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17 August 2017
Arbitral institutions are constantly seeking to update their rules to keep in line with existing trends and to distinguish themselves among their peers. In early 2017 new or amended rules came into force for three of the most prominent global arbitral institutions:
Important changes include the introduction of expedited procedures in ICC and SCC arbitrations and new SIAC rules for investment arbitrations. This update provides a brief overview of the 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 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 in comparison to SIAC's expedited procedure, under which the threshold for the amount in dispute was raised from S$5 million to S$6 million in 2016 (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% of ICC cases were under US$2 million and 25% 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 applies only 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:
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 frame 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 unnecessary 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 came into force on January 1 2017. Unlike the approach taken by the SCC, the SIAC has promulgated a comprehensive set of rules specifically for investment arbitration.
The preamble of the SIAC International Arbitration 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.
However, the SIAC International Arbitration Rules do require 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 International Arbitration Rules.
The SIAC International Arbitration 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. The key provisions of the SIAC International Arbitration Rules are set out below.
Rule 1.3 of the SIAC International Arbitration Rules provides for waiver from immunity with respect to the arbitration proceedings before the SIAC, while expressly stating that such a waiver does not apply to any immunity from enforcement which a party may have.
SIAC International Arbitration Rule 24(L) 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 whether the funder has committed to cover adverse costs liability.
The SIAC International Arbitration 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, on 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 International Arbitration Rule 38, parties are deemed to consent to:
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 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, effective from the same date.
Following the International Centre for Settlement of Investment Disputes and the United Nations Commission on International Trade Law, the SCC Rules are the most frequently used arbitration rules for investment disputes. The provisions relating to treaty-based investment disputes are found in Appendix III of 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 the 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 (eg, the Hong Kong International Arbitration Centre, the ICC and SIAC), the SCC has introduced specific guidelines on the appointment of tribunal secretaries (Article 24).
The SCC Rules for Expedited Arbitration 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 Rules for Expedited Arbitration 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 further information on this topic please contact Pierre Bienvenu at Norton Rose Fulbright LLP by telephone (+1 514 847 4747) or email (firstname.lastname@example.org). The Norton Rose Fulbright LLP website can be accessed at www.nortonrosefulbright.com.
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