Member News

Houthoff | Arbitration: The 2021 ICC Rules

On 1 December 2020, the International Court of Arbitration of the International Chamber of Commerce (”ICC”) officially launched its revised Rules of Arbitration, which will enter into force in January 2021. This News Update provides a brief overview of the key changes made in these new rules.

Strengthening the integrity of ICC arbitrations

The 2021 ICC Rules aim to improve the integrity of the proceedings. Article 11(7), for example, introduces a requirement for the parties to disclose the existence and identity of a third-party funder. This is no surprise since the ICC already recommended in its 2019 Note to Parties and Arbitral Tribunals that arbitrators should consider ”relationships with any entities having a direct economic interest in the dispute.” This Note will also be updated to include further guidance on the application of this new provision.

The 2021 ICC Rules further incorporate various modifications concerning party representation:

  • As a response to the growing demand from practitioners, Article 17(1) now requires each party to promptly inform the tribunal and other parties in the arbitration of any changes in its representation.
  • Article 17(2) empowers the tribunal to take any measures necessary to avoid an arbitrator’s potential conflict of interest following a change in party representation, for example by excluding a new party representative

Increasing technology use in ICC arbitrations

The shift towards the increased use of technology in ICC arbitration is evidenced by the new Articles 4 and 5, which include a presumption in favour of electronic copies of the Request for Arbitration and Answer, respectively. It is no longer necessary to provide hard copies of these communications, unless the submitting party expressly requests them to be delivered by registered post or courier. Furthermore, the revised Article 26(1) now expressly confirms that tribunals may, after proper consultation with the parties involved, decide to hold remote hearings.

Consolidating multiple arbitrations and joinder of additional parties

The 2021 ICC Rules expand the scope for consolidating multiple arbitrations. Under Article 10, the Court may, after a party’s request, consolidate two or more ICC arbitrations. This is possible even where different parties are involved, provided that the claims in the different ICC arbitrations are made under the same arbitration agreement or agreements. If this is not the case, consolidation is also possible, provided that the arbitrations are between the same parties, the disputes arise in connection with the same legal relationship and the Court finds the different arbitration agreements to be compatible.

In Article 7(5), the 2021 ICC Rules now allow the joinder of additional parties even after the confirmation or appointment of any arbitrator, and without the agreement of all arbitrating parties. Such agreement was previously required under the 2017 ICC Rules.

Investment arbitration

The 2021 ICC Rules introduce, for the first time, two provisions that specially relate to treaty-based investment arbitrations:

  • Article 13(6) prevents arbitrators from having the same nationality as any party to the arbitration, which will enhance the neutrality of the arbitral tribunal; and
  • Article 29(6)(c) reflects established practice that emergency arbitration is not available in investor-state disputes.

Expedited proceedings

The 2021 ICC Rules increase the threshold from USD 2 million to USD 3 million for the provisions on expedited proceedings to take precedence over any contrary terms of the arbitration agreement (Article 30). This new threshold will apply to arbitration agreements concluded on or after 1 January 2021.

Conclusion

These changes should enhance the overall flexibility, efficiency and transparency of ICC arbitrations, without altering the character of the Rules. In light of the above, we believe that practitioners will appreciate the new provisions in the 2021 ICC Rules.

Contacts:

  • Dirk Knottenbelt, Advocaat/Partner | HOUTHOFF
  • Glenn Hoek, Advocaat/Counsel | HOUTHOFF
  • Caroline Deves, Foreign Associate | HOUTHOFF
  • Alejandro Gonzalez, Advocaat/Associate | HOUTHOFF

Compliments of Houthoff – a member of the EACCNY.