 2015, compared with 2014, whereas the number chosen by other means (especially directly by the parties) increased.
When arbitrators are appointed by the Court, the standard procedure is for a proposal to be sought from an ICC National Committee. However, the Court may make appointments directly itself, and has done so increasingly in recent years, taking advantage of the extended powers given to it by the 2012 Rules. Between 2007 and 2011, 9% of all appointments were made directly by the Court, whereas by 2015 this figure had risen to 34%. The new powers given to the Court in 2012 included the direct appointment of arbitrators in cases involving states and state entities (Article 13(4)(a)); 49 appointments, representing 38% of all direct appointments, were made pursuant to this provision in 2015. The 2012 Rules also give the President of the Court the power to make direct appointments in situations where the circumstances make this necessary and appropriate (Article 13(4)(c)); the President did so on 16 occasions in 2015. They included the direct appointment of a common sole arbitrator to ensure consistency in 10 related cases that could not be consolidated.
The 127 direct appointments also included the appointment of all members of the tribunal pursuant to Article 12(8) of the Rules in 9 multiparty cases where multiple claimants or multiple respondents were unable to make a joint nomination or where all parties were unable to agree on a method for the constitution of the tribunal.
Direct appointments are not necessarily a means of overcoming lack of agreement between the parties or addressing unusual or special situations; they may reflect the parties' wishes, as in 4 cases in 2015 where the parties had provided for the direct appointment of arbitrators in their arbitration clause. These provisions led to 10 of the direct appointments made during the year.
Before taking up office arbitrators are required to confirm their independence in a statement of acceptance, availability, independence and impartiality. A total of 370 statements qualified with disclosures were submitted in 2015. Most of these did not prevent the arbitrator from being confirmed or appointed, as 339 appointments and confirmations were made notwithstanding the fact that the arbitrator had made disclosures relating to his or her independence, impartiality and/or availability. On only 31 occasions were arbitrators who had submitted qualified statements not confirmed by the Court. In the great majority of cases (75%) no issues of independence or impartiality were raised at the time arbitrators were confirmed or appointed. As these figures clearly demonstrate, a disclosure should not be thought to imply that an arbitrator will be rejected. On the contrary, it helps to increase users' confidence in the procedure, so the 7% increase in disclosures seen in 2015 is a healthy sign, consistent with the Court's recent insistence on the importance of transparency in arbitral appointments.
Independence is one of the issues that may lead to the challenge of an arbitrator in the course of the proceedings. It may well be a corollary of the increase in disclosures at the selection stage that the number of challenges in the course of the proceedings fell by over half in 2015, compared with 2014. Of the 28 challenges made during the year only 3 were accepted by the Court.
A successful challenge may lead to the replacement of an arbitrator, as may the death or resignation of an arbitrator or a joint request by all parties for an arbitrator to be replaced. A total of 48 replacements were made for these reasons during 2015. The ICC Court is also empowered to replace an arbitrator on its own initiative, although it did not do so in 2015.
2015 saw a shift in the percentages of arbitrators from different parts of the world. The most notable change was the increase in the number of appointments and confirmations of arbitrators from Latin America. While this no doubt reflects the increased involvement of Latin American parties in ICC arbitration in 2014 and 2015 and their preference for arbitrators from their own countries or region, it also points to greater numbers and wider recognition of practitioners in the region. Of the 185 Latin American arbitrators who took office in 2015, 144 were chosen directly or indirectly by the parties and 41 were appointed by the ICC Court or other appointing authority.
Although, as the tables below show, arbitrators from North and West Europe continued to be the most frequently appointed, they were less predominant than before. In 2015, they represented 53.5% of all arbitrators selected, down from some 60% five years previously. For the first time Australian arbitrators ranked among the ten most frequent nationalities. Altogether, arbitrators of 77 different nationalities were assigned to ICC proceedings in 2015.
Women arbitrators for the first time represented over 10% of all appointments and confirmations. They were more frequently appointed or confirmed as co-arbitrators (43%) than they were as sole arbitrators (32%) or tribunal presidents (25%). A higher proportion of women were appointed by the Court (54%) than nominated by parties or co-arbitrators (46%), which contrasts with a breakdown of 29% appointments/71% nominations when men and women are taken together.
Places of arbitration
This is an area in which party autonomy traditionally finds its fullest expression. In 88% of cases, the place of arbitration in proceedings commenced in 2015 was chosen by the parties. Even when fixing the seat in the remaining 12% of cases, the ICC Court sometimes relied on a preference one or more parties had expressed for a particular country.
