Institutional history
The International Chamber of Commerce (ICC) is the best known of all the international arbitration institutions. Created in Paris in 1923, it has played a leading role in promoting international laws on arbitration (such as the New York Convention), and has been largely responsible for developing arbitration as the preferred means of resolving international commercial disputes. It remains the largest institution in Europe in terms of number of cases filed (561 in 2004).
The phrase ‘ICC arbitration’ in fact refers to disputes which are administered by the International Court of Arbitration of the ICC (the Court). However, the Court is just one of the divisions within the ICC, which is not concerned exclusively with arbitration. The ICC’s constitutional aim is the promotion of international trade and investment, which it carries out through educational activities, sponsorship of research, and representation of commercial interests before various international bodies.
Aside from the Court, the ICC includes other structures such as the Institute for World Business Law, which focuses on legal research and education (often in the field of arbitration). The ICC also creates and promulgates international standards and rules for use in commerce, such as Incoterms for international sale and transportation of goods.
Organisational structure
The ICC claims to represent enterprises from every part of the world (it is sometimes referred to as the ‘World Business Organization’). Its membership consists of individual businesses and professional associations, grouped into national committees in some 85 different countries. Those committees elect delegates to the ICC World Council, which in turn elects executive officers, as well as an Executive Board.
The Court consists of a Chairman and Vice-Chairman, appointed by the Council, and members, appointed on the recommendation of the national committees. The Court is not a ‘court’ in the judicial sense. All decisions on the merits of any ICC arbitration are made by the arbitral tribunal, which is entirely independent from the Court. The Court is in fact a purely administrative body; its function is to ensure the proper application of the ICC Rules by the parties and by the tribunal. In particular, it is responsible for making certain key administrative decisions, such as whether, prima facie, an arbitration agreement exists, the fixing of the seat of the arbitration in the absence of any choice by the parties, the appointment of arbitrators where the parties have failed to do so, determining challenges to arbitrators, and scrutinising draft awards before they become final. All deliberations by the Court are kept private from the parties; its decisions are communicated without reasons. In general, there is no judicial recourse against its decisions – although a party is at liberty to challenge, or to oppose enforcement of, the final award on the basis of any procedural unfairness.
The Court is assisted by the Secretariat, which is responsible for the day-today running of the file. In practice, it is the Secretariat with whom the parties have contact during ICC arbitrations. Each case is administered by a team of ‘counsel’, designated by the Secretariat at the beginning of the arbitration, whose names appear on the relevant correspondence and who are available to answer any procedural queries the parties may have. The Secretariat is headed by a Secretary-General, who also represents the Court at educational and public events.
Regional scope and statistics
ICC arbitration is not limited to any geographical territory. Its scope is truly international.
With regard to the seat, it is sometime mistakenly thought that ICC arbitrations always have their seat in Paris. In fact, the parties are free to choose the seat of the arbitration themselves, and in most cases (over 85%) they do so. Paris remains the most popular choice, but in 2004, London was not far behind (62 cases, as opposed to 74 for Paris). In the absence of agreement between the parties there is no ‘default’ rule that Paris shall be the seat (unlike in some other institutional rules). In 2004, where the ICC itself had to fix the seat, it chose Paris most often (in 14 cases), followed by Geneva (8 cases), then Singapore (6 cases). (Its choice in such cases is motivated in part by concerns as to the enforceability of the award: the courts of all three of these countries are clearly supportive of arbitration.)
With regard to users of ICC arbitration, in 2004, parties came from 116 different countries. The continent most widely represented was Europe (54% of the total), with most parties coming from the UK, Germany and France, in that order. South and East Asia accounted for 13%, North America 12% and Latin America 11%. Compared with the statistics for 2000, parties from South and East Asia and Latin America increased by 2% and 3% respectively, while North American parties have declined by 2%.
In terms of the nationality of arbitrators, 61 countries were represented in 2004, with the most common nationalities being British and Swiss (120 arbitrators each).
The number of new cases filed with the ICC increased steadily up to 2002, when 593 cases were filed. Since that date, however, there has been a slight decline (580 new cases in 2003, 561 in 2004). It is probably too early to assess how significant this is.
