Global Vantage: International Chamber of Commerce publishes 2021 Arbitration Rules

The International Chamber of Commerce (“ICC”) has published new rules that will come into force on 1 January 2021 (“the 2021 Rules”). Aimed at increasing the efficiency, transparency and flexibility of ICC proceedings, the 2021 Rules introduce a series of key changes to the arbitral procedure of one of the world’s leading dispute resolution bodies.

The ICC’s announcement comes amidst a time of change within the international arbitration community, with the LCIA announcing its 2020 Arbitration and Mediation Rules earlier this year and the SIAC expected to release an update to its rule-set in the third quarter of 2021.

In 2019, the ICC celebrated registration of its 25,000th case, reflective of the institutions surge in popularity in recent years. Yet despite this growing success, the ICC Rules of Arbitration, which define the management of cases that are submitted to the ICC, last received substantial amendment in 2017. With Covid-19 changing the face of international arbitration almost overnight, it is encouraging to see the ICC recognise the need for amendments to reflect this ‘new normal’.

In light of the above, perhaps the most predictable changes delivered by the 2021 Rules are those which relate to technology. This includes the ability for the arbitral tribunal to determine that a hearing may be conducted remotely (Article 26(1) of the 2021 Rules). The exercise of this power is contingent upon the arbitral tribunal “…consulting with the parties, and on the basis of the relevant facts and circumstances of the case…” Comparable amendments, including the delivery of awards by electronic means, were introduced by LCIA in its updated rules published in October of this year. With restrictions on international travel in many countries set to continue into the new year, these amendments provide further evidence that changes adopted out of necessity as a result of Covid-19 are here to stay.

Another area that the LCIA and now the ICC have chosen to address in their latest rule-sets is the issue of complex arbitrations. Unlike the LCIA (which introduced the concept of ‘Composite Requests’ in its 2020 Rules), previous iterations of the ICC Arbitration Rules recognised the potential for the joinder of additional parties in arbitration proceedings. However, the 2021 Rules introduce a new Article 7(5), which expands this right so that even in the absence of the agreement of all parties (other than the additional party), an additional party may be joined to the proceedings after the confirmation or appointment of any arbitrator. Previously, joinder of additional parties was contingent upon the agreement of all parties. In addition, an amendment in Article 10(b) of the 2021 Rules clarifies that there can be consolidation of arbitrations where all of the claims in the arbitrations are made under the same arbitration agreement or agreements. Previously, it was unclear whether Article 10(b) of the ICC Arbitration Rules applied in circumstances where the same arbitration agreement was contained within different documents.

The 2021 Rules also devote substantial attention to addressing the impartiality and independence of the arbitration panel, and to providing greater transparency in the arbitration process. Amongst the changes in this respect is the requirement for parties to inform the Secretariat, tribunal and other parties of any changes in representation (Article 17(1) of the 2021 Rules), and the empowerment of the arbitral tribunal to “…take any measure necessary to avoid a conflict of interest arising from a change in party representation…” (Article 17(2) of the 2021 Rules). Further, parties are now required to disclose third-party funding arrangements (Article 11(7) of the 2021 Rules). In recent years, third-party funding has grown in popularity, with the types of finance available becoming increasingly sophisticated. It will be interesting to see whether the amendments to Article 11(7) of the 2021 Rules limit the availability of finance, as funders become wary of the need to avoid conflicts. In any event, with the international arbitration community still coming to terms with the UKSC’s judgment in Halliburton, these provisions could face significant scrutiny in the coming months.

Finally, the 2021 Rules widen the scope of the ICC’s ‘expedited arbitration’ procedure, which provides parties with a ‘streamlined’ arbitration process that adopts a reduced scale of fees. Under the expedited procedure, arbitrations are conducted on a ‘documents only’ basis, with a final award delivered within 6 months of the case management conference. Previously, the expedited procedure was only available in disputes involving sums under US $2,000,000 (or where the parties ‘opted-in’ to its use). However, the ICC, recognising that “[t]he expedited procedure…has proved its efficiency since it was introduced in 2017…”, has now expanded its remit to include disputes involving amounts of up to US $3,000,000 (Article 30 and Appendix VI of the 2021 Rules). Earlier this year, the CIC launched its low-value adjudication procedure, and with many businesses having their bottom-lines hit hard as a result of Covid-19, we expect that these types of ‘fast track’ dispute resolution mechanism could be very popular in the immediate future.

The ICC’s 2017 Arbitration Rules will continue to apply to cases that are registered prior to 1 January 2021. However, now is the time for practitioners and businesses alike to begin to familiarise themselves with the 2021 Rules and to consider whether ICC arbitration should be incorporated into dispute resolution clauses going forward. As we move into 2021, it will be interesting to see whether SIAC chooses to focus on areas such as complex arbitrations and the use of technology in its updated rule-set, following in the footsteps of the LCIA and the ICC.

You can access the 2021 Rules here.