Overview of the 2021 ICC Rules of Arbitration
On 6 October 2020, the ICC Executive Board formally adopted the revised 2021 ICC Rules of Arbitration, which will come into force on 1 January 2021. This note presents a brief overview of the key changes to the Rules.
Joinder and consolidation
The changes to Article 7 of the ICC Rules, on joinder, will allow an arbitral tribunal to grant joinder of an additional party in the course of an arbitration even without the agreement of all existing parties, which had previously been required. New Article 7(5) will allow an arbitral tribunal once constituted to grant a request for joinder submitted after the confirmation or appointment of an arbitrator, subject to the additional party’s consent to the composition of the arbitral tribunal and to the Terms of Reference. This revision increases the possibility of a successful joinder in an ongoing arbitration, while leaving the tribunal with discretion to take into account “all relevant circumstances,” notably: (i) whether the arbitral tribunal has prima facie jurisdiction over the additional party; (ii) the timing of the request for joinder; (iii) possible conflicts of interest; and (iv) the impact of the joinder on the arbitral procedure.
The scope of Article 10 of the ICC Rules, on consolidation, has been expanded to allow consolidation of two or more ICC arbitrations even where: (i) different parties may be involved, provided all the claims in the arbitrations are made under the same arbitration agreement or agreements, or (ii) a different arbitration agreement or agreements may be involved, provided that those agreements are compatible, the parties are the same and the disputes arise as to the same legal relationship.
Transparency and conflicts of interest
The 2021 ICC Rules also include two new provisions aimed at avoiding conflicts of interest between the arbitrators and other stakeholders in the arbitration.
New Article 11(7) requires parties to reveal the existence and identity of any third-party funder. It was already the ICC Court’s practice, when addressing objections to confirmation or challenges, to have regard to any relationship between arbitrators and entities “having a direct economic interest in the dispute or an obligation to indemnify a party for the award”. The significant addition of this affirmative disclosure obligation on the parties follows years of debate in the arbitral community on the manner in which third-party funding should be taken into account by arbitral tribunals and institutions.
New Article 17(2) empowers an arbitral tribunal to take “any measure necessary” to prevent a conflict of interest arising after the constitution of the arbitral tribunal due to a change in party representation. This may include “the exclusion of new party representatives from participating in whole or in part in the arbitral proceedings”. While this provision might be seen by some as potentially intruding on a party’s right to appoint counsel of its choice, a similar approach was already adopted by the LCIA in 2014, and seems to stem from the ICC’s experience with belated, tactically-minded counsel appointments.
The revised Rules expand the scope of application of the expedited arbitration provisions, increasing their applicability, subject to opt-out, to disputes of value up to US$3million instead of, as presently, US$2million.
Reflecting the ever-growing share of investment arbitrations being administered by the ICC, the 2021 Rules introduce, for the first time, two new provisions specifically dedicated to investor-State disputes.
New Article 13(6), drawing on the example set by the ICSID arbitration rules, specifies that where the arbitration is based on an arbitration agreement arising from a treaty, no arbitrator shall be of the same nationality as one of the parties (unless all parties agree otherwise).
Article 29(6) of the Rules has been amended to exclude treaty-based arbitrations from the scope of the ICC Rules’ provisions on emergency arbitrators. This amendment effectively codifies the ICC Court’s existing practice.
Appointment of arbitrators
New Article 12(9) of the revised Rules expressly authorizes the ICC—notwithstanding any other agreement of the parties as to constitution of a tribunal—to appoint all three arbitrators in certain “exceptional circumstances,” namely, where it considers it necessary to “avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award.” Given the importance of arbitrator selection to users, such a change emphasizes the ICC’s determination to guarantee to the extent possible the integrity and effectiveness of ICC arbitration.
Revised Article 26(1), on hearings, will now expressly provide an arbitral tribunal with discretion to decide whether a hearing should take place in person or remotely, thereby resolving any possible ambiguity in the current wording.
Article 36 of the Rules has been modified to now allow a party to apply for an “additional award” on claims made in the course of the proceedings and which the arbitral tribunal omitted to decide. This added post-award tool can help further guarantee the enforceability of ICC awards.
The 2021 ICC Rules mostly aim to refine and clarify current arbitral practice, rather than introduce any seismic changes. The ICC has however not shied away from addressing certain current concerns of the arbitral community by, notably, expanding the ability to include additional parties or contracts in complex disputes, requiring disclosure of third-party funding, and further fostering the integrity and efficiency of proceedings.