arbitration under the icc 2021 rules of arbitration

ARBITRATION UNDER THE ICC 2021 RULES OF ARBITRATION

26 June 2021 | HKIARB

Ms Pui-Ki Emmanuelle Ta

0

OVERVIEW

26 June 2021 | HKIARB 1

PART I. THE ICC, THE INTERNATIONAL COURT OF

ARBITRATION & THE SECRETARIAT

PART II. THE COURT IN NUMBERS

PART III. THE NEW RULES OF ARBITRATION

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PART ONE:

THE ICC, THE INTERNATIONAL

COURT OF ARBITRATION &

THE SECRETARIAT


THE ICC


The International Chamber of Commerce – the World Business Organization

Created 1919 after WWI by a handful of entrepreneurs to

▶expand international trade

▶represent business all over the world

ICC’s mission today still is to promote international trade and investment as vehicles

for inclusive growth and prosperity

Active in a wide variety of fields:

▶Rule setting: Incoterms

▶Policy advocacy: representing business at the WTO, UN

▶Dispute Resolution: Arbitration / ADR

THE ICC INTERNATIONAL COURT OF ARBITRATION


Founded in 1923 To date: 26 000+ cases

Court sessions are in English, special sessions are held in other languages

Members of the Court are appointed for a renewable three-year term by the World Council of the ICC

Composition President of the Court: Alexis Mourre (until 30 June 2021) - Claudia Salomon as of 1 July 2021)

17 Vice-Presidents

177 members

Sessions Committee sessions Weekly (am/pm)

3 Court members

All type of decisions

Special sessions Twice a month

Open to all Court members

Challenges, majority awards, States

THE ICC INTERNATIONAL COURT OF ARBITRATION


International Court of Arbitration (HQ in

Paris)

Arbitral Tribunal

(any place in the world)

▶Does not settle itself disputes

▶Supervises the work of the Arbitral Tribunals and

administers the proceedings

▶Constitution of the Arbitral Tribunal

▶Controls time limits under the Rules

▶Scrutinizes awards

▶Fixes arbitrator’s fees and administrative expenses

▶Decision on the merits of the case

▶Management of the case in consultation with the

parties

▶Principles of rapid, diligent and contradictory

process

▶Drafts the terms of reference, renders procedural

orders

▶Drafts the award(s)

▶Decides on the allocation of costs among the parties

THE SECRETARIAT OF THE COURT


Secretary General

Deputy Secretary General

Managing Counsel

ICA 1

JPA

ICA 2

AZO

ICA 3

FS

ICA 4

SPN

ICA 5

ELU

ICA 6

PAR

ICA 7

HBH

ICA 8

PTA

ICA 9

PDP

ICA 10

PFF

ICA 11

HTG

ICA 12

MDY

TYPES OF COURT DECISIONS


› Prima facie jurisdiction (Article 6(4))

› Consolidation (Article 10)

› Fixing place of arbitration (Article 18)

› Appointment of arbitrators (Article 12, 13)

› Terms of Reference (Article 23)

› Fixing time limits

› Challenge/Resignation/Replacement

(Articles 14 and 15)

› Fixing / readjusting the advance on costs and

other financial (Articles 37)

› Advances on fees

› Scrutiny of Awards (final awards, partial

awards, awards by consent, addenda,

decisions, additional awards)

› Fixing the costs of the arbitration (Article 38)

› Special procedures (Expedited Arbitration,

Appointing Authority Rules)

• Names, description, contact details of parties and representatives23(a)

• Addresses for notifications and communications23(b)• Summary of claims / relief sought

• Quantified claims/ other monetary estimation23(c)

• List of issues to be determined23(d)

• Names and contact details of AT23(e)

• Place of arbitration23(f)• Applicable procedural rules

• Amiable compositeur / ex aequo et bono23(g)

ARTICLE 23: TERMS OF REFERENCE


Procedural history

Key submissions

Court decisions

Relevant dates

Constitution of AT

Description of process

Reference to alternative methods or subsequent agreements

Other

Arbitration agreement

Choice-of-law clause

Applicable version of Rules

Language /

state any decision

ADDITIONAL CONTENT


ICC FEATURE - TERMS OF REFERENCE


Article 34: Scrutiny of the Award by the Court

Before signing any award, the arbitral tribunal shall submit it in draft form to

the Court. The Court may lay down modifications as to the form of the award

and, without affecting the arbitral tribunal’s liberty of decision, may also draw

its attention to points of substance. No award shall be rendered by the arbitral

tribunal until it has been approved by the Court as to its form.

WHAT IS SCRUTINY?


TYPES OF AWARDS


Article 2(v) of the Rules

• “‘Award’ includes, inter alia, an interim, partial, final oradditional award.”

