27 Feb 2017

2017: The Year of The Amended Arbitration Rules

Authored by: Michael Dunmore

2017: The Year of The Amended Arbitration Rules

In Brief:

  • The amendments have a number of common features.
  • The primary focus is to increase efficiency.
  • The amendments seek to bring the rules in line with international best practice.

A number of arbitration centres have recently rolled out amendments to their arbitration rules. This brief article will provide a snapshot of some of the key amendments made by some of the leading arbitration centres:

Dubai International Financial Centre-London Court of International Arbitration Rules (October 1, 2016)[1]

Emergency arbitration rules[2]

The DIFC-LCIA has substantially upgraded its rules to ensure that they adopt best practice. One key amendment is the adoption of emergency arbitration provisions, which follows similar changes made by a number of leading arbitration organisations. The emergency arbitration provisions permit a party at any time before the formation of a tribunal, to apply for an emergency arbitration to obtain urgent relief.

As is the case under other rules, an order rendered by an emergency arbitrator may be modified by a tribunal, once appointed.

Multiple contracts and multiple parties

The amendments relating to multiple parties are considerably more straightforward and state that there may be more than one claimant or respondent in each proceeding.[3]  The LCIA-DIFC Rules 2008 did not address the issue of consolidation of arbitrations. Now, following the amendments, a tribunal may, subject to certain restrictions, order the consolidation of arbitrations.[4]

Sanctions for conduct

Included in the Annex to the 2016 DIFC-LCIA rules are “General guidelines for the Parties’ Legal Representatives” which apply to all arbitrations under the rules.[5] Article 18.6 gives a tribunal the express power to sanction counsel engaging in unacceptable conduct during an arbitration. If, after a complaint is levelled against a counterparty, a tribunal may take one of three actions: (i) issue a written reprimand; (ii) issue a written caution; and (iii) take other necessary measures.

Measures to increase efficiency

Several notable amendments have been made, with the specific intention to increase efficiency. Following the procedures contained in the LCIA Rules 2008, the new DIFC-LCIA rules permit the online filing of arbitrations, if parties wish to do so. An additional amendment aiming at increased efficiency provides that a tribunal should contact the parties within 21 days of the formation of the tribunal.[6] This is to ensure that an arbitration progresses in an expeditious manner. Interestingly, similar provisions have been included in the new SCC and ICC rules, as further described below.

ICC Rules (March 1, 2017)

Expedited Rules[7]

The expedited rules are a fast track procedure for arbitrations. The new ICC expedited rules[8] will automatically apply to all disputes with a value of USD 2,000,000 or less, and to disputes of a higher value in dispute where parties agree that the expedited rules are to apply. The expedited rules include various notable features including the appointment of a sole arbitrator, despite the parties’ agreement to have a three-member tribunal. Upon the appointment of a sole arbitrator tribunal, the tribunal shall hold a case management conference within 15 days; an award then shall be rendered within 6 months of the case management conference. Additionally, the tribunal may decide the dispute on a documents-only basis. Lastly, a separate expedited procedures schedule of fees will apply (the arbitrator fees under the expedited rules are lower than the standard fees).

Increased transparency

While the core addition to the ICC rules 2017 is the expedited procedure, the ICC amendments are focused on increasing the transparency of ICC arbitrations. One amendment that does this permits the ICC Court of Arbitration to communicate to the parties its reasons for decisions including arbitrator appointments, challenges and the replacement of arbitrators.[9] Previously, when decisions were made by the ICC Court, no reasons where given to the concerned parties.[10] This amendment follows a decision by the ICC in 2016 to publish the names of tribunal members on the ICC website in an effort to become more transparent as well as reducing arbitrator fees when there are unjustified delays in submitting awards.[11]

Singapore International Arbitration Centre Rules (August 1, 2016)

Early Dismissal[12]

A notable amendment to the SIAC rules permits a party to file an application to have the early dismissal of a claim, on the basis that the claim in question is either “manifestly without legal merit” or the claim is “manifestly outside the tribunal’s jurisdiction.” When an application for the early dismissal of a claim is made, the tribunal has the discretion to decide or deny the claim. This particularly noteworthy provision has been adopted from the ICSID Convention arbitration rules.[13]