The proceedings commenced in 2015 were seated in 97 different cities in 56 countries. The traditional predominance of European seats diminished slightly, offset by an unprecedented rise in the number of cases seated in Latin America, which has doubled in the past ten years (as has the number of countries in which those seats were situated). The unusually high number of cases in Belize is explained by a series of related cases.
The USA became the third most frequent country chosen in 2015. Of the 60 cases with seats in the USA, 28 were in the state of New York, 11 in Florida, 9 in California, 6 in Texas, 2 each in Missouri and Washington DC, and 1 each in North Carolina and Ohio.
As has been the case for many years, Paris remained the city most frequently chosen as the place of arbitration, followed by London and Geneva. A newcomer to the list of most frequently selected cities was Bucharest, whose presence reflects the rise in the number of cases involving Romanian parties, several of which were domestic cases. Although in most countries the same city was always selected (usually the capital), there were several countries in which other cities were also chosen. The widest variety was seen in the USA, where each year brings new choices. Hong Kong was the place of arbitration in 11 of the 12 cases seated in China, with Beijing being the seat of the remaining case.
Choice of law
In 85% of the disputes referred to ICC arbitration in 2015 the parties had included a choice-of-law clause in their contracts. In 99% of cases they chose national laws, and their choices covered the laws of almost 100 different nations. English law and the laws of the USA were the most frequent choices, between them accounting for a quarter of all contracts. Other common choices were the laws of Switzerland, France and Germany. Choices of law are to some extent a reflection of the origins of the parties in the proceedings, which helps to explain the frequency with which the laws of Brazil, Colombia, Qatar and Romania were chosen in 2015. As regards China, Hong Kong law was chosen almost three times as often as the law of Mainland China.
In those contracts in which the parties chose US laws, their choices covered the laws of 15 states. New York law was chosen in almost 50% of contracts, California law in 20% of contracts, the laws of Florida and Texas each in 7% of contracts. Other, less frequent choices included the laws of Arizona, Columbia, Delaware, Illinois, Louisiana, Massachusetts, North Carolina, Ohio, Oregon, Pennsylvania and Washington. In Canada, parties' choices covered the laws of 3 provinces (Alberta, Ontario and Quebec), and in Australia the laws of 4 states or territories (Northern Territory, Queensland, Victoria and Western Australia).
In just 7 contracts, parties chose rules or principles other than national laws. These included the UN Convention on Contracts for the International Sale of Goods (4 contracts), the UNIDROIT Principles of International Commercial Contracts (2 contracts), and equity (1 contract).
It should be noted that the positive choices of law made by the parties in their contracts do not necessarily correspond to the law actually applied to the merits of the dispute, as this may also depend on decisions made by the arbitrators after the proceedings have begun. When making such decisions, arbitrators may also need to take account of negative choices, whereby parties exclude the application of certain rules of law.
Nature of the disputes
The disputes submitted to the ICC Court in 2015 covered widely diverse sectors of the economy, ranging from heavy industry, agriculture, transport and defence services to telecommunications, leisure and entertainment, pharmaceuticals, insurance and financial services, as well as general trade and distribution. As in the past, construction and engineering disputes were the most frequent, accounting for a quarter of all cases received during the year. Energy disputes were the next most frequent (18% of cases). Other categories accounting for over 5% of cases each were: finance and insurance, industrial equipment, general trade and distribution, telecommunications/IT, and transport.
Equally varied, too, was the monetary value of the cases, which ranged from less than USD 50,000 to over USD one billion. While the number of cases at the lower end of the range remained similar to previous years, the number of cases in which the amount in dispute exceeded USD 10 million rose to 309 from 277 in 2014. This had an impact on the average amount in dispute in 2015 filings which rose to USD 84 million, from USD 63 million in 2014. The aggregate value of all disputes pending before the Court at the end of the year was USD 286 billion.
Awards
A total of 498 awards were approved by the ICC Court during the year. They included 343 final awards, 126 partial awards and 29 awards by consent. These awards were rendered by sole arbitrators in 217 cases and by three-member tribunals in the other 281 cases.
Of the 263 partial and final awards rendered by three-member tribunals, 82% were decided unanimously, while 18% were decided by a majority of the tribunal's members. In no cases was it 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 44 of the 48 cases decided by a majority. In 75% of cases the dissenting opinion was recorded in a document separate from the award, rather than in the award itself. In the 4 cases in which no dissenting opinion was expressed, the tribunal recorded that the award had been rendered by a majority of its members without identifying the dissenting arbitrator. All but one of the 41 dissenting arbitrators whose identities were revealed had been nominated by a party (as opposed to being appointed by the ICC Court or other authority).