AdditionalAwards

• Resolve the claims which the Arbitral Tribunal omittedto decide in its partial or final awards

Final Awards• Resolve all of the issues submitted for resolution by the

Arbitral Tribunal and terminate the proceedings

Interim Awards• This term is generally used for Awards that do not

finally settle an issue

Partial Awards • Finally resolve some, but not all, of the issues

submitted for resolution by the Arbitral Tribunal

Awards by Consent

• Record the parties’ settlement and make the termsthereof subject to the New York Convention

SCRUTINY PROCESS


Draft sent to

Secretariat by

arbitral tribunal

First level review

by Counsel in charge

of case

Second level review

by Secretariat

management

Court

scrutinizes draft

Revised draft

based on

Court’s comments

Sends back

to tribunal

Secretariat notifies

award to the

parties

Tribunal signs

award, sends it to

Secretariat

Comments sent to

tribunal, revised

draft reviewed

ApprovesApproves, subject

to comments

AWARDS AND TIMELINESS (TRIBUNAL)


Generally, awards must be rendered within 6 months from the

establishment of the Terms of Reference or within any other time limit fixed

by the ICC Court.

Draft awards Expected within 2 months (SA) or 3 months (3-member ATs) fromlast substantive submissions or hearing

Arbitrator fees may be increased where the case has beenconducted expeditiously

Arbitrator fees may be decreased (5%-20%) where the draft awardis submitted with delay, such delay not being attributed to factorsbeyond the arbitrators’ control or other exceptional circumstances

AWARDS AND TIMELINESS (ICC)


Draft awards Upon receipt, Secretariat promptly informs parties

Drafts are scrutinised within 3-4 weeks

After scrutiny, Secretariat informs parties whether draft hasbeen approved or whether further scrutiny will be required

Where scrutiny is delayed for reasons not attributable toexceptional circumstances beyond the Court’s control, theICC administrative expenses are reduced up to 20%

WHAT IS VERIFIED

BY THE SECRETARIAT AND THE COURT?


award

REASONS

award enforceable

parties

jurisdiction

relief-claims

due process

numbers

interest & costs

dispositive

local rules or practice

ICC AWARD CHECKLIST


BENEFITS OF SCRUTINY


allows less experienced arbitrators take cases

uses knowledge of case

improves quality of award

uses ICC experience on validity and enforcement requirements

enhances validity and enforceability

OTHER FEATURES


ARRANGEMENT ON INTERIM MEASURES

❑ Arrangement concerning mutual assistance in court-ordered interim measures in

support of arbitral proceedings by the Courts of the Mainland and of the HKSAR:

➢ Signed on 2 April 2019

➢ Came into effect on 1 October 2019

➢ SPC interpretations on 26 September 2019

❑ Pursuant to the Arrangement:

➢ any party to arbitral proceedings in Hong Kong may apply to the competent Mainland

courts for interim measures in relation to said arbitral proceedings and in accordance

with the relevant laws and regulations of Mainland China.

➢ any party to arbitral proceedings in Mainland China may apply to the Hong Kong courts

for interim measures in relation to said arbitral proceedings and in accordance with the

relevant laws and regulations of the HKSAR.

26 May 2021Arrangement on interim measures between Hong Kong

and Mainland China

20

ARBITRAL PROCEEDINGS ELIGIBLE UNDER THE ARRANGEMENT

26 May 2021Arrangement on interim measures between Hong Kong

and Mainland China

21

Parties to an arbitration

Seated in Hong Kong

Administered by one of the approved

institutions, e.g. ICC Court Asia

Office


PART TWO:

STATISTICS


19,8%• Cases involving States or State entities

113• Cities as place of arbitration

2,81%• Seated in China/Hong Kong (20 cases)

62,8%• Cases exceeding US$ 2 million

149

• Emergency Arbitrator Applications (32 in 2020)

GENERAL STATISTICS (2020)


1 520• Arbitrators coming from 92 countries

2 507• Parties coming from 145 countries

137• Parties from Hong Kong

236• Parties from PR China

GENERAL STATISTICS (2020)


STATISTICS: AWARDS


415

508491

471 459498

479 512

599586

0

100

200

300

400

500

600

700

2009 2011 2012 2013 2014 2015 2016 2017 2018 2019

Trend in number of awards approved by year Number of Awards Approved in 2020 564

DELAYED DRAFT AWARDS (2016-2019) *EXCLUDING EPP CASES


45%(264 cases)

55%(322 cases)

Fees Reduced No reduction

586 ‘late’ draft final awards

out of 1,398

TIMELINESS OF SCRUTINY


1447 cases

6 cases

No delay slight delay

1453 draft final awards submitted to

scrutiny (2016-2019)

No delay in EPP


PART THREE:

