New International Chamber of Commerce Expedited Procedure
The International Chamber of Commerce (ICC) has approved a series of amendments to its 2012 Arbitration Rules, which will take effect as from 1 March 2017. By far the most significant of these amendments is the introduction of a new expedited procedure, which is designed to make arbitration cheaper and faster in lower value cases.
The new procedure will bring the ICC into line with other arbitral institutions, such as the Hong Kong International Arbitration Centre and the Singapore International Arbitration Centre. It should also help to deflect criticism that ICC arbitrations are prohibitively expensive for lower value disputes.
The expedited procedure will apply in cases where the value of the dispute does not exceed US$2 million or where the parties agree to follow it. It will not, however, apply where i) the arbitration agreement under which the arbitration is brought was concluded before 1 March 2017, i.e., the entry into force of the expedited procedure rules; ii) the parties have agreed to opt out; or iii) the ICC Court decides that an expedited procedure is inappropriate.
Where applicable, the expedited procedure rules provide for the following key changes compared with a non-expedited arbitration:
The Court may appoint a sole arbitrator even where the arbitration agreement provides for three arbitrators. This may in itself bring down the cost of arbitration significantly.
There will be no Terms of Reference, which are frequently a source of delay in ICC arbitrations.
The arbitral tribunal has the “discretion to adopt such procedural measures as it considers appropriate,” including i) dispensing with discovery; ii) limiting the number, length and scope of written submissions and/or written witness evidence; and iii) deciding the dispute on the basis of documents only, i.e., without a hearing. Where an arbitral tribunal decides to adopt such measures, the result will be a very significant reduction in the parties’ legal fees and disruption of management time.
The arbitral tribunal must render its final award within six months from the date of the case management conference, which itself must take place within 15 days of the transfer of the file to the arbitral tribunal. In non-expedited proceedings the final award must be rendered within six months from the date of the Terms of Reference, itself to be signed within two months from the transfer of the file to the arbitral tribunal. These time limits are all subject to extension by the Court.
The arbitral tribunal fees and the ICC’s administrative expenses will be calculated on the basis of a new scale, which should, on average, result in a forty per cent reduction as compared with the costs of a non-expedited arbitration.
The ICC has shown considerable courage in introducing expedited procedure rules in the face of concerns about the enforceability of awards rendered by a sole arbitrator where the parties have agreed to three arbitrators, and awards rendered on the basis of documents-only arbitrations.
It is to be hoped that the ICC will show similar courage in actually appointing sole arbitrators where the parties have agreed otherwise, and that those arbitrators will be brave enough to adopt the measures referred to above, particularly in deciding not to hold a hearing where one of the parties insists on having one.