On Nov. 4, the International Court of Arbitration of the International Chamber of Commerce (ICC) announced that its Rules of Arbitration would be amended as of March 2017 to implement a new Expedited Rules procedure for smaller disputes. The Expedited Rules are designed to streamline and speed up the arbitration process but involve major departures from the traditional dispute resolution practices to which many are accustomed.
Although the ICC has not yet published the Expedited Rules, the ICC announced that the rules will automatically apply to every case involving less than $2 million in dispute. Parties with larger disputes can mutually choose to adopt them as well.
The announced Expedited Rules procedure differs from standard ICC practices in the following respects:
- In applicable cases, the ICC will choose a sole arbitrator, rather than allowing the parties to choose one or more arbitrators, even in the face of an arbitration agreement providing otherwise.
- The parties will not submit Terms of Reference.
- The arbitrator can elect to decide the case based on the parties’ pleadings and exhibits, without any document production, witness testimony or oral hearing.
- The arbitrator is required to complete the proceedings and issue an award within six months of the initial case management conference.
- The administrative and arbitral fees will be lower than in traditional three-arbitrator ICC proceedings.
In essence, the Expedited Rules will create a “fast-track” process that is expected to produce a final decision in a shorter time and at a lower cost than in most large international arbitrations administered by major institutions. This may appeal to companies that engage in smaller-scale transactions and lower-stakes commercial disputes.
On the other hand, arbitrations under the Expedited Rules may omit certain basic procedures – such as the right to choose an arbitrator and to be heard in person – that many parties ordinarily take for granted in commercial dispute resolution. A discovery-free, pleadings-only process may be familiar to parties from civil law jurisdictions but is likely alien to those from common law countries. Moreover, there is some chance that an award reached through an Expedited Rules process could be viewed more skeptically by a court reviewing it in an enforcement proceeding. Because application of the Expedited Rules will be mandatory in sub-$2 million disputes, a company should consider these factors before agreeing to ICC arbitration for smaller cross-border transactions.
This is the second action the ICC has taken this year that is aimed at speeding up the arbitral process. In January 2016, it announced a new policy under which arbitrators are expected to issue awards within three months of the last substantive hearing or post-hearing submissions (two months for sole arbitrators), or else face reductions to their fees.
These innovations reflect the ICC’s attempt to address recurrent complaints by users that international arbitration has become too slow and too expensive. They also demonstrate that the ICC, considered by many to be the pre-eminent institution for international commercial arbitration, is facing increasing competition from a burgeoning array of global and regional institutions, many of them featuring lower fees and promising more efficient management of disputes than does the ICC. The ICC’s caseload actually declined slightly from 2009 to 2015, while those of other institutions (such as the Singapore International Arbitration Center and China International Economic and Trade Arbitration Commission) grew rapidly. The new rules should go some way toward helping the ICC maintain its stature and continue to attract disputes that do not warrant a full array of traditional procedural protections.