THE 2021 RULES OF ARBITRATION


revision process at the proposal of the

Court

laid before the ICC Commission on

Arbitration & ADR

approved by the ICC Executive

Board

entry into force: 01.01.2021

2021 ARBITRATION RULES: PROCESS

ICC Arbitration Rules

Last version: 2017 Rules

New: 2021 Rules

Updates to the Note to Parties and Arbitral Tribunals

1922 1927 1955 1975 1988 1998 2012 2017 2021


• GENERAL EFFICIENCY

• COMPLEX ARBITRATIONS

• CONDUCT OF ARBITRATION

• TRANSPARENCY

2021 ARBITRATION RULES: WHAT’S NEW?


Increased use of Technology

Soft copy over paper (Articles 4 and 5)

Virtual / hybrid hearings

(Articles 25, 26 and 3 Appendix VI)

GENERAL EFFICIENCY


ARTICLE 4 AND 5: REQUEST FOR ARBITRATION AND ANSWER


Amendment of paragraph 4 of Article 4

4

Together with the Request, the claimant shall:

a) submit the number of copies thereof required by Article 3(1); and

b) a) make payment of the filing fee required by Appendix III (“Arbitration Costs and Fees”) in force on the date

the Request is submitted.; and

b) submit a sufficient number of copies of the Request for each other party, each arbitrator and the Secretariat where the

claimant requests transmission of the Request by delivery against receipt, registered post or courier.


3

The Answer shall be submitted toin a sufficient number of copies for each other party, each arbitrator and the Secretariat

inwhere the number of copies specifiedrespondent requests transmission thereof by Article 3(1).delivery against receipt,

registered post or courier.

ARTICLE 26: HEARINGS



A hearing shall be held if any of the parties so requests or, failing such a request, if the

arbitral tribunal on its own motion decides to hear the parties. When a hearing is to be

held, the arbitral tribunal, giving reasonable notice, shall summon the parties to appear

before it on the day and at the place fixed by it. The arbitral tribunal may decide, after

consulting the parties, and on the basis of the relevant facts and circumstances of the

case, that any hearing will be conducted by physical attendance or remotely by

videoconference, telephone or other appropriate means of communication.

Complex arbitrations

Joining additional parties after confirmation or appointment of an arbitrator (Article 7(5))

Consolidating pending cases to save time and costs (Article 10(b))

Appointing the full tribunal where agreement is unconscionable (Article 12(9))

COMPLEX ARBITRATIONS


ARTICLE 7 - JOINDER OF ADDITIONAL PARTIES


Amendment of paragraph 1

1) A party wishing to join an additional party to the arbitration shall submit its request for arbitration against the

additional party (the “Request for Joinder”) to the Secretariat. The date on which the Request for Joinder is

received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of arbitration

against the additional party. Any such joinder shall be subject to the provisions of Articles 6(3)–6(7) and 9. No

Unless all parties, including the additional party, otherwise agree, or as provided for in Article 7(5), no additional

party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the

additional party, otherwise agree. The Secretariat may fix a time limit for the submission of a Request for Joinder.

Addition of paragraph 5

5) Any Request for Joinder made after the confirmation or appointment of any arbitrator shall be decided by the

arbitral tribunal once constituted and shall be subject to the additional party accepting the constitution of the

arbitral tribunal and agreeing to the Terms of Reference, where applicable. In deciding on such a Request for

Joinder, the arbitral tribunal shall take into account all relevant circumstances, which may include whether the

arbitral tribunal has prima facie jurisdiction over the additional party, the timing of the Request for Joinder, possible

conflicts of interests and the impact of the joinder on the arbitral procedure. Any decision to join an additional party

is without prejudice to the arbitral tribunal’s decision as to its jurisdiction with respect to that party.

ARTICLE 10 - CONSOLIDATION OF ARBITRATIONS


The Court may, at the request of a party, consolidate two or more arbitrations pending under the Rules into a

single arbitration, where:

a) the parties have agreed to consolidation; or

b) all of the claims in the arbitrations are made under the same arbitration agreement or agreements; or

c) where the claims in the arbitrations are not made under more than one the same arbitration agreement or

agreements, but the arbitrations are between the same parties, the disputes in the arbitrations arise in

connection with the same legal relationship, and the Court finds the arbitration agreements to be compatible.

In deciding whether to consolidate, the Court may take into account any circumstances it considers to be relevant,

including whether one or more arbitrators have been confirmed or appointed in more than one of the arbitrations

and, if so, whether the same or different persons have been confirmed or appointed.

When arbitrations are consolidated, they shall be consolidated into the arbitration that commenced first, unless

otherwise agreed by all parties.

