The International Chamber of Commerce (ICC) has released revised Rules of Arbitration that will take effect in January 1, 2021.
It has been stated that cases registered before that date, shall continue to be subject to ICC’s 2017 rules.
The 2021 ICC Rules contain important updates. In this means, changes include rules for accommodations that could make international arbitration more efficient and economical in the long term. This is a significant reflection of the outbreak.
In this bulletin, we would like to summarize some of the prominent changes. Especially parties that are in the energy sector, should take these changes into account when drafting arbitration agreements in cross-border contracting.
Here are some of the major changes :
Provisions of joinder and consolidation are expanded :
This new implementation will make it easier to join additional parties and also consolidate multiple matters. When considered the fact that in disputes concerning energy companies which generally involve multiple cross border parties and contracts, this amendment would contribute a lot for dispute resolution. Also, the arbitral tribunal is granted the right and authority to join third parties into the file and evaluate all relevant circumstances. For 3rd parties to join, those parties should consent and agree to the Terms of Reference.
The 2021 ICC Rules, broaden the rules for consolidation of disputes and provide more flexibility:
Previously, the consolidation was possible if the same parties were involved. Again, especially for contracts signed in energy sectors where multiple contracts are in the nature of their practice, this new rule shall allow consolidation of claims and help the dispute resolution. Not necessary to mention that for consolidation, relevant contracts shall contain the same arbitration clause (consenting to ICC arbitration pursuant to the ICC Rules).
Virtual Hearings & Electronic Submission of Documents :
As a reflection of the outbreak, subject to the tribunal's decision (upon consulting with the parties, and on the basis of relevant facts and circumstances), the option for virtual hearings will provide a more economical option for parties. The revised rules also allow for electronic submission of pleadings and written communications.
Arbitral Tribunal’s Strengthened Rights :
The tribunal is granted the power to take any measure necessary to avoid a conflict of interest regarding the party representatives. Accordingly,the tribunal may exclude any representative with a conflict of interest from participating in the proceedings.
The arbitral tribunal’s powers for the enforceability of arbitration awards are strengthened.
Exceptional circumstances :
The ICC is allowed to appoint the entire arbitral tribunal in exceptional circumstances in order to avoid a risk of unequal treatment or unfairness.
More Transparency :
The new rules require that parties disclose non-party entities or individuals who are funding a party's claims or defense.
Clarification :
It is stated that for claims that were presented during the hearing but were omitted to decide in the award, additional award may be issued by the tribunal.
Expedited Procedure:
The amount for Expedited Procedure is increased USD 3 million, which provides a more efficient and expedient arbitral process for smaller claims.
The content herein is aimed at providing a general insight regarding the subject. For customized circumstances or further information, please refer to your lawyer.