Litigation and Alternative Dispute Resolution

In International Chamber of Commerce (“ICC”) arbitrations, new claims that are subsequent to the terms of reference are subject to the arbitral tribunal’s authorization. Article 23(4) of the ICC Arbitration Rules (“Rules”) give discretion to the arbitral tribunal by setting forth that the arbitral tribunal shall consider the nature of new claims, the stage of the arbitration, and other relevant circumstances.

The issue of new claims in ICC arbitrations and the application of Article 23(4) in these matters are analyzed in this article.

In General

In ICC arbitrations, the terms of reference play an important role. One of the purposes of the terms of reference is to establish the parties’ claims. The terms of reference contain, among other things, the relief sought by the parties. If the parties make claims that fall outside of the scope of the terms of reference, the provisions to be applied to these new claims shall be determined.

In ICC arbitrations, Article 23(4) of the Rules sets forth under which conditions new claims may be advanced in ICC arbitrations. Pursuant to this provision, after the terms of reference have been signed or approved by the court, no party shall make new claims that fall outside the limits of the terms of reference, unless it has been authorized to do so by the arbitral tribunal. The arbitral tribunal shall consider the nature of such new claims, the stage of the arbitration, and other relevant circumstances.

This provision intends to assist the arbitral tribunal in managing the proceedings smoothly and efficiently, as well as providing enough flexibility to permit new claims, where appropriate[2]. Within this framework, there would be a difference if the claim is based on new facts or new legal arguments, or if there is a change in the nature of the relief sought.

It should be emphasized that only a change in the argument is insufficient to be considered as a new claim, and a new claim will imply that the relief requested is based on entirely new grounds[4].

The Factors to be Considered by the Arbitral Tribunal

Article 23(4) of the Rules gives a broad discretion to the arbitral tribunal in considering whether the new claims shall be admitted. The relevant article provides that the tribunal may consider all relevant circumstances, other than the ones given as examples in the relevant provision.

If the initial claims as recorded in the terms of reference, and the new claims arise out of the same facts and the same agreement, there is a higher chance that these new claims would be admitted by the arbitral tribunal.

Again, the timing of new claims may be of significance, as well. If the proceedings are in an early stage, such as right after the signature of the terms of reference, and prior to the statements of the parties being submitted, it is more likely that they will be admitted by the arbitral tribunal. In this case, the new claims would not have a major negative impact on slowing down the proceedings. On the other hand, if the new claims have been introduced after all the evidence has been submitted, and prior to the rendering of the award, this may affect the proceedings, and may be considered as a factor not to authorize the new claims by the arbitral tribunal.

At this point, if the new claims are withheld based on purely tactical reasons, the arbitral tribunal may take a restrictive attitude. Especially if there are factors to be weighed against the belated introduction of new claims, such as the parties submitting new evidence and arguments respecting the new claims