24 January, 2017
The ICC Court of Arbitration (the ICC Court) is one of the oldest and best known arbitral institutions in the world. On 4 November 2016, the ICC Court announced a revision to the ICC Rules of Arbitration (the Rules) that will come into force on 1 March 2017. The revisions seek to address growing demands from users for greater transparency and efficiency in ICC Arbitration procedure. We set out below the main changes of which you should be aware.
Expedited arbitration procedure
The biggest change introduced by the new ICC rules is the introduction of an expedited arbitration procedure designed to provide a cost-efficient and fast method of dealing with low, or lower, value claims. Unless the parties agree to opt out, or the ICC Court deems the procedure to be inappropriate, the new expedited procedure will apply automatically to claims with a value of up to US$2,000,000 arising out of arbitration agreements concluded after 28 February 2017. The expedited procedures can also apply to disputes worth over US$2,000,000 if the parties opt-in.
Key features of the new procedure are as follows:
- The dispute is referred to a sole arbitrator even if the arbitration agreement provides otherwise.
- There is no requirement for terms of reference.
- Parties can only make new claims after the constitution of the arbitral tribunal with the permission of the tribunal.
- The case management conference shall take place no later than 15 days after the transmission of the file to the tribunal.
- The arbitral tribunal may refuse requests for the production of documents, limit the number and length of witness statements and expert reports and decide the dispute on papers only, without an oral hearing.
The tribunal must render its award within 6 months of the case management conference.
A reduced scale for arbitrator’s fees applies.
Key deadlines can be extended, but the intention is to drastically reduce or do away with the typical use of disclosure, witness evidence and hearings.
This new procedure is likely to bring about the desired efficiency in claims that are relatively straightforward. However, low-value claims are not necessarily simple and it remains to be seen how the ICC Court will deal allocation of complex low-value cases and how procedural and substantive complexities, such as jurisdictional issues, arbitrator challenges and cases that lean heavily on expert evidence, will be dealt with within the new fast-track process.
Reasons for the ICC Court’s decisions
An amendment to Article 11(4) of the ICC Rules introduces a policy announced by the ICC Court in October 2015. The amended Rule allows the ICC Court to communicate its reasons for the appointment, removal, challenge or replacement of an arbitrator to the parties. The Court may only communicate such reasons upon the request of all the parties to the arbitration (the parties may agree to request such reasons under the relevant arbitration agreement or at any stage in the proceedings, so long as they do so in advance of the ICC Court’s decision). The parties may also be subject to an administrative fee of up to US$5,000 for the publication of such reasons.
The publication of reasons should introduce an element of transparency into the administrative decisions of the ICC Court that will be welcomed by many. However, the ICC Court retains the discretion to decline to publish reasons for decisions and it remains to be seen how this will be exercised.
Additional revisions
The updated rules also introduce the following changes:
- Terms of reference: The arbitral tribunal now has 30 days (reduced from two months) in which to sign and return the Terms of Reference to the Court.
- Arbitration costs: A Request for Arbitration now requires a filing fee of US$5,000 (increased from US$3,000).
- Administrative expenses: The new Rules introduce revised fee scales for administrative expenses, although the ICC has avoided radical change.
Key points to remember
Parties concluding contracts with ICC arbitration clauses should have regard to the following key points:
- A new compulsory six-month arbitration procedure to apply to disputes with a value below US$2,000,000 arising from contracts concluded after 28 February 2017.
- Some ICC Court decisions may be published to the parties.
For further information, please contact:
Shai Wade, Partner, Stephenson Harwood
shai.wade@shlegal.com
