Litigation and Alternative Dispute Resolution

Contact: Fatih Isik 

Introduction

The International Court of Arbitration of the International Chamber of Commerce (ICC Court”) has recently announced important amendments to the ICC Rules of Arbitration (“Rules”). Among others, the amendments also contain inclusion of expedited procedure to the Rules. The press release states that the amendments are made “with the aim of further increasing the efficiency and transparency of ICC arbitrations.” The revised rules will apply from March 1^st, 2017[1].

What is an Expedited Arbitration?

The expedited arbitration is a relatively recent tendency of the arbitration institutions aiming at time and cost efficient arbitration proceedings where the dispute concerns, in general, limited amounts of money. The expedited arbitration aims to shorten the duration of the arbitration proceedings as a whole. If the parties apply for an expedited arbitration, they will deal with fewer procedural steps, shorter time limits and lower costs and expenses.

American Arbitration Association Rules, Istanbul Arbitration Center Arbitration Rules, Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, Singapore International Arbitration Centre International Arbitration Rules, and the Mumbai Centre for International Arbitration Rules has already adopted expedited arbitration procedures.

For instance, pursuant to the Istanbul Arbitration Center Arbitration Rules on expedited arbitration[2], total claims that do not exceed TRL 300,000 on the date of initiation of arbitration are subject to the rules on expedited arbitration proceedings. The disputes will be resolved by a sole arbitrator, who shall render the award within 3 months from transmission of the file to himself/herself, and within one month commencing from the later date of the submission of the final written statement or the completion of the hearing.

Features of the Expedited Rules of ICC

Article 30 of the Rules and Expedited Procedure Rules that are set forth in Appendix VI (collectively the “Expedited Procedure Provisions”) regulate the expedited arbitrations to be conducted under the ICC Rules. It is clearly stated under Article 30 that by agreeing to arbitration under the Rules, the parties agree that Expedited Procedure Provisions shall take precedence over any contrary terms in the arbitration agreement, unless the arbitration agreement is not concluded prior to the entry into force of such provisions.

As per the revised Rules, all arbitrations with amounts in dispute below US$ 2,000,000 will be automatically subject to the expedited procedure. If the parties wish to exclude the application of the Expedited Procedure Provisions, they must expressly opt out. If the parties wish to have their dispute in a higher amount resolved through the expedited procedure, this is also possible on an opt-in basis where the parties clearly agree. In addition, even though the Expedited Procedure Provisions should have been applied due to the circumstances, the Court may determine, after consultation with the arbitral tribunal and the parties, that it is inappropriate to apply the Expedited Procedure Provisions upon the request of a party prior to the constitution of the arbitral tribunal, or on its own motion considering the circumstances. In such case, such provisions shall not apply.

Under the Expedited Procedure Rules, the ICC Court will normally appoint a sole arbitrator, irrespective of any term to the contrary in the arbitration agreement. The parties may nominate the sole arbitrator within a time limit to be fixed by the Secretariat. In the absence of such nomination, the sole arbitrator shall be appointed by the Court. Under the Rules, there will be no terms of reference. The tribunal will have discretion to decide the case on documents only, with no hearing, no document production, and no examination of witnesses (both fact witnesses and experts). If the tribunal decides to apply these steps, it has the discretion to limit the number, length and scope of written submissions and written witness evidence.

The time limit for rendering the award does not begin with the transmission of the file, but with holding the case management conference. The tribunal must render the award in six months from the case management conference, with extensions granted only in limited and justified circumstances.

Conclusion

Following suit of some other arbitration institutions, the ICC has also revised its rules in order to adopt the expedited arbitration procedure. The purpose is to offer a more cost and time efficient procedure to its users. However, the revision in the Rules has already raised discussions among practitioners. As noted above, Article 30 of the Rules states that the Expedited Procedure Rules shall take precedence over any contrary terms of the arbitration agreement between the parties. Additionally, the dispute will be resolved by a sole arbitrator, irrespective of the arbitration agreement of the parties. This nature of the Expedited Procedure Rules seems to raise more discussions, considering that such provisions could be deemed as being against the consent of parties.