The New ICC Arbitration Rules for 2021: Key Points to Note


The New ICC Arbitration Rules for 2021: Key Points to Note

Key Contact: Jon Stroud

Author: Joe Smith

Background

The International Chamber of Commerce (“ICC”) have released the draft of the 2021 Arbitration Rules (“the 2021 Rules”) due to be formally released in December 2020. The 2021 Rules will come into force on 1 January 2021.

There are not any significant changes to the rules, nor are there a vast amount of changes. This was to be expected, given that the ICC rules were updated in 2012 and 2017 respectively. However, this update will highlight some of the key changes to note ahead of the new year.

  1. Joinder Provisions – Article 7
    1. Disputes heard by the ICC are often complex, large scale disputes from multiple international jurisdictions. As a result, it is often the case that more than two parties need to be involved in arbitration, and it may be that parties need to be joined after the arbitration procedure has commenced.
    2. Under the current rules, once the tribunal has been appointed, an additional party to the arbitration cannot be joined to proceedings unless the consent of all the parties (and the additional party) is obtained. This is ordinarily a substantial hurdle to overcome, especially if there are already multiple parties involved.
    3. However, the 2021 Rules insert the new Article 7(5), which is possibly the most significant update to the rules. Article 7(5) requires only the consent of the additional party being joined once the tribunal has been appointed if a request for joinder has been submitted.
    4. In determining whether to allow the joinder request, the tribunal will consider all the relevant circumstances, including jurisdiction, the timing of the request, possible conflicts of interest and the impact of the joinder on the arbitration.
  2. Consolidation Provisions – article 10
    1. In addition to typically involving multiple parties, disputes that are subject to arbitration often relate to several different contracts or arbitration agreements.
    2. Article 10(b) of the current rules has attracted some confusion due to the vagueness of its wording. There has been uncertainty over whether consolidation could only be possible where all claims came from the same arbitration agreement.
    3. However, the new Article 10(c) in the 2021 Rules ensures that the parties will be able to request two or more arbitrations to be consolidated into one arbitration where they are not under the same arbitration agreement and:
      1. the arbitrations are between the same parties;
      2. the disputes in the arbitrations arise in connection with the same legal relationship; and
      3. the Tribunal finds the arbitration agreements to be compatible.
  3. Virtual Hearings
    1. The importance of flexibility has been essential during the COVID-19 pandemic, and the 2021 Rules have been updated to recognise this ability to conduct hearings virtually.
    2. Article 26(1) has been amended to give the tribunal the power to conduct hearings by “video conference, telephone or other appropriate means of communication”.
    3. There have been various other amendments throughout the 2021 Rules to reflect this, such as pleadings being sent electronically rather than in hard copy (Article 3) or not requiring witnesses to be physically summoned (Article 25(2)).
  4. Third-Party Funding and Representation
    1. Article 11(7) requires parties to disclose the identity of funders with an economic interest in the outcome of the arbitration. This is a new provision which aims to encourage the transparency and impartiality of the tribunal and to minimise any conflicts of interest.
    2. The tribunal also has new powers under Article 17(2) of the 2021 Rules to exclude certain representatives of the parties from participating in the proceedings. The aim of this rule is to prevent any conflicts of interest arising out of a change of representation once the tribunal has been appointed.

Comment

Whilst the 2021 Rules might not introduce an overhaul of the current rules, some important amendments and additions have been made to ensure arbitration under the ICC can adapt to the current circumstances. For example, virtual hearings will allow arbitration to continue, despite varying international COVID-19 regulations and restrictions.

Also, by revising the rules on who may join proceedings and by clarifying what agreements can be reviewed by the tribunal, it is hoped that any uncertainties over eligibility can be avoided.

It is worth noting that the rules discussed in this note are some of the key rules in the draft, but there are other amendments brought in by the 2021 Rules. The final draft is to be agreed in December 2020, but the draft rules represent a useful insight into what the 2021 Rules may have in store.

For more information on this topic, contact the Litigation Team.

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