Geographical seat/contact details
The headquarters of the ICC, in which the Court and Secretariat are located, is in Paris. Its contact details are as follows:
Secretariat
ICC International Court of Arbitration
38 cours Albert 1er
75008 Paris, France
Tel: +33 1 49 53 29 05
Fax: +33 1 49 53 29 33
Email: arb@iccwbo.org
Website: www.iccarbitration.org
EDUCATIONAL PROGRAMMES AND PUBLICATIONS
ICC educational programmes are numerous. First, both the Court and the ICC Institute of World Business Law organise a large number of conferences, seminars and educational workshops throughout the year and in various parts of the world. Registering an interest with the ICC will ensure advance receipt of brochures for such events.
In addition, the Court has its own periodical, the Bulletin, which is published three times a year (one edition takes the form of a special supplement devoted to a particular issue). The Bulletins contain a mixture of articles of general interest and extracts from interesting ICC cases. The first edition each year also contains a summary of statistical information on the ICC workload from the previous year. The ICC in fact publishes more information about the Court’s workload than any other major arbitration institution.
Every five years the ICC also publishes a collection of redacted ICC awards, the latest of which covers the years 1996 to 2000. These are indexed in such a way as to permit thematic searches. A Collection of Procedural Decisions in ICC Arbitration dating from 1993 to 1996 has also been published.
Details of all these publications may be found on the ICC Publishing website at www.iccbooks.com.
As far as publications about the ICC are concerned, there is a wide range of materials available. The best-known sources are probably WL Craig, WW Park and J Paulsson International Chamber of Commerce Arbitration (New York, Oceana Publications/ICC Publishing SA, 3rd edn, 2000) and Y Derains and E A Schwartz A Guide to the New ICC Rules of Arbitration (The Hague, Kluwer, 1998). A more recent publication is E Schäfer, H Verbist and C Imhoos ICC Arbitration in Practice (The Hague, Kluwer, 2005).
ADMINISTRATIVE EXPENSES/ARBITRATOR FEES AND EXPENSES/LEGAL COSTS
Administrative expenses
ICC arbitrations require the institution’s administrative expenses to be paid by the parties. They are fixed by the Court at the end of the arbitration, usually by reference to the amount in dispute, and in accordance with a sliding scale (the scale is set out in art 4 of Appendix III of the Rules). The scale is regressive, such that the higher the amount in dispute, the lower the percentage of that amount is charged. It should be noted also that each slice is calculated cumulatively, so the first US$50,000 attracts administrative expenses of US$2,500, the second US$50,000 attracts 3.5% of US$50,000 etc. The only exception is if the total amount in dispute is over US$80 million, in which case a flat fee of US$80,800 is charged.
In practice the amounts of administrative expenses are relatively small compared with the arbitrators’ fees (see next section). For example, a claim for US$1 million would lead to administrative expenses of US$16,800.
Arbitrator fees and expenses
Like administrative expenses, arbitrators’ fees in ICC arbitrations are fixed by the Court at the end of the arbitration, by reference to the amount in dispute. The relevant fee scale is set out in Appendix III of the Rules. (The figures in the scale are for one arbitrator: where three arbitrators are appointed, the figures should be multiplied by three.)
Unlike administrative expenses, however, the fee scale for arbitrators’ fees gives a minimum and a maximum figure. For example, for a dispute worth US$1 million with three arbitrators, the total amount would be a minimum of US$33,750 and a maximum of US$160,500. In practice, the ICC fixes the fee between these two levels according to various factors listed in art 2(2) of Appendix III, including the diligence of the arbitrator and the complexity of the dispute.
The use of a fee scale in this way has the advantage of providing an advance indication of the costs of the arbitration (which would not be the case with institutional rules fixing fees on an hourly basis). However, it should be noted that the minimum and maximum figures laid down by the scale are not absolute. The Court will fix the figure according to its own discretion where the sum in dispute is not stated. Even if there is a damages claim, the Court may fix figures that depart from the scale where this is deemed necessary due to the exceptional circumstances of the case (art 31(2); art 2(2) of Appendix III).
