New ICC Rules of Arbitration

In the opinion of Boyarkin & Partners, one of the most important legal developments of the year is the coming into effect of the new ICC Rules of Arbitration.

Beginning from 1 January 2012 new ICC Rules of Arbitration came into effect (the “ICC 2012 Rules of Arbitration”). ICC arbitrations commenced after 1 January 2012 shall be governed by the ICC 2012 Rules of Arbitration. However, the parties may still agree to submit their arbitration to the Rules in effect on the date of their arbitration agreement.

Egor Boyarkin
managing partner

Boyarkin & Partners
+7 495 228 48 47
e-mail: eboyarkin@bp-legal.com

The goal of this short write-up is not to provide a detailed overview and analysis of the new ICC 2012 Rules of Arbitration, but rather to summarise several new provisions/changes to the old provisions contained in the ICC 2012 Rules of Arbitration, which, in our opinion, are the most important from a practical point of view.

Proof of Authority

Pursuant to Article 17 of the ICC 2012 Rules of Arbitration, at any time after the commencement of the arbitration, the arbitral tribunal or the Secretariat may require proof of the authority of any party representatives. This is a completely new provision. No equivalent of such provision existed in the old ICC Rules of Arbitration.

In practice it means that the arbitral tribunal or the Secretariat at its own initiative or at the request of the other party (ies) participating in the arbitration may request any party to present a proof of authority of its representatives. This is to ensure that the representatives of the parties indeed have the authority to represent the parties in the arbitration and bring claims in order to avoid any potential challenges as to finality and binding nature of arbitral award on jurisdictional basis. This concerns both counsel to the parties and their officials who signed arbitration agreements or agreed to arbitration in the absence of an arbitration agreement.

Case Management Conferences

Under the ICC 2012 Arbitration Rules the arbitral tribunal may adopt such procedural measures as it considers appropriate to ensure effective case management and shall convene case management conferences to consult the parties on any such procedural measures (Articles 22, 23 and 24 of the ICC 2012 Arbitration Rules).

This is almost entirely new provision which is designed to ensure effective case management by the arbitral tribunal and overall effective conduct of the case. Some of the suggested case management strategies contained in Appendix IV to the ICC 2012 Arbitration Rules include: identifying issues that can be decided on the basis of documents alone, without a hearing; limiting document disclosure to those documents that are material to the case; and allowing the parties to continue settlement discussions.

Confidentiality of Proceedings

Pursuant to Article 22.3 of the ICC 2012 Arbitration Rules, upon the request of any party, the tribunal may make orders regarding the confidentiality of the proceedings and any other matters in connection with the arbitration, including taking measures to protect trade secrets and confidential information.

This new provision widens the powers of the arbitral tribunal with respect to ensuring confidentiality of the proceedings and the information disclosed during the arbitration. Under the old ICC Rules of Arbitration there was no express provision on the confidentiality of the proceedings, though the tribunal could take measures to protect trade secrets or confidential information.

Power to decide jurisdictional matters

While Article 6 of the ICC 2012 Arbitration Rules is largely based on the old ICC Rules of Arbitration, now the arbitral tribunal has received the powers to decide on such jurisdictional matters like:

(i) determination of jurisdiction in the event of a party’s failure to submit an answer, (ii) challenges to the existence, validity or scope of the arbitration agreement, and (iii) the consolidation of multiple arbitrations. Previously such issues were determined by the Court.

Emergency arbitrator

Article 29 of the ICC 2012 Arbitration Rules and Appendix V thereto provide that an emergency arbitrator may be appointed and grant interim or conservatory relief before the arbitral tribunal is constituted.

This is an entirely new concept incorporated in the ICC 2012 Arbitration Rules. No equivalent concept existed under the old ICC Rules of Arbitration. The practical purpose of this is provide an alternative to recourse to national courts for interim and conservatory measures before the Tribunal has been appointed.

It is important to note that the emergency arbitrator provisions do not apply if the arbitration agreement was concluded before 1 January 2012. This is in contrast to the general provision on the new ICC rules, which apply to all arbitrations proceedings commencing after 1 January 2011.The parties may also opt-out of the provisions, or agree to another pre-arbitral procedure that provides for interim measures.

Statement of Availability

Article 11.2 of the ICC 2012 Arbitration Rules requires that prospective arbitrators shall sign a statement of availability in order to avoid a potential conflict of obligations.

This is a new concept included in the ICC 2012 Arbitration Rules in order to promote effectiveness of the arbitration proceedings and increase responsibility of arbitrators.

Costs

The ICC 2012 Arbitration Rules incorporate two new concepts that are designed to ensure cost effective and expeditious conduct of arbitration proceedings.

Under Article 22.1 of the ICC 2012 Arbitration Rules the arbitral tribunal and the parties are required to make every effort to conduct the arbitration in an expeditious and cost-effective manner.

Under Article 37.5 of the ICC 2012 Arbitration Rules the tribunal is expressly authorised to take the parties conduct into account when making decisions about costs, including the extent to which they have conducted the arbitration expeditiously and cost effectively.

Although ICC awards have previously discussed parties' conduct in relation to costs, the ICC 2012 Arbitration Rules now contain an express rule that dilatory and wasteful tactics are a factor to be considered in allocating costs.

Conclusion

ICC 2012 Arbitration Rules contain a large number of provisions which were followed in practice but were not incorporated in 1998 ICC Rules of Arbitration, like joinder of parties, multiple contract arbitrations and multiple party arbitrations (not discussed in this brief write up). At the same time ICC 2012 Arbitration Rules introduced a good number of new concepts, like powers to decide jurisdictional matters, emergency arbitrators, the signing of statements of availability and adherence to cost effective and expeditious arbitration.

In essence introduction of the ICC 2012 Arbitration Rules is an attempt to make ICC arbitration and more authoritative and effective forum for alternative dispute resolutions.

Boyarkin & Partners

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