The 100-year old International Chamber of Commerce (“ICC”) is the world’s “most preferred” arbitral institute. Indeed, 77% of respondents in the 2018 Queen Mary University of London’s International Arbitration Survey named the ICC as their preferred arbitral institute. In 2019, the ICC registered a total of 869 cases, of which 851 were administered under the ICC’s arbitration rules. Only CIETAC (China International Economic and Trade Arbitration Commission) and the ICDR (International Centre for Dispute Resolution) recorded a higher caseload that year.
Rules of arbitration
An arbitral institute’s rules are an important source for the parties to an arbitration, as they define and regulate how the case is managed. In the case of the ICC, any proposed amendments to its rules are carefully scrutinised before implementation by the ICC International Court of Arbitration (“ICC Court”), a body composed of leading arbitration lawyers from around the world. The ICC’s role as a leading arbitral institute means that any revisions to its arbitral rules, which typically occur every five years, are closely followed by arbitration practitioners.
The proposed changes
The ICC will officially launch the 2021 ICC Rules of Arbitration (“2021 ICC Rules”) in December 2020 and the new rules will enter into force on 1 January 2021. It is important to note that any cases submitted to the ICC and registered prior to 1 January 2021 will be governed by the 2017 ICC Rules, unless the parties have specified otherwise. The proposed changes broadly focus on five key areas and can be summarised as follows:
- Arbitrations involving multiple parties and/or contracts
- The ICC often administers multi-party and multi-contract arbitrations and the new rules expand the ICC’s powers to do so. Under Article 7(5) of the 2021 ICC Rules, the arbitral tribunal will have the power to join additional parties during an arbitration.
- Further, Article 10(b) will permit the consolidation of cases featuring different parties.
- With increased attention being placed on the transparency of international arbitration, Article 11(7) of the 2021 ICC Rules will require the parties to disclose any third-party funding arrangements.
- Article 17(2) will empower the arbitral tribunal to exclude any new legal counsel from the proceedings in the event of any conflict of interest.
- Further, Article 12(9) will allow the ICC Court to disregard “unconscionable arbitration agreements”, e.g. agreements that are too onerous or based on an inequality of bargaining power, that may pose a risk to the validity of the award.
- Investment arbitration
- The 2021 ICC Rules also include provisions aimed at investment treaty arbitrations. Article 13(6) introduces a neutrality requirement in cases concerning the public interest, in which no arbitrator is permitted to have the same nationality as any of the parties.
- Further, Article 29(6)(c) provides that emergency arbitration is not available in investment treaty arbitration.
- Expedited arbitration
- Revisions to Article 30 and Annex VI of the new rules will increase the number of expedited arbitrations, which provide a more streamlined procedure, by raising the opt-out threshold from USD 2 million to USD 3 million.
- Remote hearings and additional awards
- Importantly, Article 26(1) of the 2021 ICC Rules will provide that the arbitral tribunal may, following consultation with the parties, decide to hold any hearings remotely.
- Finally, Article 36(3) introduces a provision governing additional awards regarding any claims omitted in the award.
Additionally, the ICC will provide an updated note to arbitral participants to accompany the 2021 ICC Rules and is organising a series of events to highlight the changes.
The ICC’s revisions come hot on the heels of the latest amendments to the arbitration rules of the London Court of International Arbitration (“LCIA”), another arbitral institute frequently selected by users of international arbitration. The new LCIA rules, which entered into force on 1 October 2020, made among others some similar changes to those proposed by the ICC. Such changes include broadening the arbitral tribunal’s power to consolidate multiple arbitrations and an embracing of the trend towards virtual hearings. The latter is no doubt in response to the phenomenon rapidly accelerated by Covid-19.
This suggests some alignment between the competing arbitral institutes as the arbitration community scrambles to adapt to the new reality and to meet the various needs of the parties. Given the current landscape, it is likely that several other arbitral institutes in the process of revising their current arbitration rules will be paying close attention to how parties and practitioners respond to the 2021 ICC Rules. Following criticism in recent years that arbitration lacks transparency, it is encouraging to see the ICC has worked hard to ensure a balance between party autonomy and efficiency and transparency in the latest iteration of its arbitration rules. In our view, these revisions should be welcomed by the international arbitration community.
At Magnusson, we are well positioned to assist clients with managing the full dispute resolution process, including arbitrations under the current and 2021 ICC Rules. We are also available to advise on how your business can deal with any Covid-19 related legal issues, including corporate restructuring, labour law and insurance law, reviewing commercial contracts, analysing the consequences of cancelled events and advising how to best handle procurement in emergency situations, to help ensure that you are well-placed to survive these difficult times and to thrive once Covid-19 has been contained.
Webinar: What do global SMEs need to know about Br...
Significant victory for our clients from the Finni...
Magnusson Denmark to Establish Specialist Task For...
The Acquisition of Arctic Machine Oy by the Swiss-...
Magnusson Copenhagen grows team again with energy-...
Listing of the Danish Biotech/Pharma Company, Cura...
Proposal for a new Consumer Protection Act in Swed...
Magnusson Denmark and Co-head of Corporate M&A, Pa...
Magnusson Copenhagen adds IPR and telecom/media ex...
Magnusson Denmark and Lithuania advise Ocean Winds...