Fulbright Alert - ICC Rules of Arbitration 2012

Fulbright Alert - ICC Rules of Arbitration 2012

By Richard Hill and James Rogers

Today marks the launch in Paris of the new Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules"). The ICC Rules, last revised in 1998, were adopted by the ICC World Council in June 2011 and will generally apply to all ICC arbitrations commenced from January 1, 2012.

Some of the main changes made from the 1998 Rules are as set out below.

Multi-Party Arbitrations: The 2012 ICC Rules include a number of new provisions regarding joinder of additional parties (Article 7), claims between multiple parties (Article 8), multiple contracts (Article 9), and consolidation of arbitrations (Article 10).

Under Article 7, a party may join a third party to the arbitration (without the consent of any other party being required) simply by filing a Request for Joinder with the Secretariat, provided that this is done before any arbitrator is appointed or confirmed. Once any arbitrator is appointed or confirmed, joinder will require the agreement of all parties, including the additional party.

Article 8 provides that any party may make any type of claim or counterclaim against any other party to the arbitration prior to the approval of the Terms of Reference, after which additional claims or counterclaims require the authorization of the tribunal.

Article 9 of the revised Rules now expressly confirms that claims arising out of or in connection with more than one contract may be made in a single arbitration, while Article 10 empowers the ICC Court to consolidate arbitrations, at the request of a party, subject to certain requirements.

Case Management To Reduce Time and Cost: A significant feature of the revised Rules is the focus upon case management techniques designed to avoid unnecessary delay and expense in the arbitral process. Article 24 requires a tribunal to convene a case management conference when drawing up the Terms of Reference or as soon as possible thereafter. Appendix IV to the new Rules also suggests various techniques that parties and arbitrators may wish to utilize to improve cost efficiency and avoid unnecessary delay and provides a list of document disclosure issues for parties to consider.

Rules Adapt to Technological Advancements: The revised Rules have been updated to reflect changes in information technology and current modes of communication and legal notice requirements. Antiquated methods of communication such as telex have been replaced with updated and broadly defined references to communication tools so as to provide flexibility for technological advances.

Exceptions to Reliance upon National Committees: While the role of the ICC's National Committees is preserved in relation to the appointment of arbitrators, Article 13 of the revised Rules permits the ICC Court directly to appoint arbitrators in certain circumstances, for example where the National Committee fails to make an appointment in the time allocated, or where one or more of the parties is a State entity.

Article 6 Procedure to Consider Prima Facie Existence of ICC Arbitration Clause: The revised Rules allow objections to the existence, validity or scope of an arbitration agreement to be referred directly to the arbitral tribunal rather than necessarily to the ICC Court.

Case-Specific Orders Regarding Confidentiality Now Available: Article 22 of the revised Rules envisages the tribunal making confidentiality orders tailored to the specific needs of the case before them.

Challenges to Arbitrators Increase the Scope of Disclosure Obligations: Concerns about the increasing number of challenges brought against arbitrators alleging a lack of independence and impartiality have prompted a clarification and extension of arbitrators' disclosure obligations when accepting appointments. Article 7 of the 1998 Rules provided that every arbitrator must be and remain independent of the parties involved in the arbitration, and required arbitrators to sign a statement of independence, but did not expressly refer to "impartiality." While "independence" is understood to be an objective test of the arbitrator's connections with the parties or interest in the outcome, "impartiality" is a more subjective concept. Article 11 of the revised Rules now provides that arbitrators must sign a statement disclosing any facts or circumstances which might be of such a nature as to call into question their independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to their impartiality.

Article 11 also requires arbitrators to confirm their availability when accepting an appointment, codifying an approach that the ICC Secretariat has followed in practice recently though not appearing in the previous rules.

Emergency Arbitrator Available for Immediate Relief: Where the arbitration agreement post-dates the effective date of the revised Rules (i.e., January 1, 2012), parties may now seek the appointment of an emergency arbitrator where urgent relief is required before an arbitral tribunal can be fully constituted. Article 29 of the revised Rules, in conjunction with procedures set forth in Appendix V, authorizes the President of the ICC Court to appoint an emergency arbitrator where the requesting party demonstrates that urgent relief is necessary before the arbitral tribunal is constituted and able to receive the file.

Although an emergency arbitrator's order is binding on the parties, the arbitral tribunal, once constituted, may modify, terminate, or annul an emergency arbitrator's order. The availability of an emergency arbitrator does not preclude any right of the parties to seek urgent interim relief from a competent judicial authority.

The revised ICC Rules reflect two years of dedicated work by the ICC Commission on Arbitration (which includes Fulbright partners Mark Baker, Richard Hill and Philip Punwar) and reflect the evolving demands of users of international arbitration since 1998. While they retain the many excellent features of the 1998 Rules, the revised Rules provide modern, flexible and effective procedures to meet the needs and expectations of the parties to international arbitration disputes.


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