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( Source of the document: ICC Digital Library )
Although fundamental to international arbitration,2 party autonomy does not go unfettered. No one is more aware of this than John Beechey. Both in private practice and during his outstanding presidency of the ICC International Court of Arbitration, John has displayed a strong sense of client service, including utmost respect for party autonomy, yet he has also been constantly aware that party autonomy is subject to limits, and has made a significant contribution to clarifying and redefining those limits, not only through the decisions taken by the ICC Court, but also in public statements and exchanges with state courts and other institutions.
Institutional arbitration rules embrace party autonomy in at least two ways. The first is through their very nature and application. They apply because the parties have referred to them in their arbitration agreement (generally made before or, less often, after the dispute arises), as a consequence of which they become part of that agreement. [Page104:] Institutional rules thus have a contractual - not a legal - basis,3 and the choice of arbitration pursuant to institutional rules is in itself an expression of the parties' will and their preference for a pre-established set of procedural and administrative norms as opposed to ad hoc arbitration proceedings or another form of dispute resolution.4 This freedom is recognized by virtually all legal systems and is made explicit in many national arbitration statutes.5
Secondly, party autonomy finds expression through the content of the rules. In most cases, the rules set out a limited number of fundamental procedural principles, largely inspired by due process, and point to procedural options that parties and arbitrators may (but are not obliged to) adopt. In so doing, they recognize party autonomy and leave the field open for its expression through party agreements on details of procedure. Also, subject to the exceptions mentioned below in section III, rules generally permit derogations from the provisions they contain as a further expression of party autonomy.6
Despite its pervasive role, party autonomy in institutional arbitration is subject to limits of two kinds. First, precisely because the rules are an expression of party autonomy, they are subject to general restrictions on liberty of action from sources outside the rules, i.e. they cannot violate overriding mandatory rules and public policy. Second, within a pre-established set of rules the parties' freedom to make changes or additions is limited by the need to ensure they are compatible with the chosen rules.
The first category will be referred to as 'outer' limits on party autonomy and the second as 'inner' limits on party autonomy.
II. Outer limits on party autonomy
These limits are reached when the parties' will, expressed in the choice of a given set of arbitration rules, comes into conflict with public policy or mandatory rules of law.7 Specifically, the focus here is on situations where that conflict is caused by the arbitration rules themselves or their application by the institution, not by the manner in which they are applied by arbitrators.
Claims that specific provisions of arbitration rules are contrary to fundamental legal principles have sometimes found their way into legal literature and the decisions of national courts. For instance, Antoine Kassis, writing in 1988,8 claimed that the scrutiny of draft awards by the ICC International Court of Arbitration foreseen in the ICC Rules of Arbitration (the 'ICC Rules') made all ICC awards unenforceable, as such scrutiny encroached on the adjudicative powers of arbitral tribunals. The most extreme expressions of such positions have generally been denounced and had little or no impact.9 However, there have been times when state courts in various jurisdictions have found that the application of institutional rules may result in a violation of public policy or mandatory provisions, and have consequently set aside or refused to enforce awards rendered pursuant to those rules.
It may seem surprising that arbitration rules could be capable of violating fundamental legal principles. After all, these rules are drafted by bodies of arbitration specialists, generally after extensive review [Page106:] and consultations at various levels.10 Moreover, when entering into arbitration agreements, parties are usually assisted by sophisticated lawyers aware of possible risks the adoption of the rules might pose. Yet, with international arbitrations now taking place in an increasing number of jurisdictions,11 the risk of idiosyncratic decisions by state courts (e.g. on the basis of an unduly broad interpretation of the scope of public policy) is all the greater. Even in arbitration-friendly jurisdictions, courts have sometimes held that arbitration rules conflict with mandatory provisions or public policy on such matters as non-discrimination, access to justice, equal treatment, independence and immunity from liability, as the rulings discussed below illustrate.
1. Non-discrimination in relation to attributes of arbitrators: Jivraj
In Jivraj, the English Court of Appeal held that the requirement for arbitrators to be drawn from a particular religious community contravened the mandatory principle of non-discrimination.
According to the arbitration clause, the arbitral tribunal had to be composed of 'respected members of the Ismaili community and holders of high office within the community'. The claimant sought to appoint an arbitrator who did not fulfil this condition, arguing that the clause amounted to religious discrimination outlawed by the English Employment Equality (Religion or Belief) Regulations of 2003 ('EERBR 2003'), which implement EU Directive 2000/78 forbidding employment discrimination.12 The respondent took the matter to the High Court, which upheld the arbitration agreement on the grounds that EERBR 2003 did not apply to arbitrators and that even if it did, the requirement contained in the clause would be a genuine occupational requirement under that statute. The Court of Appeal took a different view. It held that the provision of services by an arbitrator falls within the broad definition of 'employment' under EERBR 2003 and that restricting the pool of potential arbitrators to Ismailis fell foul of mandatory non-discrimination law.13 Reversing the decision of the Court of Appeal, the UK Supreme Court held that arbitrators cannot be considered [Page107:] as 'employees' for the purposes of anti-discrimination legislation and ruled that an arbitration agreement requiring all arbitrators to be of a certain religious belief was valid.14
Although Jivraj concerned ad hoc rather than institutional arbitration, it is relevant here since the finding of the Court of Appeal on requirements with respect to religion could have had an impact on the validity of clauses referring to institutional rules that restricted the choice of arbitrators on the basis of other criteria. For instance, it is very common to find in institutional rules provisions relating to the nationality of arbitrators, which are intended to ensure that they are perceived as neutral.15 Although, as was eventually recognized by the Supreme Court, Jivraj arose from what was doubtless an incorrect interpretation of the scope of English employment law, the ruling of the Court of Appeal sounded a warning over the enforceability of arbitration agreements referring to rules that restricted the choice of arbitrators on other grounds such as nationality.
2. Party equality in the constitution of the arbitral tribunal: Dutco
Arbitration rules that have special provisions for constituting arbitral tribunals in multiparty cases could come into conflict with public policy if they disregard the principle of party equality.16 This is illustrated by the famous Dutco case in France.
In an ICC arbitration involving three members of a consortium with differing interests, both respondents claimed the right to appoint an arbitrator. Upon being informed that the ICC Court would apply a provision of its 1998 Rules that empowered it to appoint an arbitrator on behalf of the multiple respondents in the absence of a joint nomination, the second respondent decided to acquiesce to the first respondent's choice, albeit under protest. The tribunal rendered a partial award in which it held, among other things, that it had been validly constituted. Alleging that party equality had been breached, the respondents sought to have the award set aside by the Paris Court of Appeal, but [Page108:] their allegation was dismissed.17 The Court of Cassation took a different view, however,18 finding that it is an infringement of party equality to allow one party to nominate an arbitrator but not each of the others, notwithstanding the fact that the parties had chosen institutional rules that allow this. It held that the equality of the parties in the constitution of the arbitral tribunal was a matter of public policy and could not be waived by the parties ahead of a dispute.19 The relevant provision of the 1998 ICC Rules was modified in the wake of Dutco to empower the ICC Court to avoid the risk of inequality between the parties by appointing all the members of the arbitral tribunal itself in the absence of a joint nomination by multiple parties.20
Courts in other jurisdictions have been confronted with the same problem. In a recent case in Brazil, where the institution appointed an arbitrator on behalf of two respondents with divergent positions on the substance of the dispute, the Brazilian courts took the same approach as the French Court of Cassation in Dutco.21 The award, rendered under the rules of the Centro de Arbitragem e Mediaçao da Câmara de Comércio Brasil Canadá (CAM/CCBC), was set aside by the São Paulo lower court on grounds of breach of party equality in the constitution of the arbitral tribunal, the president of CAM/CCBC having appointed an arbitrator, as provided by the CAM/CCBC Rules, following the respondents' failure to agree on a joint nomination. Elsewhere, however, courts have sometimes taken a different view.22
3. Access to justice for impecunious parties: Pirelli and Lola Fleurs
The Pirelli case centred on an impecunious party's right of access to justice in the context of institutional arbitration.
