The International Chamber of Commerce ("ICC") has come up with new set of Arbitration Rules 2021 ("ICC Rules 2021") which will come in effect from 01st January, 2021. As compared to the earlier Arbitration Rules of 2017 ("ICC Rules 2017"), it seems that ICC Rules 2021 is not a complete revamp of the procedural rules for conducting arbitration. Rather, it preserves a substantial portion of the ICC Rules 2017 while introducing provisions that indicate towards ensuring more efficient adjudication of disputes. The ICC Rules 2021 lays more emphasis on adopting fair procedure and have further broadened the horizon for multi-party arbitration. It has also made an attempt to crystallize certain provisions with an idea of keeping up with the growing reliance on electronic communication as well as to make arbitration proceedings more convenient for the participants, especially owing to global restrictions in place due to the ongoing pandemic.
A. Joinder of Parties Post-Constitution of Arbitral Tribunal
A new provision has been added to Article 7 in the ICC Rules 2021 that provides for adding further parties to the arbitration even after the arbitral tribunal is constituted, which was missing in the ICC Rules 2017. The new Article 7(5) of the ICC Rules 2021 empowers an arbitral tribunal to decide on any request made by a party for adding further parties to the arbitration. The request so made is subject to the additional party agreeing on the constitution of the tribunal and the Terms of Reference. The arbitral tribunal, while deciding on such a request, will have to consider various factors outlined in the provision which includes the prima facie assessment of the jurisdiction of the arbitral tribunal over the proposed additional party, possible conflict of interests, timing of the request made and impact on the arbitration proceedings of the joinder of the additional party.
B. Consolidation of Arbitration Proceedings
Article 10 of both ICC Rules 2017 and ICC Rules 2021 provide for consolidation of two or more arbitration proceedings pending between the same or different parties under the Rules. It further provides for various factors to be taken by the International Court of Arbitration ("Court") to decide on the consolidation of the arbitration proceedings, as inter alia provided under Article 10(a) to 10(c) of both the rules.
In the ICC Rules 2021, Article 10 has expanded the factors to be considered for consolidation of the arbitration agreements. Particularly, the ground under Article 10(b) has undergone a change and has expanded the scope of consolidation. It provides for consolidation in situations where the claims have arisen out of "same agreement or agreements", thereby, recognizing mirror arbitration agreements. Article 10(c) further clarifies that where the claims made are not under the same arbitration agreement or agreements but the arbitration is between the same parties, then the Court is required to consider other factors such as whether arbitration agreements are compatible or not and whether the arbitration proceedings have arisen out of the same legal relationship between the parties or not.
C. Mandatory Reporting of Third-Party Funding
Article 11 of the ICC Rules 2021 comes with an additional provision i.e. Article 11(7), which imposes a duty on the parties to the Arbitration to immediately inform about a non-party who is funding the claims or defences in the proceedings (third party funder) and has a vested interest in the outcome of the arbitration proceedings. Such information is to be provided immediately on its existence, to the Arbitral Tribunal, Secretariat of the Court ("Secretariat") and the other parties to the arbitration proceedings. Such a provision has been added in order to ensure well-informed disclosures of impartiality, which is required to be done by the proposed appointed arbitrators in accordance with Article 11(2) and 11(3) of the ICC Rules 2021 and to rule out any conflict of interest issues.
D. Powers of the ICC Court to Appoint Arbitrators
Article 12 of both the Rules provide for a procedure for constitution of an arbitral tribunal consisting of either a sole arbitrator or three arbitrators. Article 12(9) of the ICC Rules 2021 another additional provisional in relation to the constitution of the arbitral tribunal has been inserted, which is absent in the ICC Rules 2017. Now, Article 12(9) empowers the Court to have a discretion in appointing each member of the arbitral tribunal in exceptional circumstances of avoiding the significant risk of "unequal treatment" and "unfairness" that may affect the validity of the award. Such a power of the Court is notwithstanding any agreement between the parties in regard to the constitution of the arbitral tribunal.
E. Procedure Related to Change in Party Representative
The ICC Rules 2021 has witnessed a complete change in Article 17 as compared to the provision under ICC Rules 2017, which is in relation to the change in the representation of parties during the pendency of the arbitration proceedings. The new Article 17 has got a new title as "Party Representation" which mandates for a party to promptly inform the arbitral tribunal about the change in its representation. It also empowers the arbitral tribunal to take any measure to avoid conflict of interest arising out such change in representation and such measures include the power to restrict the new representative from participating in part or whole of the arbitration proceedings. This might be considered as an intrusion on the party autonomy and the right to choose its counsel, however, it is a way devised by the ICC to counter the tactical counsel appointments usually done at a belated stage in a proceeding.
