Global Vantage: Latest International Centre for Dispute Resolution Rules come into effect

The latest version of the Arbitration and Mediation Rules of the International Centre for Dispute Resolution (“ICDR”) came into effect on 1 March 2021 (the “2021 Rules”). Antony Smith examines some of the key changes introduced by the 2021 Rules in our latest Global Vantage article.

In recent years, the ICDR has cemented its position as one of the world’s leading dispute resolution bodies, achieving record highs in both the number of arbitration and mediation case filings received. With the 2021 Rules, ICDR now hopes to consolidate this success by helping to “promote greater efficiency and economy” within its dispute resolution procedures. In pursuit of those aims, the 2021 Rules introduce a raft of procedural amendments, which take account of the substantial change that the industry has undergone since the ICDR last updated its rules in June 2014. These include placing an increased emphasis on the use of mediation and expanding the availability of the ICDR’s expedited arbitration procedures. The 2021 Rules come shortly after the publication of similar updates from the ICC and the LCIA.

One of the key themes in the 2021 Rules is the encouragement for parties to try and address and resolve their differences as early in the dispute’s lifecycle as possible. In this regard, the 2021 Rules introduce a new “Early Disposition” provision (Article 23). In certain circumstances, this will allow tribunals to dismiss specific issues in a claim or counterclaim prior to any hearing on the merits of those issues. Narrowing the disputed issues should help to guide the parties towards a more focussed and efficient arbitration. A similar “Early Determination” provision was introduced in Article 22.1(viii) of the latest edition of its rules, which were published last year. As well as the power of “Early Disposition”, the 2021 Rules also look to streamline the arbitration process by promoting the use of mediation. Article 6 of the 2021 Rules incorporates mediation into the arbitration process on a ‘presumptive’ basis, requiring that the parties – by default – conduct an ICDR mediation at the same time as the arbitration proceedings. This hybrid approach could have significant benefits, including eliminating the need to ‘restart’ the ADR process afresh if attempts to mediate prove unsuccessful.

In addition to attempts to improve the efficiency of arbitrations, the ICDR has also introduced changes which could increase the speed of the arbitration process. In this respect, the principal changes implemented in the 2021 Rules include the expansion of the cases to which the ICDR’s expedited procedures apply (by default), and amendments to the rules on consolidation of arbitrations. The 2021 Rules confirm that, by default, the expedited procedures will apply in cases in which no disclosed claim or counterclaim is greater than USD$500,000 (exc. interest and arbitration costs). This is double the claims ceiling stated in the 2014 ICDR Rules. With the expedited procedures designed to reduce the cost and time involved in arbitrations, this is another helpful change for prospective parties. As to consolidation, a small yet significant amendment has been to the circumstances in which consolidation is available. Article 9(1)(c) of the 2021 Rules now permits consolidation where arbitrations involve “related” parties. This is a less onerous hurdle to surmount than Article 8(1)(c) of the 2014 ICDR Rules, which required that the parties were the “same”. Again, this is a useful amendment, broadening the circumstances in which parties can avoid the cost and time associated with issuing separate proceedings.

Aside from their focus on speed and efficiency, the 2021 Rules address the issue of ethics and conflicts of interest within international arbitration. This is a concern that will undoubtedly be on the minds of many panels and prospective parties, with the recent decision of the UK Supreme Court in Halliburton providing evidence as to the seriousness with which issues as to the independence and impartiality of arbitrations will be treated by domestic courts. Article 14 of the 2021 Rules emphasises that is imperative for arbitrators to remain “impartial and independent”, and, amongst other things, mandates that the tribunal complies with “The Code of Ethics for Arbitrators in Commercial Disputes” (the “Code”). Published by the American Arbitration Association, the Code includes ten ‘canons’ that detail the ethical standards to which members of arbitration panels are expected to comply.

Finally, the 2021 Rules include several ‘enforced’ changes, reflecting the way in which the international arbitration community has had to adopt its practices to meet the practical and procedural challenges posed by the pandemic. For example, Article 26 of the 2021 Rules provides that in certain circumstances (e.g. where the parties agree) the hearing itself, or a portion of it, “…may be held by video, audio, or other means…”. This is complemented by Article 32, which enables arbitral tribunals to electronically sign orders or awards (to the extent permitted by law). Whilst these amendments are unsurprising given the present circumstances, it is encouraging to see organisations such as the ICDR recognise the need to respond to the ‘new normal’ and highlights the relative ease with which arbitration institutions can respond to change. This inherent flexibility is one of the key features which distinguishes arbitration from litigation.

With the 2021 Rules now in full effect, we encourage practitioners and businesses alike to review the ICDR’s amendments and to consider the impact that they may have on disputes going forward. Overall, we think that the changes introduced by the ICDR should by welcomed by stakeholders, with the institution following in the footsteps of the LCIA and the ICC in addressing some of the most salient issues that the industry has faced over the past few years. With SIAC expected to introduce the latest revisions to its rules in Q3 of 2021, it will be interesting to see whether the common issues addressed by the LCIA, ICC and now the ICDR appear once again.