On 1 January 2021, following work undertaken jointly by the International Court of Arbitration (the “Court”) of the International Chamber of Commerce (the “ICC“) and the ICC Commission on Arbitration and ADR, the amended ICC Rules of Arbitration entered into force. We have selected for your attention the most notable innovations introduced by the 2021 ICC Rules of Arbitration (the “2021 Rules“).
Raising the threshold for expedited arbitrations
The threshold for expedited procedures was raised from USD2 million to USD3 million. Such procedure was initially introduced by the ICC in 2017. The expedited procedure offers simplified arbitration without composing Terms of Reference with a reduced scale of fees.
However, the new threshold for expedited procedures will only apply to arbitration agreements concluded on or after 1 January 2021.
Joinder and consolidation
The 2021 Rules provide for a more liberal approach to the consolidation of multiple arbitrations. Now the Court can order consolidation, even in cases where the claims in the arbitrations are made under different arbitration agreements, the arbitrations are between the same parties, the disputes arise from the same legal relationship and the Court finds the arbitration agreements to be compatible.
Joinder of a third party is now allowed upon a party’s request after the constitution of an arbitral tribunal. The 2017 Rules provided for such possibility only before the constitution of the arbitral tribunal. While deciding on joinder, the arbitral tribunal shall take into account all relevant circumstances, which may include prima facie jurisdiction over the additional party, the timing of the request for joinder, possible conflicts of interests as well as the joinder’s impact on the arbitral procedure. The additional party, in its turn, should accept the constitution of the arbitral tribunal and agree to the Terms of Reference where applicable.
Expansion of powers of the Court
In exceptional circumstances, which are to be determined by the Court on a case-by-case basis, the Court may appoint each member of the arbitral tribunal regardless of any agreement by the parties on the method of constituting the arbitral tribunal. This can be undertaken to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award.
Disclosure of third-party funding
Any third-party funding should be disclosed to ensure the arbitrators’ impartiality and independence. Since third-party funders may have a direct economic interest in the ultimate award, the parties should communicate promptly to the arbitral tribunal, the other parties, and the ICC Secretariat the identity of any non-party which is involved in the funding of claims or defences.
The 2021 Rules introduce in explicit terms the possibility of holding virtual hearings. Also, according to the amendments, holding a hearing will not be mandatory, unless any party so requests or the arbitral tribunal on its own motion decides to hear the parties.
Powers of the arbitral tribunal to limit counsel
The parties have now an explicit duty to notify the ICC Secretariat, the arbitral tribunal and the other party of any change in their representation. In turn, the arbitral tribunal can exclude new representatives from participating in whole or in part in the arbitral proceedings to avoid a conflict of interest.
Applications to deal with neglected claims
The 2021 Rules expressly authorise the parties to make an application for an additional award as to claims that the arbitral tribunal has failed to determine.
New provisions for treaty-based arbitrations
Emergency arbitration may not be invoked in cases where the arbitration agreement pursuant to which the application is made is based on a standing offer to arbitrate in a treaty. In treaty-based arbitrations, the arbitral tribunal may not comprise nationals of the same State as either party unless the parties agree otherwise.
Jurisdiction of the French courts over administration of the ICC arbitrations
Disputes arising out of or in connection with the administration of the arbitral proceedings by the Court will be governed by French law and will be resolved by the Paris Judicial Tribunal (Tribunal judiciaire de Paris) in France.
If you would like to know more about the subject covered in this publication, or our services, please contact Sergiy Gryshko, Partner, Head of the Dispute Resolution practice.