The International Chamber of Commerce (ICC) has announced changes to its Rules of Arbitration (ICC Rules) which will come into force on 1 March 2017. The changes include the introduction of an expedited procedure for small claims, as well as general amendments designed to streamline non-expedited cases, and provide greater transparency to the arbitration process.
Expedited Cases
The introduction of an expedited procedure brings the ICC in line with other arbitral institutions such as the Hong Kong International Arbitration Centre and the Singapore International Arbitration Centre, and reflects the growing demand for faster and cheaper arbitrations.
Under the new ICC Rules the expedited procedure will only be available for claims for amounts not exceeding US$2 million, or where the parties have otherwise agreed in their arbitration agreement to use the expedited procedure. The expedited procedure will not be available where: (i) the arbitration agreement predates 1 March 2017 (the point at which the amendments come into force); (ii) the parties have opted-out of the expedited procedure in their arbitration agreement; or (iii) the ICC Court decides - either as a result of a motion from one party or of their own accord - that the expedited procedure is not appropriate for that particular case.
The principal differences of an expedited arbitration will be:
1.The Court will be able to appoint a sole arbitrator – even when the arbitration agreement specifies that more than one arbitrator should be used. The sole arbitrator must be appointed within an expedited time frame.
2.There will be no Terms of Reference.
3.Awards must be given within six months of the case management conference, which in turn must be held within 15 days of the Tribunal receiving the file. Extensions will only be granted in circumstances which are, according to the Court, "limited and justified". This is a reduction from the deadline for awards in non-expedited cases, where the award is due within six months of the Terms of Reference being agreed.
4.The Tribunal will have the discretion to adopt such procedural measures as it considers appropriate including the ability to decide that document production is not required or that written submissions should be limited in length.
5.The Tribunal may also decide that any merits hearing should be held by video conference or telephone or indeed that no hearing is required – and the Tribunal may decide to base its decision on the written submissions of the parties alone.
6.The fees for expedited procedures will also be calculated on a new scale, which is expected to result in reduced fees in comparison to non-expedited cases.
Further Amendments
The ICC has also announced a number of other changes to the ICC Rules, designed to bring them into line with ICC policy, set out in ICC practice notes adopted by the Court in October 2015. Accordingly, from 1 March 2017 the Court, upon request from one of the parties, will be able to provide reasons for its appointment of arbitrators without requiring permission from all the parties as well as its reasons for prima facie decisions on jurisdiction and decisions on consolidations of proceedings. The change has been heralded by the ICC Court as a new step in increasing the transparency and accountability of the Court. Further changes also include reducing the time limit for agreeing Terms of Reference to 30 days from when the Tribunal receives the case file (as opposed to two months).
Comment
The amendments to the ICC Rules to allow for an expedited procedure are a welcome change and demonstrate the ICC's willingness to adapt and develop in line with demand from the market. It will allow a greater number of lower value claims to be resolved quickly and cost-efficiently. It remains to be seen, however, how the ICC will approach more complex cases under the US$2m threshold and whether it will insist on the use of a sole arbitrator. The removal of the need for Terms of Reference in the expedited procedure is also expected to create considerable efficiency, given that this aspect of the ICC Rules can be time consuming and costly.
Regarding the ICC's more general changes, the reduction in the time permitted to establish Terms of Reference is a welcome development for the same reasons. It will also be helpful for users to gain further insight into the workings of the ICC Court through the reasons given on challenges, jurisdiction and consolidation decisions.
For more information, please contact Andrew Cannon, Partner, Rosalind Axbey, Associate or your usual Herbert Smith Freehills contact.
Andrew Cannon
Partner, Global Co-Head of International Arbitration and of Public International Law, London
Key contacts
Andrew Cannon
Partner, Global Co-Head of International Arbitration and of Public International Law, London
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