In an ICC arbitration the ICC Court fixed separate advances on costs for the principal claims and counterclaims at the claimant's request pursuant to Article 30(2) of the 1998 ICC Rules (Article 36(3) of the 2012 ICC Rules). The respondent objected that it could not afford to pay the advance corresponding to its counterclaims and failed to do so. In accordance with Article 30(4) of the 1998 ICC Rules (corresponding to Article 36(6) of the 2012 Rules), the ICC Court consequently considered the counterclaims as withdrawn. In the final award the arbitral tribunal accepted the claimant's claims and did not examine the respondent's counterclaims.
The award was set aside by the Paris Court of Appeal on grounds of unequal treatment and denial of access to justice.23 The court insisted that the jurisdictional nature of arbitration meant that parties must be given the same rights of access to justice as in court proceedings. Although it did not go as far as saying that the ICC provision allowing for separate advances on costs was in itself contrary to public policy and due process,24 it did consider that in the circumstances its application would result in a denial of access to justice.
The decision of the Court of Appeal was in part overturned by the Court of Cassation. The supreme court held that a tribunal's failure to consider a party's counterclaims violates the fundamental principle of right of access to justice only if the counterclaims are 'inseparable' ('indissociables') from the principal claims. It ruled that insofar as the Court of Appeal did not adequately address this point, its decision was flawed in law.25 Although neither the award nor the ICC provision allowing for separate advances on costs was declared invalid, the [Page110:] supreme court's ruling could in certain circumstances lead to a conflict between the institutional regime and the fundamental right of access to justice.26
Just a month before the Court of Cassation's decision in Pirelli, the Paris Court of Appeal had faced a similar situation, but in the context of an ad hoc arbitration, in Lola Fleurs.27 The Court of Appeal rejected the claimant's arguments (i) that its inability to pay the arbitration costs rendered the arbitration clause 'manifestly inapplicable' and (ii) that if it were left with no choice but arbitration it would be denied access to justice. While rejecting the first argument, the court observed that arbitral tribunals have a duty to guarantee access to justice.
In light of this decision (and subject to any further developments in case law), arbitral institutions and arbitrators will need to exercise discernment when applying Article 36(6) of the 2012 ICC Rules (or Article 30(2) of the 1998 ICC Rules).28 Where a party fails to meet its payment obligations and the parties' claims are inseparable from each other and from their defences it may be unwise for the institution to consider the impecunious party's claims as withdrawn.29
It is somewhat ironic that in both Pirelli and Lola Fleurs the jurisdictional nature of arbitration, which is often cited as one of its strengths, weakened the effectiveness of the parties' choice of arbitration rules.
4. Right to question an arbitrator's independence: Tecnimont and Nyckool
Arbitration rules almost without exception clearly affirm that all arbitrators must be and remain independent and impartial, and provide the administering institution with means to ensure this requirement is met. Whether and to what extent the institution's powers in this regard (e.g. relating to the appointment, confirmation or challenge of arbitrators), which the parties implicitly accept when they agree upon the institution's rules, limit a party's right to invoke an arbitrator's lack of independence in proceedings to set aside or enforce an award is a question that might reveal a conflict between arbitration rules and fundamental legal principles.
An illustration is the Tecnimont case in France, on which the courts have already rendered no fewer than four decisions.30 The case concerned an ICC arbitration in which the respondent challenged an arbitrator for failing to reveal certain links between the law firm where he was of counsel and one of the parties. The ICC Court examined the arbitrator's independence and rejected the challenge. A partial award subsequently rendered by the arbitral tribunal was first annulled by the Paris Court of Appeal.31 This decision was overturned by the Court of Cassation,32 which referred the matter to the Reims Court of Appeal for reconsideration. The Reims Court of Appeal annulled the award for a second time.33 This was followed by another decision by the Court of Cassation, which overturned the second annulment, too.34
In the second annulment decision, the Reims Court of Appeal distinguished in the broadest possible terms between the assessment of independence made by the arbitral institution in the challenge procedure and that made by the domestic court in the procedure to set aside the award. The court held that as the independence of arbitrators is a matter of public policy, the time limit for making a challenge against an arbitrator is not binding on a court asked to rule on the validity of an award rendered by a tribunal that includes the challenged arbitrator. Nor are the parties limited in the court procedure to the factual circumstances on which the challenge was based: the fact that the circumstances justifying the annulment of the award had not been invoked when the arbitrator was challenged is irrelevant.
Taking a very different view, the Court of Cassation in its second ruling held that when a party fails to exercise its right to challenge an arbitrator within the time limit set in the arbitration rules to which it has agreed, that right is deemed to have been waived in proceedings to set aside a subsequent award. This decision reinforces the contractual nature of arbitration rules. Without denying that the independence of arbitrators is a matter of public policy, it recognizes that the right to [Page112:] invoke a lack of independence can be waived (for instance, as here, by failing to challenge the arbitrator within the time limit set by the relevant rules).
The Court of Cassation did not delimit the respective powers of the institution and the annulment court to investigate the arbitrator's independence.35 Pending clarification on this point, one may conclude that although independence is an absolute requirement and, as a matter of public policy, cannot be touched upon by arbitration rules, the exercise of the right to invoke an arbitrator's lack of independence is subject to party autonomy and therefore can be waived depending on the chosen rules.36
If an institution's procedures relating to the independence of arbitrators contain features that are in themselves contrary to public policy (such as unreasonably short time limits for submitting a challenge),37 then it is of course possible that an award could be set aside. An illustration can be found in a 2012 decision of the Paris Court of Appeal on an institution's objection to the setting aside of an award rendered under its aegis (Nykcool). The institution in question was the Chambre Arbitrale Maritime de Paris, whose rules (in Article VIII) give parties 15 days from commencement of the arbitration to challenge an arbitrator, regardless of whether or not they were aware of the circumstances on which the challenge is based. The court rejected the objection,38 ruling that the aforementioned provision was unreasonable by depriving parties of the right to raise an arbitrator's failure to disclose facts affecting his or her independence when they become aware of this after the expiry of the 15-day time limit.
5. Immunity from liability of arbitrators and institutions: SNF
Most arbitration rules protect arbitrators and institutions from liability in the performance of their functions under the rules.39 The ICC Rules40 formulate the principle in broad terms, with respect to both the persons benefitting from the protection:
The arbitrators, any person appointed by the arbitral tribunal, the emergency arbitrator, the Court and its members, the ICC and its employees, and the ICC National Committees and Groups and their employees and representatives …
and the objective scope of the exemption:
… shall not be liable to any person for any act or omission in connection with the arbitration.
However, the same provision also contains language that may restrict the scope of the protection:
… except to the extent such limitation of liability is prohibited by applicable law.
Clauses excluding or limiting liability may come up against mandatory legal provisions that render them ineffective where obligations of a fundamental nature or particular kinds of liability are at issue (e.g. conscious wrongdoing, gross or wilful negligence). Wording of the kind used in the ICC Rules is intended to give the provision maximum effectiveness without infringing mandatory law.
