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Revised ICC Arbitration Rules come into force

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Amendments to the 2012 ICC Arbitration Rules, announced at the end of last year, come into force on 1 March 2017.

The amendments include:

  • A general provision allowing the ICC Court to provide the parties with reasons for its decisions on the appointment and challenge of arbitrators. 
  • A reduction in the time period for finalising Terms of Reference from 2 months to 30 days.
  • An increase in fee scales, which took effect on 1 January 2017, including an increase in the filing fee from US$3,000 to US$5,000.
  • The introduction of a new Expedited Procedure, designed to reduce the duration and cost of ICC arbitration. 

The new Expedited Procedure will apply automatically to claims under US$2m unless: the arbitration agreement was concluded prior to 1 March 2017; the parties agree to “opt out” of the Expedited Procedure; or the ICC Court decides that it is inappropriate to apply the Expedited Procedure. 

Parties can agree to adopt the Expedited Procedure for claims in excess of US$2m.

The key provisions of the new Expedited Procedure are as follows:

  • The ICC Court will appoint a sole arbitrator, even if the arbitration agreement provides otherwise.
  • No Terms of Reference need to be established and a case management conference will take place within 15 days of the file being transmitted to the arbitrator by the ICC.
  • Once the arbitrator is appointed, no party can introduce any new claims without the express authorisation of the arbitrator.  In deciding whether or not to allow the introduction of new claims, the arbitrator will consider the stage of the arbitration, cost implications and any other relevant circumstances.
  • The arbitrator may adopt such procedural measures as he/she considers appropriate.  This includes limiting the number, length and scope of written submissions and written witness evidence; deciding not to allow requests for document production; and deciding the dispute solely on the basis of documents, without the need for a hearing.
  • Where a hearing is to be held, the arbitrator may conduct it by video-conference, telephone or other such means.
  • The arbitrator must render the final award within 6 months of the case management conference.
  • The fees will be fixed according to a reduced scale of administrative expenses and arbitrator’s fees, making the procedure cheaper than a standard ICC arbitration.

Historically, around one-third of the disputes submitted to ICC arbitration each year are valued at less than US$2 million and, in future, these disputes will be fast-tracked automatically, unless the parties decide to opt out of the Expedited Procedure.

Expedited arbitration is not new.  Many of the major arbitral institutions (including the SCC, HKIAC and SIAC) already offer procedures for expedited arbitration.  A key distinguishing feature of the ICC procedure is that it is mandatory, not optional, for claims under US$2m.  This is not an approach that has been adopted by other institutions and, indeed, in 2013 the HKIAC changed its expedited arbitration procedure from an automatic procedure to an elective one.

The results of the 2015 International Arbitration Survey conducted by the School of International Arbitration at Queen Mary University of London suggest that parties prefer the optional approach to expedited arbitration.  The survey found that whilst 92% of respondents supported the inclusion of simplified procedures in institutional rules, only 33% favoured their inclusion as a mandatory feature. 

The new expedited procedure will only apply automatically to claims under US$2m where the arbitration agreement was concluded after 1 March 2017, so it will be some time before we can assess the impact of the new procedure.  It will be particularly interesting to see whether the streamlined procedure and reduced fee scales will encourage parties to adopt the expedited procedure for claims in excess of US$2m.

 

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