On 1 January 2012, the revised ICC Arbitration Rules entered into force. They contain new and amended provisions promoting the efficiency of the arbitral process and dealing with the increased complexity of commercial relationships. The new emergency arbitrator proceedings also allow the parties to obtain urgent interim relief prior to the constitution of the arbitral tribunal.
1. BACKGROUND AND MAIN PURPOSE OF REVISION
Following a more than two-year revision process, the revised arbitration rules of the International Chamber of Commerce (ICC) entered into force on 1 January 2012 (the "Rules"). The Rules apply to all arbitrations commenced on or after 1 January 2012, irrespective of the date of the arbitration agreement.
The revision process was led by a task force which gathered input from members of the ICC and arbitration practitioners. The task force also included users of ICC arbitration. Based on a consensus that the previous 1998 ICC Rules worked well in principle and needed to be updated only in areas which had either evolved or had presented certain difficulties in practice, the main aims of the revision were to codify established practices of the ICC, to take into account the increasing number of so-called "complex arbitrations" involving multiple parties and/or multiple contracts, to consider certain trends in international arbitration and, particularly, to address the arbitration community's growing concern that there was at times a disproportion between the issues at stake and the time and cost of the arbitration procedure.
2. SAVING TIME AND COST
2.1 Introduction
The main amendments designed to increase time and cost efficiency of the arbitral process are reflected in the new Articles 22 and 24 of the Rules.
2.2 Effective Case Management
Article 22(1) imposes on the arbitrators and the parties the duty to conduct the arbitration in an expeditious and costeffective manner, having regard to the complexity and value of the dispute. The duty of the arbitrators to effectively manage the case is an ongoing task which continues throughout the proceedings and will encourage the arbitral tribunal to become familiar with the facts and issues of the case from the very start and actively manage the arbitration to ensure that is conducted efficiently. The parties' conduct in this respect is one factor under the Rules to be taken into account by the arbitral tribunal when deciding on the allocation of the costs of the arbitration. This gives the parties an incentive to refrain from dilatory tactics.
«The revised ICC Rules promote efficiency of the arbital process.» 2.3 Case Management Conference
Article 24(1) introduces a mandatory obligation for the arbitral tribunal to conduct a case management conference. Such conference is an effective means towards promoting time and cost efficient proceedings. It is to be held in the initial stages of the proceedings, either when drawing up the Terms of Reference or "as soon as possible thereafter". A case management conference does not require a meeting in person - rather, modern means of communication can be used.
The arbitral tribunal can request the attendance of the "parties in person or through an internal representative" at the case management conference (Article 24(4)). The presence of a party representative guarantees that the decisions taken with regard to the proceedings are backed by the parties themselves rather than only their counsel. Also, it may assist in finding an agreement on procedural means which are time and cost efficient, but entail certain procedural risks (such as the decision to have limited document disclosure and production) whilst ensuring that the parties fully understand such risks.
2.4 Case Management Techniques
The main purpose of the case management conference is to discuss procedural measures which will help control time and costs of the proceedings. To assist the arbitral tribunal and the parties, the drafters of the Rules have identified in a new Appendix IV a non-exhaustive list of the most common case management techniques. Such techniques include bifurcation of the procedure (that is, dividing the proceedings into several stages), identification of issues which can be decided on the basis of documents only, certain basic rules regarding the production of documentary evidence, and indication of issues on which the parties shall focus during the hearing.
3. DEALING WITH COMPLEX ARBITRATIONS
3.1 Introduction
Commercial relationships increasingly lead to complex arbitrations involving multiple parties and/or multiple contracts. The new provisions in Articles 6 to 10 of the Rules mostly reflect the current practice of the International Court of Arbitration of the ICC (the "Court") and the Secretariat of the Court (the "Secretariat"), although the revision also introduces some changes.
It is important for users to note that the new Articles 7 to 10, as well as Article 6(4) which deals with the jurisdictional aspects of complex arbitrations, do not entail a diminishment of party autonomy or a dilution of privity of the arbitration agreement. Parties can still rely on the fact that, from the viewpoint of the Rules, an arbitration agreement is binding upon the parties to that particular arbitration agreement only, unless the Court deems that the parties "may have agreed" to arbitrate their claims falling under more than one arbitration agreement together in one arbitration.
«The Rules contain new comprehensive provisions for complex arbitrations.» 3.2 Joinder of Additional Parties
Article 7 deals with the joinder of additional parties after the commencement of an arbitration. It follows from Article 6(4) that joinder can arise under two basic scenarios. First, where the additional party is a party to the same arbitration agreement forming the basis for the arbitration between the original parties, and, second, where the additional party and the original party wishing to join the additional party are bound by another arbitration agreement.
Without the consent of all parties, joinder is only possible prior to the confirmation or appointment of any arbitrator. In other words, a constituted ICC arbitral tribunal is not entitled to join a third party unless all parties agree.
3.3 Claims between Multiples Parties
Article 8 of the Rules codifies the Court's current practice regarding claims between multiple parties. Also in this case, it follows from Article 6(4) that such claims can be made under the same or under different arbitration agreements. They may also be made under a single arbitration agreement entered into between all of the parties to the multi-party arbitration, or under a different arbitration agreement entered into between only some of the parties to the multi-party arbitration.
Article 8 permits the making of additional claims until the signing of the Terms of Reference. Upon signature of the Terms of Reference pursuant to Article 23 of the Rules, the general rule for new claims under Article 23(4) will apply.