Such clauses have sometimes been criticized, and their effectiveness questioned or even denied, both by commentators41 and by courts in several jurisdictions.42 In its 2009 ruling in SNF, the Paris Court of Appeal stated in very bold terms that clauses limiting liability are ineffective. The case involved an ICC arbitration. The institution's liability was pursued for an alleged breach of its contractual obligations towards the parties with respect to the scrutiny of the draft award and the ICC Court's control over the time limit for rendering the award. The Paris Court of Appeal held that the provision of the ICC Rules in question should be considered unwritten ('doit être reputée comme non écrite'). The rationale is that excluding liability for non-compliance with obligations that have been willingly assumed is inconsistent with the fact of having assumed those obligations, any breach of which should remain sanctionable.43 The Court of Appeal was criticized for not taking into account that this was not a breach of a fundamental obligation of the institution and there was no allegation of gross or wilful negligence.44
Were fundamental legal principles found to have been breached, this would not lead to the annulment or unenforceability of an award, but to the ineffectiveness of the rule purporting to limit or exclude liability. This consideration, and the fact that the rule may be enforceable in certain jurisdictions, albeit subject to limits, eventually led to its retention in the 2012 ICC Rules.45
III. Inner limits on party autonomy
1. 'Mandatory' institutional rules
It is quite rare for conflicts to occur between institutional rules and particular arrangements agreed between the parties. There are two main reasons for this. First, as already mentioned, most institutional rules are designed to allow expressions of party autonomy through variations from or additions to the rules. Those rules usually set out general principles and leave the parties largely free to agree on procedural details or depart from the fallback solutions foreseen in the rules. Some provisions of the ICC Rules expressly allow for derogation by the parties.46 Second, by virtue of the principle lex specialis derogat generali, any particular arrangements the parties have agreed between themselves (be it in their arbitration agreement or subsequently, but prior to the appointment of the arbitrators)47 will normally prevail over the institution's rules. The supremacy of the parties' specific arrangements is sometimes expressly foreseen in arbitration statutes.48
It could be considered inaccurate to talk of 'limits on party autonomy' in relation to arbitration rules, as those rules and the provisions they contain are chosen by the parties and are therefore just as much an expression of party autonomy as the particular procedural arrangements agreed between the parties. The conflict here is not between the will of the parties and the law, but between two different expressions of the parties' will. Likewise, the use of the terms 'mandatory' and 'institutional public policy' in relation to institutional rules could be misleading given that the rules apply by choice, not by law.
The parties' use of an institution's rules is a contractual undertaking, so any problems arising from their modification are contractual issues between the parties and the institution. The institution, for its part, undertakes to carry out a number of administrative functions when its rules are used.49 If the parties depart from those rules, then this amounts to a unilateral amendment, which could cause the institution to refuse to administer the arbitration.50 When adopting the rules of a given institution, parties are therefore assumed to accept mandatory rules contained therein as restrictions on their autonomy.51
Although few would disagree that there are certain provisions in arbitration rules from which the parties cannot derogate, identifying which provisions they are or defining criteria allowing permissible amendments to be distinguished from unacceptable modifications of the institution's offer of services is more challenging.52 Besides, the rules themselves generally offer little or no guidance. Without pretending to be exhaustive, the following sections attempt to identify, on the basis of general criteria and with reference to examples from the ICC Rules, the nature and scope of institutional rules that can be considered as mandatory. The notion of mandatory provisions is obviously found in the rules of other institutions, too,53 but different institutions may have different views on which of their rules qualify as mandatory.
2. Provisions whose terms forbid any amendment
An example of such a provision can be found in Article 2(4) of Appendix III to the ICC Rules:54
The arbitrator's fees and expenses shall be fixed exclusively by the Court as required by the Rules. Separate fee arrangements between the parties and the arbitrator are contrary to the Rules.
The rule could not be clearer: it evokes separate arrangements in order to exclude them categorically. Its purpose is to preserve the integrity of the process by preventing direct negotiations between the parties and the arbitrators on fees. Any agreement between the parties that seeks to amend the process and criteria for fixing arbitrators' fees would be unacceptable to the institution, which is likely to refuse to administer the case.
Another example is the exclusion of hybrid arbitration agreements that purport to allow institutions other than the ICC to administer cases under the ICC Rules. This principle is expressed in Articles 1(2) and 6(2), respectively:
The Court is the only body authorized to administer arbitrations under the Rules …
By agreeing to arbitration under the Rules, the parties have accepted that the arbitration shall be administered by the Court.
These provisions were included in the 2012 ICC Rules as a response to several court decisions,55 or even arbitration rules,56 that uphold or allow for the practice of hybrid arbitrations. However, as the decisions below illustrate, there would still appear to be pockets of resistance or misunderstanding.
In Insigma Technology Co. Ltd v. Alstom Technology Ltd, the Singapore High Court held that the Singapore International Arbitration Centre (SIAC) could administer arbitration proceedings under the ICC Rules and rejected a challenge brought against an award on the grounds that [Page117:] this was not permitted.57 In 2013 the Assistant Registrar in the Singapore High Court relied on Insigma and issued two similar decisions in HKL,58 where the parties had made a pathological arbitration agreement referring to arbitration before 'the Arbitration Committee at Singapore under the rules of the International Chamber of Commerce'. In the first decision, the Assistant Registrar directed the parties to 'approach any arbitral institution in Singapore which would be able to administer the arbitration, applying the ICC Rules'. In the second decision, while acknowledging that '[i]n the ordinary course of things, hybrid arbitrations should be avoided', the Assistant Registrar held that: 'Although Art. 1(2) of the ICC Rules claims for the International Court of Arbitration the sole authority to administer ICC arbitrations, the power of the rules to bind emanates from the consent of the parties.' The Assistant Registrar appears to have overlooked the fact that Articles 1(2) and 6(2) are an integral part of the ICC Rules to which the parties have 'consented' (to use the Assistant Registrar's term) and that permitting any other institution to administer arbitrations under the ICC Rules would therefore disregard the will of the parties, which the decision purports to uphold.59
A hybrid arbitration agreement referring to ICC Rules administered by the American Arbitration Association (AAA) was recently examined by a US court in Exxon Neftegas Ltd v. WorleyParsons Ltd. The Supreme Court of the State of New York 60compelled arbitration before the AAA despite an objection from one of the parties that the ICC Rules do not [Page118:] allow administration by any body other than the ICC Court and that, in any event, this would require several provisions of the ICC Rules to be modified.61
Institutional rules are intimately, if not inseparably, linked to the institution that issued them.62 That institution will likely have in place the structure and practices necessary for their proper administration. Regardless of the impracticality of having the ICC Rules administered by another institution, Articles 1(2) and 6(2) of the 2012 ICC Rules imply that any other institution purporting to apply the Rules correctly would have to decline the case. As well as expressing a policy position (namely, institutions should not accept amendments to the rules which are unworkable or likely to lead to inefficiency, and the role of each institution in the administration its own rules should be respected), these provisions also create a legal obstacle, insofar as the parties, in adopting the ICC Rules, have made a contractual commitment to have disputes administered by the ICC Court. If the parties assign the administration of a dispute to another institution, this would contravene not only the ICC Rules but also their own agreement to have recourse to ICC arbitration and may render any subsequent award invalid or unenforceable under Article V(1)(d) of the New York Convention or other similar provisions.63
Even if parties were regarded as having opted out of Articles 1(2) and 6(2) when entering into a hybrid arbitration agreement, the fact remains that administrative tasks assigned to specific bodies or persons within the ICC - the ICC Court, its President, Secretary General and the Secretariat of the Court64 - would have to be performed by comparable organs in other institutions (assuming they exist), which would in itself contravene the ICC Rules.65 Therefore, although parties in a hybrid arbitration would not be bound by any decision of the ICC Court (as it would not have been seized with the case), any amendment to the ICC Rules aimed at excluding the administrative role of the institution would be at variance with the express terms of the ICC Rules incorporated into the parties arbitration agreement and therefore could render a subsequent award invalid or unenforceable under the New York Convention.66
3. Provisions that correspond to essential features of the rules
A second category of rules that institutions require to be left unchanged are those that reflect distinctive features of the arbitration procedure of a given institution or aspects that are inseparable from the institution's structure or practice.
