The New ICC Rules

On 12 September 2011, the International Chamber of Commerce unveiled its newly revised ICC Rules of Arbitration (“New Rules”). Going into effect on 1 January 2012, the New Rules are the result of over two years of discussion and development by a special committee made up of members of the ICC Commission on Arbitration, representatives of the ICC International Court of Arbitration Secretariat, as well as practitioners, drawing on input from a 200-member Commission task force. Formally adopted this June, the new rules will revise the current framework which has been in place for the past 13 years and has provided a legal basis for over 8,000 arbitrations worldwide.

ICC Representatives had, even before the unveiling, announced that the New Rules would not simply be “change for change's sake”. Rather, the revisions focused around (1) addressing the growing complexity of arbitral disputes, especially the increased need for urgent interim remedies, (2) time and cost reduction, and (3) amenability to investment arbitration.

Below is an overview of some of the more significant aspects of the New Rules.

The Arbitral Tribunal

While the current rules demand the arbitrator “be and remain independent of the parties involved in the arbitration”, the New Rules explicitly require arbitrators to also remain impartial, something which was previously just a matter of practice.

With the aim of reducing delays caused by over-burdened and over-booked arbitrators, arbitrators will henceforth also be required to declare their availability in their statements of acceptance (along with their independence and impartiality).

While under the current rules, the ICC Court can only appoint sole arbitrators or chairmen upon proposal by a National Committee, the New Rules provide for three situations under which the ICC Court may directly appoint an arbitrator. Namely, when (1) one of the parties is a state or state entity, (2) “the Court considers that it would be appropriate to appoint an arbitrator from a country…where there is no National Committee”, or (3) the President of the court certifies that in his opinion, a direct appointment is “necessary and appropriate”.

Time & Cost Efficiency

The most frequent criticisms facing arbitration today, whether under the ICC Rules or otherwise, regard the escalation of costs and delays. In fact, a study by the Corporate Counsel International Arbitration Group last year found that every single corporate counsel surveyed thought arbitration “takes too long” and “costs too much”. Modifications throughout the rules are geared towards enabling and encouraging all arbitration stakeholders to conduct proceedings expeditiously and cost-effectively. The rules explicitly command that “the arbitral tribunal and the parties […] make every effort to conduct the arbitration in an expeditious and cost-effective manner”.

Specific provisions to this effect include an appendix of case management techniques “for controlling time and cost” and a now-required “case management conference” to consult on procedural measures such as the aforementioned case management techniques. Furthermore, the arbitral tribunal may reward good behavior by taking the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner into account when deciding upon the costs of the proceedings.

Emergency Arbitrator Provisions

Upon the request of a party applying for urgent interim or conservatory measures “that cannot await the constitution of the arbitral tribunal”, the President of the Court may appoint an Emergency Arbitrator to resolve such a demand. This appointment is to be made “within as short a time as possible, normally within two days from the Secretariat’s receipt of the Application”.

Within 15 days, the Emergency Arbitrator is to make an order which shall be binding on the parties until (1) the President of the Court terminates the proceedings, (2) a court of law accepts a challenge to the Emergency Arbitrator, (3) the arbitral tribunal issues a final award, or (4) the arbitration is terminated or all claims are withdrawn. Furthermore, once an arbitral tribunal is appointed, it may modify, terminate, or annul the Emergency Arbitrator’s orders. The Emergency Arbitrator may not act as an arbitrator in the actual arbitration.

Parties may opt out of the Emergency Arbitrator Rule and it does not apply to agreements signed prior to 1 January 2012 or to agreements stipulating another mechanism for pre-arbitral interim measures.

Jurisdiction

Under the current rules, a party’s objection regarding the existence, validity, or scope of an arbitration agreement is to be resolved by the ICC Court. Under the New Rules, the tribunal itself is empowered to decide any such objection, as well as its jurisdiction in the event an answer is not filed or where multiple arbitrations are consolidated (see below). The ICC Court involves itself in jurisdictional decisions only via specific referral by the ICC Secretary General.

Joinder and Consolidation

The new rules for the first time explicitly lay out guidelines for arbitrations involving multiple parties or contracts, and expand the ICC Court’s power of consolidation. The New Rules permit any party to request the joinder of additional parties as well as to bring separate claims arising from distinct contracts in a single arbitration. In arbitrations involving more than two parties, any party may bring claims against any other party. Finally, the court may consolidate separate arbitrations under three circumstances: (1) party agreement, (2) all claims stemming from the same arbitration agreements, or (3) where the arbitrations are between the same parties and the disputes arose from the same legal relationship, if the ICC Court finds the arbitration agreements to be compatible.