F. Mode of Hearing through Electronic Means
In addition to the physical hearings, the Article 26(1) of the ICC Rules 2021 has provided for the arbitral tribunal to opt for conducting arbitration hearings via videoconference, telephone or any other mode of communication. Such decision will be depending upon the facts and circumstances of the case and upon the consultation with the parties to the arbitration. Earlier under the ICC Rules 2017, the mode of videoconference and telephonic communications had its relevance only limited to conducting case management conferences under Article 24 and expedited arbitration proceedings under Article 30. Now, under the ICC Rules 2021, the aforesaid modes have been further recognized, to conduct regular arbitration hearings as well.
G. Provision for Additional Award
Under Article 36 of the ICC Rules 2021, a provision has been added for filing an application by a party to the Secretariat, for an additional award on the aspects that were raised and were omitted by the arbitral tribunal while deciding on the matter. Article 36(3) of the ICC Rules 2021 provides for filing the aforesaid application after the award has been rendered and duly communicated to the parties in accordance with Article 35(1). Article 36(3) further provides for a procedure timeline to be adhered to while deciding the application for an additional award with respect to omitted claims. Earlier under ICC Rules 2017, Article 36 was only limited to correcting any computational, typographical, clerical or any other similar types of error in the award rendered by the arbitral tribunal. This will further enhance the enforceability of ICC arbitral awards.
H. Addition of New Article 43
ICC Rules 2021 have come with an additional Article 43, which was not there in the ICC Rules 2017. Article 43 of ICC Rules 2021 provides for adjudication of claims arising out of the administration of arbitral proceedings. Such claims, according to Article 43, shall be governed by the French Law and will be settled by the Paris Judicial Tribunal of France.
I. Facilitating Investment Arbitration
The ICC Rules 2021 have inserted two new provisions to improve transparency and procedural fairness with respect to treaty-based arbitrations. Article 13(6) has been added in the new ICC Rules 2021 to disallow the appointment of an arbitrator having the same nationality to that of any of the party, in a situation where the arbitration proceedings are arising out of a treaty.
Another provision that has undergone change is Article 29(6)(c) which now excludes the applicability of the Emergency Arbitration Provisions where the arbitration proceedings arises out of a treaty.
J. Threshold for Expedited Procedure
Under the ICC Rules 2017, the Expedited Rules that are outlined in Appendix VI were applicable to only such cases where the disputed amount does not cross over US$ 2,000,000/-. Under the new ICC Rules 2021, such limit has been increased from US$ 2,000,000/- to US$ 3,000,000/- increasing the number of cases to be dealt expeditiously on a default basis.
- Under both the Rules (ICC Rules 2017 & ICC Rules 2021), the President of the ICC Court or anyone else authorized on his behalf, has the power to take urgent decisions on behalf of the Court and such a decision is required to be reported to the Court under Article 1(3). The distinction under ICC Rules 2021 is that it mandates the reporting of such decision to the Court at one of its next session. Under the ICC Rules 2017 however, the reporting could be done in any of the upcoming sessions of the Court. Similar change can be found in the reporting mandate with respect to the following situations:
- Reporting to the Court of a decision taken by the committee appointed by the Court under Article 1(4) of the ICC Rules 2021.
- Reporting to the Court of the confirmation made by the Secretary General with respect to the impartiality of arbitrators, as provided under Article 13(2) of ICC Rules 2021.
- Under Article 5 of the ICC Rules 2017, the respondent was required to respond to the request for arbitration "within 30 days from the receipt" of the request, whereas, under the ICC Rules 2021, the same time period has been changed to "within 30 days from the following day of the receipt of the request", thereby adding one more day to the time mandate.
- Both the Rules provide for the appointment of an Emergency Arbitrator under Article 29, in cases where parties are in need of urgent measures that cannot await the constitution of the arbitral tribunal. Article 29(1) to 29(4) of both the Rules forms part of the Emergency Arbitrator Provisions. Under Article 29(6) ICC Rules 2021, the conditions for applicability of the Emergency Arbitrator Provisions has undergone a change as compared to the earlier Article 29(6) of ICC Rules 2017. Particularly, Article 29(6)(c) is the replaced provision which provides for a different ground for the inapplicability of the Emergency Arbitrator Provisions, as compared to the earlier Article 29(6)(c) of ICC Rules 2017. Article 29(6)(c) states that the Emergency Arbitrator Provisions shall not apply to cases where the arbitration agreement arises out of a treaty. Earlier, Article 29(6)(c) provided for the ground for inapplicability where the parties had agreed to a different pre-arbitral procedure.
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