ARTICLE 12 - CONSTITUTION OF THE ARBITRAL TRIBUNAL



Notwithstanding any agreement by the parties on the method of constitution of the arbitral tribunal,

in exceptional circumstances the Court may appoint each member of the arbitral tribunal to avoid

a significant risk of unequal treatment and unfairness that may affect the validity of the award.

Efficient conduct of arbitration

Expedited arbitration for all cases up to USD 3 million

(Article 1(2) Appendix VI)

Emergency arbitrator application conditions eased

(Article 29.6.(c))

CONDUCT OF ARBITRATION


ARTICLE 1(2) OF APPENDIX VI: NEW THRESHOLD FOR EPP



The amount referred to in Article 30(2), subparagraph a), of the Rules is US$ 2,000,000. :

a) US$ 2,000,000 if the arbitration agreement under the Rules was concluded on or after 1

March 2017 and before 1 January 2021 or

b) US$ 3,000,000 if the arbitration agreement under the Rules was concluded on or after 1

January 2021.

ARTICLE 29: EMERGENCY ARBITRATOR


Amendment of paragraph 6 (c) of Article 29

The Emergency Arbitrator Provisions shall not apply if:

a) the arbitration agreement under the Rules was concluded before 1 January 2012;

b) the parties have agreed to opt out of the Emergency Arbitrator Provisions; or

c) the parties have agreed to another pre-arbitral procedure that provides for the

granting of conservatory, interim or similar measures.

c) the arbitration agreement upon which the application is based arises from a treaty.

Conduct of arbitration

Tribunal may exclude counsel

(Article 17)

Parties disclose funding arrangements

(Article 11(7))

Additional award

(Article 36(3))

Tribunal encourages parties to consider settlement/mediation

(Appendix IV, paragraph(h)(i))

2021 ARBITRATION RULES: WHAT’S NEW?


ARTICLE 17 PROOF OF AUTHORITY PARTY REPRESENTATION



1) Each party must promptly inform the Secretariat, the arbitral tribunal and the other parties of any changes in its

representation.


2) The arbitral tribunal may, once constituted and after it has afforded an opportunity to the parties to comment in

writing within a suitable period of time, take any measure necessary to avoid a conflict of interest of an arbitrator

arising from a change in party representation, including the exclusion of new party representatives from

participating in whole or in part in the arbitral proceedings.

ARTICLE 11 - GENERAL PROVISIONS



In order to assist prospective arbitrators and arbitrators in complying with their duties

under Articles 11(2) and 11(3), each party must promptly inform the Secretariat, the

arbitral tribunal and the other parties, of the existence and identity of any non-party

which has entered into an arrangement for the funding of claims or defences and

under which it has an economic interest in the outcome of the arbitration.

Addition of new paragraph 3

Any application of a party for an additional award as stated in Article 3(1) as to claims made in the arbitral

proceedings which the arbitral tribunal has omitted to decide must be made to the Secretariat within 30 days from

receipt of the award by such party.


After transmission of an application pursuant to Articles 36(2) or 36(3) to the arbitral tribunal, the latter shall grant

the other party or parties a short time limit, normally not exceeding 30 days, from the receipt of the application by

that party or parties, to submit any comments thereon. The arbitral tribunal shall submit its decision on the

application in draft form to the Court not later than 30 days from expiry of the time limit for the receipt of any

comments from the other party or parties or within such other period as the Court may decide. A decision to

correct or to interpret the award shall take the form of an addendum and shall constitute part of the award. A

decision to grant the application under paragraph 3 shall take the form of an additional award. The provisions of

Articles 32, 34 and 35 shall apply mutatis mutandis.

ARTICLE 36: CORRECTION AND INTERPRETATION OF THE

AWARD; ADDITIONAL AWARD; REMISSION OF AWARDS


APPENDIX IV: CASE MANAGEMENT TECHNIQUES


Amendment of paragraph h)

h) Settlement of disputes:

(i) Informing encouraging the parties that they are free to settle consider

settlement of all or part of the dispute either by negotiation or through any

form of amicable dispute resolution methods such as, for example,

mediation under the ICC Mediation Rules;

Transparency Court communicates reasons for decisions to parties(Appendix II, Article 5)

Court structure and organization reset (Appendix I and II)

Appointments and elections fully set out and regulated

TRANSPARENCY


Addition of Article 5: Communication of Reasons of Decisions

1 Upon request of any party, the Court will communicate the reasons for Articles 6(4), 10, 12(8), 12(9), 14 and

15(2).

2 Any request for the communications of reasons must be made in advance of the decision in respect of which

reasons are sought. For decisions pursuant to Article 15(2), a party shall address its request to the Court when

invited to comment pursuant to Article 15(3).

3 In exceptional circumstances, the Court may decide not to communicate the reasons for any of the above

decisions.

Article 5 of APPENDIX II: Communication of reasons of

decisions


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