Analysis of the Arbitration Regime under the ICC Rules

Analysis of the Arbitration Regime under the ICC Rules

October 23, 2019

By Nihit Nagpal and Palak Nehra

International Chamber of Commerce (ICC) was founded in the aftermath of the First World War when no world system of rules governed Trade, Investment, Finance or Commercial Relations. Without waiting for governments to fill the gap, ICC’s founders acted on their conviction that the private sector is best qualified to set the global standards of business. They called themselves the Merchants of Peace[1].

The International Court of Arbitration is the world’s leading Arbitral Institution. Since 1923, it has helped in resolving difficulties in international commercial and business disputes to support trade and investment. It plays an essential role by providing individuals, businesses and governments alike with a variety of customizable services for every stage of their dispute.  The main purpose is to ensure proper application of the ICC Rules, as well as assist parties and arbitrators to overcome procedural obstacles.

Arbitration, over the years has become much effective and transparent. The rules governing Arbitration are aimed at resolving cross border disputes by building a neutral and expedited framework/regulations. The new rules target at better implementation of the new policies, to foster efficiency and transparency of Arbitrations governed by ICC.

By introducing ethical principles on party representation, the Court aims at ensuring that the highest standards of honesty and professional conduct are abided by all participants in Arbitration. It is fundamental that the legitimacy of the arbitral process be protected at all times, and the ICC initiative clearly establishes that it is the duty of the parties to cooperate in good faith for application of a fair and efficient resolution of disputes governed by the new ICC Rules.

Key Provisions under the new ICC Rules

Article 1:  International Court of Arbitration

  • The International Court of Arbitration is the independent arbitration body of the ICC empowered with supervisory powers.
  • The Court in itself doesn’t adjudicate commercial disputes but they are responsible to direct and supervise the resolution process.
  • The Courts are the only authority having discretionary powers to administer proceedings providing approvals for the awards.
  • The Court may allocate one or more committees consisting of its members giving them the power to take certain decisions, provide the decision to be brought into the notice of the court in the next session.
  • The proceedings are carried out by the Secretariat of the Court and the direction of the Secretary General.

Article 2: Elaboration of basic rules

  • Parties can adapt to any arbitral clauses suitable after due consent
  • The Arbitral Tribunal could have one or more Arbitrators
  • There can be more than one claimant, respondent and other additional parties
  • The party or parties can implead other claimants, respondents & additional Parties
  • The claims can be raised against any party
  • The award passed can be partial, interim or final

Article 3: Time Limit and Pleadings

  • Sufficient number of copies of the pleadings and documents to be served by the party
  • The notification for communication mandates delivery by way of courier, email which provides a record of sending
  • The notification regarding communication of service to be provided on the same day
  • Official Holidays and non-business days to be included in the calculation of period of time

Article 4: Request for Arbitration

  • A party wishing to have recourse to arbitration under the Rules shall submit its Request for Arbitration (the “Request”) to the Secretariat at any of the offices
  • The date on which the Request is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of the arbitration
  • Together with the Request, the claimant shall:
  1. submit the number of copies thereof required by Article 3(1); and
  2. Make payment of the filing fee required on the date the Request is submitted.
    In the event that the claimant fails to comply with either of these requirements, the Secretariat may fix a time limit within which the claimant must comply, failing which the file shall be closed without prejudice with the claimant’s right to submit the same claims at a later date in another Request.
  3. The Secretariat shall transmit a copy of the Request and the documents annexed thereto to the respondent for its Answer to the Request once the Secretariat has sufficient copies of the Request and the required filing fee.

Article 5: Reply to the Request; Counterclaims

  • The party shall file its reply to the request of initiation of Arbitration within 30 days from the date of receipt of communication by the Secretariat
  • Secretariat at its discretion can grant Extension of Time
  • Secretariat should share reply with the other party
  • The party can file counterclaims along with the reply

Article 6: Arbitration Agreement

  • The parties to agree upon adjudication of the agreement under the new rules
  • Parties to acknowledge that the resolution would be administered by the Court
  • Court proceedings should not be interrupted with the refusal of failure to attend at any stage of the proceedings
  • Arbitral Tribunal plays a paramount role in deciding upon the validity of the Arbitration Agreement

Article 7: Joinder of Additional Parties

  • The party who wishes to join an additional party must give in writing to implead a party

Article 8: Claims between multiple parties

  • In case of multi-party claims can be admitted against any party by the other party

Article 9: Many Contracts

  • Claims with more than one contract to be addressed in a single arbitration

Article 10: Merging of Arbitrations

  • With the request of the parties the court can agree to join two or more arbitrations and put it under a single arbitration, keeping following points in consideration:
  1. It can only happen if parties agree to consideration
  2. If the claims are registered under the same arbitration agreement
  • The claims can be merged if it is undertaken under more than one arbitration agreement

[1] https://iccwbo.org/about-us/who-we-are/history/

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