ICC Rules of Arbitration

In this article, Sandip Kumar pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses the Importance of the ICC Rules of Arbitration.

Introduction

The Rules of Arbitration are made to resolve the cross-border disputes by building a neutral framework of operations. It is built to control the progress of the cases submitted to the International Court of Arbitration and the forum is built to help any individuals, business enterprises and Governments in solving important disputes at every level.

The standard clauses which are applicable in ICC Arbitration

The disputes among the parties to an agreement must be settled under the Rules of Arbitration of the ICC in presence of one or two arbitrators appointed under the guidelines defined in the rules.

  • Parties can adapt any clauses suitable for their kind of arbitration.
  • Parties are free to take the number of arbitrators given in the rules.
  • Any risk of ambiguity should be avoided while adapting the clause, and
  • Any unclear words should be omitted to resists the dispute.

The Rules of Arbitration

Introductory Provisions Article 1

The International Court of Arbitration is the independent arbitration body of the ICC and it is known as the Court.

  1. The Court is not responsible for resolutions of any disputes but it directs the resolution of disputes through arbitral tribunals and as per the Rules of ICC.
  2. The Court is the only authorized body who can administer the proceedings, providing approval for the awards and other functions such as setting the internal rules etc.
  3. The President of the Court on his absence or by the request to one of his/her vice-Presidents can ask him to take urgent decisions as an when required on behalf of the Court on condition that the decision to be brought into the notice of the Court in next session.
  4. As per the Internal Rules, the Court may allocate one or more committees consisting of its members the power to take certain decisions, provided the decision to be brought into the notice of the Court in next session.
  5. The proceedings of the Court are carried out under the Secretariat of the Court and under the direction of its Secretary-General.

Article 2 Elaboration of the Rules

  1. The Arbitral tribunal could have one or more arbitrator.
  2. There could be more than one claimant, respondents & additional parties.
  3. The party or parties could include the claimants, respondents or additional parties.
  4. The claim or claims can be raised against any party or any other party.
  5. The Award can be partial, interim or final.

Article 3 Explanation about the time limits of the written notification and its submission

  1. A sufficient number of copies of pleadings, written communication, and documents applicable are required to get submitted by any party to each party including individual copies for the arbitrator and secretariat. If any copy of notification from the arbitral tribunal had been sent to parties, a same copy must be given to secretariat as well.
  2. The notification or communication should be delivered keeping an acknowledgment such as receipt, by registered post with AD, courier, email, which provides a record of sending.
  3. The notification or communication shall be or would have been received on the day by the party itself or by its representative.
  4. The time period is fixed under the Rules and it has to start on the mentioned date. If the day is a holiday count in that particular country the next business day will be counted as the date of commencing of the arbitration.
  5. The Official holidays and non-business days are included in the calculation for this period of time. The period of time will expire in the first following business day if the last day of the relevant period of time granted is an official holiday or a nonbusiness day in the country where the notification or communication are supposed to be made.

Article 4 Explanation of the request for Arbitration

The party wishes to have an alternative to the arbitration rules may submit a request to the Secretariat at the office as mentioned in the Internal Rules of the Arbitration. The Secretariat must make aware of the receipt date of the request to the claimant and respondent. The date of the request received by the Secretariat is considered as the date of the beginning of the arbitration.

The following details are required while filing a request

  1. Full name of the party or parties, complete description, address and contact details must be available.
  2. The details such as full name, address and other contact details of the claimant or his /her representative in the arbitration must be available.
  3. The detailed description of nature and situation which gave the birth of the dispute and the claim intended thereof.
  4. A statement of relief is required to know the amount of any calculated claims and to some extent an estimate of the monetary value in case of any other claims.
  5. The presence of any relevant agreements especially the arbitration agreement(s).
  6. In case of claims done under multiple arbitration agreements, a clue must be provided against the arbitration agreement.
  7. As per the relevant particulars and any observations or proposals concerning the number of arbitrators and their choice and any further nomination of an arbitrator is required.
  8. The place or area, language for the arbitration are to be selected as per the relevant particulars.

Commencing the Arbitration

The Claimant may support the arbitration by providing some necessary documents or information which can enrich the chances of providing an effective decision towards the resolution of the disputes.

