14 Mar 2021

ICC Rules 2021: Out with the Old, in with the New

Authored by: Maria Lezala and Amira Ioana Shaat,

In Brief:

  1. The previous 2017 ICC Arbitration Rules, which came into force on 1 March 2017, have now been replaced by revised 2021 ICC Arbitration Rules, which came into force on 1 January 2021 (the “2021 ICC Arbitration Rules”). The 2021 ICC Arbitration Rules define and regulate the management of cases received by the ICC from 1 January 2021 onwards. 

  2. “The amendments to the Rules … mark a further step towards greater efficiency, flexibility and transparency of the Rules, making ICC Arbitration even more attractive, both for large, complex arbitrations and for smaller cases.” – ICC Court President, Alexis Mourre[1]

  3. The 2021 ICC Arbitration Rules are a welcome change, as they incorporate necessary and pragmatic amendments to address the needs of an evolving arbitration community. We discuss the main changes to the ICC Arbitration Rules in further detail below.

It is important for parties to be aware of the changes incorporated into the 2021 ICC Arbitration Rules. We address the main changes below.

A. Written Notifications or Communications (Article 3)

Article 3(1) of the 2021 ICC Arbitration Rules provides (inter alia) that save as otherwise required in Articles 4(4)(b) and 5(3), all pleadings, other written communications and/or documents annexed thereto must be sent to each party, each arbitrator, and the Secretariat.

Article 3(1) adopts a pragmatic approach, by permitting parties to submit their pleadings to the ICC electronically, in contrast to the previous version of the article, which required parties to submit hard copies.

B. Joinder of Additional Parties (Article 7)

The previous version of this article did not allow an additional party to be joined to an arbitration after the confirmation or appointment of any arbitrator, unless this was agreed by all parties (including the additional party).

The current article adopts a more flexible approach, as a joining party may now be joined to an arbitration subject to: (i) the arbitral tribunal (once constituted) permitting the joinder and (ii) the joining party consenting to the constitution of the arbitral tribunal and the Terms of Reference (if applicable). Article 7(5) provides that the arbitral tribunal must take into account all relevant circumstances, including but not limited to, the tribunal’s prima facie jurisdiction over the joining party, before permitting the joinder.

C. Consolidation of Arbitrations (Article 10)

The previous version of this article required that a party’s claim needed to have been brought under the same arbitration agreement (i.e. the same contract), in order to consolidate two or more arbitrations.

Article 10(b) now permits consolidation where the claims are made under the same arbitration agreement or agreements. Further, Article 10(c) also confirms that consolidation is permitted for claims that are “not made under the same arbitration agreement or agreements”. This approach now allows consolidation of arbitrations under the same or different agreements, thereby increasing the compatibility between arbitration agreements and facilitating a more cost efficient approach to conducting ICC Arbitrations.

D. Arbitral Tribunal – General Provisions (Article 11)

The previous version of this article did not require a party in an arbitration to identify a third-party funder to the Tribunal.

The current article promotes transparency, by requiring each party to immediately inform the Secretariat, the tribunal and the other parties, of the existence and identity of any non-party which has entered into funding arrangements with one of the parties (for the funding of claims or defences) under which it has an economic interest in the outcome of the arbitration.

E. Arbitral Tribunal – Constitution of the Arbitral Tribunal (Article 12)

In order to further facilitate the equal treatment of parties and to avoid any unfairness which may affect the validity of an award, the ICC has introduced Article 12(9) which states: “notwithstanding any agreement by the parties on the method of constitution of the arbitral tribunal, in exceptional circumstances the Court may appoint each member of the arbitral tribunal to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award” (emphasis added).

The introduction of Article 12(9) may be considered to be controversial, as it effectively gives a Tribunal the power “in exceptional circumstances” to disregard the parties’ agreement on the method of constitution of the arbitral tribunal. It is not clear, at this stage, what would constitute “exceptional circumstances”.

F. Arbitral Tribunal – Appointment and Confirmation of Arbitrators (Article 13)

In an effort to expand neutrality and impartiality, Article 13(6) was introduced and requires that none of the arbitrators in a treaty-based arbitration are permitted to hold the same nationality as any of the parties to the arbitration, unless the parties agree otherwise.

J. Party Representation (Article 17)

Under the previous version of this article, there were no provisions dealing with conflicts of interest that could arise between arbitrators and/or new party representatives, resulting from changes to party representation.

In order to maintain transparency and to prevent conflict of interests, Articles 17(1) and 17(2) were introduced and require the parties to promptly notify the Secretariat, the arbitral tribunal and other parties, of any changes to their legal representation.

