International Court of Arbitration under ICC Rules of Arbitration

The International Court of Arbitration is a branch of the International Chamber of Commerce (ICC) and one of the world’s leading institutions for providing international arbitration services. The International Court of Arbitration is known for resolving international commercial and business disputes, administering more than half of all arbitration disputes worldwide. ICC’s International Court of Arbitration was founded to resolve business conflicts among internationally trading companies and constitutes a leading centre in providing resolution services for commercial disputes. The court is widely renowned for its neutrality.

ICC Rules of Arbitration are used worldwide to resolve business disputes through arbitration. The current Rules are in force as from 1 January 2012.

They define and regulate the conduct of cases submitted to the International Court of Arbitration of ICC. In choosing to follow these rules, parties involved in international business transactions are assured of a neutral framework for the resolution of cross-border disputes.

Commonly known as the ICC Rules, the rules of arbitration govern the conduct of ICC arbitration proceedings from start to finish. They regulate the filing of claims, the constitution of arbitral tribunals, the conduct of proceedings, the rendering of decisions and the determination of costs

 The choice of ICC arbitration as the dispute resolution method should ideally be made when businesses and governments negotiate their contracts and treaties.

However, parties can enter into an arbitration agreement at any other time, such as after a dispute has arisen.

Standard arbitration clauses

ICC provides standard arbitration clauses, which may be used by parties without modification or modified as may be required by any applicable law or according to the parties’ preferences.

 Arbitration

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”

If the parties do not want the Emergency Arbitrator Provisions of 2012 (read about it below) Rules to apply, they must expressly opt out by using the following arbitration clause:

 Arbitration without emergency arbitrator

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The Emergency Arbitrator Provisions shall not apply.”

The parties may also stipulate in the arbitration clause:

  • the law governing the contract;
  • the number of arbitrators;
  • the place of arbitration; and/or
  • the language of the arbitration.

In principle, parties should also always ensure that the arbitration agreement is in writing and carefully and clearly drafted.

 Adaptation of the clauses to particular circumstances

The standard clause can be modified in order to:

  • Take account of the requirements of national laws and any other special requirements that the parties may have. In particular, parties should always check for any mandatory requirements at the place of arbitration and potential place(s) of enforcement.
  • Make special arrangements where the contract or transaction involves more than two parties
  • Combine several ICC dispute resolution services

Combined and multi-tiered dispute resolution clauses may help to facilitate dispute management and reduce time and costs.

Arbitration can be combined with:

  • Pre-arbitral referee procedure
  • Mediation
  • Expertise
  • Dispute Boards

and virtually any other form of ADR.

ICC Arbitration procedure

ICC Arbitration is conducted under the ICC Rules of Arbitration in effect on the date of commencement of the arbitration unless the parties have agreed to submit to the Rules in effect on the date of their arbitration agreement (Article 6 (1)).

Request for Arbitration (Article 4)

The “Request for Arbitration” is registered on the day it reaches one of the offices of the Secretariat of the International Court of Arbitration. “Requests” may be filed either with ICC Headquarters or with the Secretariat’s Hong Kong office.

The Secretary-General acknowledges receipt of the “Request” and indicates to the Claimant the names and contact details of the counsel and other members of the team in charge of the file.

The Answer (Article 5)

As soon as the “Request for Arbitration” is complete and the filing fees are paid, the counsel that has been assigned the case transmits the “Request” to the other party or parties, who must send the “Answer” (or Answers) to the “Request”, together with any counterclaims, within 30 days.

Pleas on Jurisdiction

 Where any party:

(i) does not file an answer,

(ii) raises one or more pleas concerning the existence, validity or scope of the arbitration agreement, or

(iii) questions whether all of the claims may be determined together in a single arbitration,

the arbitration will proceed and the arbitral tribunal shall decide such issue unless the Secretary General refers the matter to the Court for a decision (Articles 6(3) and 6(4)).