In the context of ICC arbitration, the provisions relating to the scrutiny of draft awards by the ICC Court (Article 33 of the ICC Rules) clearly belong to this category. Scrutiny is a powerful quality control mechanism that enhances the enforceability of awards. Although some other international institutions provide for some form of scrutiny of draft awards,67 the formal and systematic review of all draft awards by a body such as the ICC Court is universally recognized as a core feature of ICC arbitration and one that distinguishes it from any other [Page120:] institutional arbitration procedure.68 Scrutiny is so central to ICC arbitration procedure that the institution would not accept a case if the parties had excluded or altered the process.69
In the Samsung v. Qimonda case, the ICC Court refused to administer an arbitration where, in the arbitration agreement, the parties excluded the application of certain provisions of the ICC Rules, notably those relating to the scrutiny of draft awards and the institution's role in the confirmation of arbitrators. Noting that the institution's refusal to administer the case created a difficulty for the constitution of the arbitral tribunal, one of the parties filed an application with the Paris Court of First Instance for the appointment of an arbitrator. The court confirmed that the institution's refusal to administer the case was justified and consented to act as juge d'appui.70
Equally essential are the provisions relating to the ICC Court's role in screening requests for arbitration and jurisdictional objections, and deciding on its own competence to administer a case (Articles 6(3) and 6(4) of the ICC Rules). The purpose of this function is to filter out groundless proceedings so as to avoid the cost and effort of setting in motion the procedure and constituting an arbitral tribunal in cases where the arbitral tribunal would almost certainly find that it does not have jurisdiction.71 Although the function in itself is not peculiar to ICC arbitration, the importance of the Court's role as gatekeeper and the unique form it takes in ICC proceedings mean that it must be considered a distinctive component of the ICC Rules, and one from which the parties may not derogate.72
Likewise, the Terms of Reference (Article 23 of the ICC Rules) can also be considered a distinctive feature of ICC arbitration. Their exclusion by the parties may cause the institution to refuse to administer the case.73 However, institutional public policy, like public policy in general, [Page121:] is relative and may evolve over time. An institution may consider a certain aspect of its procedure as essential and unmodifiable at a particular time but in a later iteration of its rules take a different view or even exclude that aspect. An example is precisely the Terms of Reference in ICC arbitration. During the revision process that led to the adoption of the 1998 ICC Rules, the possibility of dispensing with Terms of Reference or making them optional was considered but rejected by the ICC Commission on International Arbitration (as it was then called), which decided to maintain them as mandatory.74 Although today they are still seen as an essential and distinctive feature of ICC arbitration, it cannot be ruled out that they could be considered dispensable at some point in the future. It has already been observed that the integrity and quality of the ICC arbitration process do not depend on them and that they may lead to added cost and delay.75 The requirement to hold a case management conference at an early stage of the proceedings to discuss procedural measures and adopt a procedural timetable, which was introduced in Article 24(1) of the 2012 ICC Rules, may be regarded as a suitable alternative.
Another example of the evolving nature of institutional public policy is the rule that the ICC Court does not provide reasons for its decisions on the appointment, confirmation, challenge and replacement of arbitrators (Article 11(4) of the ICC Rules). This rule has traditionally been explained as a corollary of the administrative nature of such decisions and as a way of minimizing the risk of challenges against the award or against the decision itself. The rule also helps to ensure that decisions are not delayed by the need for Court members to reach a consensus on the reasons for their decisions.
The principle that the ICC Court does not provide reasons for its decisions on the confirmation, appointment, challenge and replacement of arbitrators was acknowledged by the French courts in Fairplus, where both the outer and inner limits of party autonomy were at stake. The Paris Court of First Instance held that the arbitral institution is under no obligation to give reasons for its decisions on challenges, which are [Page122:] administrative in nature, and added that not giving reasons does not amount to a violation of due process and is not otherwise contrary to public policy.76
Proponents of the view that reasons should be given for such decisions point out that they are comparable to decisions of state courts, which are generally reasoned. Furthermore, the publication of reasoned decisions, which would necessarily imply prior communication of the reasons to parties and arbitrators, would foster consistent practices and lead to greater predictability.
It is now accepted that there may be circumstances in which parties can request the Court to give reasons for its decisions in this field. In 2012, the ICC Commission on Arbitration and ADR produced a report which put forward the idea that, when resorting to investment arbitration under the ICC Rules, states may wish to derogate from Article 11(4) and include in the relevant investment instruments wording expressing the need for reasons to be given for such decisions.77 This has actually occurred in two recent cases involving state entities, although as they were not based on international investment instruments they are not direct applications of the proposition made in the Commission's report. However, the fact that parties can jointly request the Court to give reasons for its decision in certain circumstances implies that Article 11(4) of the ICC Rules is not a provision from which no derogation is possible. This has indeed been confirmed by the ICC Court's recent announcement that, upon request by the parties, it may communicate the reasons for certain decisions it makes, including those on challenges and replacements of arbitrators.78
4. Provisions intended to safeguard public policy and mandatory rules of law
A third category of unmodifiable rules comprise those empowering the institution to ensure compliance with public policy and mandatory rules of law. The ultimate purpose of these provisions is to protect the validity and enforceability of arbitral awards.
The provisions on the confirmation and appointment of arbitrators in ICC arbitration clearly belong to this category. 'Confirmation' as used in Article 13(2) of the ICC Rules refers to the role of the institution in relation to arbitrators nominated by the parties or pursuant to their agreements (e.g. tribunal president nominated by co-arbitrators, or arbitrators selected by an external appointing authority). 'Appointment' is the term used when it is the ICC Court that selects the arbitrator(s) (Article 13(3) of the ICC Rules).79
Under the ICC Rules, all arbitrators must be either confirmed by the Secretary General or the Court, or appointed by the Court. The purpose of this provision is to allow the institution to vet all prospective ICC arbitrators and, in particular, check their independence and impartiality.80 Although its examination is likely to be less strict when confirming arbitrators to whom the parties have not objected than when appointing arbitrators, the institution remains free to refuse confirmation of an arbitrator lacking the necessary independence and impartiality, even in the absence of an objection.81 The rule on confirmation is a corollary of the fundamental requirement of international arbitration law expressed in Article 11(1) of the ICC Rules:
Every arbitrator must be and remain impartial and independent of the parties involved in the arbitration.'
Parties may not dispense with this requirement.82 If the parties were able to exclude the role of the institution in confirming arbitrators nominated by them or pursuant to their agreements, then the institution would have no effective means of verifying the prospective arbitrators' independence and impartiality, other than in the context of [Page124:] a challenge,83 and a subsequent award rendered by arbitrators lacking the necessary independence and impartiality could be set aside or refused enforcement. In Samsung v. Qimonda referred to above, the parties had excluded in their arbitration agreement the confirmation of arbitrators by the ICC Court and its Secretary General. The Paris Court of First Instance endorsed the institution's refusal to administer the case.84
Another provision belonging to this category is Article 12(8) of the ICC Rules, which allows the appointment of all of the arbitrators in multiparty cases. The use of the word 'may' ('the Court may appoint each member of the arbitral tribunal') could give the impression that this is not a mandatory provision and that parties are free to provide otherwise. However, as mentioned earlier, this provision was introduced in the 1998 ICC Rules precisely to avoid the risk of inequality when multiple respondents (or claimants) are unable to agree on a joint nomination, which the French Court of Cassation in its Dutco decision found to be a breach of public policy. Given the reason for this provision, its exclusion would undermine the validity and enforceability of a subsequent award. Where parties have agreed on specific procedures for selecting arbitrators in multiparty disputes, the ICC Court will generally defer to their agreement. However, it is important that the ICC Court should have the power to apply Article 12(8) and appoint all of the arbitrators in the event that the parties' agreement would put the award at risk.85 Consequently, any attempt by the parties to exclude this power may cause the institution to refuse to administer the case.
