ICC Changes Arbitration Rules to Improve Efficiency Confidentiality and Fairness
Perhaps the most important change to the rules is the addition of a procedure for emergency action.
March 8, 2012
On January 1, 2012, the International Chamber of Commerce (ICC) adopted changes to its Rules of International Arbitration.[i] The ICC is a common forum for international arbitration. The ICC rule changes seek to address the needs of those participating in international arbitrations for additional certainty, efficiency, confidentiality, and for resolutions that are timely, appropriate, and fair.
The rule changes will apply to all arbitrations commenced after January 1, 2012 and will affect the way future cases are arbitrated.
Improved Timeliness of Relief: ICC Addresses Arbitrator Availability, Award Date & Emergencies
Emergency Action and Emergency Arbitrators
Perhaps the most important change to the rules is the addition of a procedure for emergency action. The ICC has now instituted a mechanism whereby an emergency arbitrator can be appointed in the event a party seeks an interim injunction in order to prevent substantial harm.[ii] This process mirrors the injunctive relief sometimes given to litigants in the United States and elsewhere.
The party seeking emergency relief must apply to the ICC Secretariat and the ICC President then determines whether to appoint the emergency arbitrator, and there are short timelines for a responding party to challenge a particular arbitrator.[iii]
The Emergency Arbitrator convenes proceedings in person or remotely and with regard to the nature and urgency of the application. The decision of the Emergency Arbitrator will normally be issued within 15 days of transmission of the file to the Emergency Arbitrator.[iv] This decision is not binding on the arbitrator or panel that is later named.
Significantly, however, this service is only available for agreements entered into after January 1, 2012. Parties may opt out of this mechanism or opt into other procedures for settling disputes in the interim before a panel can be constituted.
Confirmation of Arbitrator Availability
At the time the arbitrator confirms their impartiality, they now will also need to confirm their availability. ICC arbitrators must already disclose their other arbitrations, giving parties some clue as to whether the arbitrator will have time to deal with their dispute.
The additional confirmation of availability may be particularly valuable where an arbitrator’s other commitments (professional or personal) are unknown to the parties. In addition, this requirement seeks to guard against scenarios where arbitrators are simply too busy to render decisions in a timely fashion.
The new Rules require the arbitrator to provide the parties and the ICC Secretariat with an expected date of its award at or soon after the close of proceedings.[v] This provision addresses concerns that have arisen from the occasional long waits that have preceded arbitration awards. While this date is not binding on the arbitrator, it is intended to provide parties with some ability to predict when they will have their decision.
Improved Efficiencies: ICC Addresses Consolidation, Case Management & Technology
Consolidation of Cases and Claims
Some of the new rule changes aim to bring greater efficiency to multi-party and multi-contract disputes through case and claim consolidation.[vi] These changes may prove very important, though whether they will dramatically change ICC arbitration depends upon how widely they are adopted by parties. New Article 7 allows a party to an existing arbitration to request the joinder of a new party by submitting the request before the appointment of an arbitrator or (with the consent of all parties) after the appointment of an arbitrator or panel.[vii] The old rules required the consent of all parties to add additional parties regardless of the timing of the request.
This change certainly has the potential to streamline multiparty cases, though it remains to be seen whether it will do so in practice. The nature of arbitration requires some consent to be governed by arbitration which this new party may never have given. In addition, the ICC allows parties to have input on the selection of arbitrators, which means that after selection of the arbitrator, any joinder must be with the consent of all parties including the added party, which has not had the opportunity to weigh in on the arbitrator or panel.
The rules also allow for the resolution of disputes covering multiple contracts. Article 9 allows for a single arbitration to resolve disputes relating to multiple contracts.[viii] Where the parties consent or where the claims are under a single arbitration agreement the new rules allow for the consolidation of separate arbitrations.[ix] If consolidations become common, it could reduce the cost of arbitration born by parties and by the ICC.
Mandatory Case Management Conference
Many courts in the United States convene case management conferences early in the proceedings to lay out the court’s expectations and try to ensure an efficient process. Many ICC arbitrators (especially those hailing from jurisdictions where case management conferences are common) convened conferences around the drafting of the Terms of Reference for the same reasons. Now this practice is enshrined in the rules and is mandatory.