English was the language used to draft 407 (82%) of the awards approved in 2015. The remaining awards were drafted in Spanish (31 awards), French (26 of awards), Portuguese (12 awards), German (7 awards), Hebrew, Italian, Polish and Slovak (2 awards in each language), and Arabic, Greek, Romanian, and Turkish (1 award in each language). In addition, 3 bilingual awards were approved: 2 in English and Chinese and 1 in English and Portuguese.
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. The importance of scrutiny is shown by the fact that comments were made by the Court on all but 4 of the 498 awards it approved in 2015, while 62 awards were returned to the arbitral tribunal for resubmission. Notwithstanding scrutiny, it is sometimes necessary for awards to be corrected or interpreted by the arbitral tribunal after being issued. This happened with 43 awards in 2015, while 25 applications for the correction or interpretation of an award were rejected by the arbitrators who had rendered the awards, although in some cases they added to their original award an order relating to the costs of the correction/interpretation proceedings.
Emergency Arbitrator
Ten applications for urgent measures prior to the commencement of arbitration were filed during the year. Uptake of the ICC emergency arbitrator procedure has been increasing steadily since its introduction in 2012. At the end of 2015 a total of 24 applications had been received, and the start of 2016 has already seen several new applications.
All 10 applications received in 2015 were deemed admissible and led to the appointment of an emergency arbitrator. The emergency arbitrator's order was issued within the 15-day time limit set down in the ICC Emergency Arbitrator Rules in 8 of the cases. In the remaining 2 cases the order was issued respectively 20 and 26 days after transmission of the file to the emergency arbitrator. The orders granted or partly granted the relief sought in 4 cases and dismissed the remaining 6 applications.
The parties involved in the cases in which these applications were made were from Australia, Bermuda, Bolivia, Colombia, France, Mauritius, Mexico, Morocco, Peru, Philippines, Poland, Spain, Sweden, Switzerland, Tunisia and the United Kingdom. The emergency arbitrators who ruled on their applications were nationals of Colombia, France, Germany, Peru, Spain, Switzerland, the United Kingdom and the USA.
ICC as Appointing Authority
ICC offers a service for the constitution of arbitral tribunals in arbitrations not administered by itself. This service is provided by the Court and regulated by a special set of rules separate from the Rules of Arbitration. In 2015, ICC received 16 requests for the appointment of an arbitrator in non-ICC proceedings, 6 of which were for appointments in UNCITRAL arbitrations and 10 for appointments in other arbitrations.
They involved parties from 18 countries and independent territories in Africa, Asia, Europe and North America. Two of the requests were for the appointment of arbitrators in cases conducted pursuant to bilateral investment treaties, one of which was administered by ICSID and the other conducted under the auspices of the Permanent Court of Arbitration. State entities were also involved in two other requests, one of which was rejected due to a pathological clause that could not be considered to give ICC the required authority to act. The requests covered all categories of arbitrators - sole arbitrators (4), co-arbitrators (9) and tribunal presidents (3).
Mediation
In 2015, 16 new requests for mediation were filed with the ICC International Centre for ADR. In 12 cases, the request was made on the basis of a prior agreement between the parties to submit disputes to the ICC Mediation Rules. Of the 4 remaining, unilateral requests for mediation, 3 were refused by the other party or parties, so the cases could not proceed. No requests were received in which the parties opted for settlement procedures other than mediation (as is possible under the ICC Mediation Rules), which demonstrates a clear preference for mediation over other amicable dispute resolution procedures.
The mediation requests filed in 2015 involved parties from a total of 20 countries throughout the world. As a neutral and flexible procedure, ICC mediation lends itself to disputes between parties from distant countries and contrasting cultures. Nine of the 2015 cases were between parties from different regions of the world and all but 4 between parties from different countries. Argentinian and French parties were the most frequent. All 9 Argentinian parties appeared in a single multiparty case, while the 6 French parties appeared in 6 different cases, which points to a more widespread use of mediation in France. As in previous years, European parties outnumbered those from any other continent, but the balance between Europe and other regions narrowed, with a shift towards Africa and the Americas.
The parties included two states: one in North Africa and the other in South East Asia.
