The International Chamber of Commerce (“ICC”) has revised its arbitration rules with the aim to further increase the efficiency and transparency of ICC arbitrations. The revised rules will enter into force on 1 March 2017. The key changes are described herein.

Introduction

ICC is the world’s leading arbitration institute, illustrated by its 966 new cases in 2016 involving parties from 137 states. Last autumn ICC approved a revision of its 2012 arbitration rules, which will enter into force on 1 March 2017. The revised rules will apply to arbitration proceedings that commence after 1 March 2017, irrespective of the date of the arbitration agreement or when the contract containing the arbitration clause in question was concluded, ref. art. 6 (1) of the revised rules.

As further described below, the key changes are as follows:

• New provisions for expedited proceedings,
• Reduction of the time limit for issuing the Terms of Reference,
• Allowing ICC to disclose to parties its reasons for decisions on appointment, confirmation, challenge or replacement of arbitrators,
• The procedural timetable and the Terms of Reference no longer need to be finalised before the tribunal can proceed to address the claims and counterclaims for which costs have been advanced

In addition to a detailed presentation of the new provisions for expedited proceedings and a presentation of these other key changes, the amended cost scales that became effective on 1 January 2017 will be presented.

As several leading arbitration institutions have revised its rules since last summer, this might be a good opportunity to revisit your default company’s arbitration clauses. We would be more than happy to assist and discuss this with you. Contact person is Mikal Brøndmo.

New provisions for expedited proceedings

The most pivotal change in the revised ICC rules is the new provisions for expedited proceedings in a new art. 30 and a new appendix VI with its Expedited Procedure Rules. By introducing expedited procedure, the ICC has followed a number of other leading institutions that have introduced expedited procedures. Pursuant to art. 30 (2) a) and appendix VI art. 1 (2), the Expedited Procedure Rules shall apply if the amount in dispute does not exceed USD 2 million. According to ICC art. 30 (2) b), the parties may also agree that the Expedited Procedure Rules shall apply if the amount in dispute exceeds USD 2 million.

However, the Expedited Procedure Rules shall not apply if the arbitration agreement was concluded before 1 March 2017, ref. art. 30 (3) a), or if the parties have agreed to opt out of the Expedited Procedure Rules, ref. art. 30 (3) b), or if the Court so determines, ref. art. 30 (3) c). Consequently, the parties should give particular attention to the drafting of ICC clauses in agreements concluded after 1 March 2017, and consider whether or not to expressly opt out of the Expedited Procedure Rules.

Pursuant to appendix VI art. 2 (1), the Court may appoint a sole arbitrator even if the parties have agreed otherwise in their arbitration agreement. Based on information given from the ICC, we have reason to believe that the Court will normally do so when the Expedited Procedure Rules apply. Outside the scope of the Expedited Procedure Rules, the parties’ agreement prevails, ref. art. 11 (6). Thus, this constitutes an important change.

The Terms of Reference is a distinctive feature of ICC arbitration. However, pursuant to appendix VI art. 3 (1), art. 23 regarding the Terms of Reference, shall not apply for expedited proceedings.

In order to ensure efficiency, the tribunal has broad discretion to adopt procedural measures it considers appropriate, ref. appendix VI art. 3 (4). It explicitly mentions that the tribunal may, after consultation with the parties, decide to limit the number, length and scope of written submissions or witness evidence. Furthermore, new claims cannot be made after the arbitral tribunal has been constituted, unless it has been authorized to do so by the arbitral tribunal, ref. art. 3 (2). And the case management conference shall normally take place within 15 days after the date on which the file was transmitted to the arbitral tribunal, ref. art. 3 (3). Finally, the tribunal may decide the dispute solely on the basis of documents, ref. art. 3 (5).

The time limit for rendering the final award is within six months from the date of the case management conference, ref. art. 4 (1), which allows for extension of time from the Court. In accordance with art. 4 (2), the fees of the arbitral tribunal shall be fixed according to a separate scale for the expedite procedure set out in appendix III, where ICC’s administrative expenses are maintained while the arbitrators’ fee range is reduced by 20 %.

Reduction of the time limit for issuing the Terms of Reference

The time limit for issuing the Terms of Reference is reduced from two months to 30 days from when the file was transmitted to the tribunal, ref. art. 23 (2). The Terms of Reference provides a framework for the arbitration by summarizing the merits of the dispute and setting out the arbitration’s procedural parameters in one document.

Allowing ICC to disclose to parties its reasons for decisions on appointment, confirmation, challenge or replacement of arbitrators

In order to increase transparency, the revised art. 11 (4) does no longer prevent the Court from communicating the reasons for its decisions as to appointment, confirmation, challenge or replacement of an arbitrator. According to ICC’s press release regarding the changes, it was underlined that any party will now be in a position to ask the ICC Court to provide reasons for its decisions.

The Terms of Reference and the procedural timetable no longer need to be finalised before the tribunal can proceed to address the claims and counterclaims for which costs have been advanced

Furthermore, appendix III art. 1 (3) has been revised to enhance efficiency. In the revised 2017-rules, the Terms of Reference no longer need to be signed and approved by the Court and the procedural timetable no longer need to be established, before the tribunal can proceed to address the claims and counterclaims for which costs have been advanced.

The amended cost scales became effective on 1 January 2017

In addition to the above described changes to the ICC rules, we would like to  call your attention to certain amendments to the  cost scales which came into effect on 1 January 2017. Pursuant to appendix III art. 4 (1), the amended cost scales will be applicable to arbitration proceedings commenced on or after 1 January 2017, irrespective of the version of the Rules applying to such arbitrations.

The key amendments to the cost scale relates to filing fees and administration expenses. With regard to the filing fee, this has been increased from USD 3,000 to USD 5,000. As for the administrative expenses, changes have been made to the percentages applicable to the lower and the top tranches of the amount in dispute. For disputes with a disputed amount below USD 200,000, the percentages have been reduced, while the percentages have increased for disputes in the range of USD 200,000 and USD 2,000,000, and for disputes with a disputed amount above of USD 500 million. The maximum amount for administrative expenses has been raised to USD 150,000.

No changes have been made to the scale of arbitrator’s fees.

As mentioned above, proceedings conducted under ICC’s new Expedited Procedure Rules will be subject to separate cost scales set forth in Appendix III of the ICC Arbitration Rules which will enter into force on 1 March 2017.