September 03, 2014 Practice Points

AAA Unveils Enhanced International Arbitration Rules

By P. Jean Baker

The International Centre for Dispute Resolution (ICDR) of the American Arbitration Association (AAA) recently issued revisions to its International Dispute Resolution Procedures (Including Mediation and Arbitration Rules), effective June 1, 2014. This is the first time the AAA’s international rules have been substantially refreshed since 1996.

Significant changes effected by the revisions include the following:

1. International expedited procedures (Articles 1(4) and E-1 to E-10): These new procedures provide for the appointment of a sole arbitrator and apply in any case where no disclosed claim or counterclaim exceeds US$250,000 exclusive of interest and the costs of arbitration, unless the parties agree or the ICDR determines otherwise. Parties may also agree to use these expedited procedures in other cases. These provisions are unique because other arbitral institutions do not include expedited procedures in their rules.

2. Mediation (Article 5): The new rules state that, following the time for submission of an answer, the ICDR may invite the parties to mediate, and the parties may thereafter agree to mediation at any stage of the proceedings. Unless the parties agree otherwise, any mediation shall proceed concurrently with the arbitration, and the mediator shall not be an arbitrator appointed to the case. Other arbitral institutions do not include such a provision in their rules.

3. Joinder (Article 7): A party may join an additional party by submitting a notice of arbitration against the additional party. No additional party may be joined after the appointment of any arbitrator, unless all parties, including the additional party, otherwise agree.

4. Consolidation (Article 8): A party may request the administrator to appoint a consolidation arbitrator, who will have the power to consolidate two or more arbitrations pending under the rules or under other arbitration rules administered by the AAA or ICDR. The appointment of a consolidation arbitrator is unique to the ICDR.

5. Default arbitrator selection method (Article 12(6)): The old rules provided for the ICDR to appoint arbitrators in the event the parties cannot agree on either the designation or the selection process. In lieu of direct appointment by the ICDR, parties typically agreed to use the list method of selection described in the AAA’s Commercial Arbitration Rules, but not in the old ICDR rules. The enhanced rules now explain that, in the absence of party agreement on the method of appointment, the ICDR will send to each party a list of arbitrator candidates and, failing agreement, the parties have 15 days to strike names and number the remaining names in order of preference. The ICDR will then invite an arbitrator to serve from among the persons who have been approved on the parties’ lists and in accordance with the designated order of mutual preference.

6. Impartiality, independence, and disclosure of potential conflicts (Article 13): Prospective arbitrators are required under the new rules to sign a notice of appointment affirming their independence, impartiality, and availability and to disclose any circumstances that could give rise to justifiable doubts as to their independence or impartiality.

7. Conduct of party representatives (Article 16): The ICDR is in the process of finalizing its review of guidelines regarding the conduct of party representatives. The new rules in anticipation of issuance of guidelines provide that the conduct of party representatives shall be in accordance with such guidelines as the ICDR may issue on the subject.

8. Exchange of information (Article 21): Among other streamlining provisions, the revised rules mandate that the tribunal manage information exchange among the parties with a view toward maintaining efficiency and economy.

9. Express exclusion of U.S. litigation procedures (Article 21(10)): Depositions, interrogatories, and requests to admit are generally not appropriate procedures for obtaining information in an arbitration under the new rules.

10. Time of the award (Article 30): Unless otherwise agreed by the parties, specified by law, or determined by the ICDR, the final award shall be made no later than 60 days from the date of the close of the hearing.

Keywords: litigation, ADR, American Arbitration Association, International Centre for Dispute Resolution, International Dispute Resolution Procedures, expedited procedures, joinder, default arbitrator

P. Jean Baker is with the American Arbitration Association in Washington, D.C.


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