A review of the new ICC Arbitration Rules and whether they address adequately the vexed question of delay

The new ICC Arbitration Rules: Old wine in a new bottle?

Andrew Rawstron of the Construction Law Group looks at the background to the new ICC Arbitration Rules and comments on whether they adequately address the vexed question of delay

On 1st January 1998, a new edition of the ICC Arbitration Rules was published. The previous edition, issued in 1988, made only minor changes to that issued in 1975 and it had therefore been some 20 years since the Rules were thoroughly overhauled by the time that the ICC Working Group, led by Yves Derains, began work in October 1995.

The growth of international arbitration

In that time, the number of international arbitrations, and the number of construction related arbitrations in particular, has grown substantially. In 1996 alone 433 new cases were filed with the ICC Court; in total there are more than 900 ICC arbitrations currently ongoing. Clearly the ICC has a substantial stake in the market, but it is not the only arbitral institution concerned with international disputes. Indeed, it was in part as a result of the success of the UNCITRAL Rules and the new model Rules of the American Arbitration Association that the ICC decided to review its own Rules. So what has been achieved?

The ICC's stated objectives

The ICC's stated objectives were to formulate new Rules in an attempt to

• reduce delays;
• minimise unpredictability; and
• improve Rules which were defective.

Worthy aims. Concern as to procedural delays in particular has been voiced for some time and in that context it might therefore have been expected that the new Rules would adopt a fundamental change of approach. In fact, that is not the case. Key features of the 1988 Rules remain intact. In particular

• the ICC Court retains a central administrative role;
• the use of "Terms of Reference" remains a key feature; and
• the ICC Court will continue to scrutinise draft Awards prior to their publication.

So how have the ICC sought to address the question of delay? A full review of the changes introduced is beyond the scope of this article, but a number of points are worthy of note.

Time limit for the award

At first sight, the new Rules do not appear to make significant changes. As before, the time limit for rendering an Award is generally six months from the signing of the Terms of Reference. Under the 1988 Rules this time limit was frequently extended and the new Rules again make express provision in this respect. In practice it seems likely that the six month time limit will often be exceeded. That said, the ICC have sought to address a number of specific causes of delay. In particular

• The Tribunal may proceed with the arbitration, notwithstanding the refusal of a party to take part.
• Neither a Request for Arbitration nor the Answer to that Request need include a formal Statement of Case or Defence. Instead, the Claimant is obliged to include a "statement of the relief sought".
• The arbitration may now proceed once the Claimant has paid the provisional advance on costs.
• The Tribunal is now obliged to fix a provisional timetable by the time that the Terms of Reference have been drawn up.
• When the Tribunal is satisfied that the parties have had a reasonable opportunity to be heard, it can declare the proceedings closed. At that stage no further submissions can be made without authorisation by the Tribunal.
• If a party fails to appear at the hearing "without valid excuse" the Tribunal has the power to proceed with the hearing regardless.

The new Rules therefore give the Tribunal enhanced powers to progress the proceedings. At the same time, they also offer a considerable degree of procedural flexibility to parties who are willing to proceed by consent. In particular, Article 17(3) is important. It provides that the Tribunal can assume "the powers of an amiable compositeur or decide ex aequo et bono" (the latter being new) if the parties agree to give it those powers. More generally, there is no reason why the parties should not seek to agree a fast track timetable or adopt "alternative" routes to resolution of the issues in dispute other than by reference to black letter law. The new Rules simply provide a framework for the process.

New claims

The ICC's belief that procedural flexibility should be encouraged is also reflected in one of the most significant changes to the 1988 Rules. Previously, unless a claim was identified in the Terms of Reference it could not be advanced in the proceedings without the consent of the other party concerned. It was often the case that consent would be refused for "tactical reasons" and in those circumstances there was no alternative but to have related issues resolved in more than one forum. A victory for the technocrats.

In contrast, Article 19 now provides that the Tribunal may allow new claims to be introduced once the Terms of Reference have been settled, having regard to the nature of the claim concerned, the state of the arbitration and any other "relevant circumstances". The purpose of the "Terms of Reference" is still to clarify the matters in dispute but is no longer to strictly define them. Whilst some lawyers may query the value of Terms of Reference in these circumstances, and the introduction of new claims is still likely to be contentious, from a commercial perspective the increased flexibility of the Rules is clearly to be welcomed.

Conclusion

Overall, the new Rules represent a process of evolution and in general they have been well received. It is now up to the parties, their advisers and in particular the arbitrators who are appointed to use the powers available and seize the opportunity presented to make international arbitration under the ICC Rules an effective process.