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Introduction of Revised 2021 ICC Arbitration Rules


Approximately four years since the International Chamber of Commerce (the “ICC”) introduced its 2017 ICC Rules of Arbitration (the “2017 ICC Rules”), the ICC has introduced a new amendment.  The new ICC Rules of Arbitration (the “2021 ICC Rules”) will enter into force on January 1, 2021 and will apply to cases commenced after January 1, 2021.  The revisions mostly clarify ambiguities in interpretation of the rules and reflect new trends in arbitration.  We briefly introduce below the amendments in relation to COVID-19 and other notable amendments which would be helpful when proceeding with arbitration under the 2021 ICC Rules. 

1.   Amendments Reflecting New Trends of Arbitration Practice

(1)   Virtual Hearings and Electronic Submissions

The 2021 ICC Rules were revised to reflect new trends in arbitration as a result of the COVID-19 pandemic.  The basis for hearings by virtual means were prepared in line with the ICC’s Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic.  Specifically, Article 26 (1) of the 2021 ICC Rules provides that an arbitral tribunal may, after consultation with the parties, decide to hold hearings by virtual means, including videoconference and other appropriate means of communications (Article 26 (1) of the 2021 ICC Rules).

Further, unlike the existing provisions that require submission of written communications in hard copies, the 2021 ICC Rules stipulate that written communications may be submitted via electronic means (Article 3 (1) of the 2021 ICC Rules).

The 2021 ICC Rules include provisions that promote efficient arbitration procedures by reflecting the impact of the COVID-19 pandemic and advancements in modern technology.   

(2)   Investor-State Arbitration 

The 2021 ICC Rules newly established provisions to consider the growing number of investment treaty arbitrations (ISD).  Article 13 (6) of the 2021 ICC Rules provides that no arbitrator shall have the same nationality as any party to the investor-state arbitration (Article 13 (6) of the 2021 ICC Rules).  It also specifies that the ICC emergency arbitrator provisions are not available for investor-state arbitrations (Article 29 (6) of the 2021 ICC Rules).  

Given the foregoing, we understand the new provisions to be an effort to promote investor-state arbitration managed by the ICC by ensuring that the ICC Rules may be applied to investor-state arbitration.  

2.   Amendments Increasing Efficiency of Arbitration Proceedings

(1)   Consolidation of Cases and Joinder of Parties 

It was not clear under the existing 2017 ICC Rules whether only disputes arising from one contract could be consolidated, but the 2021 ICC Rules clarify that consolidation is possible not only for multiple disputes arising out of one contract but also disputes arising out of multiple contracts (Article 10 of the 2021 ICC Rules).
Furthermore, unlike the existing 2017 ICC Rules where joinder of a third party to the arbitration after an arbitral tribunal has been constituted requires the consent of all parties, the revised 2021 ICC Rules provide that the arbitral tribunal may allow joinder of additional parties at the request of any party even after the arbitral tribunal has been constituted (Article 7 (5) of the 2021 ICC Rules).     

We expect that a single arbitration procedure may fundamentally resolve disputes which would have proceeded through multiple arbitrations due to the existing restrictions on consolidation or joinder of parties in the 2017 ICC Rules. 

(2)   Request for Additional Awards

Article 36 (3) was added to the 2021 ICC Rules to enable additional awards to be made within 30 days of the receipt of the award in the event an arbitral tribunal omits to address claims made during the course of arbitral proceedings in its award. 

The new provision is expected to reduce the burden of additional time and cost, which was inevitable due to lack of provisions allowing additional awards, and increase efficiency by enabling the case to be dealt with promptly in one procedure.

3.   Amendments to Prevent Conflicts of Interest and Ensure Stable Operation of Arbitral Proceedings

(1)   Obligation to Disclose Third-Party Funder

To reflect the increasing number of cases in international arbitration involving participation by third-party funders, the 2021 ICC Rules introduce a new provision requiring parties to disclose any third-party funders (Article 11 (7) of the 2021 ICC Rules).  This provision aims to ensure the neutrality and independence of an arbitral tribunal by enabling the tribunal to confirm any conflicts of interest, including any relationships which may exist between funders and arbitrators.  

(2)   Restricting Party Representatives with Conflict of Interest 

The 2021 ICC Rules require each party to promptly notify the ICC Secretariat, the arbitral tribunal and other parties of any changes in its representation.  A new provision empowers an arbitral tribunal with the authority to take any necessary measure to avoid a conflict of interest arising from a change in party representation (Article 17 (1) and 17 (2) of the 2021 ICC Rules).  In other words, when a conflict of interest arises due to a change in a party’s representation, the arbitral tribunal may disallow the new counsel from participating in the proceeding.  This provision will ensure stable arbitral proceedings by eliminating the risk of changing the constitution of arbitral tribunal due to an arising conflict of interest.      

(3)   Exceptions to Constitution of Arbitral Tribunal by Party Agreement 

The 2021 ICC Rules provide that the ICC Court may appoint the member of the arbitral tribunal “in exceptional circumstances” despite the existence of any other agreement of the parties regarding the constitution of the arbitral tribunal (Article 12 (9) of the 2021 ICC Rules).  Regarding cases constituting “exceptional circumstances,” the ICC Comment further clarifies that where unfair arbitration agreements pose a risk to the validity of the award itself, the ICC Court may intervene to ensure the integrity of arbitral proceedings. 

While the above provision is an exception to cases where the agreement of the parties prevail, the provision is incorporated in order to ensure smooth arbitral proceedings and is expected to facilitate stable operation of arbitral proceeding.    

4.   Other Amendments

In addition, the scope of application of the expedited procedure was expanded from USD 2 million to USD 3 million allowing more cases to be submitted to expedited procedures (Appendix VI, Article 1 (2) of the 2021 ICC Rules).  Further, in case a party to the arbitration raises a claim regarding administration of arbitration proceedings by the ICC Court, the claim shall be governed by French law and settled by the Tribunal Judiciaire de Paris (Article 43 of the 2021 ICC Rules). 

The 2021 ICC Rules were amended to (i) reflect new trends in arbitration practice, (ii) promote efficiency in arbitral proceedings, and (iii) prevent any conflicts of interest and ensure the stable operation of the proceeding.  We expect that the 2021 ICC Rules will promote fairness and efficiency of arbitral proceedings. 

Given that the ICC, which administers the largest number of arbitration cases, has amended its rules, we expect other arbitral institutions will follow to amend their rules as well so it will be important to be aware of these changes and be prepared when proceeding with arbitration after 2021.