The ICDR is the international division of the American Arbitration Association (AAA), and its rules and procedures are specifically designed to provide parties, arbitrators, and mediators with a complete framework for resolution of a cross-border dispute. Within the structure of the ICDR Rules, international parties and neutrals maintain broad autonomy to control their own processes. The time-tested framework of the ICDR Rules provides immense value to a wide variety of users in many different fields, and ICDR arbitration awards are enforced in jurisdictions around the world.
As time progresses, formal rules and processes are worthy of critical examination and corresponding revision. Prior to the COVID-19 pandemic, the ICDR drafting committee had already begun the process of revising the ICDR Rules. International arbitration experts from around the world and AAA-ICDR management and administrative teams worked in conjunction for over a year to thoughtfully craft the new ICDR Rules as a reflection of the current changes and best practices in international arbitration. Amid that process, the COVID-19 pandemic brought dramatic changes to every corner of life and industry, making the release of the 2021 ICDR Rules well timed to address these recent developments in the context of dispute resolution.
The ICDR Rules offer a total package for dispute resolution: International Mediation Rules, International Arbitration Rules, and International Expedited Procedures. All three of these components underwent revisions in 2021, and this article discusses some of the important highlights from each.
International Mediation Rules
The 2021 International Mediation Rules contain updated, explicit references to the parties’ option to conduct all or part of the mediation via video, audio, or other electronic means. Cybersecurity is also brought to the forefront, requiring that privacy and data protection be addressed by the mediator and the parties at the outset of the process.
Rule M-14 details the parties’ option to request that the mediator or the ICDR issue an attestation to assist in the enforcement of a settlement agreement under the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention) or other applicable law. Citing the Singapore Convention informs users about the potential ability for a settlement agreement reached through mediation to be enforced directly in contracting states, guarding against the need for additional litigation in the event a settlement agreement is eventually breached.
Article 6 of the new International Arbitration Rules now provides for presumptive mediation under the International Mediation Rules, with the option for any party to opt out. Changing the language in the rules from a suggestion of mediation to a presumption further promotes mediation as a process to be seriously considered by parties as a way to cut costs and facilitate amicable, efficient resolution of a dispute.
International Arbitration Rules
The International Arbitration Rules likewise contain an updated provision allowing for the use of video, audio, or other electronic means during the proceedings. Article 22 requires that the tribunal discuss cybersecurity, privacy, and data protection with the parties during the first procedural hearing at the beginning of the arbitration process, in order to establish an appropriate level of security and compliance for the arbitration proceeding.
Efficiency and economy are salient themes throughout the revisions to the ICDR Rules, offering clear guidance for the tribunal and parties to flesh out the issues of the case in a systematic manner. Article 23 outlines the process for a party to request leave from the arbitral tribunal to request early disposition of any issue presented by any claim or counterclaim in advance of the hearing on the merits. Article 39 authorizes the tribunal to make a separate award for recovery in favor of the party or parties advancing costs of the arbitration.
The arbitrator’s authority to determine arbitral jurisdiction, consolidation, and joinder are all emphasized in the 2021 revisions. Article 21 fosters the concept that the tribunal has the authority to determine arbitrability objections. Under certain circumstances, Article 8 permits joinder of additional parties after constitution of the tribunal, and Article 9 permits consolidation of cases with related parties into a single arbitration. Another unique mechanism appears under Article 7, which, although not new to the 2021 rules, gives parties the option to request the appointment of an emergency arbitrator to decide an application for relief on an emergency basis, before the main tribunal is appointed.
Tribunal secretaries are expressly referenced in Article 17, which provides that a secretary may be appointed with the consent of the parties and will serve in accordance with ICDR guidelines. Article 14 addresses third-party funding, providing that the tribunal may require the parties to disclose the identity of any nonparty that is paying costs in the arbitration or has an economic interest in the outcome of the arbitration. Use of tribunal secretaries and third-party funders is common practice in international arbitration, and by addressing their presence, the 2021 rules help to safeguard against potential conflicts of interest that may arise and could eventually jeopardize the validity of an arbitration award.
Administrative decision-making is highlighted in Article 5, which defines the International Administrative Review Council as the determining authority for administrative issues, including challenges to the appointment or continuing service of an arbitrator, disputes regarding the number of arbitrators to be appointed, or determining whether a party has met the administrative requirements to initiate or file an arbitration, contained in Article 2.
Article 40 strikes a balance between protecting parties’ confidentiality and promoting transparency via the publication of awards, stating that the ICDR may publish redacted awards, orders, decisions, and rulings unless a party has objected in writing to publication within six months from the date of the award.
International Expedited Procedures
The new International Expedited Procedures apply in any case in which no disclosed claim or counterclaim exceeds US$500,000 exclusive of interest and costs. The parties may also mutually agree to apply the expedited procedures in cases of any claim amount.
Under Article 1(4), it is presumed that in cases in which no claim or counterclaim exceeds US$100,000, the dispute will be resolved by written submissions only, due within 60 days of the arbitrator’s first procedural order.
Parties to cases under the expedited procedures are to present detailed submissions at the outset of the process, the parties’ arbitrator selection lists must be returned within 10 days of transmittal, the arbitrator must issue a procedural order within 14 days of appointment, oral hearings must be held within 60 days of the procedural order, and the award is due within 30 days from the closing of the hearings. Although the delineated timelines may be extended by agreement of the parties, if followed, the expedited procedures offer parties a 135-day total time cycle from initiation of the case to issuance of the award.
How Can I Use the New ICDR Rules?
Parties can provide for arbitration and mediation of future disputes by inserting clauses into their contracts. The introduction section of the 2021 ICDR Rules contains sample language and also offers a link to additional clause-drafting guidance at www.clausebuilder.org.
If parties want to use the new ICDR Rules to resolve an existing dispute where they are not parties to a contract providing for the use of the ICDR Rules, they may enter into a submission agreement and voluntarily submit the dispute for resolution under the ICDR Rules.
Conclusion
Disputes, much like the many changes of life, are ongoing and inevitable. As environments change, so must the rules and procedures under which we operate. The March 1, 2021, amendments to the International Dispute Resolution Procedures are the capstone of a comprehensive discourse concerning best practices and innovation in international dispute resolution. The ICDR Rules balance party autonomy with neutral authority, while transparently outlining the entire process so that parties know what to expect when involved in an international dispute. Additional information on the ICDR’s rules is available here.
