ICC joins the Covid era with an update of its 2017 rules

ICC joins the Covid era with an update of its 2017 rules

The Covid-19 pandemic has seen a shift in the way arbitration is conducted, not only during the pandemic, but probably in the longer term too.  At a minimum, there will be a greater use of electronic communication and semi-virtual hearings, if not entirely virtual ones.  It is not surprising, then, that arbitral institutions are hurriedly updating their rules to accommodate these changes.

The first major institution to update its rules, rather than issue supplemental guidance, was the LCIA.  Their new rules took effect on 1 October 2020, applying to all arbitrations commenced from that date (see our article: Evolution not revolution).  Now the ICC has followed suit, publishing a draft of new rules which it intends to introduce on 1 January 2021, after an official launch at the beginning of December.   

Neither revision can be described as radical.  However, in addition to dealing with Covid issues, the ICC has taken the opportunity to clarify some of its existing rules, tweak others (such as those governing investor-state disputes), and make a few substantive changes.  These include a requirement for third party funding arrangements to be disclosed, which will help avoid conflicts of interests where tribunal members are concerned (Art 11(7)).  More controversially, they also include provisions restricting party autonomy in small but significant ways, for example by allowing a tribunal to veto the use of new counsel where this could give rise to a conflict of interests and potentially derail an arbitration  –  a well-known procedural tactic (Article 17(2)).

More:  Clyde & Co announces new Art Award partnership with Perspective Project

A further change of some practical significance is the expansion in scope of the ICC’s expedited procedure, which is now quite widely used.  In future, all disputes with a value of USD 3 million (rather than USD 2 million) or less will be dealt with under the procedure, unless the parties have opted out of it in their agreement or the ICC Court decides otherwise (Article 30 and Appendix VI).  This is helpful, but means that it is more important than ever that parties opt out of the expedited procedure if it is not to their taste.  Among other things, it provides for the appointment of a sole arbitrator, even where the arbitration agreement specifies three.

It remains to be seen whether further substantive changes will be made before the new ICC rules are formally launched in December.


More from: | Category: Legal Company News