ICDR Introduces 2021 Rules Amendments
The International Centre for Dispute Resolution (“ICDR”) introduced its amended International Dispute Resolution Procedures (the “2021 ICDR Rules” or the “Rules”)), which came into effect on 1 March 2021. The amendments promote efficiency and economy, including addressing issues arising from changes in hearing procedures due to the pandemic. The ICDR Rules follow other leading arbitration institutions, such as the London Court of International Arbitration (“LCIA”) and the International Chamber of Commerce (“ICC”)(which published their new rules in October 2020 and January 2021 respectively), in introducing amendments seeking to meet the changing demands of the ever evolving practice of international arbitration. This note presents a brief overview of the key changes to the ICDR Rules.
The International Administrative Review Council
In an effort to promote transparency regarding ICDR decision-making on arbitrator challenges and other administrative determinations, the 2021 ICDR Rules introduces a new Article 5, which clarifies that the International Administrative Review Council (“IARC”) may decide issues related to (a) arbitrator challenges, (b) the continuing service of an arbitrator, (c) disputes relating to the number of arbitrators, (d) the place of arbitration, and (e) whether the administrative requirements to initiate or file an arbitration have been met. The IARC is comprised of at least three current or former ICDR executives or other IARC members as determined by the ICDR, and has its own guidelines outlining its scope of authority, issue submission and decision-making process.
Joinder and Consolidation
The 2021 ICDR Rules expands the application of former Article 7.1, which previously allowed joinder only if all parties agreed. The new Article 8(1) now permits joinder after the constitution of the tribunal if the tribunal determines that such joinder would serve the interests of justice and the additional party consents to the joinder. Likewise, the Rules under the new Article 9 expands the ability to consolidate where arbitrations involve “related” parties, as opposed to the “same” parties under the previous rules.
Impartiality and Independence of Arbitrators
In addition to the general obligations of arbitrators to maintain standards of impartiality and independence and to act according to the Rules and the terms of their appointment, arbitrators are now obligated under the new Article 14(1) to act in accordance with the ICDR’s Code of Ethics for Arbitrators in Commercial Disputes.
Third Party Funding
In line with keeping the arbitrators’ obligation of impartiality and independence, the Rules address the issue of third-party funding and undisclosed economic interests. Under Article 14(7), upon application by a party or on its own initiative, the tribunal may require a party to disclose the existence and identity of a third-party funder, to confirm that such funder has undertaken to pay or to contribute to the cost of arbitration and to describe the nature of the undertaking.
Technology and Data Protection
To address some of the challenges to hearing dynamics presented by the COVID-19 pandemic, the 2021 Rules amend Articles 22 and Article 26 (formerly Article 20 and 23 respectively) to promote the use of video, audio, or other electronic means for conducting preliminary matters and final hearings. However, Article 22(3) requires the tribunal to discuss cybersecurity, privacy and data protection at the procedural hearing. Additionally, Article 26 now allows for an entire hearing or portion of a hearing to be held by video, audio, or other electronic means, provided that the parties agree, or the tribunal determines, after allowing the parties to comment, that doing so would be appropriate and would not compromise due process. Article 26 also permits witness examination by video or other means that do not require physical presence. Finally, new Article 32(4) permits the tribunal to electronically sign an order or award unless the applicable law requires a physical signature, the parties agree that a physical signature is necessary, or the tribunal or the ICDR determines that a physical signature is appropriate.
Early Disposition and Expedited Procedures
The new Article 23 of the 2021 ICDR Rules aims to promote efficiency in arbitration by specifically permitting early disposition of issues. A party must request leave from the tribunal and the tribunal may allow such request if (a) the application has a reasonable possibility of succeeding; (b) it will dispose of, or narrow, one or more issues in the case; and (c) that consideration of the application is likely to be more efficient or economical than leaving the issue to be determined later with the merits.
In the same vein of driving efficiency in the proceedings, the 2021 ICDR Rules increased the maximum claim or counterclaim allowed expanding access to the Expedited Arbitration Rules from USD 250,000 to USD 500,000.
The 2021 ICDR Rules modify its previous iteration in line with the demands of international disputes and the challenges presented by the COVID-19 pandemic. Notably, the ICDR follows other international arbitration institutions, such as the LCIA and the ICC, in directly addressing some of the current concerns of the arbitration community such as expanding the ability to join additional parties, requiring disclosure of third-party funding and increasing its focus on efficiency of arbitration proceedings.