Further, the arbitral tribunal can (once constituted and after it has afforded an opportunity to the parties to comment in writing within a suitable period of time), take any measures necessary to avoid a conflict of interest of an arbitrator arising from a change in party representation, including the exclusion of new party representatives from participating in the whole, or parts of, arbitral proceedings.

The Tribunal’s interference with a party’s right to choose their legal counsel may therefore be justified where there could be a potential conflict of interest.

H. Conduct of the Arbitration (Article 22)

In order to ensure effective case management, Article 22(2) introduced that “after consulting the parties, the arbitral tribunal shall adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties. Such measures may include one or more of the case management techniques described in Appendix IV” (emphasis added).

I. Hearings (Article 26)

It was previously common practice that physical in-person hearings would take place before an arbitral tribunal.

Article 26 was revised (most likely to, inter alia, take into account the current global pandemic and the restricted movement of parties to arbitration proceedings), to facilitate a more pragmatic approach to attendance at hearings.

The position under this article is that a hearing will be held if any of the parties so requests or, failing such a request, if the arbitral tribunal on its own motion decides to hear the parties. Further, the arbitral tribunal may now decide, after consulting the parties, and on the basis of the relevant facts and circumstances of the case, “whether any hearing should be conducted by physical attendance or remotely by videoconference, telephone or other appropriate means of communication”.

Attendance by videoconference or telephone will assist to better facilitate hearings (particularly during the pandemic) and can significantly reduce arbitration costs.

J. Emergency Arbitrations (Article 29)

Under the previous version of this article, the Emergency Arbitrator Provisions did not apply if the parties had agreed to other pre-arbitral procedures that provided for the granting of conservatory, interim or similar measures. This provision has been removed under the current rules.  

A further provision was added at Article 29(6)(c), which provides that Emergency Arbitrator Provisions will not apply if the arbitration agreement arises out of a treaty.

K. Awards (Article 36)

The previous version of this article only permitted parties to apply for correction of errors or in relation to the interpretation of an award. There were no provisions dealing with claims made in the arbitral proceedings which the arbitral tribunal had omitted to decide.

In order to enhance the efficiency of proceedings, a party may now make an application to the Secretariat, within 30 days from receipt of the award, for an additional award to be issued dealing with any claim raised during the arbitration that was not addressed in the original award.

An additional award will form part of the original award as an addendum. This amendment will also prevent ‘infra petita’ challenges of awards in the courts.

L. Governing Law and Settlement of Disputes (Article 43)

The previous ICC Arbitration Rules did not include a specific choice of law and dispute resolution provision with respect to claims arising out of or in connection with the ICC Court’s administration of the arbitration proceedings.

Article 43 is a completely new article which states that “any claims arising out of or in connection with the administration of the arbitration proceedings by the Court under the Rules shall be governed by French law and settled by the Paris Judicial Tribunal (Tribunal Judiciaire de Paris) in France, which shall have exclusive jurisdiction”.

M. Internal Rules of the International Court of Arbitration – Reasons for Decisions (Appendix II, Article 5)

In order to enhance the transparency of the International Court of Arbitration, the Court can now be requested to provide its reasoning behind the following decisions – and only in exceptional circumstances can it decline to do so.

The Court may be requested, in advance of the decision for which the clarification is being sought, to provide its reasoning for:

i. its decision on the existence of the arbitration agreement and the scope of it (Article 6(4));

ii. the agreement or refusal to consolidate arbitrations (Article 10);

iii. the constitution of the arbitral tribunal (Article 12(8) and (9)); and

iv. the challenge of arbitrators (Article 14).

N. Expedited Procedure Rules – Application of the Expedited Procedure Rules (Appendix VI, Article 1)

Given the efficiency of the Expedited Procedure and the growing number of opt-in requests, the 2021 ICC Arbitration Rules have increased the upper limit for automatic application of the Expedited Procedure Rules from USD 2 million (under the previous rules) to USD 3 million. The USD 2 million threshold will continue to apply automatically to arbitration agreements concluded between 1 March 2017 and 31 December 2020.

Conclusion

The revisions to the ICC Arbitration Rules are very welcome; a pragmatic approach which will make ICC Arbitrations more attractive and enables ICC Arbitrations to be implemented with greater efficiency, flexibility and transparency.

For further information, please contact Maria Lezala, Senior Associate, Dispute Resolution M.Lezala@hadefpartners.com  or Amira Ioana Shaat, Associate, Dispute Resolution and Shipping A.Shaat@hadefpartners.com.


[1] ICC Publication: ICC unveils revised Rules of Arbitration, 8 October 2020