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June 02, 2017 Practice Points

New ICC Arbitration Rules Could Tempt Parties Away from the LCIA and Other Institutions

By Harriet Chopra

The International Chamber of Commerce (ICC) has long been regarded as one of the foremost arbitration venues for the resolution of high value, complex international disputes. But its reputation for being expensive and sometimes overly bureaucratic has led to the perception that other arbitral bodies, such as the London Court of International Arbitration (LCIA) and the Hong Kong International Arbitration Centre (HKIAC), are more appropriate for the resolution of lower value disputes. It was therefore somewhat surprising when, in 2015, the LCIA published statistics showing that, for claims where the value in dispute was less than U.S. $1 million, the costs of a LCIA arbitration were comparable with those of an ICC arbitration.

In an effort to combat this perception, the ICC introduced a new set of Rules on 1 March 2017 including an Expedited Procedure, which will apply automatically to all claims where the amount in dispute does not exceed U.S. $2 million, unless the parties have specifically opted out of the procedure.

The Expedited Procedure is contained in Article 30 and Appendix VI of the new Rules and provides that:

  • The Court may appoint a sole arbitrator, even where the contract provides for a three (or more) arbitrator Tribunal
  • There will be no need for the usual Terms of Reference
  • The Case Management Conference must take place no later than 15 days after the date on which the file is transmitted to the Tribunal
  • The Tribunal will have discretion to limit the number, length and scope of written submissions and witness evidence and make such other procedural directions as it considers appropriate (for example, it may decide that disclosure/discovery is not required at all)
  • The Tribunal may decide the dispute solely on the basis of documents submitted by the parties and without a hearing or examination of witnesses
  • Alternatively, the Tribunal may decide that any hearings, including the final hearing, ought to be conducted by telephone or video conference
  • Perhaps most importantly, the Tribunal must render its final award within six months of the date of the CMC

Finally, fees will be calculated using a new scale, which it is anticipated will lead to significantly reduced costs when compared to non-expedited cases.

The length of time it can take to obtain an award has long been a source of frustration for parties and practitioners alike; the requirement for Tribunals to commit to a schedule for delivery of their final award is therefore likely to be extremely appealing. Currently, there is no similar requirement within the LCIA Rules, for example, and information published by the LCIA in 2015 suggested that the median duration of an arbitration conducted by a sole arbitrator under its rules was 15 months. Under the new ICC Rules, it is theoretically possible, depending on the nature of the dispute of course, to obtain an award within 12 months or less. Consequently, some parties who have traditionally incorporated LCIA Rules into their contracts may now wish to consider the benefits of adopting the new ICC Rules instead. 

Conversely, parties whose contracts already provide for ICC arbitration may now wish to consider whether to expressly opt out of the new Expedited Procedure, which will otherwise apply to all claims of $2m or less. Opting out might be appropriate where, for example, the monetary value of a contractual claim may be small but the wider implications for the parties could be significant.

It will be interesting to see how quickly other institutions follow suit by introducing similar expedited procedures and in particular time limits for the provision of an award.

Harriet Chopra is an associate at Michelmores LLP in London, England.

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