New ICC Arbitration Rules and Guidelines

The International Chamber of Commerce has adopted amendments to its Rules of Arbitration, along with a new, consolidated version of its Note to Parties and Arbitral Tribunals.

These Rules and guidelines are obviously important for international arbitration, but they may provide useful guidance on good practice for ad hoc and administered arbitrations in Canada as well.

The amended ICC Rules came into force on March 1, 2017.

The most significant changes relate to the Expedited Procedure Rules (Article 30 and Appendix VI) which will now be the default rules for claims under USD 2 million, and may also be used for larger claims by agreement of the parties.

Among the notable features of the Expedited Procedure:

• The dispute will be heard by a single arbitrator, even if the parties have agreed to otherwise in an arbitration agreement.

• After consulting the parties, the tribunal may decide the dispute on the basis of documents and written evidence, with no oral hearing or examination of witnesses.

• If a hearing is held, the tribunal may conduct it by videoconference, telephone or similar means.

• The deadline for rendering an award is 6 months, starting from the date of the initial case management conference (which is to be held within 15 days of the tribunal receiving the file).

• The arbitrator’s fees are roughly 20% lower than the usual ICC fee range. The ICC administrative fees are the same.

The ICC has recognized that delays in receiving awards is a problem in international arbitration. Section 25 of the Note to Parties and Arbitral Tribunals says:

Arbitrators have a duty to devote to the arbitration the time necessary to conduct the proceedings as diligently, efficiently and expeditiously as possible. Accordingly, prospective arbitrators must indicate in the Statement the number of arbitrations in which they are currently acting, specifying whether they are acting as president, sole arbitrator, co-arbitrator or counsel to a party, as well as any other commitments and their availability over the next 24 months.

And the Note includes (in Article VIII) the potential for higher fees for arbitrators when draft awards are delivered early and the threat of reduced fees when they are delivered late. We can also expect the court to be more active in ensuring that arbitrators are accountable for delays in hearing and deciding cases.

The Note also includes new guidance on the conduct of all participants in arbitrations (Article IV).

It requires arbitrators, parties and their representatives to follow “the highest standards of integrity and honesty, and to conduct themselves with honor, courtesy and professionalism.” It encourages witnesses, experts and other participants to do the same. The Note expressly encourages parties and tribunals to adopt the IBA Guidelines on Party Representation in International Arbitration, where appropriate.

The Note specifically prohibits ex parte contacts between an arbitrator and a party, with limited exceptions.

• A prospective arbitrator may communicate with a party or party representative on an ex parte basis to determine his or her expertise, experience, skills, availability, acceptance and the existence of potential conflicts of interest.

• To the extent that the parties so agree, arbitrators may also communicate with parties or party representatives on an ex parte basis for the purpose of the selection of the president of the arbitral tribunal.

• In all such ex parte communications, an arbitrator or prospective arbitrator shall refrain from expressing any views on the substance of the dispute.

Alexis Mourre, President of the ICC Court, is quoted on the ICC web page announcing the new Rules and Note, saying:

“By introducing ethical principles and endorsing the IBA Guidelines on Party Representation, the Court aims at ensuring that the highest standards of honesty and professional conduct are abided with by all participants in the arbitration. It is of fundamental importance that the legitimacy of the arbitral process be protected at all times, and the ICC initiative establishes with clarity the parties’ duty to cooperate in good faith and to behave with integrity for the sake of the fair and efficient resolution of disputes submitted to our rules.”

Some other existing Rules are also worth noting.

Arbitrators must provide full disclosure of any circumstances that might call their independence and impartiality into question (Article III).

These include, but aren’t limited to situations where the arbitrator (or prospective arbitrator) or his or her law firm:

• represents or advises, or has represented or advised, one of the parties or one of its affiliates.
• acts or has acted against one of the parties or one of its affiliates.
• has a business relationship with one of the parties or one of its affiliates, or a personal interest of any nature in the outcome of the dispute.
• acts or has acted on behalf of one of the parties or one of its affiliates as director, board member, officer, or otherwise.
• is or has been involved in the dispute, or has expressed a view on the dispute in a manner that might affect his or her impartiality.
• The arbitrator or prospective arbitrator has a professional or close personal relationship with counsel to one of the parties or the counsel’s law firm.

They also include situations where the arbitrator or prospective arbitrator:

• acts or has acted as arbitrator in a case involving one of the parties or one of its affiliates.
• acts or has acted as arbitrator in a related case.
• has in the past been appointed as arbitrator by one of the parties or one of its affiliates, or by counsel to one of the parties or the counsel’s law firm.

These are ongoing obligations, and the arbitrator must declare any new information which comes to light during the course of the arbitration. Any doubt must be resolved in favour or disclosure.

As the Note makes clear:

A disclosure does not imply the existence of a conflict. On the contrary, arbitrators who make disclosures consider themselves to be impartial and independent, notwithstanding the disclosed facts, or else they would decline to serve. In the event of an objection or a challenge, it is for the Court to assess whether the matter disclosed is an impediment to service as arbitrator. Although failure to disclose is not in itself a ground for disqualification, it will however be considered by the Court in assessing whether an objection to confirmation or a challenge is well founded. (section 19)

Some of these rules are not new, but they reflect the principles of full disclosure which applies in international arbitration. We would do well to pay attention to the continuing evolution of these guidelines and apply them where appropriate to Canadian arbitration rules and procedures.