  1. The number of copies needs to submit as per requirement in arbitration as mentioned in Article 3 (1).
  2. The payment as per the rule needs to be done on the date of filing of the arbitration. In case the fees couldn’t be cleared as per the conditions, the Secretariat will fix a time limit in which the claimant must clear the payment else the file will be closed without in prejudice followed the same claims to be put forward on another date by another request.
  3. The Secretariat will only process the request and the documents to the respondent once the Secretariat receives the required no. of copies and the fees as per the standard rules.

Article 5 Rules apply against the reply of the Request and the Counterclaims

  1. The respondent is supposed to get back with the Answer within a time limit of 30 days upon receipt of the request from the Secretariat office, with the following information:
    1. The full name of the respondent, description, address and contact details must be mentioned.
    2. Full name, address and other contact details of the person(s) representing the respondent in the arbitration.
    3. The situation which gives rise to the dispute and the base on which the claims registered.
    4. Response to the relief pursued.
    5. The number of arbitrators to be selected on the basis of the proposals and according to the provisions in the rules by the claimant.
    6. Proposal regarding the place of the arbitration can be done as per the law and the language used in the arbitration.
    7. The Answer with some relevant documents can be submitted by the claimant which will contribute in terms of providing an effective solution to the dispute.
  2. The respondent may request for some additional time while putting forward its answer from the Secretariat, provided the respondent’s application must contain fruitful observations or proposal regarding the selection of the number of the arbitrator and the choice of nominating the arbitrators. The Court will follow its own rules in case if the respondent fails to do the same.
  3. As discussed in Article 3(1) the number of copies of the Answer should be provided to the Secretariat.
  4. The Secretariat should share the related answer and the documents among all the other parties.
  5. While raising the counterclaims the respondent must submit the Answer according to the following points given below:
    • Nature and the circumstances under which the dispute has arisen and the counterclaims had been done including specific ground to do the same.
    • The statement of the relief to be provided including the amount of any précised counterclaims and a rough estimate of the monetary value proposed through any other claims.
    • The presence of any relevant agreements especially the arbitration agreement(s).
    • In case of claims done under multiple arbitration agreements, a clue must be provided in the arbitration agreement to find out exactly under which the claim is done.
    • The Answer with some relevant documents can be submitted by the respondent which will contribute in terms of providing an effective solution to the dispute.
  6. The Secretariat allowed the claimant to file a reply within a time limit of 30 days from the date of receipt of the counterclaims, the Secretariat can allow some more time to the claimant before submitting the file to the arbitral tribunal.

Article 6 Points mentioning the effect of the Arbitration Agreement

  1. The parties must agree to put forward the arbitration under the Rules, submitting the documents on the starting date of the arbitration unless they have agreed to provide it on the mentioned date in the arbitration agreement.
  2. While agreeing to the arbitration under the Rules, the parties have to acknowledge that the arbitration shall be controlled by the Court.
  3. The arbitral tribunal is responsible for taking a decision if the Secretary-General had referred it to the court on the following points:
    • If the party did not reply to the claim made against it.
    • The claim can be decided in a single arbitration if any party raises one or more about the existence in any arbitration agreement or concerning whether all of the claims made in the arbitration could be decided as a single entity.
    • The arbitration must go on and the arbitral tribunal is the authorize body to decide on any question arose on the jurisdiction of the claim or the decision of claim to be determined in that arbitration.
  4. The cases referred to the Court as per Article 6(3), the Court is the deciding authority for the proceedings in the arbitration and determines its age. The arbitration will continue till the Court is satisfied with the arbitration agreement under the Rules and as mentioned in the given particular:
    • In case of two parties, the arbitration may carry out between the two.If any additional party joins as per the Article 7, the Court must be satisfied according to the arbitration that binds their existence.
    • The claims as per Article 9 which are made under more than one arbitration agreement, the arbitration proceedings will be carried on those cases on which the Court is satisfied.
    • If the Court found the arbitration agreement under which the claims had been made is well matched.
    • All parties will agree that the claims which are made can be resolute under a single arbitration. The decision of according to Article 6(4) is without any prejudice and to the admissibility or merits of any party’s plea or pleas.
  5. The matters that are mentioned under Article 6(4), if decided by the Court against any decision under the jurisdiction of the arbitral tribunal, if it except as to parties or claims with respect to which the Court decides that the arbitration cannot proceed, the arbitral tribunal can put it forward itself if necessary.
  6. The parties reserve a right to ask the Court beyond their jurisdiction if they are not told by the Court as per Article 6(4) that the arbitration cannot proceed without the presence of some or all of them.
  7. As per the Article 6(4), if the Court decides that any arbitration could not proceed in respect to any claims, it must not restrict the parties to submit the claim once again at another date in other proceedings.
  8. The Court proceedings should not be interrupted with the refusal or failure of attending it by any parties in any stage of the proceedings.
  9. The Arbitral tribunal plays a vital role in deciding the validity of the arbitral agreement and shall not stop any proceedings against any allegation raised by the parties of not being it as valid or null and void. Even though the contract is found not valid or null and void then also the arbitral tribunal reserves the right to regulate the parties’ rights and to decide their claims and pleas.