IV. Concluding remarks
In institutional arbitration, conflicts do and will occur when the expression of party autonomy meets its limits. This in no way casts doubt on the reliability of institutional arbitration. As we have seen, there may be legitimate reasons for the limits. When such conflicts do occur, administered arbitration is better equipped than ad hoc arbitration to handle them. Institutions generally apply their rules with [Page125:] a margin of discretion and flexibility,86 which allows conflicts to be overcome, and, if called for, they may amend their rules to the extent necessary to avoid recurring conflicts.87
Institutional rules are generally the product of the collective work of bodies of arbitration specialists, and are drafted in the light of the institution's experience in administering cases. Parties would be well advised to remember that derogations from the rules should be confined to situations where they respond to a genuine need. There is no reason for institutions to be too deferential to the will of the parties if it translates into unreasonable procedural agreements aimed at modifying the rules in a way that would result in an inefficient, if not unworkable, procedure and, in certain cases, unenforceable awards.88
Secretary General of the ICC International Court of Arbitration and Director of ICC Dispute Resolution Services; firstname.lastname@example.org.This article reflects a presentation given by the author at a conference entitled 'Limits to Party Autonomy in International Commercial Arbitration' at the New York University Center for Transnational Litigation, Arbitration, and Commercial Law on 17 September 2015. The conference materials will be published.
See N. Blackaby, C. Partasides et al., Redfern and Hunter on International Arbitration, 5th ed. (Oxford University Press, 2009), § 6.08, who describe party autonomy as 'the guiding principle in determining the procedure to be followed in an international arbitration'; G.B. Born, International Commercial Arbitration, 2d ed. (Kluwer, 2014) at 250: 'It is elementary that "arbitration" is a consensual process that requires the agreement of the parties.'; T.J. Stipanowich, 'The Arbitration Penumbra: Arbitration Law and the Rapidly Changing Landscape of Dispute Resolution' (2007) 8 Nevada Law Journal 427 at 432: 'The principle of freedom to choose among procedural options suffuses nearly all aspects of arbitration …'
A. Pinna, 'L'autorité des règles d'arbitrage choisies par les parties', The Paris Journal of International Arbitration 2014-1, 9. Arbitration rules remain consensual even when contained in statutes or international conventions such as the 1965 Washington Convention applicable to ICSID arbitration proceedings; they apply to the extent the parties have consented to their application.
G.B. Born, supra note 2 at 168.
E.g. those based on the UNCITRAL Model Law on International Commercial Arbitration, Art. 2(d)-(e) of which provides that '(d) where a provision of this Law … leaves the parties free to determine a certain issue, such freedom includes the right of the parties to authorize a third party, including an institution, to make that determination; (e) where a provision of this Law refers to the fact that the parties have agreed or that they may agree or in any other way refers to an agreement of the parties, such agreement includes any arbitration rules referred to in that agreement'. See also English Arbitration Act, s. 24(2); Swiss Private International Law Statute, Art. 182; French Code of Civil Procedure, Arts. 1446, 1452 and 1464(3); Italian Code of Civil Procedure, Art. 832.
See UNCITRAL Arbitration Rules, Art. 1(1): 'Where the parties have agreed that disputes between them in respect of a defined legal relationship, whether contractual or not, shall be referred to arbitration under the UNCITRAL Arbitration Rules, then such disputes shall be settled in accordance with these Rules subject to such modification as the parties may agree.'
A. Mourre, 'Institutional Arbitration Rules: Do They Deserve More Deference from the Judiciary?' in P. Wautelet et al., eds., The Practice of Arbitration, Essays in Honour of Hans van Houtte (Hart, 2012) 149: 'It is also self-evident that courts are not bound by institutional rules that would be found to be against public policy.'
See A. Kassis, Réflexions sur le règlement d'arbitrage de la Chambre de commerce internationale : les déviations de l'arbitrage institutionnel (LGDJ, 1988). Summary in English: 'The Questionable Validity of Arbitration and Awards under the Rules of the International Chamber of Commerce' (1989) 6:2Journal of International Arbitration 79. For a similar position see an isolated decision of the Turkish Supreme Court, 10 Mar. 1976, Keban,  Arbitration 241 (excerpts), which refused enforcement of an ICC award on the ground that the scrutiny process was contrary to Turkish public policy. See also Cubic Defense Systems Inc.'s suit against the ICC in the French Court of Cassation, where the company argued that its contract for services with the ICC was in breach of public policy as the ICC Rules allowed undue interference by the institution in the adjudicative mission of the arbitral tribunal, in particular when scrutinizing draft awards. The Court of Cassation rejected this argument and affirmed that the scrutiny process does not involve the exercise of a jurisdictional and adjudicative function, which is left exclusively to the arbitrators (Court of Cassation, 20 Feb. 2001, Revue de l'arbitrage, 2001.511).
On the views expressed by Kassis, see J. Paulsson, 'Vicarious Hypochondria and Institutional Arbitration' (1990) 6:3 Arbitration International 226; E. Loquin, 'L'examen du projet de sentence par l'institution et la sentence au deuxième degré. Réflexions sur la nature et la validité de l'intervention de l'institution arbitrale sur la sentence', Revue de l'arbitrage 1990.427.
The ICC Rules, for example, are revised within the ICC Commission on Arbitration and ADR, which is the ICC's rule-making body in the field of international dispute resolution. The Commission comprises over 600 members from more than 90 different jurisdictions. Rules are revised by 'task forces' of the Commission, which sometimes set up smaller drafting groups. During the revision process, successive drafts are discussed at plenary meetings of the Commission and ICC National Committees are also consulted.
ICC arbitrations were seated in 63 different jurisdictions in 2013 and in 57 different jurisdictions in 2014; see statistical reports, (2014) 25:1 ICC International Court of Arbitration Bulletin 5 at 12; [2015:1] ICC Dispute Resolution Bulletin 7 at 14.
The provisions in question were revoked on 1 Oct. 2010, but replaced by equivalent provisions in the Equality Act 2010.
Jivraj v. Hashwani  EWCA Civ. 712; see S. West & E. Poulton, 'Jivraj v Hashwami - When Will Courts Use Their Blue Pencil?' (2011) 26:8 Mealey's International Arbitration Report 25; J.-B. Racine, Annotation of UK Court of Appeal and Supreme Court decisions, Revue de l'arbitrage, 2011.1026 (in French).
Jivraj v. Hashwami  UKSC 40.
E.g. ICC Rules, Art. 13(5): 'The sole arbitrator or the president of the arbitral tribunal shall be of a nationality other than those of the parties. However, in suitable circumstances and provided that none of the parties objects within the time limit fixed by the Court, the sole arbitrator or the president of the arbitral tribunal may be chosen from a country of which any of the parties is a national.' Cf. LCIA Arbitration Rules, Art. 6(1): 'Where the parties are of different nationalities, a sole arbitrator or the presiding arbitrator shall not have the same nationality as any party unless the parties who are not of the same nationality as the arbitral candidate all agree in writing otherwise.'
