On October 6, 2020, the International Chamber of Commerce (ICC) released an updated version of its Arbitration Rules that will come into force on January 1, 2021 (“2021 Rules”)[1], replacing the 2017 version. The new Rules are still subject to changes before their definitive publication in an official launch event scheduled for December this year.
The 2021 Rules are not substantially different from their former version. Compared to the major changes previously introduced in the 2012 and 2017 Rules, which triggered a significant change in institutional arbitral practice worldwide, the changes in the 2021 Rules are relatively minor and are intended to recognize current practice or to clarify the interpretation of the provisions
The purpose of the update is to increase the efficiency, flexibility and transparency of the rules, which now address even some recent developments in international arbitration, including virtual hearings, the growing trend of third-party funding and the facilitation of large-scale multi-party arbitrations.
For the parties and professionals, the main changes in the 2021 Rules involve the possibility of including new parties during the course of the arbitration proceedings (Article 7(5)), as well as the consolidation of procedures that have different parties (Article 10(b)).
A change intended to bring more transparency to the procedure is the one introduced with the new Article 11.7 of the 2021 Rules, which establishes that each party must promptly inform the ICC Secretariat, the Arbitral Tribunal and other parties of the existence and identity of any third 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 (Article 11(7)).
In the same sense, the 2021 Rules now have a provision that allows the ICC Court to disregard the arbitration agreement with respect to the method for appointing arbitrators and constituting an Arbitral Tribunal, if it believes that the mechanism chosen represents a significant risk to the equal and fair treatment of the parties, which may lead to the invalidity of the arbitral award (Article 12(9)).
In addition, Arbitral Tribunals are now expressly authorized to take any measure necessary to avoid a conflict of interest of an arbitrator arising from a change in the legal representation of the parties, including up to the exclusion of new representatives from the arbitration proceeding (Article 17(2)).
Two new provisions specifically applying to investment treaty arbitrations were introduced by the 2021 Rules. The first of them provides that no arbitrator shall be of the same nationality as any of the parties, in order to ensure the total neutrality of the court in cases involving public interest (Article 13(6)). The second confirms the unavailability of emergency arbitration for disputes between investor-State disputes (Article 29(6)(c)).
Another important addition is the discretionary power attributed to the Arbitral Tribunal to decide if any necessary hearing will be held in person or virtually (Article 26(1)).
The 2021 Rules now also expressly allow for an additional arbitration award to be issued in respect of requests made in the proceedings by the parties that the Arbitral Tribunal has failed to decide upon. It is for the party to request an additional award within 30 days of receipt of the original award (Article 36(3)).
Finally, in view of the success of the expedited procedures, the limit for the automatic application of these rules was increased from US$ 2 million to US$ 3 million (Article 30 and Annex VI (1)(2)).
The other changes relate mainly to the internal functioning of the Court itself, the appointment of the president, and the formation, constitution, quorum and decision-making of committees.
Prior to the entry into force of the 2021 Rules, CCI will release an updated version of its Guide to Parties and Arbitration Courts on Conduct in Arbitration, which was last updated in January 2019.
[1] Available in: https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/rules-of-arbitration-2021/, access on 09 October 2020.
Coauthors: Anna-Katharina Scheffer da Silveira and Luiza de Sousa Braz
