Revised ICC Arbitration Rules

Introduction

The International Chamber of Commerce (« ICC ») has undertaken another revision of its arbitration rules. The 2021 version of the rules (« 2021 Rules ») will apply to arbitration proceedings initiated as of January 1, 2021, irrespective of the date of conclusion of the contract in which the arbitration agreement is included or of the date of conclusion of the special agreement to submit a dispute to arbitration (subject to the specific provisions pertaining to the applicability of the emergency arbitrator and expedited procedure provisions).

The 2021 Rules codify certain practices of the Court of Arbitration of the ICC (the « Court ») and also introduce new measures aimed at improving the flexibility, efficiency and transparency of ICC arbitration proceedings. This new version of the Rules consolidates the major developments achieved by the Court in these fields under the presidency of Alexis Mourre.

Thus since 2016, the ICC publishes the names of arbitrators designated in ICC arbitration proceedings (unless the parties object), with a view to increasing transparency but also to promoting new generations of arbitrators and to fostering diversity and inclusion in the constitution of arbitral tribunals. Since 2016, the Court also has the faculty of reducing the fees of arbitrators who render their award unjustifiably late.

An important innovation, the expedited arbitration procedure (which initially applied mainly to disputes which financial value did not exceed USD 2 million), was introduced with the revision of the Rules of 2017.

Finally in 2019, the ICC announced that arbitral awards would henceforth be published (in an anonymised format) two years after they are rendered, bearing in mind that the parties can object to such publication or provide for some carve-outs in this context. The 2021 Rules build on the progress already made and place emphasis more specifically on multiparty arbitration, on measures aimed at guaranteeing the independence and impartiality of the arbitral tribunal and on the extension of the scope of the expedited arbitration procedure. The Rules also feature an upgrade on the technical ground by enabling the parties to complete certain formalities exclusively by electronic means and by encouraging the holding of hearings remotely.

Multiparty arbitration

Joinder of additional parties

The 2017 Rules (Article 7.1) allow for the joinder of an additional party after the confirmation or appointment of any arbitrator only if all parties, including the additional party, agree to it. In the framework of the 2021 Rules, it will be possible for the tribunal to authorize the joinder of an additional party without the consent of all parties, on the sole condition that the additional party accept the constitution of the arbitral tribunal and the Terms of Reference (Article 7.5). When making its decision, the arbitral tribunal shall take into account the relevant circumstances of the dispute including (i) its prima facie jurisdiction, (ii) the timing of the request for joinder, (iii) possible conflicts of interests and (iv) the impact of the joinder on the arbitral procedure.

Consolidation of arbitrations

Whereas Article 10 of 2017 ICC Rules contemplates the consolidation of arbitrations when “all of the claims in the arbitrations are made under the same arbitration agreement”, the new Article 10 of the 2021 Rules refers to “the same arbitration or agreements”. This addition is both important and welcome as it allows for the consolidation of arbitrations based on separate contracts and between different parties when the arbitration agreements are the same. This is a usual situation in complex transactions such as in construction or project finance transactions involving multiple related parties and contracts.

Constitution of the arbitral tribunal

The 2021 Rules include a new article 12.9 which gives the Court the faculty of designating all tribunal members, irrespective of the method of constitution provided for in the arbitration agreement. This faculty must be used in “exceptional circumstances” and to avoid a significant risk of unequal or unfair treatment that could affect the validity of the award.

This new faculty granted to Court is undoubtedly aimed, amongst others, at enabling to overcome difficulties in the constitution of the arbitral tribunal that arise in cases falling under the Dutco case law. By way of reminder, in the so-called Dutco case, the French supreme court ruled that the parties’ right to be on an equal footing in the constitution of the arbitral tribunal is a principle of international public order. The Supreme Court specified that the parties cannot waive this right before any dispute arises.

Independence and impartiality of the tribunal

Measures enabling to exclude party representatives designated after the constitution of the arbitral tribunal

In order to avoid supervening conflicts of interest during the proceedings, the new article 17.2 gives the arbitral tribunal the power to exclude from all or part of the proceedings counsel designated by one or more parties after the constitution of the arbitral tribunal. Under article 17.1, parties are also under an obligation to promptly inform the ICC of any change in their representation.