For an overview of arbitration statutes, institutional rules and courts decisions on the constitution of the arbitral tribunal in multiparty arbitrations, see R. Ugarte & T. Bevilacqua, 'Ensuring Party Equality in the Process of Designating Arbitrators in Multiparty Arbitration: An Update on the Governing Provisions' (2010) 27 Journal of International Arbitration 9.
Paris Court of Appeal, 5 May 1989, BKMI Industrienanlagen GmbH v. Dutco Construction Co., Revue de l'arbitrage 1989.723 (Annot. P. Bellet); Journal du droit international 1992.707 (Annot. C. Jarrosson).
Court of Cassation, 7 Jan. 1992, Siemens AG et BKMI Industrienanlagen GmbH v. Dutco Construction Co. (1992) 10 ASA Bulletin 295 (Annot. C. Jarrosson); (1992) Journal du droit international 1992.707 (Annot. C. Jarrosson); J.-L. Delvolvé, 'Multipartism: The Dutco Decision of the French Cour de cassation' (1993) 9 Arbitration International 197; E.A. Schwartz, 'Multiparty Arbitration and the ICC: In the Wake of Dutco' (1993) 10:3 Journal of International Arbitration 5.
See E. Gaillard & J. Savage, eds., Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer, 1999) at 468.
The provision has been retained in almost identical terms in the 2012 ICC Rules; see 1998 ICC Rules, Art. 10(2) and 2012 ICC Rules, Art. 12(8). See also LCIA Arbitration Rules, Art. 8(1); ICDR International Arbitration Rules, Art. 12(5); SCC Rules, Art. 13(4).
Paranapanema S/A v. Banco Santander (Brasil) S/A & Banco BTG Pactual S/A, 22 July 2013, 0002163-90.2013.8.26.0100, aff'd São Paulo Court of Appeal.
For an ad hoc domestic case decided in Switzerland by the Zurich Superior Court, see Obergericht Zürich, 11 Sept. 2001, (2002) 20 ASA Bulletin 702 (Annot. L. Hirsch). Unlike Dutco, the clause in this case gave each of the members of a partnership the right to appoint an arbitrator; the court held that the strict application of the arbitration agreement would violate the principle of party equality and appointed an arbitrator on behalf of the two respondents. A similar approach was taken in a German ad hoc case: Frankfurt Higher Regional Court, 16 Sept. 2010; see S. Kröll, 'Siemens - Dutco Revisited? Balancing Party Autonomy and Equality of the Parties in the Appointment Process in Multiparty Cases', http://kluwerarbitrationblog.com/blog/2010/10/15.
Paris Court of Appeal, 17 Nov. 2011, Licensing Projects S.L. v. Pirelli & C. S.p.A., The Paris Journal of International Arbitration 2012-1, 159 (Annot. D. Cohen, 'Non-paiement de la provision d'arbitrage, droit d'accès à la justice et égalité des parties: avancée ou menace pour l'arbitrage?'). The court relied on Arts. 1520(4) (violation of due process) and 1520(5) (violation of international public policy) of the French Code of Civil Procedure. See also T. Clay, Annotation, Dalloz 2011.3023.
See C. Kaplan, 'L'affaire Pirelli restituée dans son contexte. Propos d'audience de M. l'Avocat general Pierre Chevalier', The Paris Journal of International Arbitration, 2013-3, 585 at 586: 'The mere fact that an impecunious party cannot assert its rights in the context of a private and contractual system of justice which, by definition, must be paid for, such as arbitration, does not of itself amount to such a violation.'
A. Pinna, 'La confirmation de la jurisprudence Pirelli par la Cour de cassation et les difficultés pratiques de garantir au plaideur impécunieux l'accès à la justice arbitrale', The Paris Journal of International Arbitration 2013-2, 479; at 483 the author describes the 'inseparability' criterion as difficult to understand and apply. For an interpretation of the inseparability criterion as necessitating that counterclaims be examined as defences against the main claims, see D. Bensaude, 'Chronique de la jurisprudence de droit de l'arbitrage', Gazette du Palais (2 July 2013) 16.
See C. Dupeyron & F. Poloni, 'Procédure de liquidation d'une partie, arbitrage et droit d'accès à la justice : vers une réconciliation?' (2013) 31 ASA Bulletin 904.
Paris Court of Appeal, 26 Feb. 2003, SARL Lola Fleurs v. Société Monceau Fleurs et autres, (2013) 31 ASA Bulletin 900.
A. Pinna, supra note 3 at 24: '… des centres d'arbitrage on attend, tout d'abord, une application intelligente du règlement d'arbitrage afin que soient respectées les garanties procédurales. Se pose par exemple la question de savoir comment la CCI appliquera l'article 36 de son Règlement de 2012 après l'affaire Pirelli. Il est probable qu'elle ne prononcera pas de décisions de retrait de demandes formulées par le plaideur impécunieux à la légère.'
Art. 36(6) of the ICC Rules provides that, in the event of the parties' failure to pay an advance on costs, the Secretary General of the Court 'may' direct the tribunal to suspend its work. The problem arises mainly where parties fail to pay the advance on costs in already ongoing proceedings. If the claimant fails to pay the advance of costs at the outset, the arbitral institution may refuse to administer the case.
It is accepted in France that, as a decision of an administrative nature, an institution's ruling on a challenge against an arbitrator for lack of independence does not prevent the facts underlying the challenge from being raised in subsequent proceedings to challenge the award, which may be set aside if the court finds the allegations are true. See Paris Court of Appeal, 12 Jan. 1996, Gouvernement de l'Etat du Qatar v. Creighton, Revue de l'arbitrage 1996.428 (Annot. P. Fouchard): 'il est constant que la récusation refusée par l'institution d'arbitrage n'empêche pas la Cour de juger de l'indépendance et de l'impartialité des arbitres après le prononcé de la sentence'. See also Paris Court of Appeal, 13 June 1996, Société KFTCIC v. Société Icori Estero et autre, Revue de l'arbitrage 1997.251 (Annot. E. Gaillard).
Paris Court of Appeal, 12 Feb. 2009, J&P Avax v. Tecnimont, Revue de l'arbitrage 2009.186 (Annot. T. Clay).
Court of Cassation, 4 Nov. 2010, The Paris Journal of International Arbitration 2010-4, 1147 (Annot. T. Clay).
Reims Court of Appeal, 2 Nov. 2011, Revue de l'arbitrage 2012.112 (Annot. M. Henry); The Paris Journal of International Arbitration 2011-4, 1109 (Annot. T. Clay).
See T. Clay, infra note 36. A third decision on annulment is expected from the Court of Appeal in the near future.
A. Mezghani & J.-J. Arnaldez, 'Les décisions des institutions arbitrales relatives aux récusations et le sort de la sentence devant le juge de l'annulation, note sous Cass. civ. 1re, 25 juin 2014', Revue de l'arbitrage 2015.88, 94-96.
T. Clay, 'Tecnimont, saison 4: entre révélation et réaction', The Paris Journal of International Arbitration 2014-3, 547 at 555. French courts have held that an arbitral award can be challenged on procedural grounds, such as arbitrators' lack of independence, only if the challenging party raised the objection during the arbitration, unless it was unable to do so, e.g. because it was unaware of the circumstances justifying the challenge: Court of Cassation, 25 Mar. 1999, Revue de l'arbitrage 1999.319 (Annot. C. Jarrosson).
T. Clay, supra note 36 at 556(557; M. Henry, Annotation of Reims Court of Appeal, 2 Nov. 2011, Revue de l'arbitrage 2012.120.
Paris Court of Appeal, 30 Oct. 2012, Gazette du Palais, 8 Jan. 2013 (Annot. D. Bensaude).
See e.g. LCIA Arbitration Rules, Art. 31(1).