Mediators from Europe and the USA were selected in the 13 cases that proceeded beyond the initial request. They included 4 women and 9 men. Roughly half were nominated by the parties (in one case, the parties' nominee was chosen from a list of suitable candidates provided by the Centre). The other mediators were appointed by the Centre in the absence of agreement between the parties on a joint nominee. All but two of the appointments were made on the basis of a proposal from an ICC National Committee. The two exceptions were cases in which the attributes required of the mediators were very specific and the Centre was best placed to find the most suitable candidate.
The disputes that were submitted to mediation in 2015 came from a wide range of economic sectors. As in arbitration, construction disputes topped the list, followed by disputes relating to energy and general trade. Other cases concerned service industries as well as heavy industry and manufacturing. The value of the disputes ranged from some USD 200,000 to over USD 1 billion, and averaged just under USD 100 million.
Of the 13 mediations that were set in motion during the year, 4 reached a settlement before the year-end. The average time taken to reach the settlement in these cases was 5 months from the filing of the request.
Experts
In 2015, ICC introduced a triptych of new rules relating to experts, which replaced the former Rules for Expertise. The new rules deal separately with each of the three services traditionally provided by the Centre - the proposal of experts, appointment of experts and administration of expert proceedings - and extend the first two to cover neutrals as well as experts. Of the 28 requests received in 2015, 26 were filed under the new rules and 6 were for neutrals. As in the past, over half of requests were for proposals, with the remainder split equally between appointments and the administration of expert proceedings. In addition to the appointment of an expert or the confirmation of an expert agreed upon by the parties, the administration of expert proceedings includes 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.
Half of the requests for the proposal of experts were made by tribunals in ICC arbitrations, in which case the proposal is made free of charge. Two requests for the proposal of experts were received from arbitral tribunals in non-ICC proceedings. All other requests came directly from the parties.
The cases that gave rise to the requests filed in 2015 involved parties from 26 countries and led to the proposal or appointment of experts and neutrals of 9 nationalities. Unusually, the number of cases involving parties of the same nationality (domestic cases) exceeded the number of international cases. These domestic cases involved parties from Argentina, Australia, Bahrain, Belgium, Egypt, France, Germany, Greece, Italy, Kazakhstan, Mexico, Poland and Spain. Seven cases involved a state, state ministry or an entity under state control.
When selecting the experts, the Centre acted on a suggestion from its Standing Committee on 2 occasions and was assisted by an ICC National Committee on 9 occasions. Otherwise, it drew directly on the pool of candidates already known to it.
Two-thirds of requests were for technical experts, 25% for legal experts and 11% for financial experts. The construction, energy and transport sectors were the fields in which expertise was most often sought. Other fields included telecommunications and information technology, industrial services and equipment, pharmaceuticals, finance, business services and textiles.
DOCDEX
DOCDEX is dispute resolution service specifically designed for trade finance. 2015 saw the launch of new ICC DOCDEX Rules, which have extended the scope of the service to a wider range of trade finance instruments. Nine new DOCDEX cases were registered during the year. Of these, 4 were administered under the new rules and 5 under the former rules. The disputes related to letters of credit (3 cases), collections (3 cases) and guarantees (3 cases). The amounts of these instruments ranged from USD 150,000 to USD 80 million and averaged just over USD 14 million.
The origins of the parties involved in these cases once again demonstrated the appeal ICC DOCDEX has in Asia, and especially in Mainland China (6 of the 7 Chinese parties were from Mainland China and 1 from Hong Kong). Two of the cases involving Chinese parties were initiated by a Chinese bank against another Chinese bank. A third single-nationality case involved two Indonesian banks.
The DOCDEX procedure leads to a decision by a panel of three experts, normally of different nationalities. The panels appointed in the 2015 cases were made up of experts of 29 nationalities (including one holding triple citizenship).
DOCDEX is a document-based procedure in which speed is of the essence. One of the innovations of the 2015 Rules is the provision of digital templates to allow filings by email. The average duration of the cases filed in 2015 (from the filing of the request to notification of the decision) was a little over two months.
Dispute Boards
The ICC Dispute Rules, which were also revised in 2015, differ from ICC's other dispute resolution rules insofar as parties wishing to set up and operate dispute boards may use them without recourse to ICC. ICC's intervention, if necessary, is limited to a number of administrative services intended to facilitate the application of the rules. Under the 2015 rules, four such services are offered: the appointment of dispute board members and determination of challenges against them, the determination of their fees and the reviewing of their decisions.
In 2015, ICC received one request for the appointment of a person to act as member of a dispute board in a construction project involving parties from a Gulf state. The Centre appointed a British construction law specialist to the case within three weeks of the request.