If the Secretary General refers the case to the Court, it will then decide whether and to what extent the arbitration shall proceed. Arbitration will proceed if and to the extent that the Court is prima facie satisfied that an arbitration agreement under the Rules may exist (Article 6(4)).

Emergency Arbitrator Provisions (Article 29)

 A party that needs urgent interim or conservatory measures and cannot await the constitution of an arbitral tribunal may apply for emergency relief in accordance with the Emergency Arbitrator Provisions. The application can be submitted at the same time, before or after the “Request for Arbitration”, but no emergency arbitrator shall be appointed after the file has been transmitted to the Arbitral Tribunal.

The Emergency Arbitrator Provisions do not apply if the relevant arbitration agreement was concluded before 1 January 2012, if the parties have opted out of the Emergency Arbitrator Provisions, or if the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures. Furthermore, the Emergency Arbitrator Provisions apply only to parties that are either signatory of the arbitration agreement.

Provisional advance

 After receipt of the “Request”, the Secretary General normally requests the claimant to pay a provisional advance intended to cover the costs of arbitration until the “Terms of Reference” have been drawn up.

The Claimant’s payment is then credited towards its share of the advance on costs.

The Court and Secretariat usually will not take any steps in the arbitration (such as, for example, towards setting up the arbitral tribunal) until the provisional advance has been paid.

Request for Joinder of additional party (Article 7), Claims between Multiple Parties (article 8) and Multiple Contracts (article 9)

 The Rules allow any party to arbitration to join any other party prior to the appointment of confirmation of any arbitrator. Requests for joinder of a party are similar to Requests for Arbitration (Article 7).

When a request for joinder is submitted, the additional party becomes a party to the arbitration and may raise pleas pursuant to Article 6(3) of the Rules. It is important to be aware of the timing for such joinder, as no additional party may be joined after the confirmation or appointment of an arbitrator unless the parties and the additional party agree otherwise.

Setting up the arbitral tribunal, fixing the advance on costs

Following receipt of the “Answer(s)” to the “Request” (or the expiration of the time-limit for its receipt), and the “Answer(s)” filed by any additional parties joined under Article 7, the Secretary General and/or the Court may need to take certain decisions to set up the arbitral tribunal.

For example, the Rules require that all arbitrators nominated by parties be confirmed by the Court or Secretary General (Articles 13 (1) and 13 (2)).

Furthermore, the Court may be required to appoint a tribunal president or sole arbitrator, or a co-arbitrator on behalf of a party that has failed to nominate one (Articles 13 (3) and 13 (4)). The Court may also need to fix the place of arbitration if the parties have not agreed on it (Article 18).

In some cases, the Secretary General may decide under Article 6 (3) of the Rules to refer a prima facie jurisdictional question to the Court, for it to consider whether an arbitration agreement under the Rules may exist, and between which parties (Article 6 (4)).

Advance on costs

Usually before transmitting the case file to the arbitral tribunal, the Court fixes the advance on costs in an amount likely to cover the fees and expenses of the arbitrators and the ICC administrative expenses. The Secretariat transmits the file to the Arbitral Tribunal provided the advance on costs requested at this stage (i.e. the provisional advance, mentioned above) has been paid. The Secretariat will usually invite the parties to pay the full advance on costs when it transmits the case file to the arbitral tribunal.

General role of the Secretariat and Court

During this early phase of the arbitration, the Secretariat closely monitors the case. It is always available to assist the parties with a range of preliminary issues that may come up. Sometimes the resolution of such issues will require input in the form of a decision from the Court. Sometimes the Secretariat is able to deal with the issue itself.

While maintaining strict neutrality, the Secretariat can always be contacted for any questions concerning the progress of a case, for example as to the status of setting up the arbitral tribunal.

Arbitral Proceedings

The Arbitral Tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner.

Language of the proceedings (Article 20)

 If not agreed by the parties, the Arbitral Tribunal determines the language or languages of the arbitration.

