The revised Arbitration Rules of the International Chamber of Commerce in Paris (ICC) became effective on 1 March 2017. The most significant change concerns the introduction of an Expedited Procedure which is designed to accelerate arbitration proceedings and make them cheaper.

 In arbitration proceedings, private legal disputes are resolved, under an arbitration agreement between the parties, by a non-government body rather than a state court. We distinguish between ad-hoc arbitral tribunals set up for a given dispute and institutional arbitration courts.

Especially in the world of international business, arbitration has become increasingly important as an alternative way of dispute resolution because of its many advantages. In contrast to state courts, arbitration proceedings are not public, which ensures higher confidentiality. Arbitration proceedings are faster as they usually do not provide for an appeal – appeals are allowed to a limited extent only. In addition, the parties to the dispute can choose their arbitrators themselves and thus select experts well-versed in the particular problem. Arbitration offers greater flexibility because parties are not bound to often cumbersome legal procedural rules and can choose the procedure, location and language of the arbitral proceedings themselves. As a result, dispute resolution can take place on "neutral ground" and in a neutral language.

One of the most significant advantages of arbitration is its easier enforceability. Because of the New York Convention of 1958, which has since been ratified by 157 states, arbitral awards can be enforced almost everywhere in the world.

Expedited Procedure

Many arbitration rules – such as the "Vienna Rules" of the Vienna International Arbitral Centre at the Austrian Federal Economic Chamber – already provide for an expedited procedure in low-value cases. The ICC court in Paris has now introduced its own rules for an expedited procedure for arbitration agreements concluded after 1 March 2017. According to Article 30 and Appendix VI of the ICC Arbitration Rules, the expedited procedure rules apply when the amount in dispute does not exceed US$ 2m. However, parties are free to apply the expedited procedure also in disputes over US$ 2m and to arbitration agreements concluded before 1 March 2017. Alternatively, parties may agree to opt out entirely.

A special feature of the new rules is that a dispute may be referred to a sole arbitrator even if the arbitration agreement provides for a three-member tribunal. Accordingly, enterprises wanting to avoid an award by a sole arbitrator will in the future have to pay close attention to the wording of their arbitration agreements. The arbitrator will be agreed by the parties or, if no agreement can be reached, the ICC court appoints a sole arbitrator.

To further simplify the expedited procedure, no terms of reference are required any more and the case management conference must be held within 15 days after the case files are referred to the tribunal. This provision favours claimants as they can prepare the proceedings at their discretion while respondents have to act rapidly because of the tight deadlines.

In drafting the request for arbitration the claimant needs to consider that after the arbitral tribunal has been constituted no new claims may be made unless authorised by the arbitral tribunal, which takes into account the nature of such new claims, the stage of the arbitration, cost implications and any other relevant circumstances.

A key new feature is that the arbitral tribunal may at its discretion decide not to allow requests for documents production or to limit the number, length and scope of written submissions and written witness evidence. After consultation with the parties, it may decide the dispute solely on the basis of the documents submitted by the parties unless any of the parties requests a hearing. The tribunal will have the authority to hold hearings not only in person, but also via telephone or video conference. In response to procedural economy considerations, the fees for arbitrators will be cut by about 20%.

In expedited procedures, the tribunal will be required to render its award within six months of the case management conference, unless this deadline is extended by the ICC court. Scrutiny of the award through the ICC court continues to be part of the expedited procedures.

Further changes

Changes have also been introduced for proceedings that do not fall under the expedited procedure rules which are designed to further procedural economy and transparency. Thus the deadline for issuing the terms of reference will be reduced to 30 days. Moreover, the ICC court now has the option to communicate the reasoning for its decisions on appointing, confirming, rejecting and replacing arbitrators.

Conclusion

From now on, in drafting arbitration clauses enterprises need to consider carefully whether or not to apply the expedited procedure. If the parties wish to opt out they need to explicitly specify its non-application.

Originally published June 2017

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.