New I.C.C. expedited arbitration procedure for small claims

Alert, Feb. 7, 2017

New I.C.C. expedited arbitration procedure for small claims

comes into force 1 March 2017

On 4 November 2016 the International Chamber of Commerce (“ICC) announced its new Rules of Arbitration (“ICC Rules) which will come into force on 1 March 2017.

The revised ICC Rules introduce a new set of rules for expedited procedures regarding so-called ‘small claims’. Further more the ICC announced a number of general changes to its Rules which include rules to streamline certain cases, and to provide greater transparency to the arbitration process as a whole.

This introduction of an expedited procedure for ‘small claims’ brings the ICC in line with other arbitral institutions, such as Stockholm Chamber of Commerce, Hong Kong International Centre and Singapore International Arbitration Centre. The ICC so aims reflect the growing demand for faster and especially cheaper arbitrations.

Expedited Arbitration Procedure

The biggest change to be introduced by these new ICC Rules will be the ‘Expedited Arbitration Procedure’. This speedier procedure is reflected in the new Expedited Procedure Rules. They shall automatically apply if the amount in dispute is under US$ 2 million.

The Expedited Arbitration Procedure will be available in case:

(i)     the arbitration agreement is entered in to on or after 1 March 2017 (the effective date);

(ii)    the parties have not opted-out of the Expedited Arbitration Procedure in their arbitration agreement; or,

(iii)   the ICC (Tribunal) has not determined – either as a result of a motion from one party or their own accord – that the Expedited Procedure should not be appropriate for that particular case.

Key figures of the new procedure are:

  • The dispute is referred to a single arbitrator, even if the arbitration agreement provides otherwise.
  • No requirement to draft and agree upon the so-called terms of reference.
  • Parties can only make new claims after the constitution of the arbitral tribunal, and with the permission of the tribunal.
  • The case management conference shall take place no later than fifteen (15) days after the transmission of the file to the tribunal.
  • An oral hearing is only held in the arbitrator's sole discretion.
  • The tribunal may decide to base its decision solely on the written submissions of the parties.
  • The possibility to limit the number and volume of written submissions.
  • Award has to be rendered within six (6) months.
  • Extensions will only be granted in circumstances which are, according to the Tribunal, “limited and justified”.
  • A reduced scale for arbitrator’s fee applies, which should result in reduced fees (in comparison to non-expedited cases).

Additional revisions

The ICC has also introduced a number of other (general) changes to the ICC Rules:

Terms of reference. The deadline for drafting the Terms of Reference will be reduced by the new rules. The arbitral tribunal now has thirty days (reduced from two (2) months) in which to sign and return the Terms of Reference to the Tribunal. However, the tribunal or sole arbitrator can apply for an extension with the Tribunal is needed.

Arbitration costs. A request for arbitration now requires a filing fee of US$ 5,000 (in fact, increased from US$ 3,000).

Administrative expenses. The new ICC Rules introduce a revised fee scale for administrative expenses. Although the ICC has avoided a radical change; the amounts are still substantial.

Article 11(4) of the ICC Rules. This article will be deleted. It prevented an ICC Tribunal from providing reasons for decisions on challenges, replacement of arbitrators, and in the context of its prima facie jurisdictional decisions, and consolidations of arbitrations. The aim of this change is to increase transparency regarding a Tribunal’s decisions.

Comment

This new procedure is likely to bring about the desired efficiency in claims that are relatively straightforward. It will allow a greater number of lower value claims to be resolved quickly and cost-efficiently. However, low-value claims are not necessarily simple and it remains to be seen how an ICC Tribunal will deal with complex low-value cases.

The removal of the Terms of Reference in this procedure is also expected to create efficiency, given the fact that this aspect of the ICC Rules can – in practice – be time consuming and costly.

The other changes are also a welcome development. It will also be helpful for users to gain further insight into the workings of the ICC through the reasons given on challenges, jurisdiction and consolidation decisions. This is an important step that should further strengthen confidence in the integrity of the ICC arbitration process.

Any further questions? Please contact Maarten P.P. van Buuren, business lawyer and litigator, at vanbuuren@wlp-law.com or at +31-88-200 1300

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