New ICC Rules Of Arbitration 2012

 

Sharon Chong highlights some aspects of the new ICC Arbitration Rules

 

On 12 September 2011, the International Chamber of Commerce (“ICC”) issued its revised Rules of Arbitration, which updates its 1998 Rules of Arbitration (“the 1998 Rules”) which have been in force since 1 January 1998.

The New Rules of Arbitration 2012 (“the New Rules”) is the result of a two-year effort by the ICC Commission of Arbitration and will come into force on 1 January 2012. The New Rules retain the essential features of ICC arbitration while adding new provisions to provide more flexible and effective procedures to meet the current developments in arbitration practice and information technology.

This article highlights some of the changes that will be introduced under the New Rules.

 

JURISDICTION CHALLENGES

Under the 1998 Rules, the International Court of Arbitration ("ICC Court") is required to make a prima facie finding on the existence of an arbitration agreement. Under Article 6 of the New Rules, any jurisdictional issues will be referred directly to and decided by the arbitral tribunal, unless the Secretary General decides to refer the matter to the ICC Court for its decision pursuant to Article 6(4).

 

MULTI-PARTY AND MULTI-CONTRACT ARBITRATIONS

The New Rules include provisions that deal with issues in complex arbitrations such as joinder of additional parties, claims between multiple parties, multiple contracts and consolidation of arbitrations.

 

(i) Article 7

Article 7 of the New Rules allows a party to join an additional party to the arbitration by submitting a Request for Joinder to the Secretariat. However, if the application is made after the confirmation or appointment of any arbitrator, the consent of all parties, including the additional party, will be required. 

 

(ii) Article 8

Any party in a multi-party arbitration may make any claim or counterclaim pursuant to Article 8 of the New Rules against any other party prior to the approval of the Terms of Reference, after which such claims or counterclaims will require the authorisation of the arbitral tribunal.

This provision addresses a common problem arising from the 1998 Rules in relation to the filing of a cross-claim by a Respondent against a co-Respondent. Whilst Article 5 of the 1998 Rules provides for counterclaims filed by the Respondents against the Claimants, the 1998 Rules do not provide for the filing of cross-claims.

 

Various writers have commented on the scope of Article 5 of the 1998 Rules and its applicability to the filing of a cross-claim. Bernard Hanotiau in Complex Arbitrations (Kluwer Law International, 2005) commented that “in the absence of any express provision and taking into account the objection raised by one of the respondents, ... the cross-claim brought by one respondent against another was not admissible, and that consequently, the respondent should pursue the matter with the said co-respondent in a separate arbitral proceeding. The Court considered that claims between co-respondents would only be admissible with the consent of the parties, since the ICC Rules do not provide for this type of cross-claim.”

Similarly, Yves Derains and Eric A. Schwartz in A Guide to the New ICC Rules of Arbitration (Kluwer Law International) were of the view that it is the exclusive privilege of the Claimant to determine who are the parties to the arbitration and that where there are multiple Respondents, “a Respondent is also not entitled to make a cross-claim against another Respondent, unless all of the parties otherwise agree. In such circumstances, a Respondent party wishing to join a third party to the proceedings or to file a cross-claim against a co-Respondent will be left with no alternative but to commence a new arbitration against such party, unless all of the parties concerned otherwise consent.”

This view was shared by Michael W. Buhler and Thomas H. Webster in their book, Handbook of ICC Arbitration (2nd Edition, 2008) which states that the current view is that in the absence of an arbitration agreement drafted to cover also cross-claims, it is generally not possible to pursue such claims under the 1998 Rules.

 

Article 8 of the New Rules now empowers a Respondent to file a cross-claim against a co-Respondent without having to commence a new arbitration.

 

(iii) Article 9

With regards to multi-contract arbitrations, Article 9 of the New Rules allows claims arising out of or in connection with more than one contract to be made in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement.

 

(iv) Article 10

Article 10 of the New Rules allows the parties to request for the consolidation of two or more arbitrations into a single arbitration provided that all parties agree to the consolidation or where all the claims in the arbitrations are made under the same arbitration agreement.

In cases where the claims in the arbitrations are made under more than one arbitration agreement, the following conditions must be satisfied – (a) the arbitrations must be between the same parties, (b) the disputes in the arbitrations arise in connection with the same legal relationship, and (c) the ICC Court must be satisfied that the arbitration agreements are compatible.

When arbitrations are to be consolidated, they will be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties.

 

CONDUCT OF THE ARBITRATION AND CASE MANAGEMENT CONFERENCES

(i) Article 22

Article 22 of the New Rules imposes an express general obligation on the arbitral tribunal and the parties to make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute.

 

(ii) Article 24

To encourage the avoidance of unnecessary delay and expense in the arbitral process, Article 24 of the New Rules requires the arbitral tribunal to convene a case management conference with the parties when drawing up the Terms of Reference or soon thereafter to consult the parties on procedural measures which it considers appropriate. The tribunal may, after the consultation, adopt such procedural measures. Appendix IV of the New Rules provides examples of case management techniques that can be used by the tribunal and the parties for controlling time and cost.

 

(iii) Article 37

Article 37(5) empowers the arbitral tribunal to take into consideration the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner when it decides on the costs of the proceedings.

 

EMERGENCY ARBITRATORS

Article 29 of the New Rules permits the parties to make an application pursuant to the Emergency Arbitrator Rules in Appendix V of the New Rules for an emergency arbitrator for urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal, provided that such application is received by the Secretariat before the file is transmitted to the tribunal.

The emergency arbitrator’s order does not bind the arbitral tribunal and may be modified, terminated or annulled by the tribunal. Article 29 and the Emergency Arbitrator Rules (collectively "Emergency Arbitrator Provisions") are inapplicable where (a) the arbitration agreement was concluded before the effective date of the New Rules (1 January 2012), or (b) the parties have agreed to opt out of the Emergency Arbitrator Provisions, or (c) the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures. These provisions do not preclude the parties from seeking interim relief from a competent judicial authority.

 

IMPARTIALITY, INDEPENDENCE AND AVAILABILITY OF ARBITRATORS

Article 11 of the New Rules imposes on the arbitrators an additional requirement, apart from being independent, to be impartial. Arbitrators will be required to confirm their availability before accepting an appointment or confirmation. Further, arbitrators must sign a statement disclosing any facts or circumstances which might be of such a nature as to call into question their independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to their impartiality.

 

NEW TECHNOLOGY MEASURES

In order to update the rules to reflect changes in the technology age, Article 3 of the New Rules specifically allows communications to be made by e-mail. Although the New Rules omit references to communications by facsimile transmission, telex and telegram which were expressly permitted under the 1998 Rules, communications by facsimile transmission and telex (but not telegram) are still permitted as they comprise "other means of telecommunication that provide a record of sending thereof" which has been retained from the 1998 Rules.

 

NEW TERMINOLOGY

The designation of the ‘Chairman’ and ‘Vice-Chairmen’ of the ICC Court have been replaced by the designation ‘President’ and ‘Vice-Presidents’ respectively.

 

CONCLUSION

The amendments are welcomed as they provide more modern and flexible procedures in order to address and deal with the increasing number of complex arbitrations and to ensure expeditious and cost-effective resolution of disputes without compromising on the quality of decisions.

 

SHARON CHONG ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

 

 

 
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