ICC STRIVES FOR GREATER TRANSPARENCY AND EFFICIENCY IN UPDATED PRACTICE NOTE TO PARTIES AND ARBITRAL TRIBUNALS ON THE CONDUCT OF ARBITRATION UNDER THE ICC RULES

On 20 December 2018, the International Court of Arbitration of the International Chamber of Commerce (ICC) published updated guidance on the conduct of arbitration under its arbitration rules. The Note to Parties and Arbitral Tribunals on the Conduct of Arbitration under the ICC Rules of Arbitration (Note) entered into force on 1 January 2019, and represents a continuation of the ICC's efforts to increase transparency and efficiency, and widen its range of services to users.  We consider six of the most significant updates to the Note below.

Disclosures by arbitrators and prospective arbitrators

The Note clarifies that disclosures regarding independence and impartiality by arbitrators should address the parties and their affiliates, and also non-parties having an interest in the outcome of the arbitration. The Note states that the Secretariat may assist arbitrators in preparing their disclosures by identifying a list of "relevant entities" at the outset of the arbitration.  Prospective arbitrators are expected to assess whether disclosures should be made in respect of non-parties (including any non-parties not identified by the Secretariat) and to consult the Secretariat when in doubt.  This renewed focus reflects the trend towards increased transparency in the arbitral process, at a time where several high-profile challenges to arbitrators – particularly in investment treaty arbitration – have drawn particular attention to the adequacy of disclosures by arbitrators.

Additional Secretariat assistance in the constitution of arbitral tribunals

The Note sets out two additional services which the Secretariat may provide in constituting the arbitral tribunal.

First, parties or co-arbitrators may jointly seek the Secretariat's assistance to propose a prospective sole arbitrator or presiding arbitrator, and to contact prospective arbitrators to obtain information on their experience, availability and possible conflicts of interest.

Second, parties may agree that the appointment procedure be made in consultation between the parties and the Secretariat.  For example, parties may agree that the default appointment of a sole arbitrator or presiding arbitrator may be made using a list procedure:  the Secretariat will provide the parties with a list of candidates, and the parties may eliminate prospective names and also rank them by order of preference.  These responses will then be considered before a default appointment is made.  This is a codification of a practice which is already commonly employed, but which will not be familiar to every party or counsel arbitrating under the ICC Rules.

Enhanced transparency during and after proceedings: publication of case data and awards

For arbitrations registered from 1 July 2019, the ICC Court will publish information relating to (a) the sector of industry involved and (b) counsel representing the parties in the arbitration.  This is in addition to the ICC Court's previous policy of publishing information relating to the composition of ICC tribunals and the status of the arbitration.

All ICC awards made from 1 January 2019 may be published no less than two years after their notification on an opt-out basis.  Parties may agree to a longer or shorter time period, or may at any time before publication object to publication or require that any award be redacted or anonymised wholly or in part.

Where certain aspects of the arbitration or the award are covered by a confidentiality agreement, publication will be subject to the parties' specific consent.  The Secretariat may also exempt an award from publication in certain sectors of industry or in sensitive cases.

Data Protection

A new section of the Note is devoted to compliance with the European Union General Data Protection Regulation (GDPR).  Parties, their representatives, arbitrators, the administrative secretary, witnesses, experts and any other individuals that may be involved in any capacity in the arbitration are deemed to accept that their personal data will be collected, transferred, archived and published by agreeing to participate in an ICC arbitration.

The duty falls upon the parties to ensure that their representatives, witnesses, experts and other individuals involved are aware and accept the use of their personal data, and that applicable data protection regulations, including the GDPR, are complied with.  Further, both the parties and arbitrators are required to ensure that secured means of collecting, communicating, and archiving data are used throughout the entire arbitration process and during the applicable retention period of such data.