Conservatory measures (Article 28)

 The Rules provide that the Arbitral Tribunal can order interim or conservatory measures. This does not affect the parties’ rights, in appropriate circumstances, to apply to any competent judicial authority for such measures.

 Law applicable to the merits (Article 21)

 In the absence of an agreement between the parties as to the applicable rules of law, the Arbitral Tribunal applies the rules of law which it determines to be appropriate. In all cases, the Arbitral Tribunal takes account of the provisions of the contract and the relevant trade usages.

If the parties have agreed to give it such powers, the Arbitral Tribunal may act as amiable composite or decide ex aequo et bono.

Rules of procedure (Articles 19, 22, 25, 26)

 The parties and arbitrators are free to fix the rules of procedure, subject to any mandatory provisions that may be applicable. The parties may determine, for instance, whether and to what extent document production requests or cross-examination will be allowed. The Arbitral Tribunal proceeds within as short a time as possible to establish the facts of the case by all appropriate means. The parties have the right to be heard; the tribunal may also decide to hear witnesses and experts, and may summon any party to provide additional evidence.

Closing of the proceedings (Article 27)

 As soon as possible after the last hearing concerning matters to be decided in an award or the filing of the last authorized submissions, the arbitral tribunal will declare the proceedings closed with respect to the matters to be decided in the award and inform the Secretariat and the parties of the date by which it expects to submit its draft award to the Court.

Time limit for the final award (Article 30)

 The Court will, at the outset of a case, fix a time limit for the final award based upon the arbitral tribunal’s procedural timetable. If no such time limit specific to the procedural timetable is fixed, the time limit for the final award will initially default to six months from the date of approval or of the last signature of the terms of reference. The Court can extend the time limit for the final award.

Award and Award Scrutiny

Scrutiny is a distinctive feature of ICC arbitration. No arbitral award is issued until it has been approved by the Court.

 Submission of the draft Award and scrutiny

 After the closing of the proceedings, the Arbitral Tribunal will draw up a draft “Award” which is submitted to the Court for scrutiny. The Court will scrutinise all awards. In doing so, it may lay down modifications as to form and, without affecting the Arbitral Tribunal’s liberty of decision, draw its attention to points of substance. In scrutinising draft awards, the Court considers, to the extent practicable, the requirements of the mandatory law at the place of arbitration.

Notification of the Award

Once approved by the Court, the “Award” is signed by the arbitrators. It is deemed to be made at the place of the arbitration on the date it indicates. It is then notified to the parties by the Secretariat.

Introduction of Expedited Procedure

International Chamber of Commerce has with effect from 1st March 2017 amended its Rules of Arbitration and introduced an Expedited Procedure for lower-value claims.

The Expedited Procedure is automatically applicable where the arbitration agreement was concluded after 1st March 2017 and the amount in dispute does not exceed US$ 2 million, unless the parties expressly opt-out, or the Court considers it inappropriate in the circumstances of a case.

The Expedited Procedure may also be applied in higher value claims, or to arbitration agreements concluded prior to 1st March 2017, if the parties expressly opt-in to Expedited Procedure.

The key features of the new Expedited Procedure are as follows:

  1. The Court may appoint a sole arbitrator “notwithstanding any contrary provision of the arbitration agreement.”
  2. There will be no Terms of Reference, as is mandatory in normal course under the ICC Rules.
  3. A case management conference must be held within 15 days after the date on which the file is transmitted to the arbitral tribunal.
  4. The arbitral tribunal has been given discretion with respect to various procedural issues. For example, the tribunal may decide not to allow requests for document production or to limit the number, length and scope of written submissions and written witness evidence. Further, the tribunal may choose to decide the dispute solely on the basis of documents submitted by the parties, and if a hearing is required, conduct the same over video-conference, telephone or similar means of communication.
  5. The final award must be rendered within six months from the date of the case management conference.
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About maheshspeak

I write randomly on law, jurisprudence, polity, travel, food and anything else interesting. You can also visit my personal homepage at maheshsreenivasan.com
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