ICC Releases New Rules of Arbitration

On September 12, 2011, the International Chamber of Commerce released a revised version of its Rules of Arbitration, which were drafted and have been in use since 1998. The revised Rules will apply to ICC arbitrations commenced after January 1, 2012, and are intended to meet the growing complexity of international business and ensure that the process is conducted in an “expeditious and cost-effective manner.” 

The revision process, which began in 2008, resulted in revisions to the existing Rules, as well as an expansion of the Rules to address discrete issues. Some of the more important changes include the following: 

Commencement

The Rules are now updated to include more substantive information at the initiation of arbitration. While the prior Rules permitted parties to submit a Request for Arbitration that was brief and largely unsupported with the idea that more could be learned through discovery, the revised Rules require the party to provide the “basis on which the claims are made” as well as the “amounts of any quantified claims.” 

Emergency Arbitrator 

Probably the most significant change to the Rules is the inclusion of provisions permitting a temporary Emergency Arbitrator to be appointed. In arbitrations commenced under an arbitration agreement entered after January 1, 2012, parties may seek “urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal” even before arbitration has been formally commenced. The arbitral tribunal, once constituted, may modify or annul any order entered by the Emergency Arbitrator. 

The costs of the new provisions are substantial: a minimum fee of USD40,000 applies to any application for emergency relief, although the Emergency Arbitrator may assess those costs to another party. The new provisions do ensure quick relief. An Emergency Arbitrator is to be appointed within two working days of the submission of the application, and the Emergency Arbitrator is required to issue an order within fifteen days. 

Notably, though the parties would agree to be bound by any order made by the Emergency Arbitrator, any such order would not be a final arbitration award that could be enforced by local courts under the New York Convention. As a result, these new provisions - while significant - are expressly not intended to replace a party’s ability to seek urgent interim measures in local courts.

Multi-Party Arbitrations 

The new Rules also significantly improve parties’ ability to arbitrate multiple claims or claims against multiple parties. Whereas under the current Rules, only parties to an arbitration agreement or clause may participate and may be bound by the award, the revised Rules are much broader. Any party now may request that an additional party join the arbitration, so long as that request is made before any arbitrators have been confirmed. Further, when the arbitration involves more than two parties, any party may now make a claim against any other party, so long as such claims are made before the Terms of Reference are signed or approved. Finally, claims concerning multiple contracts under separate arbitration agreements can be brought in one proceeding, and under certain circumstances, multiple related arbitrations pending under the ICC Rules may be consolidated into a single proceeding.

Confidentiality 

While the revised Rules still do not automatically make all arbitrations confidential, the revisions do include provisions permitting the tribunal to enter orders concerning confidentiality at the request of either party. As a result, parties entering into arbitration agreements should consider discussing confidentiality in their arbitration agreements or clauses. 

Administration

The revised Rules emphasize the cost-effectiveness of the arbitration process, including through a number of revisions expressly dedicated to controlling costs. First, the revised Rules require the tribunal to hold a case management conference and adopt procedural measures to ensure efficient management of the proceedings. Second, the revised Rules allow the tribunal to take into account - when deciding to whom costs should be assessed - which parties have conducted the arbitration in an expeditious and cost-effective manner. Finally, the revised Rules refer to the ICC’s recent publication, “Techniques for Controlling Time and Costs in Arbitration,” and the Rules include an Appendix, which provides examples of case management techniques for the tribunal and the parties. 

As with all Rule revisions, the true impact of those revisions will not be entirely clear until the Rules are in use. And of course, more specific procedures (such as those governing the Emergency Arbitrator) simply may be contrary to the parties’ desires. As a result, parties should be diligent to include any necessary variations in the arbitration clauses or agreements. However, in general, these revisions appear to continue the ICC’s commitment towards maintaining an efficient, cost-effective process, and they have been much-anticipated for that reason.