Intervention of third party funders

Under article 11.7 of the 2021 Rules, parties will also be under an obligation to disclose the intervention of third party funders in the framework of ICC arbitration proceedings. This provision concludes the debate on the need for parties to make such disclosure, with a view to avoiding that arbitrators become unwittingly conflicted with a funded party. This new provision is in line with a more global tendency to promote transparency in international arbitration. Thus, in February 2017, the Paris Bar Board had adopted a resolution according to which Paris Bar lawyers “should recommend to their client to disclose the existence of the funding scheme to the arbitrators and should explain the potential adverse consequences of not doing so (in particular with regard to the validity and enforcement of the award)”.

Investment arbitration

Finally, in investment arbitration proceedings based on a treaty, the new article 13.6 provides that no arbitrator shall have the nationality of any party to the arbitration, in order to offer more guarantees of neutrality of the arbitral tribunal.

Expedited procedure

The introduction of an expedited arbitration procedure was one of the main innovations of the 2017 Rules. As a reminder, the expedited procedure is generally conducted by a sole arbitrator and aims at obtaining an award within 6 months. It provides for a reduced scale of administrative expenses and arbitrator’s fees compared to a standard ICC arbitration and invites the parties and arbitrator to limit among others the requests for document production, the length and scope of written submissions, the examination of witnesses and experts and the holding of a hearing. The expedited procedure is already a success even though it only became applicable to arbitration agreements concluded as from 1st March 2017 (146 cases between March 2017 and end of 2019). The expedited procedure was so far applicable to all arbitrations up to an amount in dispute of USD 2 million - except when excluded (opt-out) - which already accounts for 36.3 per cent of the cases recorded by the ICC in 2019. The 2021 Rules extend the scope of application of the expedited procedure to arbitrations with an amount in dispute of up to USD 3 million and based on arbitration agreements concluded as from 1st January 2021. Unless the Court determines otherwise, the expedited procedure also remains open to cases involving a higher amount in dispute when the parties agree to apply it (the parties have made this choice in 21 cases in 2019). This change clearly reflects the will to further increase the efficiency and lower the costs of ICC arbitration with regard to disputes involving small amounts.

Additional award

The 2021 Rules introduce a new Article 36.3 allowing the parties, within 30 days from receipt of the award, to apply for an additional award to address claims which the arbitral tribunal has omitted to decide. As for the correction and interpretation of awards, the other party/parties will have a short time limit, normally not exceeding 30 days, to submit any comments thereon and the arbitral tribunal will itself have a time limit not exceeding 30 days to submit to the Court the additional award in draft form.

Modernization – Electronic communications

As soon as on April 9, 2020, the ICC had reacted to the challenge posed by the Covid-19 global health crisis by publishing a Guidance note on possible measures aimed at mitigating the effects of the Covid-19 pandemic on arbitrations and inviting the arbitrators and the parties, wherever applicable, to envisage the holding of virtual hearings.

This is also the approach adopted in the 2021 Rules which provide that “the arbitral tribunal may decide, after consulting the parties, and on the basis of the relevant facts and circumstances of the case, that any hearing will be conducted by physical attendance or remotely by videoconference, telephone or other appropriate means of communication” (Article 26(1)).

This addition had been called for as it enables to reduce the costs and length of the proceedings and reflects an existing and increasingly common practice. It also grants to the arbitrators the authority to resolve situations in which in person hearings are impossible or very difficult to hold or to put an end to dilatory tactics. Time will tell if this change of setting will become standard. The benefits of holding hearings remotely shall, however, not overshadow the various challenges involved and in particular the difficulty to assess the credibility of a witness or to efficiently cross-examine such witness remotely.

Finally, with a view to modernizing arbitration and preserving the environment, the 2021 Rules favor communication by electronic means over paper filings by providing, among others, that the requests for arbitration and answers will no longer be communicated in hard copies unless it is expressly requested by a party (Articles 3(1), 4(4), and 5(3)).