3 May, 2017
The revised International Chamber of Commerce Rules of Arbitration ("ICC Rules") came into force on 1 March 2017, superseding the existing ICC Rules which had been effective since 1 January 2012. Most significantly, the revised ICC Rules introduce an expedited procedure for small claims, bringing the ICC Rules in line with similar procedures offered by other arbitral institutions around the world. There are also some more general tweaks intended to shorten and streamline the arbitral process.
Expedited Procedure
For all disputes where the amount claimed does not exceed US$2 million, the new expedited procedure rules will automatically apply unless the parties explicitly opt out of them in their arbitration agreement. For disputes where the claim amounts to more than US$2 million, the parties are still able to use the expedited procedure rules, provided both parties agree (i.e. they opt in). However, the ICC Court retains ultimate discretion to decide whether the expedited procedure rules are inappropriate on a case-by-case basis.
The key features of the new expedited procedure include:
- Regardless of the number of arbitrators stipulated in the arbitration agreement, a sole arbitrator will be appointed whose fees are calculated on a reduced scale.
- The arbitrator has the power to limit disclosure, witness statements, expert reports and/or the length of written submissions, in order to keep proceedings on a fast track.
- Hearings, if needed, may be held by video or telephone conference. Alternatively, the arbitrator may choose to make a decision based solely on written submissions.
- Terms of Reference are not required. Instead, a case management conference must be held within 15 days of the tribunal receiving the file.
- Awards must be rendered within six months of the case management conference, with extensions only granted in “limited and justified” circumstances.
It is important to consider the revised ICC Rules when drafting commercial agreements with an ICC arbitration clause. When drafting, businesses should consider whether they want to opt in or opt out of the expedited procedure rules and tailor the language of the arbitration clause accordingly, particularly taking into account the US$2 million threshold. The revised ICC Rules provide model language for insertion into arbitration clauses regarding the expedited procedure rules.
Greater Transparency
At the request of any party, the ICC Court is required to provide reasons for appointments, confirmations, challenges and replacements of arbitrators as well as decisions on jurisdiction and consolidation of proceedings. This enhanced transparency will be helpful for parties in better understanding the ICC Court’s decision-making process. The revised ICC Rules have also implemented procedures intended to streamline and reduce costs for non-expedited cases. An example includes halving the time limit for agreeing Terms of Reference from two months to 30 days.
These changes demonstrate the ICC’s desire to increase the efficiency, transparency and accountability of ICC arbitrations. As proceedings are intended to take no longer than 6.5 months under the new expedited procedure, a significant number of lower value claims may be resolved more cost-efficiently. Speed and costs are, of course, two important factors for clients to consider when assessing the benefits of commencing proceedings.
