The 2021 ICC Arbitration Rules further improve the efficiency, flexibility and transparency of the arbitral process

The ICC is updating its 2017 Arbitration Rules, which will take effect on 1 January 2021 and will apply to cases registered as of that date (the “2021 Rules”).

The coronavirus pandemic and repeated lockdowns around the world have transformed the way international arbitrations are conducted today. The new changes to the ICC Arbitration Rules reflect those realities and, as noted by Alexis Mourre (the President of the ICC Court), further streamline the arbitration process to make it more efficient, flexible and transparent, for both large and small cases.

While the changes are generally limited in scope, they reflect the ICC’s desire to ensure that the ICC rules respond to the ever-changing business environment and meet the challenges of current times.

The key modifications are discussed below.

Electronic filing

The revised Article 3 now allows electronic filing of parties’ submissions and written communications. The aim is to substitute the requirement to provide submissions and communications in hard copy.

This change takes into account the reality of parties exchanging submissions and communications by electronic means and the upcoming introduction of the Secretariat’s online case management platform. This is also in line with the current situation caused by the COVID-19 crisis, where hard copy filings were physically impossible for some time, and the overall move towards “greener arbitration”.

As a practical consequence, electronic filings will simplify the process and save on the costs of physical filings. Nevertheless, the amendment does not prevent submission in paper form, where a party opts for it.

Joinder of additional parties 

A new paragraph, Article 7(5), allows the arbitral tribunal to join, at the request of any party, a consenting additional party to the arbitration, after the tribunal has been constituted. In the previous rules, no joinder was allowed after the confirmation or appointment of any arbitrator, unless all other parties agreed (Article 7(1) of the 2017 Rules), which was unlikely. Now, joinder with the consent of only one party and the party to be joined can be allowed by the arbitral tribunal if it is in the interests of efficiency. Any such joinder will be subject to the additional party having accepted the constitution of the arbitral tribunal (that has taken place before its joining) and agreeing to the Terms of Reference (if such has been already concluded).

In deciding on a request for joinder, the arbitral tribunal is required to take all relevant circumstances from jurisdictional to procedural factors into account, such as “whether the arbitral tribunal has prima facie jurisdiction over the additional party, the timing of the Request for Joinder, possible conflicts of interests and the impact of the joinder on the arbitral procedure”.

This promotes procedural efficiency and flexibility, particularly when the need for such a joinder arises or becomes apparent as the case unfolds. It includes, for example, situations when an additional party that was not a named claimant or respondent at the outset of the proceedings turns out to have a vested interest in the outcome of the dispute.

Changes are also made to clarify the provisions on consolidation of arbitrations that aim to further expand the arbitrators’ ability to consolidate multiple proceedings and join numerous parties to a single arbitration. Article 10(b) confirms that the consolidation of cases is possible under several agreements with the same arbitration clause, adding the plural “agreements” whereas the 2017 Rules contained only the singular form. Article 10(c) sets out more plainly that it concerns claims between the same parties but “not made under the same arbitration agreement or agreements”.

Third party funding disclosure and conflicts of interest 

The new Article 11(7) introduces novel disclosure requirements. Each party is now expressly obliged to disclose the “existence” and “identity” of any non-party to the case who has an economic interest in the outcome of the ICC case because of a funding arrangement. The aim of this provision is to assist the acting arbitrators and any future arbitrators in fulfilling their own disclosure duties and to ensure that conflicts of interest are avoided because of third-party funder involvement.

Another provision aimed at avoiding conflicts of interest is the new paragraph in Article 17(2). It grants the arbitral tribunal, once constituted, discretion to exclude new party representation where it causes a conflict of interest (this can result in the exclusion in whole or in part from participation in the arbitral proceedings). The parties should thus keep in mind that any change of counsel after the constitution of the tribunal will be subject to this scrutiny (and request their future legal representatives to conduct conflict checks before retaining them), if they were not already mindful of the impact such change could have on the independence of the tribunal. In practice, this will prevent meritless challenges against arbitrators on grounds which lie beyond their control and which could derail the proceedings.