Article 7 Joinder of Additional Parties

  1. The party who wishes to join an additional party must give a notification of arbitration against the additional party known as Request of the Joinder to the Secretariat. The date on which the request is received by the Secretariat will be considered as the starting date of arbitration against the additional party. Any such joinder shall follow the requirements as mentioned in Articles 6(3) to 6(7) and 9. After the confirmation, no additional party will be allowed to join unless all parties including the additional party agree to do so.
  2. The Request for Joinder must contain the required information as followed:
    • Correct reference to the case for which the arbitration will be carried out.
    • The complete name, address and contact details of the parties including the additional party to be mentioned.
  3. The provisions mentioned in Articles 4(4) and 4(5) shall apply, after the necessary changes were made after the request for joinder.
  4. The additional parties may submit the Answer after making the necessary changes according to the provisions mentioned in Articles 5(1) to 5(4). The Claims made by the additional party must be made as per the points mentioned in Article 8.

Article 8 Claims between Multiple Parties

In case of multi-party arbitrations claim can be registered against any party by other party provided the provisions mentioned in 6(3) to 6(7) and 9. There is a restriction in submitting any new claims after signing the Terms of Reference beyond the approval of the Court and the authorization of the arbitral tribunal.

Article 9 Many Contracts

As per the provisions provided in Articles 6(3) to 6(7) and 23(4) the claims or in connection with more than one contract are addressed in a single arbitration, despite the claims registered in one or more than one arbitration agreement under the Rules.

Article 10 Merging of Arbitrations

With the request of the party the court can agree to join two or more arbitrations and put it under a single arbitration, keeping following points in line as follows:

  • It can only happen if the parties agree to consolidation.
  • If the claims are registered under the same arbitration agreement.
  • The claim can be merged if it is done under more than one arbitration agreement and done between the same parties. The disputes are connected to the same legal relationship and the Court discovers the arbitration agreements to be well-matched.

Before merging the Court can take any relevant circumstances under consideration for including one or more arbitrators confirmation or appointment in more than one of the arbitrations the same or different persons have been confirmed or appointed. The arbitration commenced first are taken into account for consolidation unless or otherwise agreed by all parties.

The internal rules of International Court of Arbitration

Article 1 The working procedure of Confidential Character in the International Court of Arbitration

  1. The President and the Vice-president are included by the Court members for the smooth driving of the Court procedures.
  2. The Court sessions as a whole are opened only for the members and to the Secretariat.
  3. In special circumstances, the President of the Court can authorize an outsider who can attend the session, provided he/she have to keep the confidentiality of the work as per the rules decided by the Court.
  4. The person authorized by the President during the Court session including the members are been communicated through the Secretariat regarding any documents submitted or withdrawn during the Court proceedings.
  5. An investigator or a researcher can be appointed by the President or the Secretary-General for undertaking any work related to academic nature to familiarize themselves with the awards and other documents which is of general interest, have an exception in notes, declarations, and papers forwarded by the parties within the outline of the arbitration proceedings.
  6. The authorization shall be provided to the beneficiary with an undertaking for keeping the confidentiality of the character in the documents. It can only be published with a prior approval of the text by the Secretary-General of the Court.
  7. In each case, the Secretariat have to submit the arbitration under the Rules recollect in the records of the Court for awards, Terms of Reference and decisions of the Court, and the relevant communication done by the Secretariat.
  8. The documents, communications or correspondence submitted by the parties or the arbitrators for the Court proceedings shall be destroyed if it is not been claimed by a party or an arbitrator in the form of written requests within a standard period of time given by the Secretariat to return the documents, communications or correspondence. The related costs and expenses for the return of those documents shall be borne by the party or arbitrator.

