Get creative: Mastering metrics
First published in the 1LoD Global Benchmarking Survey & Annual Report 2019
Arbitral institutions are constantly seeking to update their rules to keep in line with current trends and to distinguish themselves amongst their peers. In early 2017, new or amended rules come into force for three of the most prominent global arbitral institutions: the International Chamber of Commerce (ICC), the Singapore International Arbitration Centre (SIAC), and the Arbitration Institute of the Stockholm Chamber of Commerce (SCC). Important changes include the introduction of expedited procedures in ICC and SCC arbitrations, and new SIAC rules for investment arbitrations. We provide a brief overview of key features of these updated rules.
Following a consultation process in 2016, the ICC published proposed amendments to the ICC Rules of Arbitration in November 2016. These new rules (the ICC Rules 2017) came into force on March 1, 2017.
The most significant amendment to the ICC Rules is the introduction of an expedited procedure under Article 30 (as supplemented by Appendix VI: Expedited Procedure Rules). The expedited procedure was introduced in response to a growing demand from users, in particular in Asia, and in order to bring the ICC Rules in line with those of other major arbitral institutions.
The expedited procedure will apply for cases in which the amount in dispute does not exceed US$2 million. This limit appears relatively low by comparison to SIAC’s expedited procedure, under which the threshold for the amount in dispute was raised in 2016 from SG$5,000,000 to SG$6 million (approximately US$3.5 million to US$4.2 million). However, while the average amount in dispute for ICC arbitrations in 2015 was US$80 million, 33 per cent of ICC cases were under US$2 million and 25 per cent of cases were under US$1 million. Therefore a significant proportion of ICC cases will fall within the new ICC expedited procedure.
The ICC Rules 2017 also provide that parties may agree to opt-in to the expedited procedure if the amount in dispute exceeds the threshold. Conversely, parties may opt-out of the expedited procedure or the ICC Court may determine that the expedited procedure is inappropriate for a particular case. The expedited procedure will only apply to arbitration agreements entered into after March 1, 2017, unless the parties agree to opt-in.
The main features of the expedited procedure are as follows: notwithstanding the arbitration agreement, the ICC Court may appoint a sole arbitrator; the requirement for Terms of Reference has been removed; the tribunal has discretion not to allow document requests and to limit written submissions and evidence, as well as to decide the matter on documents only; the final award is to be made within six months of the case management conference. All ICC awards, including cases conducted under the expedited procedure, will continue to be subject to scrutiny by the ICC Court.
The ICC Rules 2017 have also reduced the time limit within which the Terms of Reference are to be signed, from two months to 30 days following transmission of the file to the tribunal (Article 23(2)). The purpose of this amendment is to reduce time in the initial phases of the arbitration and encourage tribunals to avoid unnecessarily delay. The ICC Court may (as is the case presently) extend the deadline in appropriate cases.
The prohibition on communicating reasons for the Court’s decisions to the parties has been removed (Article 11(4)). This amendment is in line with the ICC Court’s current practice to provide, in appropriate cases, reasoned decisions for challenges, for decisions to initiate replacement proceedings, as well as for decisions on prima facie jurisdictional decisions and consolidations. The Court has been providing reasons for some of these decisions since October 2015, but due to the previous language in the ICC Rules 2012, provision of reasoned decisions was subject to the agreement of all parties.
The SIAC Investment Arbitration Rules (SIAC IA Rules) came into force on January 1, 2017. Unlike the approach taken by the SCC, described below, the SIAC has promulgated a comprehensive set of rules specifically for investment arbitration.
The preamble of the SIAC IA Rules states that the rules may apply to disputes involving “a State, State-controlled entity or intergovernmental organization, whether arising out of a contract, treaty, statute or other instrument.” This provides a relatively broad scope for disputes which can be referred to the SIAC under these rules.
The SIAC IA Rules, however, do require the parties to have expressly referred their disputes to the SIAC under its investment rules. There appears to be no mechanism (aside from subsequent agreement) by which parties in appropriate cases can be transferred from the Arbitration Rules of the SIAC (SIAC Rules) to the SIAC IA Rules.