Constitution of the arbitral tribunal

According to the new rule in Article 12(9), the ICC Court can appoint each member of the arbitral tribunal, regardless of party agreement on the constitution of the tribunal, if the application of the arbitration agreement would lead to a manifest risk of unequal treatment and could affect the validity of the award. Such situations may arise if the arbitration agreement grants unequal power to one of the parties to appoint a sole arbitrator or presiding arbitrator or the majority of the tribunal.

It further strengthens the general rule provided in Article 42, that the arbitral tribunal and the Court shall make every effort to ensure the award is enforceable at law. An unfair tribunal appointment process may risk the award being set aside. Given that party appointment of arbitrator(s) is a fundamental principle of arbitration, how the courts will interpret “exceptional circumstances” (of Article 12(9)) remains to be seen in the coming years.

Remote hearings

The revised Article 26(1) grants the arbitral tribunal the procedural authority to decide whether the hearing should be in-person or remote, and the manner in which a hearing may be conducted (via videoconference, telephone or other appropriate means of communication). Importantly, a remote hearing can be ordered by the arbitral tribunal irrespective of a party’s opposition, provided the parties have been consulted and all relevant circumstances have been considered by the tribunal. 

This amendment is timely in light of the current COVID-19 pandemic but also anticipates the need for efficient conduct of proceedings in a post-pandemic world.

Emergency arbitration 

Two modifications have been introduced with regard to the emergency arbitration procedure.

First, the new rules remove the requirement of the absence of any party agreement referring to another pre-arbitral process for granting interim or conservatory measures (Article 29(6)). While the requirement that the emergency arbitrator provisions could not apply if the parties had agreed to another pre-arbitral procedure made sense when the emergency procedure was introduced in 2012 – to avoid a conflict between the pre-2012 pre-arbitral referee procedure and the emergency arbitrator provisions – it is irrelevant now.

In addition, the new rules exclude the application of the emergency arbitration procedure in arbitrations arising from a treaty, which was already the ICC practice and has now been codified in the rules (Article 29(6)(c)).

Expedited rules

The threshold for the application of the expedited procedure has been increased from US$2 million to US$3 million. Introduced in 2017, the procedure enables the resolution of disputes in a short timeframe and at a reduced cost.

The amendment will apply to future cases, when the arbitration agreement was concluded as of 1 January 2021 (Article 30(2) and Annex VI, Article 1(2)(ii)). This change is based on three and a half years of experience of the expedited procedure (introduced in March 2017), that has justified this increase.

Investment arbitration 

In addition to above-mentioned modification that emergency arbitration is not available for treaty-based disputes due to its quick procedure (Article 29(6)(c)), the new rules introduce another amendment affecting treaty-based arbitration, which concerns the nationality of arbitrators. According to new Article 13(6)), no arbitrator shall have the same nationality as that of any party in investment cases based on treaty. The amendment recognises the unique nature of treaty arbitration and aims to ensure neutrality of the arbitral tribunal (and the perception of such neutrality).

Additional awards

A new provision of Article 36(3) allows an arbitral tribunal to make an additional award on claims that it omitted to decide in a first award. It is currently the ICC Court’s practice to admit additional awards where the law of the seat allows them. However, up to now parties had to initiate a new arbitration if the law of the seat was silent on this. This new rule ensures that the parties can seek an additional award without going through the difficulty of commencing new arbitration.

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Ahead of the entry into force of the 2021 Rules, the ICC will release an updated version of its Note to Parties and Arbitral Tribunals on the Conduct of Arbitration, last amended in January 2019.

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In addition to the new ICC rules, the ICC Court will also have a new President as of 1 July 2021. Ms Claudia T. Salomon has been formally recommended for election as President of the ICC International Court of Arbitration, subject to formal election by the ICC Executive Board. If elected, she will become the first female president of the Court in its 100-year history.