ICC modifies rules to try to save time and costs in arbitrations

The International Chamber of Commerce (“ICC”) has been at the forefront of the development of international arbitration since the early 1900s. Following a proposed reform earlier this year, the ICC has announced important amendments to the ICC Rules of Arbitration. The amended Rules, which will apply from 1 March 2017, include a new expedited procedure which will apply to all cases below US$2m and to any cases above this amount if the parties agree.

New Features

Under the Expedited Procedure Rules, the ICC Court has the power to appoint a sole arbitrator even if the arbitration agreement provides otherwise. There will be no Terms of Reference in the expedited procedure and the tribunal will have the discretion whether to decide the case without a hearing, document production requests and examination of witnesses. Also of particular note is the fact that awards must be made in six months from the date of the case management conference. Extensions will only be granted in limited and justified circumstances. The ICC has announced that expedited procedures will have a “significantly reduced” pay scale, although the ICC Court and its Secretariat will continue to carry out quality control through the scrutiny of awards.

The introduction of an expedited procedure follows the trend set by other institutions which have made similar changes to their rules including the American Arbitration Association, the Arbitration Institute of the Stockholm Chamber of Commerce, the Hong Kong International Arbitration Centre and Singapore International Arbitration Centre, amongst others.

The ICC has also introduced other amendments to its Rules to streamline non-expedited proceedings including a reduction in the time limit to establish Terms of Reference from two months to one. In a bid to increase transparency, the Rules now allow the ICC Court to provide reasons for is decisions made on challenges, jurisdictional decisions and consolidations without having to seek the consent of all of the parties.

Will the changes achieve their aims?

One of the common criticisms of arbitration is the lack of speed and resultant high costs.

The ICC Court President Alex Mourre has hailed the new Rules for offering “an entirely new offer to our users” and “providing an effective answer to the legitimate concerns of the business community as to time and costs.”

Commenting in Global Arbitration Review on the amendments to the Rules, CMS Disputes partner Guy Pendell said “Lower value does not always equal lower importance, and concerns may arise where the significance of the dispute would merit a more thorough procedure. Conversely, I can also envisage disputes where the amount in dispute has been overstated by a claimant (or a claimant’s counsel) in order to avoid the expedited procedure.”

CMS Disputes partner Adrian Bell adds that “The response from the ICC to the growing trend of awards taking longer and arbitrations costing more should be welcomed, but the community also needs to recognise that one size will not always fit all. It remains to be seen whether the default nature of the expedited procedure will be a deterrent to future users of the ICC Rules in lower value claims.”