Article 2 Discussion related to the Participation of Members of the International Court of Arbitration in ICC Arbitration

  1. The President and the members of the Secretariat of the Court are not allowed to act as arbitrators or as counsel in the cases submitted to the ICC arbitration.
  2. The Court shall not appoint Vice-Presidents, President or any members of the Court as arbitrators. They might be selected for any other work related to Court proceedings on an agreement with the parties or pursuant in a matter of validation.
  3. The President, Vice-President or a member of the Court or the Secretariat is involved in any kind of job in proceedings pending before the Court, he must inform the Secretary-General of the Court and made him/her aware of their involvement.
  4. The person should not be involved or his/her presence is not required in the Court session if decided by the Court while having any discussions or taking decisions by the Court.
  5. The person is not permissible as per the above point to receive any material documentation or information pertaining to the actions.

Article 4 The Committee of Court

  1. As per the Article 1(4) of the Rules and Article 5, the Court can create a Committee of the Court.
  2. The members of the Committee have a president and at least two other members of the Court. The President of the Court can act as the president of the Committee. In the absence of the Court president or in request of him, a Vice-President of the Court or, in exceptional circumstances, another member of the Court who is eligible can act as President of the Committee.
  3. Regarding the two members of the committee as mentioned in the above points should be appointed from the Vice-Presidents or any other members of the Court. The court has to appoint the members before every full session.
  4. The Committee meets held whenever decided by the President. Minimum two members of the committee are required to start the discussion.
    1. The decision taken by the committee is regulated by the Court.
    2. The compact decisions must be taken by the committee.
    3. The committee can transfer any case to the next session if they cannot reach a decision, by making a proper suggestion.
    4. The decision made by the Committee must be brought into the notice of the court in the next session.
  5. In case of a requirement of any urgent procedure as per the provisions mentioned in 1(4) and Article 5, the Court may prepare a Committee consisting of one member.

Article 5 Court Secretariat

  1. In the absence or request of the Secretary General ’s, the authority lies with the Deputy Secretary-General or the General Counsel to refer any substances to the Court with a confirmation of the arbitrators and by certifying true copies of awards and by requesting the payment of a provisional advance.
  2. As per the rules the Secretariat’s office should be outside the headquarters of the ICC. The list of offices must be with the Secretariat. All the request of the Arbitration will be submitted to the designated offices only. Any functions under the Rules are performed with the instruction of the Secretary-General, Deputy General or General Counsel.

Article 6 Inspection of Arbitral Awards

During inspection for providing the Awards, the Court considers the extent practicable and the mandatory law implementation at the place of arbitration.

Amendments done in the Rules

The Arbitration Rules were amended on March 1, 2017, and the most important changes made are the advance procedure for arbitration with low fees. The procedure is applicable to the cases not exceeded US$ 2 million unless the parties decide to opt out. It is applied to only those cases of arbitration agreements that end after 1 March 2017.

Some more features are available below:

  • According to the new procedure, the ICC court can appoint a sole arbitrator despite the arbitration agreement.
  • The expedited procedure is also available as per choice to participate in the cases having a higher-value and will be a smart answer to users’ who are concerned about the overtime and cost.
  • The removal of Terms of References in case of expedited procedure in the new format had not only boosted the procedure wherein it has also affected in terms of efficacy of ICC arbitrations, by reducing the time limit for establishing Terms of Reference which has been reduced from two months to one month.
  • Under the 2017 Rules, The ICC arbitrations will become even more transparent, the Court will have to provide adequate reasons if demanded by the parties.

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