Effective March 1, 2017, the International Chamber of Commerce (“ICC”) has amended its Arbitration Rules (“Rules”) and “Note to Parties and Arbitral Tribunals on the Conduct of Arbitration.”

The new Rules will apply to arbitration agreements concluded on or after March 1, 2017, unless parties expressly opt-in to have the new Rules apply to their arbitration.

What’s included in the new Rules?

Included in the new Rules are various measures to enhance the efficiency and transparency of the ICC arbitration proceedings. The most notable change is the adoption of the so-called “expedited proceedings,” which apply on a mandatory basis to smaller cases, and are designed to speed up the proceeding (the “Expedited Procedures”).

Why the change?

Although many arbitration institutions and practitioners have emphasized speed as one of the main advantages of resolving a dispute through arbitration (owing to the fact that arbitral awards are generally not subject to further appeal on the merits), there has been continued criticism that procedures unique to arbitration are delaying the process unnecessarily, such as the make-up of the arbitral tribunal, and the need to agree on procedures among the parties and the tribunal (e.g., the Terms of Reference in ICC arbitrations). In particular, in cases where the disputed amount is relatively small, such procedural delays were criticized as imposing an undue burden on the parties’ legal costs.

In response, the ICC has adopted the Expedited Procedures with a view to promoting a speedier and more efficient proceeding.

Notable details of the Expedited Procedures under the Rules:

1) Scope of application

• Expedited Procedures automatically apply to cases where the disputed amount is USD 2 million or less.

• Expedited Procedures can apply upon agreement of the parties for cases, where the disputed amount exceeds USD 2 million.

2) Towards a more efficient process

• Under the normal ICC proceedings, parties are required to agree on the Terms of Reference regarding procedural matters that govern the conduct of the arbitration, and the issues at dispute in the arbitration to be reviewed by the tribunal. Such Terms (as agreed to by the parties) are issued by the tribunal in the form of an order. Although the process is considered to have been effective in promoting a more orderly and smoother proceeding for the tribunal, there has been criticism that it also unnecessarily delays the proceedings. In the new Expedited Procedures, it is possible to conduct the arbitration without the Terms of Reference process.

• In the Expedited Procedures, a dispute will be heard by a sole arbitrator appointed by the ICC court, even if the parties already agreed to have three arbitrators in an arbitration agreement.

• In Expedited Procedures, it is possible for the arbitral tribunal to issue an award solely based on written submissions of the parties (i.e., without holding a hearing or conducting witness examinations).

3) Arbitration costs

• Arbitrator fees for Expedited Procedures have been set around 20% lower than the fees for normal ICC arbitration proceedings. This allows parties to conduct arbitration at reasonable costs for cases with lower amounts in dispute.

Expected impact:

The ICC is the arbitral institution which administers the largest numbers of cases worldwide. Adoption of the Expedited Procedures by the ICC is expected to have significant impact on other arbitral institutions, which have yet to amend their arbitration rules.