Art. 40; see also Art. 34 of the 1998 ICC Rules.
P. Lalive, 'Sur l'irresponsabilité arbitrale' in J. Haldy, J.-M. Rapp, P. Ferrari, eds., Etudes de procédure et d'arbitrage en l'honneur de Jean-François Poudret (Lausanne, 1999) 419; also Annotation of Cubic Defense Systems, Inc. v. CCI, Revue de l'arbitrage 1999.103.
E.g. French Court of Cassation, 22 Oct. 1996, Dalloz 2006.1599; Austrian Supreme Court of Justice, 28 Apr. 1998, Revue de l'arbitrage 1999.392 (Annot. C. Liebscher).
Paris Court of Appeal, 22 Jan. 2009, SNF SAS v. Chambre de commerce internationale, Revue de l'arbitrage 2010.314 (Annot. C. Jarrosson).
C. Jarrosson, supra note 43; A. Mourre, supra note 7 at 158; with respect to scrutiny, the institution was accused not of failing to exercise its control altogether, but of not doing so with sufficient care.
Against retention, see C. Jarrosson, Annotation of Paris Court of Appeal, 22 Jan. 2009, Revue de l'arbitrage 2010.320 at 325-326.
E.g. Art. 6(1) on the applicable version of the ICC Rules, Art. 6(9) on the separability of the arbitration agreement, Art. 12(5) on the procedure for the constitution of a three-member arbitral tribunal, Art. 18(2) on the possibility of holding hearings and meetings at places other than the place of arbitration, Art. 28(1) on the arbitral tribunal's power to order interim relief.
Whether, and to what extent, procedural agreements made between the parties after the arbitrators have accepted their appointment (including agreements to amend the arbitration rules on the basis of which the arbitrators have accepted their mission) are binding on the arbitrators is a matter pertaining to the contractual relationship between the parties and the arbitrators, which will not be dealt with here.
E.g. Italian Code of Civil Procedure, Art. 832(2): 'In case of conflict between the arbitration agreement and the rules, the arbitration agreement will prevail.'
On the nature of the contractual relationship between the parties and the institution, see E. Gaillard & J. Savage, eds., Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer, 1999) at 602; T. Clay, L'arbitre (LGDJ, 2001) at 565.
M. Pryles, 'Limits to Party Autonomy in Arbitral Procedure' (2007) 24 Journal of International Arbitration 327 at 329; J. Waincymer, Procedure and Evidence in International Arbitration (Kluwer, 2012) § 6.2.3. With specific reference to ICC arbitration, see Y. Derains & E.A. Schwartz, A Guide to the ICC Rules of Arbitration (Kluwer, 2005) at 7 ('Insofar as the ICC, by issuing its Rules, can be said to make an offer to the public to administer arbitrations in accordance therewith, the ICC can reasonably also take the position that it is not obligated to accept to administer cases where the parties have made alterations of the Rules that the Rules do not contemplate.'); W.L. Craig, W.W. Park, J. Paulsson, International Chamber of Commerce Arbitration (Oceana/ICC, 2000) at 295.
G.B. Born, International Commercial Arbitration, 2d ed. (Kluwer, 2014) at 2138. In relation to the ICC Rules see J. Fry, S. Greenberg, F. Mazza, The Secretariat's Guide to ICC Arbitration (ICC, 2012) at 18; see also W.L. Craig, W.W. Park, J. Paulsson, supra note 50 at 295.
R.H. Kreindler, 'Impending Revision of the ICC Arbitration Rules: Opportunities and Hazards for Experienced and Inexperienced Users Alike' (1996) 13:2 Journal of International Arbitration 45 at 56: 'the extent of permissible derogation is unclear, and the issue requires clarification'; Y. Derains & E.A. Schwartz, supra note 50 at 8.
For LCIA see A. Winstanley, 'Party Autonomy and Institutional Rules', 8th Biennial IFCAI Conference, 3 June 2005; for ICSID see A.R. Parra, 'The Limits of Party Autonomy in Arbitration Proceedings under the ICSID Convention' (1999) 10:1 ICC International Court of Arbitration Bulletin 27.
See T.H. Webster & M. Bühler, Handbook of ICC Arbitration (Sweet & Maxwell, 2014) at 568.
J. Fry, S. Greenberg, F. Mazza, supra note 51 at 14, 66. In theory, the parties may agree that the rules of an arbitral institution be used in ad hoc arbitral proceedings. However, given the numerous functions that an institution performs under any institutional rules (particularly those of the ICC), such an agreement is highly unlikely in practice, as the parties would have to make numerous amendments to the rules or empower the arbitral tribunal to perform the institution's functions.
See e.g. CIETAC Arbitration Rules, Art. 4(3): 'Where the parties agree to refer their dispute to CIETAC for arbitration but have agreed on a modification of these Rules or have agreed on the application of other arbitration rules, the parties' agreement shall prevail unless such agreement is inoperative or in conflict with a mandatory provision of the law applicable to the arbitration agreement. Where the parties have agreed on the application of other arbitration rules, CIETAC shall perform the relevant administrative duties.'
2009] 3 S.L.R. (R.) 940. The arbitration agreement read as follows: 'Any and all such disputes shall be finally resolved by arbitration before the Singapore International Arbitration Centre in accordance with the Rules of the International Chamber of Commerce then in effect and the proceedings shall take place in Singapore and the official language shall be English.'
HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd,  S.G.H.C.R. 5,  S.G.H.C.R. 8.
A.C. Nicholls & C. Bloch, 'ICC Hybrid Arbitrations Here to Stay: Singapore Courts' Treatment of the ICC Rules Revisions in Article 1(2) and 6(2)' (2014) 31 Journal of International Arbitration 393; at 401(403 the authors 'acknowledge that hybrid arbitrations may not always be efficient' but argue that 'based on the principle of party autonomy, parties are well within their rights to mutually modify the ICC Rules 2012 … the ICC's administration cannot be forced upon parties to an arbitration if they choose to opt out'. As stated by J. Fry, 'HKL Group Ltd v. Rizq International Holdings Pte Ltd and HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd' (2013) 30 Journal of International Arbitration 453 at 456(458, the Assistant Registrar also erred in the interpretation of the (pathological) arbitration agreement, as the term 'Arbitration Committee' might have been interpreted as referring to the arbitral tribunal or to the ICC Court, and the reference to Singapore might have been interpreted as a reference to the place of arbitration.
The New York Supreme Court is a court of first instance. On 16 Sept. 2013, Judge Charles Ramos was designated by the Chief Administrative Judge of the Courts of New York State to hear all disputes relating to international arbitration arising before the Commercial Division of New York County.
Case No. 654405/2013, order of 16 July 2014. The arbitration agreement referred to arbitration 'pursuant to the Arbitration Rules of the International Chamber of Commerce (ICC Rules)' and provided that '[t]he American Arbitration Association shall administer the arbitration, and also act as the appointing authority when the ICC Arbitration Rules call for an appointing authority to act'. The arbitration was initially filed with the ICC Court and subsequently withdrawn. Judge Ramos ordered 'the parties … to have any arbitration administered by the [AAA] pursuant to the ICC Rules, with the parties to seek the court's assistance if they are unable to agree on any modifications to the ICC Rules required for AAA administration … If the AAA is unwilling or unable for any reason to administer the arbitration under the ICC Rules, the reference to the ICC Rules in the arbitration clause … is severed and the parties shall arbitrate pursuant to the arbitration rules designated by the AAA in accordance with its procedures.' See A. Sabater & M. Stadnyk, 'New York International Arbitration Judge, One Year Later', New York Law Journal (17 Nov. 2014).
