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Revised 2021 ICC Rules for Arbitration

January 26, 2021

Shortly after the new 2020 LCIA Arbitration Rules came into force on 1 October 2020, the International Chamber of Commerce (“ICC”) announced a revised version of the 2017 ICC Arbitration Rules (“2017 Rules”) and the 2014 ICC Mediation Rules. The 2021 ICC Arbitration Rules (“2021 Rules”) apply to all cases filed from 1 January 2021 and while the amendments do not introduce any substantial changes, they “mark a further step towards greater efficiency, flexibility and transparency”. As the ICC announced a record number of new references in 2020 despite the current pandemic, we consider some of the more notable changes to the arbitration procedure.

Electronic Submissions, Remote Hearings and Case Management

It is fitting to start with the amendments that recognise the current remote working arrangements for parties, institutions and practitioners alike. The presumption of default paper filings has been removed under the 2021 ICC Arbitration Rules and written communications can now be “sent” as opposed to “being supplied in a number of copies” (Article 3(1) 2021 Rules). In fact, parties have to expressly request hard copy transmission for the Request for Arbitration and the Answer (Article 4.4(b), Article 5(3) of the 2021 Rules).

Under Articles 25(2) and 26(1) of the 2017 Rules, the Tribunal was required to hear the parties together in person upon a party’s request or it could decide itself to convene a hearing on a day and at a place fixed by it. Article 26(1) of the2021 Rules expressly allows the Tribunal to conduct hearings in person, remotely by videoconference or via other appropriate means (for example, perhaps a hybrid hearing). This flexibility is subject to consultation with the parties and must take into account “the relevant facts and circumstances of the case”.

Whilst effective case management has always been encouraged in the ICC Rules, the 2021Rules include specific guidance on the measures that can be adopted by the parties and Tribunal (Appendix IV of the 2021 Rules).  Such measures include, but are not limited to, the use of IT means for hearings.

Disclosure of Third-Party Funding Arrangements and the ICC Court’s Accountability

The level of transparency in international arbitration proceedings is an ongoing issue that continues be the subject of debate. The 2021 Rules incorporate a new provision at Article 11(7) requiring each party to “promptly inform the Secretariat, the arbitral tribunal and the other parties, of the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defences and under which it has an economic interest in the outcome of the arbitration”. The disclosure of third-party funding seems to capture even third-party funders that fall outside specialist entities, and it applies to treaty based arbitrations as well.

It is also worth noting the addition of a new Article 5 in Appendix II to the 2021Rules. This expressly allows a party to ask the ICC Court to communicate the reasons for decisions on certain issues, such as the consolidation of arbitrations (Article 10) and the existence of the arbitration agreement(Article 6(4)). Such requests have to be made “in advance of the decision in respect of which reasons are sought” and, in exceptional circumstances, the ICC Court may exercise its discretion and refuse to communicate its reasoning.

 

Appointment of the Tribunal

Article12(9) of the 2021 Rules gives the ICC Court a new power to overrule any agreement between the parties regarding the method of constitution of the Tribunal if there is a “significant risk of unequal treatment and unfairness that may affect the validity of the award”. In such exceptional circumstances, the ICC Court may appoint each member of the Tribunal.

Joinders and Consolidation of Proceedings

In addition to transparency, the 2021 Rules address another recurrent theme in international arbitration concerning third party joinders and the consolidation of concurrent proceedings. Under the 2017 Rules, no additional party could be joined after the appointment or confirmation of any arbitrator unless all parties (including the additional party) otherwise agree. However, under Article 7(5) of the 2021 Rules, any request for joinder made after the appointment or confirmation of any arbitrator shall (subject to various conditions) be decided by the Tribunal once constituted.

Article 10 of the 2021 Rules introduces greater flexibility for the consolidation of proceedings. Article 10(b)expressly addresses consolidation claims made “under the same arbitration agreement or agreements”. Article 10(c) further extends the ICC Court’s consolidation powers and makes provision for claims in arbitrations that “are not made under the same arbitration agreement or agreements, but the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the Court finds the arbitration agreements to be compatible.”

This is a welcome clarification of the scope of the ICC Court’s powers to consolidate proceedings particularly where it makes commercial sense to do so.

Conclusion

The 2021 Rules include welcome changes towards more transparency, efficiency and flexibility. However, some of these amendments may be perceived as more controversial than others in the arbitration realm (for example, the requirement to disclose third-party funding and the ICC Court’s new power to assess whether a method of constitution of the Tribunal agreed by the parties could give rise to a serious risk of unequal treatment and unfairness). It remains to be seen how the ICC’s revisions will be received in this very competitive institutional environment.

*This article is not intended to give any legal advice or to give rise to a client-solicitor relationship. It has been prepared for information purposes only. If you require legal assistance on arbitration and/or litigation matters, please contact iLaw’s Head of Arbitration, Jenny Lau at jenny.lau@ilaw.co.uk

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