Using the ICC fee scales to calculate costs can be somewhat complicated. In practice, it is much easier to make use of the Court’s ‘costs calculator’ on its website (www.iccwbo.org/court/english/cost_calculator/cost_calculator.asp). The user simply inputs the value of the claim and the number of arbitrators and the likely costs are instantly displayed.
Parties’ obligations
The parties are obliged to make advance payments toward the costs of an ICC arbitration at various points in the proceedings.
Filing fee
When submitting its Request for Arbitration, the claimant must pay a filing fee, currently fixed at US$2,500. This is credited to the claimant’s portion of the advance on costs (see further below).
Provisional advance on costs
Once the claimant’s Request for Arbitration has been received, the Secretary-General has a discretion to (and in most cases will) ask that the claimant pay a provisional advance to cover the costs of the arbitration up to the point where the Terms of Reference are settled. Like the filing fee, the provisional advance is credited towards the claimant’s share of the advance on costs.
Advance on costs
The Court must, as soon as practicable, fix an advance on costs for the arbitration as a whole. The advance comprises an amount likely to cover arbitrator fees and expenses, as well as administrative costs, utilising, so far as possible, the scales set out above. The advance may be, and often is, readjusted in the course of the arbitration.
The advance on costs must be paid in equal shares by the claimant and the respondent. In the event that one party refuses to pay its share, the claim as a whole may be deemed by the Court to have been withdrawn; alternatively, the other party may pay the share of the defaulting party in order to ensure that the proceedings continue.
Counterclaims
Generally, the amount of any counterclaim is added by the Court to the amount in dispute for the purpose of fixing the administrative costs and tribunal’s fees. With regard to the advance on costs, a single, global advance is fixed which is paid in equal shares by the parties. However, in exceptional circumstances and if a party requests it, the Court may elect to fix separate advances on costs for claims and counterclaims, in which case each of the parties must pay the advance relevant to its claim or counterclaim only. Such an election may be made if the counterclaim is disproportionately large and the respondent is refusing to pay its share of the costs.
Awards as to costs
Under art 31(3), the final award of the arbitral tribunal must fix the costs of the arbitration and decide how they shall be apportioned between the parties. The costs of the arbitration have three components: first, the administrative expenses and arbitrator fees, fixed by the Court in the manner discussed; secondly, any expert fees and expenses; and, thirdly, the reasonable legal and other costs incurred by the parties for the arbitration. The amounts already paid by the parties by way of advance on costs are taken into account in the calculation of which party owes what to the other.
AGREEMENTS TO ARBITRATE
The ICC recommends the following standard arbitration clause:
‘All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.’
A clause which does not follow this standard wording may, of course, still be effective in granting jurisdiction to an ICC tribunal, provided it clearly shows an intention to arbitrate under the ICC Rules. Where a clause is pathological (ie it does not clearly refer to the ICC Rules), or where there is doubt as to the applicability of the clause to the parties or dispute in question, the Court will (if the respondent raises the issue) apply a prima facie test of validity only (see below, under ‘Resolution of jurisdictional issues’). Thereafter, assuming the test is passed and the tribunal is constituted, the tribunal will itself determine whether it has jurisdiction based on a full analysis of the arbitration clause and the submissions of the parties. In any event, it is still open to a party to challenge the final award, or oppose enforcement, based on the lack of a valid arbitration agreement.
In addition to the elements contained in the ICC’s standard clause, which essentially directs that any dispute be determined in accordance with the ICC Rules, parties may wish to include more detail in their arbitration agreement on matters such as the number of arbitrators, the seat of the arbitration, and the language of the proceedings.
Parties are generally free to supplement or modify the ICC Rules in their arbitration agreements. For example, they may specify different mechanisms for selection of arbitrators. The ICC may, however, refuse to accept jurisdiction if a mandatory feature of the ICC Rules is removed. Mandatory features would include, in particular, requirements as to the independence of arbitrators, control of costs by the Court, the fixing of Terms of Reference and scrutiny of the award by the Court.
INITIATING PROCEEDINGS
Required documents/preconditions
A party wishing to commence an arbitration must submit a Request for Arbitration to the ICC Secretariat. There is no special form for the Request. However, it must include certain information stipulated by art 4(3), including the circumstances and nature of the dispute, the relief sought, and the content of the arbitration agreement.