3.4 Multiple Contracts
Article 9 addresses the issue of multiple contracts. This issue can arise both in the context of an arbitration between two parties or in a multi-party situation. Parties who have entered into multiple contracts may have provided for a framework arbitration agreement to govern all disputes arising out of the multiple contracts entered into between the parties. However, framework arbitration agreements are not very frequent in practice. Thus the multiple contracts provision in Article 9 – albeit mentioning both alternatives – deals primarily with a situation in which there are multiple arbitration agreements under the Rules.
3.5 Consolidation
Article 10 concerns consolidation of arbitral proceedings and replaces Article 4(6) of the 1998 ICC Rules. Pursuant to Article 10, it is the Court, and not the arbitral tribunal, which decides issues of consolidation.
This provision has undergone important changes and the possibilities of consolidation have been broadened. Consolidation is now possible in three basic scenarios, namely (1) if all parties agree to consolidation; (2) if all claims made in the arbitrations fall under the same arbitration agreement; and (3) where the claims in the arbitration are made under different arbitration agreements, however in this last case only if (a) the consolidation involves arbitrations between the same parties; (b) the disputes in the arbitrations concern the same legal relationship; and (c) the arbitration agreements are compatible. It bears emphasizing that the Court may, but is not obliged to order consolidation if these conditions are met.
In principle, an application for consolidation can be made at any stage while the arbitrations are pending under the Rules. That being said, the Court will take into account all relevant circumstances when deciding whether to order consolidation, particularly how far each of the arbitrations is advanced, whether any arbitrators have been confirmed or appointed and, if so, whether the same persons shall act as arbitrators in the consolidated arbitration.
4. THE NEW GATEKEEPER TEST OF ARTICLE 6
Article 6 contains one of the most significant changes to the 1998 ICC Rules. Under Article 6(2) of those rules, if the respondent did not file an answer to the request for arbitration or if objections regarding the existence, validity or scope of the arbitration agreement were raised, the matter had to be referred to the Court for a prima facie decision on jurisdiction.
Statistics showed, however, that only a very small percentage of cases submitted to the Court failed to meet the prima facie test. Therefore, it was decided that, under the revised Rules, the Secretary General of the ICC Court should function as a "gatekeeper" and decide which cases should be submitted to the Court and which cases should go directly to the arbitral tribunal. In other words, the new general rule is that the arbitral tribunal itself will be the first body to decide on jurisdictional issues. The Court will decide jurisdictional issues only in the exceptional case that the Secretary General decides to submit such questions to the Court. This new regime is expected to considerably further the efficiency of ICC arbitration, particularly with respect to the constitution of the arbitral tribunal.
The other important change regarding the prima facie test concerns cases in which there are multiple parties and/or multiple arbitration agreements (Articles 7 and 9). While the 1998 ICC Rules do not contain specific rules as to how such cases are dealt with, Article 6(4) of the revised Rules describes the tests that the Court will apply in these particular situations. The main purpose of this clarification is to provide transparency.
5. EMERGENCY ARBITRATOR
The provisions on emergency relief are entirely new to ICC arbitration. Article 29 of the Rules is the core provision that sets the framework for the new regime for urgent interim or conservatory measures which cannot await the constitution of an arbitral tribunal under the Rules (defined as "Emergency Measures"). The detailed procedural rules for the emergency arbitrator proceedings are determined in Appendix V.
«Emergency arbitrator proceedings enable urgent relief before the tribunal is constituted.» The main reason for introducing emergency arbitrator proceedings was to fill the vacuum before the constitution of the arbitral tribunal. During this time, which can last up to several months, if one of the parties needs urgent interim relief under the 1998 ICC Rules, it usually has no option other than to address a state court. While in many cases this is an efficient and appropriate course of action, there are situations in which such action is not possible or not appropriate. In such circumstances, the parties to an ICC arbitration agreement can now obtain Emergency Measures from an emergency arbitrator within approximately 15 days.
In order to make it abundantly clear that the emergency arbitrator procedure shall be an additional option and not curtail a party's ability to seize a state court, Article 29(7) stipulates that, from the viewpoint of the Rules, any party can address any competent judicial authority notwithstanding the applicability of the emergency arbitrator proceedings.
The emergency arbitrator is available whenever parties have agreed to arbitrate their dispute under the Rules, provided, however, that the arbitration agreement was concluded on or after 1 January 2012. In other words, the emergency arbitrator rules to not apply retroactively. If parties do not wish to be bound by these rules, they must explicitly exclude them. The Rules provide for an additional standard arbitration clause explicitly excluding the applicability of the emergency arbitrator. Whilst such exclusion is not generally advisable, there may be circumstances in which it is warranted.
It is important to note that the new emergency arbitrator rules apply only to "parties that are either signatories of the arbitration agreement" or "successors to such signatories". This limitation means that so-called extension theories, which are sometimes applied in order to draw non-signatories into arbitration, cannot be relied upon in emergency arbitrator proceedings. Moreover, it excludes the application of the emergency arbitrator rules to treaty-based arbi- trations, which is particularly relevant with respect to investor/state disputes.
The emergency arbitrator's decision (defined as the "Order") is binding upon the Parties and the Parties expressly undertake to comply with the Order. By contrast, it is not binding on the arbitral tribunal, which may modify, terminate or annul the Order once it is constituted.
6. OUTLOOK
The 2012 ICC Rules set a new standard for institutional arbitration rules that will be welcomed by the arbitration community. Whilst maintaining the typical features of ICC arbitration, the Rules face up to the increasing challenges of modern-day arbitration and will meet the needs of the users of ICC arbitration.
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.
