New ICC Rules of Arbitration Entering into Force from the Beginning of 2021
1 December 2020
Authors: Anna-Maria Tamminen (Member (alternate) of the ICC Court, Finland), Pontus Ewerlöf, (Member ICC Commission on Arbitration and ADR, Sweden], and Karri Heliö (Associate Trainee)
On 6 October 2020, the Executive Board of the International Chamber of Commerce (the “ICC”) approved the revised ICC Rules of Arbitration entering into force on 1 January 2021. The global launch of the new rules (“2021 ICC Rules”) will take place on 1 December 2020. The ICC has made a few changes to the rules regarding e.g. expedited procedure, remote hearings, joinder of additional parties to an arbitration, and the disclosure of non-party funders. These changes are briefly discussed below.
Additionally, the new rules contain updated provisions on the power of the ICC Court, in exceptional circumstances, to appoint each member of the arbitral tribunal (Article 12(8)). The 2021 ICC Rules also give arbitral tribunals the power to exclude new party representatives from participating in the proceedings to avoid conflicts (Article 17(2)) and the power to issue an additional award to address claims that were not addressed in the award (Article 36(3)). Finally, the 2021 ICC Rules increase the transparency with regard to the working of the ICC Court and provide that any claims arising in relation to the administration of the arbitration proceedings by the ICC Court would be handled by the Paris Judicial Tribunal under French law.
The 2021 ICC Rules of Arbitration will apply to all ICC arbitrations registered after 1 January 2021.
The expedited arbitration procedure was introduced in the 2017 revision of the ICC Rules and provides for the disposal of awards within six months from the case management conference. The procedure has proven popular as, according to the ICC's 2019 Dispute Resolution Statistics, there were 146 cases being conducted under expedited procedure provisions at the end of 2019, and at that time 37 of the 50 awards that had been rendered had been finalised within the six-month time limit.
The 2021 ICC Rules contain a new Article 30 and Appendix VI, which expand the scope of application of the expedited procedure by increasing the threshold requiring the parties to opt-out from their application from USD 2 million in dispute to USD 3 million. This will increase the number of cases submitted to expedited arbitration on a default basis. The parties’ right to opt out of the expedited procedure explicitly in their arbitration agreement remains unchanged. From a Nordic perspective, it is noteworthy that neither the SCC nor the FAI Rules limit the use of expedited arbitration rules on the basis of the amount in dispute.
Since the release of the 2017 ICC Rules, the way of conducting international arbitration has changed following the global response to the coronavirus pandemic and associated lockdowns. The 2021 rules acknowledge these necessary changes to international practice. The current Article 25(2), which states that a tribunal "shall hear the parties together in person if any of them so requests", has been deleted. The new Article 26(1) provides that an arbitral tribunal may, after consultation of the parties, decide to hold hearings remotely by videoconference, telephone conference, or other appropriate means of communication. This means that remote hearings may be held even if one party objects to it.
The revisions also provide for paperless filing: the request for arbitration and answer can be submitted electronically. This removes the requirement for paper copies to be sent as a default (Articles 3(1), 4(4)(b), and 5(3)).
Multi-Party and Multi-Contract Arbitrations
Currently, a party wishing to join a third party in the arbitration after the tribunal has been appointed needs the consent of all parties, including the additional party. Article 7(5) of the 2021 ICC Rules provides that the arbitral tribunal (once constituted) may join additional parties at the request of any party. In deciding whether a joinder is appropriate, the tribunal must consider "all relevant circumstances", including whether the tribunal has prima facie jurisdiction over the additional party, the timing of the request, possible conflicts of interest, and the impact on the arbitration procedure.
Moreover, the 2021 ICC Rules put in writing what has already been clarified in existing ICC practice: under Article 10(b), a party may request the consolidation of two or more arbitrations where these are commenced under multiple back-to-back contracts which contain the same arbitration clause but are not necessarily between the same parties (“all of the claims in the arbitrations are made under the same arbitration agreement or agreements”). Additionally, under Article 10(c), the 2021 ICC Rules allow for consolidation where the claims in the arbitrations are not made under the “same” arbitration agreement(s) as long as the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the ICC Court finds that the arbitration agreements are compatible.
Disclosure of Non-Party Funders
The 2021 ICC Rules will increase the transparency of the proceedings as Article 11(7) requires each party to promptly disclose “the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defences and under which it has an economic interest in the outcome of the arbitration.” On the one hand, this provision aims to protect tribunals’ independence and, on the other hand, it answers to the growing calls from national courts for greater regulation of third-party funding in litigation and arbitration proceedings.
The changes introduced in the 2021 ICC Rules focus on increasing the efficiency and flexibility of arbitrations administered by the ICC. This development is consistent with recent revisions introduced by other institutions, including the Finland Arbitration Institute, which introduced a slightly revised set of rules on 1 January 2020, and the London Court of Arbitration (LCIA), which introduced an updated set of rules applicable from 1 October 2020. Rather than making any significant changes, the ICC revision aims to clarify and refine the arbitration practice by taking action on certain current concerns of the arbitration community. In making these changes, some powers have been transferred from the parties to the arbitral tribunal. Furthermore, from the viewpoint of the current coronavirus pandemic, particularly the changes facilitating the use of virtual hearings are warmly welcomed.