Together with the filing fee, the claimant must submit copies of the Request for each party and arbitrator, as well as one for the Secretariat. A failure by the claimant to meet these requirements will result in the Secretariat fixing a time limit for compliance, in default of which the file will be closed. In that event, the claimant may still submit the same claims at a later date in another Request.
Service requirements
No particular service method is specified in the ICC Rules. The Request, together with the copies, may be submitted to the Secretariat by post, courier or hand. It also appears that, in practice, the Secretariat will, where necessary, accept the Request by fax or email and then set a deadline for the submission of an original and copies. This may be appropriate where the limitation period for commencing proceedings is about to expire.
Submission of the Request on the other parties is carried out by the ICC itself, not by the claimant.
SELECTION/APPOINTMENT/CHALLENGE OF ARBITRATORS
Make-up of tribunal
Unless the parties agree otherwise, an ICC arbitration must be undertaken by a sole arbitrator or by three arbitrators. The process of appointment will depend upon the extent, if any, to which the parties have reached agreement on the issue. If the parties have agreed that there should be a sole arbitrator and have further agreed on a particular person, they must nominate the person for confirmation by the Court. If the parties have agreed on a sole arbitrator but cannot settle who it should be, the person will be appointed by the Court.
If the parties have agreed that the dispute should be referred to three arbitrators, each side must nominate an arbitrator for confirmation by the Court in the Request for Arbitration or when the Answer to the Request is due, respectively. A failure to do so will result in an appointment by the Court. The third arbitrator, who becomes the chairman of the arbitral tribunal, is ordinarily appointed by the Court. However, the parties may adopt an alternative procedure, subject to the appointee being confirmed by the Court. A common approach is for the two arbitrators nominated by the parties to select a chair.
If the parties have not reached agreement on the number of arbitrators, the default rule is that the Court will appoint a sole arbitrator, ‘save where it appears to the Court that the dispute is such as to warrant the appointment of three arbitrators’ (art 8(2)). In practice, such appointment is normally made if the dispute is particularly complex or valuable; however, the ICC may appoint particularly experienced sole arbitrators in high value cases.
Requirements of independence
By art 7(1), every arbitrator is required to be and to remain independent of the parties involved in the arbitration. Independence is usually taken to mean lack of any financial interest in the outcome of the case, or lack of business connection with the parties. Although there is no express requirement for ‘impartiality’ under the ICC Rules (in the sense of lack of bias with respect to the subject-matter of the arbitration), art 15(2) requires arbitrators always to act ‘fairly and impartially’ and, in practice, challenges may be made against arbitrators on impartiality grounds alone (see below).
Each arbitrator is required to declare his or her independence from the parties at the stage of appointment and confirmation. Any facts which ‘might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties’ must be revealed in the declaration (art 7(2)). If a party objects to an arbitrator on the basis of any disclosed facts, it may challenge the appointment according to the procedure summarised below. After this initial declaration, arbitrators are also under a continuing duty to reveal any such facts during the course of the arbitration.
Roles of parties and institution in selection
There is no list of ICC ‘approved’ arbitrators, and parties may nominate whom they wish. However, nominations must be confirmed by the Court, which will, in every case, verify the independence and impartiality of the arbitrator in question. Where the Court itself selects a sole arbitrator or chairman of a tribunal, it usually does so on the basis of a proposal from a national committee (see ‘Organisational structure’ above).
Nationality of arbitrators
Under the ICC Rules, sole arbitrators and chairmen of tribunals must be of a different nationality to the parties, unless the parties agree otherwise. Article 9(1) also requires the Court to take into consideration, when confirming or appointing any arbitrator (including a party-nominated arbitrator), his or her ‘nationality, residence and other relationships with the countries of which the parties … are nationals’. However, in practice, the nationality of a party-nominated arbitrator will not normally be a barrier to his or her confirmation.
Multiple parties
If an arbitration with multiple claimants and respondents is to be referred to three arbitrators, both the claimants jointly and the respondents jointly must nominate an arbitrator for confirmation under art 10. If either the claimants or the respondents fail to agree on a joint nomination or method for the constitution of the tribunal, the Court may appoint each member of the arbitral tribunal, designating one as chairman. In this context, the Court has a discretion to apply the rules governing selection in regular arbitrations, including nationality requirements (art 10(2)).