See P. Cavalieros, Revue de l'arbitrage 2002.1020, in his annotation of an arbitral award rendered pursuant to an arbitration agreement providing for arbitration under the ICC Rules administered by the Court of Arbitration of Budapest, considers the potential conflict between the rules of the two institutions in several areas of procedure (e.g. screening of the request for arbitration, constitution of the arbitral tribunal, fixing of the place of arbitration, scrutiny of the draft award) and observes that it is difficult to distinguish provisions associated with the institution's administrative role from procedural provisions that do not depend on the administering institution.
The unenforceability of the award would result not from a breach of mandatory law, as suggested by A.C. Nicholls & C. Bloch, supra note 59 at 404, but from disregard of the parties' will to submit to the ICC Rules, including Arts. 1(2) and 6(2).
Under the ICC Rules, tasks assigned to the Secretary General of the Court include confirming arbitrators, fixing provisional advances on the costs of the proceedings, and deciding whether to refer preliminary jurisdictional objections to the Court, while those assigned to the ICC Court include appointing arbitrators, fixing advances on costs, deciding on challenges against arbitrators, and scrutinizing draft awards.
See P. Cavalieros, supra note 62 at 1033; J. Fry, supra note 59 at 460-461.
For this reason, one cannot agree with A.C. Nicholls & C. Bloch, supra note 59 at 405, 411: 'amending a non-amendable rule is of no consequence in a hybrid arbitration since the ICC's refusal to administer the arbitration is meaningless'. When parties opt for hybrid arbitration governed by the ICC Rules and administered by another institution, they are not 'agreeing to that particular institution applying and making decisions on the ICC Rules 2012'. And whether 'other institutions, including but not limited to the SIAC, have the infrastructure to handle such cases' is irrelevant, as the ICC Rules refer to the role played by the organs of the ICC, not those of other institutions.
E.g. SIAC (Art. 28(2)), CIETAC (Art. 49), International Commercial Arbitration Court of the Chamber of Commerce & Industry of the Russian Federation (Art. 42), JAMS International Arbitration Rules (Art. 32(3)).
Y. Derains & E.A. Schwartz, supra note 50 at 5: 'No other major arbitral institution has a similar formal process in place for the review of arbitral Awards rendered under its auspices.' See also J. Fry, S. Greenberg, F. Mazza, supra note 51 at 327.
Owing to the unique nature and structure of the ICC Court, the scrutiny process can be neither excluded nor modified by transferring the power to review and approve draft awards to some other organ such as the President of the ICC Court or the Secretariat; see R.H. Smit, 'Mandatory ICC Arbitration Rules' in G. Aksen et al., eds., Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in honour of Robert Briner (ICC, 2005) 845 at 851.
Paris Court of First Instance, 22 Jan. 2010, Revue de l'arbitrage 2010.571 (Annot. J.-B. Racine). The parties subsequently agreed to conduct the arbitration on an ad hoc basis and conferred on the ICC Court the power to act as appointing authority.
The question is of limited practical importance as the ICC Court decides that an arbitration cannot proceed only in rare cases of manifest lack of jurisdiction. Therefore, parties have little interest in excluding its screening power. See A. Carlevaris, 'Preliminary Matters: Objections, Bi-furcation, Request for Provisional Measures' in C. Giorgetti, ed., Litigating International Investment Disputes (Brill/Nijhoff, 2014) 175.
R.H. Smit, supra note 69 at 853-854.
J. Fry, S. Greenberg, F. Mazza, supra note 51 at 240; R.H. Smit, supra note 69 at 862; Y. Derains & E.A. Schwartz, supra note 50 at 5-6.
R.H. Kreindler, supra note 52 at 98.
R.H. Smit, supra note 69 at 863: 'In short, while Terms of Reference serve many useful functions, one may wonder whether they are so essential to the quality of proceedings or nature of ICC arbitration as to be deemed mandatory.' The author also emphasizes that exceptions have been developed in practice: the ICC Court does not require that Terms of Reference be adopted when the case is settled and the parties request that the settlement be recorded in an award by consent, or when urgent interim relief is sought.
Fairplus Holding et La Valaisanne v. CCI, 19 Dec. 2012, The Paris Journal of International Arbitration 2013-2, 455. In Société Opinter France v. Société Dacomex, 15 Jan. 1985, Revue de l'arbitrage 1986.87, the Paris Court of Appeal rejected a challenge against an arbitral award rendered after the ICC Court had rejected a challenge against an arbitrator without giving reasons. The Court of Appeal held that the obligation to provide reasons applies only to jurisdictional acts, not to administrative acts like the ICC Court's decisions on challenges. The ruling was confirmed in similar terms by the Court of Cassation: Société Opinter France v. S.a.r.l. Dacomex, 7 Oct. 1987, Revue de l'arbitrage 1987.479.
'Arbitration Involving States and State Entities under the ICC Rules of Arbitration', report of a task force of the ICC Commission on Arbitration and ADR (2012) proposes the following wording, § 21: 'The Parties agree that the International Court of Arbitration shall communicate the reasons for its decisions on the disputed confirmation, non-confirmation, challenge and replacement of arbitrators, in derogation of Article 11(4) of the ICC Rules of Arbitration.'
See ICC, 'ICC Court to communicate reasons as a new service to users', 8 Oct. 2015, http://www.iccwbo.org/News/Articles/2015/ICC-Court-to-communicate-reasons-as-a-new-service-to-users/.
J. Fry, S. Greenberg, F. Mazza, supra note 51 at 116. ICC arbitrators are 'appointed' by the ICC Court even when they are 'proposed' by ICC National Committees pursuant to the ordinary method of appointing arbitrators set out in Art. 13(3) of the ICC Rules.
Art. 13(1) of the ICC Rules, which lists factors taken into consideration by the Court and the Secretary General when confirming or appointing arbitrators. They include those that could affect the prospective arbitrator's independence and impartiality ('nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals'), as well as the 'the prospective arbitrator's availability and ability to conduct the arbitration in accordance with the Rules'. Availability is less likely to affect the validity and enforceability of an award than independence and impartiality. The main aim is to ensure the efficiency of the proceedings.
J. Fry, S. Greenberg, F. Mazza, supra note 51 at 160; R.H. Smit, supra note 69 at 856.
R.H. Smit, supra note 69 at 855.
However, challenges presuppose an initiative by one of the parties and their impact is more disturbing than prior verification at the stage of confirmation.
The arbitration agreement referred to the ICC Rules 'sous les exceptions précisées à l'acte selon lesquelles la nomination des arbitres ne serait pas sujette à confirmation ni rejet par la CCI et la sentence arbitrale ne serait pas sujette à l'approbation de la CCI'; see Paris Court of First Instance, 22 Jan. 2010, Revue de l'arbitrage, 2010.571. Upon receiving the request for arbitration, the Secretariat of the ICC Court informed the parties that it would consent to administer the case only if the parties waived the modification of the ICC Rules, which the claimant accepted, but not the respondent.
J. Fry, S. Greenberg, F. Mazza, supra note 51 at 152, where reference is made to agreements that purport to give only some of the parties the right to nominate co-arbitrators.
As indicated above in relation to party equality in the constitution of arbitral tribunals in multiparty cases and access to justice for impecunious parties, the institution can exercise its discretion to protect the validity and enforceability of awards.
The 1998 amendment allowing the ICC Court to appoint all the members of the arbitral tribunal to avoid the risk that materialized in Dutco is the most notable example. See A. Pinna, supra note 3 at 24.
R.H. Smit, supra note 69 at 847: 'parties can agree to the most pathological things … The Court serves a useful function in protecting the parties from themselves and the Court from the potentially disastrous consequences of the parties' pathological derogations from the ICC Rules.'