Arbitral tribunals are required, at an appropriate time in the arbitration, to remind the parties and other participants in the arbitration that their data may be used, as well as of their right under the GDPR to seek the correction or suppression of their data.  To this end, the ICC Court encourages the parties and arbitral tribunals to include in the Terms of Reference a clause which sets out that the GDPR applies to the arbitration and that by participating in the arbitration, participants are deemed to accept that their personal data may be collected, transferred, published and archived.

Increased transparency and scrutiny for investor-state arbitrations

The ICC Court has introduced four practice points on transparency to cater to the growing number of investor-state arbitrations administered by the ICC.

• Prospective arbitrators are encouraged to disclose in their curriculum vitae a complete list of treaty-based cases in which they participated as arbitrator, expert or counsel.
• Parties may agree to apply the UNCITRAL Rules on Transparency in full or partially, and the Secretariat may act as repository of information published as a consequence.
• Awards may be published six months after their notification as opposed to the usual two years applicable for other awards, unless a party objects.
• The arbitral tribunal has the power under Article 25(3) of the Rules to hear amici curiae submissions upon consulting the parties.

Additionally, investor-state arbitration awards will undergo scrutiny by Vice-Presidents of the Court and Court members with specific investment arbitration experience.  The ICC will hope that these changes will continue to position ICC arbitration as a genuine alternative to the ICSID process for investor-state arbitration, at a time where – fairly or unfairly – arbitration under the ICSID Convention continues to attract more criticism than in its earlier years, particularly from State participants.

Clarity on duties of administrative secretaries

In its press release regarding the updated Note, the ICC Court refers to a perception that the previous version of the Note imposed an unduly restrictive approach to the tasks that may be entrusted to an administrative secretary.  It must be said, at the outset, that this is by no means a universal perception – and that far from considering the administrative secretary role as previously too restricted in its ambit, a number of ICC arbitrators do not employ administrative secretaries at all.

The revised Note provides some clarity by listing a number of organisational and administrative tasks which may be performed by an administrative secretary, upon the arbitral tribunal's instructions and under its strict and continuous supervision, including:

• transmitting documents and communications on behalf of the arbitral tribunal;
• organising and maintaining the arbitral tribunal's file and locating documents;
• organising hearings and meetings and liaising with the parties in that respect;
• drafting correspondence to the parties and sending it on behalf of the arbitral tribunal;
• preparing for the arbitral tribunal's review drafts of procedural orders as well as factual portions of an award, including the summary of the proceedings, the chronology of facts, and the summary of the parties' positions;
• attending hearings, meetings and deliberations, taking notes or minutes and keeping time;
• prepare written notes or memoranda;
• conducting legal research; and
• proof-reading and checking citations, dates and cross-references in procedural orders and awards, as well as correcting typographical, grammatical or calculation errors.

The arbitral tribunal will remain responsible for the administrative secretary's conduct during the arbitration.  The arbitral tribunal is not allowed to delegate its decision-making functions or any other essential duties of an arbitrator to an administrative secretary, nor is it released from its duty to personally review the file and/or draft any decision of the arbitral tribunal.

The ICC's clarification of what may be expected of an administrative secretary is helpful and to be welcomed, particularly in relation to the factual portions of an award (the procedural history of the case, recitation of the parties' case summaries from the Terms of Reference, and so on).  Those elements are uncontroversial, but can be time-consuming in their drafting.

Whilst an administrative secretary is not necessary or appropriate for every case, there are often real advantages to the tribunal and to the parties in such an appointment, particularly for sole arbitrator cases.  Time spent by the administrative secretary is usually time saved for the arbitral tribunal, and can ensure that the parties receive the Final Award in their hands sooner – and without any abdication of the tribunal's decision-making powers, nor any dilution of their engagement with the file.

The full ICC Note is available in English, Chinese, French, German, Portuguese and Spanish here.

For further information, please contact Craig Tevendale, Partner, Daniel Chua, Associate, or your usual Herbert Smith Freehills contact.