Thursday, February 18, 2021

International Chamber of Commerce's Revised Rules of Arbitration

The International Chamber of Commerce (“ICC”) has unveiled revised Rules of Arbitration which will come into force on 1 January 2021 and will be applicable to cases submitted to the International Court of Arbitration on or after the enforcement date (the “Rules”).

The significant changes introduced by the ICC to the Rules include the following points:

1. ICC Appointment of the Arbitral Tribunal

The amendment to Article 12(9) grants the ICC the authority to appoint all members of the arbitral tribunal when there is an innate inequality or unfairness in the parties’ arbitration agreement. The amendment was added to address specific situations in which implementing the parties’ arbitration agreement would result in an unequal treatment of the parties, and might consequently jeopardise the enforceability of any award.

2. Joinder for Additional Parties

Under the previous Rules, a party was only able to request the addition of an additional party before the confirmation or appointment of any arbitrator or if all the parties, including the additional party, agreed to the addition.

The newly introduced Article 7(5) of the Rules allows for a request for joinder to be made before the arbitral tribunal and after the confirmation or appointment of any arbitrator. The arbitral tribunal may, after considering all the relevant circumstances, and without the consent of the other party in the arbitration, accept the request for joinder.

3. Consolidation of Arbitrations

The 2021 Rules have amended Article 10(b) of the ICC Rules. From now on, consolidation is possible where “all of the claims in the arbitrations are made under the same arbitration agreement or agreements.” This new amendment permits the consolidation

4. Treaty-based Arbitrations

Article 13(6) of the Rules states that “Whenever the arbitration agreement upon which the arbitration is based arises from a treaty, and unless the parties agree otherwise, no arbitrator shall have the same nationality of any party to the arbitration.

The ICC added this provision to ensure the neutrality of the arbitral tribunal and to preserve the fairness of the arbitration process by establishing that no arbitrator in a treaty-based arbitration should have the same nationality of any party to the arbitration, unless otherwise agreed by the parties.

5. Changes in Party Representation

In accordance with the Article 17, if a party changes its representative it must immediately inform the ICC Secretariat, the arbitral tribunal, and the other parties. The arbitral tribunal may take any measure necessary to avoid a conflict of interest for an arbitrator arising from such a change. This includes excluding new counsel from participating in whole or in part in the proceedings.

6. Expedited Rules

After witnessing the results of the expedited procedures set out in the 2017 Rules of Arbitration, the threshold of US$2 million dollars has been raised to US$3 million dollars in the 2021 Rules. Cases that fall under the expedited procedures umbrella usually take less than six months to render the award. The procedure is also now more cost-effective.

As of date, in cases where the amount in dispute is less than the US$2 million threshold, the parties may opt out of the expedited procedure, and parties may agree to opt into this procedure where the amount in dispute is higher than this threshold.

7. Virtual Hearings

The modified Article 26(1) of the 2021 Rules introduces in clear terms the possibility of holding virtual hearings, which have become the new normal in light of the recent COVID-19 pandemic. The article sets out several possible modes of communication including, but not limited to, videoconferencing, telephone, or other appropriate means of communication.

Under the ICC Rules 2017, the videoconferencing and telephonic communications were limited to conducting case management conferences under Article 24 and expedited arbitration proceedings under Article 30. Now, under the ICC Rules 2021, the aforesaid modes have been further recognised so as to extend to the conduct of full arbitration hearings.

The new wording further clarifies that a hearing need no longer be held in person, unless any party so requests, or if the arbitral tribunal deems it necessary.