The SIAC IA Rules are largely based on the SIAC Rules, with specific amendments to cater for investment disputes. The tribunal is granted broadly the same powers and discretion under both sets of rules. Key provisions of the SIAC IA Rules are set out below.
Rule 1.3 of the SIAC IA Rules provides for waiver from immunity with respect to the arbitration proceedings before the SIAC, while expressly stating that such waiver does not apply to any immunity from enforcement which a party may have.
Also of interest is SIAC IA Rule 24(l), which grants the tribunal the power to order disclosure in relation to third party funders, which is particularly relevant in light of Singapore’s recent legislative amendments to allow for third party funding for international arbitrations. Pursuant to this provision, the tribunal may order the disclosure of the existence of a third party funder (including the identity of the funder) and, where appropriate, details of the funder’s interests in the outcome of the proceedings and/or whether the funder has committed to cover adverse costs liability.
The SIAC IA Rules also permit submissions by a non-disputing third party (on their own initiative or by invitation of the tribunal) who is a party to the treaty under which the arbitration was commenced (Rule 29.1). However, such submissions are limited to “a question of treaty interpretation that is directly relevant to the dispute.” Rule 29.2 also permits any non-party to the arbitration to make submissions, upon application to the tribunal, provided that such third party is found to have “sufficient interest in the arbitral proceedings and/or any other related proceedings” (Rule 29.3).
Pursuant to SIAC IA Rule 38, the parties are deemed to consent to the publication of the nationality of parties, identity and nationality of arbitrators, the treaty/statute/other instrument under which the dispute was commenced, and the date of commencement of proceedings and whether they have terminated. The SIAC may also publish redacted excerpts of the reasoning of the tribunal and redacted decisions of the SIAC Court on challenges.
Other points to note include: the increased time limit for the Response to the Notice of Arbitration and for constitution of the tribunal (Rules 4.1, 6.2 and 7.2); the default number of arbitrators is three instead of one (Rule 6.2); the SIAC Court, and not the President, shall appoint arbitrators under the Rules (Rules 6.2, 7.2, 7.3 and 9); appointments by the SIAC Court for sole arbitrator or presiding arbitrator shall be done in accordance with a list procedure (Rule 8); the submissions, unless otherwise agreed, are to be in memorial style (Rule 17); and the emergency arbitrator provisions are opt-in (Schedule 1).
The SCC Rules 2017 came into force on January 1, 2017, to coincide with the centenary celebrations of the SCC. The revised rules introduce a number of relatively minor amendments to the institute’s rules. The SCC also released a separate set of Rules for Expedited Arbitration (SCC Expedited Rules), effective from the same date.
Following ICSID and UNCITRAL, the SCC Rules are the most frequently used arbitration rules for investment disputes. The provisions relating to treaty based investment disputes are found at Appendix III to the SCC Rules 2017, and apply to cases under the SCC Arbitration Rules “based on a treaty providing for arbitration of disputes between an investor and a state.” The 2017 revisions have introduced procedures for submissions from third parties, broadly similar to the new provisions introduced by SIAC, discussed above.
The SCC Rules 2017 have also introduced a summary procedure under Article 39, pursuant to which parties may request the tribunal to determine one or more issues of fact or law by way of summary procedure. New provisions have been introduced for multi-party and multi-contract disputes, including provisions for the joinder of parties (Articles 13 and 14). Following other arbitral institutions (such as the HKIAC, the ICC and SIAC), the SCC has introduced specific guidelines on the appointment of Tribunal Secretaries (Article 24).
The SCC Expedited Rules apply only in the event that the parties have agreed to their application (Article 11), which may result in a more limited use than the provisions for expedited procedures of other institutions which apply by default to claims under a certain value.
While the SCC Expedited Rules contain relatively standard provisions, Article 30 provides that the Request for Arbitration and the Answer to the Request for Arbitration will constitute the parties’ primary submissions for the arbitration, permitting only one “supplementary written submission” unless the tribunal decides otherwise.
For more information contact:
First published in the 1LoD Global Benchmarking Survey & Annual Report 2019
Insights on global urban migration and infrastructure projects in an evolving market