Multiple contracts and multiple parties

The SIAC rules 2013 contained provisions dealing with claims arising from multiple contracts and involving multiple parties. The 2016 amendments ‘fine tune’ these provisions. Under the 2016 rules, a claimant may file a request for arbitration that arises out of multiple contracts by filing one notice of arbitration.[14] Additionally, parties and non-parties to an arbitration may apply to join an additional party or to intervene in the arbitration either before or after a tribunal has been constituted, so long as the additional party is bound to the arbitration agreement or all parties to the arbitration consent.[15]

Award for non-payment[16]

Under most sets of arbitral rules, when a party (usually the respondent) refuses to pay its share of the administrative costs of the arbitration, the claimant if it wishes to proceed with the arbitration without any delay, pays both parties’ shares of the costs of arbitration, in order to have the arbitration move forward. The SIAC Rules 2016 now expressly permit a tribunal to render an award against a party that does not pay its share of the costs of arbitration.

Stockholm Chamber of Commerce Arbitration Rules (January 1, 2017)

Summary procedure[17]

The new SCC rules introduced a “Summary procedure” which is similar to the SIAC provisions for early dismissal. It allows a party to make a request for the final determination of factual or legal issues at any time during the arbitration. This provision is aimed at saving time and costs in cases where a party has made a claim that is “manifestly unsustainable, or when a claim is unfounded as a matter of law.” Similarly to the SIAC rules, in making a determination on summary procedure applications, the SCC rules do not set a deadline for a tribunal to make a determination; rather the tribunal may make a determination at any time during the course of proceedings.

Multiple contracts and multiple parties[18]

The SCC rules adopt provisions that provide for the joinder of additional parties to an arbitration as well as the consolidation of related arbitrations into one arbitration. These provisions are included in most other arbitration rules.

Case Management conferences and Timetable[19]

Case management conferences between tribunals and parties have been utilized as a common tool by tribunals under all sets of rules, case management conferences are used at the commencement of an arbitration to lay out a procedural framework and timetable for each arbitration. In a further effort to promote efficiency, the SCC rules now indicate that after an arbitration has been referred to a tribunal, the tribunal shall conduct a case management conference to establish the procedures and the timeframe

Conclusion

In summary, many of the amendments have been made to keep rules in line with international best practice, in particular amendments related to arbitrations with multiple parties, involving multiple contracts as well as emergency arbitration provisions. Various other amendments have been made in an attempt to increase efficiency in arbitrations. In light of the amendments, it will be interesting to see whether additional arbitration centres follow suit with implementing summary dismissal procedures when updating their rules in the future.

 

[1] The amendments to the DIFC-LCIA rules generally follow the 2014 amendments to the LCIA Rules 2014.

[2] Article 9B, DIFC-LCIA Rules 2016.

[3] Articles 1.5, 2.5 and 15.6, DIFC-LCIA Rules 2016.

[4] Articles 22.1(ix), 22.1(x) and 22.6, DIFC-LCIA Rules 2016.

[5] Article 18.5, DIFC-LCIA Rules 2016.

[6] Article 14, DIFC-LCIA Rules 2016.

[7] Article 30, ICC Rules 2017.

[8] A number of other institutions already have a stand-alone set of expedited rules including: HKIAC, SCC, SIAC, ICDR and KLRCA.

[9] Article 11(4), ICC Rules 2017.

[10] Article 11(4), ICC Rules 2012.

[11] ‘ICC Court announces new policies to foster transparency and ensure greater efficiency’ http://www.iccwbo.org/News/Articles/2016/ICC-Court-announces-new-policies-to-foster-transparency-and-ensure-greater-efficiency/ Accessed on December 29, 2016.

[12] Rule 29, SIAC Rules 2016.

[13] Rule 41(5), ICSID Arbitration Rules 2006.

[14] Rule 6, SIAC Rules 2016.

[15] Rule 7, SIAC Rules 2016.

[16] Rule 27(g), SIAC Rules 2016.

[17] Article 29, SCC Rules 2017.

[18] Articles 14 and 15, SCC Rules 2017.

[19] Article 28, SCC Rules 2017.

 
 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the developing jurisdiction of the UAE.