A case management conference will be convened by rule around the time the Terms of Reference are negotiated and issued.[x] The rules suggest areas that may be streamlined via a case management conference, such as identification of issues that the parties agree on, bifurcating proceedings where appropriate, facilitation of settlement, or discovery limitations.[xi] In addition, the arbitrator may take into account the parties’ conduct with regard to reaching a timely resolution in awarding costs.[xii]
Broadened Acknowledgement of Technological Advances
The ICC’s Arbitration Rules previously referred to specific methods of communication, such as telex. The updated rules incorporate the use and potential use of other communication methods, and allow for use of telephonic appearance or video conferencing at hearings and online communication among the parties, the tribunal, and the Secretariat.[xiii]
Improved ICC Confidentiality: ICC Addresses Public Disclosure
Unlike other arbitration rules, the ICC does not guarantee confidentiality of submissions. The new rules do, however, allow the tribunal to issue a protective order upon request of a party.[xiv]
The arbitrator may, at the request of any party, make orders concerning confidentiality to protect trade secrets and confidential information. Parties to an ICC Arbitration will likely seek to protect their sensitive documents from public scrutiny and even try to shield their most sensitive documents from the other party. Just as courts in the United States must balance the parties’ desire for secrecy with the disclosure necessary to allow each side to make their case, the ICC Arbitral Tribunal is obliged to be fair and impartial and to allow each party to reasonably present their case.[xv]
Improved Fairness: ICC Addresses Impartiality & National Committee Changes
ICC arbitrations involve the parties in the selection of the arbitrators. While it is generally recognized that arbitrators should be independent and not partial to either party, the previous ICC Rules focused on the independence of the arbitrator and the lack of any connection or relationship to a party.
Impartiality, including the ability to serve without bias toward one party, was not specifically and explicitly the focus of the old rules for selection. Under the updated rules, arbitrators must confirm both independence and impartiality in a statement before they are appointed to a particular matter.[xvi] These changes come in response to increasing challenges brought against particular arbitrators for partiality.
National Committee Changes
The role of the ICC’s National Committees remains more or less intact after the changes to the rules. These committees will be familiar to any litigants who have sought their assistance in locating arbitrators or submitted a proposed arbitrator. The Rules have been altered to allow the ICC to directly appoint arbitrators in certain circumstances.[xvii] These include cases where sovereign states or state actors are parties to the arbitration.
The changes to the ICC Arbitration Rules that went into effect on January 1 of this year appear calculated to codify certain practices that have already been adopted by many arbitrators and to further ensure the fairness, confidentiality, timeliness, and efficiency of arbitrations under the ICC umbrella. Whether the new Rules have their desired effect remains to be seen. Yet for parties who seek the benefits of international arbitration of their disputes, the ICC’s efforts may be an encouraging sign that the organization is responsive to their concerns.
[i] The updated rules are available at: http://www.iccwbo.org/uploadedFiles/Court/Arbitration/other/2012_Arbitration%20and%20ADR%20Rules%20ENGLISH.pdf.
[ii] ICC Arbitration Rules Article 29; Appendix V.
[iii] ICC Arbitration Rules Appendix V Articles 2-3.
[iv] ICC Arbitration Rules Appendix V Article 6.
[v] ICC Arbitration Rules Articles 27 & 33.
[vi] Rules of Arbitration of the International Chamber of Commerce (hereinafter “ICC Arbitration Rules”) Articles 6-10.
[vii] ICC Arbitration Rules Article 7.
[viii] ICC Arbitration Rules Article 9.
[ix] ICC Arbitration Rules Article 10.
[x] ICC Arbitration Rules Article 24; see also Appendix IV.
[xi] ICC Arbitration Rules Appendix IV.
[xii] ICC Arbitration Rules Article 37.
[xiii] See, e.g., ICC Arbitration Rules Appendix IV (f).
[xiv] ICC Arbitration Rules Article 22.
[xvi] ICC Arbitration Rules Article 11.
[xvii] ICC Arbitration Rules Article 13.
© Robins, Kaplan, Miller & Ciresi L.L.P., 2012
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