In an effort to streamline arbitration proceedings where possible, the International Court of Arbitration of the International Chamber of Commerce (“ICC”) announced on November 4, 2016 that it would issue new Expedited Procedure Rules, effective March 1, 2017, which will comprise the new Appendix VI of its Rules of Arbitration (“ICC Arb. R.”). The ICC also announced that it will amend ICC Arb. R. Article 30, which is its current rule governing expedited procedures, as well as Appendix III, which contains the schedules of administrative expenses and arbitrator fees.
When effective, the new Expedited Procedure Rules (“EPRs”) will apply automatically if the amount in dispute does not exceed US$2,000,000 (App. VI, Art. 1(2)), although the ICC Court of Arbitration will have discretion, after consultation with the arbitral tribunal and the parties, to decide that the rules ought not apply to a particular case (id., Art. 1(4); and ICC Arb. R. 30(3)(c)). The EPRs also will not apply if the parties’ arbitration agreement came into effect before March 1, 2017, or if the parties expressly agreed to opt out of the Expedited Procedure Rules. (ICC Arb. R. Art. 30.)
Other key provisions of the EPRs are:
- The Court of Arbitration, rather than the parties, may appoint a sole arbitrator, notwithstanding any contrary provision in the arbitration agreement. (App. VI, Art. 2(1).)
- The arbitral panel will not formulate Terms of Reference. (Id., Art. 3(1).) (Under ICC Arb. R. 23, the arbitral tribunal normally draws up Terms of Reference, based on the parties’ submissions, to be signed by the parties. Among other things, the Terms of Reference summarize the parties’ claims and the issues to be determined.)
- The case management conference must be held no later than 15 days after the date the case file was transmitted to the arbitral tribunal. (App. VI, Art. 3(3).)
- The arbitral tribunal may adopt streamlining procedural measures after consulting with the parties, including prohibiting requests for document production and limiting the number, length and scope of written submissions and written witness statements. (Id., Art. 3(4).)
- The arbitral tribunal may, after consulting with the parties, decide the dispute based solely on written submissions and exhibits, with no oral hearing and no witness examinations. (Id., Art. 3(5).)
- The arbitral tribunal must render its final award within six months of the date of the case management conference, although the Court of Arbitration may extend the deadline pursuant to a reasoned request from the arbitral tribunal or on its own initiative. (Id., Art. 4(1); and ICC Arb. R. 31(2).)
- The levels of arbitrator fees are significantly reduced. (App. IV, Art. 4(2); see also App. III, setting forth standard and expedited fee scales.)
- The parties may, by agreement, (a) opt out of these rules in smaller cases, or (b) adopt these rules in larger cases, consistent with the flexibility that motivates many parties to choose arbitration.
To its credit, the ICC has adopted a set of rules that appear to be better suited to the arbitration of smaller cases, although they create an overall procedure that is more familiar to civil law lawyers than common law lawyers. Nevertheless, these rules are consistent with the ICC’s stated goal of increasing the efficiency of arbitrating such smaller cases and of commercial arbitration in general.
Parties should be aware, however, that these new EPRs can supersede the express terms of their arbitration agreements. ICC Arb. R. Art. 30(1) expressly provides that the EPRs take precedence over contrary terms of the agreement. Thus, by agreeing to arbitrate under ICC rules, the parties agree that the EPRs shall trump any contrary terms in their arbitration agreement. For example, arbitration agreements often require three arbitrators instead of one, and they sometimes describe the permitted methods and scope of discovery. Such provisions become mere statements of preference with no binding effect, if the parties adopted the ICC Arb. R. and their arbitrable dispute involves a claim of US$2,000,000 or less.
We note also that the ICC has taken steps to make its other arbitration proceedings more efficient. These include (i) reducing the time limit for the arbitral tribunal to establish Terms of Reference from two months to one month (ICC Arb. R. 23(2)); and (ii) incentivizing arbitral tribunals to issue their awards within three months (or two months in the case of a sole arbitrator) of the closing of the record, or otherwise risk being penalized by a reduction of arbitrator fees (ICC Policy Announcement, dated January 5, 2016).