Timing/handling of challenges
An arbitrator may be challenged by a party either at the stage of his or her confirmation by the Court (in which case the challenge is also known as an ‘objection’), or once the arbitrator has already been appointed. The principal ground for doing so is lack of independence, as set out above. Arbitrators may also be challenged for a failure to act fairly or to afford a party an opportunity to present its case under art 15(2) or inadequate productivity.
The party mounting the challenge must submit a written statement to the Secretariat specifying the facts and circumstances on which the challenge is based. A strict time limit applies to the submission of the statement, being 30 days from the date on which the party received notification of the appointment or confirmation of the arbitrator or was thereafter informed of the relevant facts and circumstances. The Secretariat must give the arbitrator subject to the challenge, any other arbitrator and the other party the opportunity to make written comments. Thereafter, the Court will determine the admissibility of the challenge.
It is often said that the later a challenge is made in ICC arbitration, the less chance it has of success. In most cases, challenges take the form of objections at the appointment stage, by reason of matters declared in the arbitrator’s statement of independence. The Court will, in practice, apply a higher standard of independence at that stage (ie the test is easier for the challenging party to pass). When a challenge is made after the arbitrator has already been appointed, a plenary session of the Court is required to consider the challenge. Fewer such challenges are made, and a smaller proportion succeed.
International Chamber of Commerce (ICC)
Replacement of arbitrators
Separately, the Court has the power to replace an arbitrator of its own motion under art 12. The grounds for the exercise of this power by the Court are essentially the same as those for challenges by a party, namely, that the arbitrator is prevented from fulfilling his or her functions legally or factually, is not doing so in accordance with the ICC Rules, or is failing to do so within the prescribed time limits. The Court must invite written comments in much the same way as the Secretariat would for challenges by a party.
Also, an arbitrator may cease to hold office upon his or her death, or after a request for replacement from all the parties.
In addition, an arbitrator’s involvement may be terminated upon the Court accepting his or her resignation. While the Court usually does so, it will not automatically accept an arbitrator’s resignation. The Court is vigilant to ensure that an arbitrator, especially a party appointee, is not resigning as a dilatory tactic at the deliberation stage, to delay the issuing of an award against his or her appointing party.
RESOLUTION OF JURISDICTIONAL ISSUES
Role of institution and arbitrators
Disputes as to the existence, validity or scope of the arbitration agreement are resolved by the tribunal when constituted and not the Court. The Court may, however, play a limited role in determining jurisdiction following submission of the Request for Arbitration. If the Respondent does not file an Answer, or if the Respondent takes issue with the arbitration agreement in its Answer, the Court must satisfy itself on a prima facie basis that a relevant arbitration agreement may exist before proceeding with the arbitration (art 6(2)). This is simply to avoid the cost and delay of appointing a tribunal if it is inevitable that the tribunal will decline jurisdiction. The prima facie test is, in practice, a relatively easy one for the claimant to pass. As with all decisions by the Court, a prima facie decision on jurisdiction is administrative in nature and is not subject to judicial challenge.
If the Court determines that an arbitration agreement is not in place, any party may still seek a declaration from any court having jurisdiction as to whether or not a binding arbitration agreement exists.
If the Court decides that it is satisfied as to the existence of a relevant arbitration agreement, the decision will be wholly without prejudice to any submissions the parties may make on the issue to the tribunal when it is subsequently appointed.
The timing of the tribunal’s award on jurisdiction (ie whether in a preliminary award or in the final award on the merits) will depend on its own discretion and/or the law of the place of the arbitration. Possibilities for challenging such an award also depend on the law of the seat.
If any party refuses or fails to participate in the arbitration at any stage, the proceedings continue regardless.
TYPICAL AND/OR REQUIRED PROCEDURES
Pleadings
As has already been mentioned, the claimant must file a Request for Arbitration, which is then met with the respondent’s Answer to the Request and, where applicable, the claimant’s Reply to Respondent’s Counterclaims (art 5). No subsequent pleadings are identified by the ICC Rules. In principle, the parties either agree on the exchange of further pleadings, or the procedure is fixed by the tribunal. Normally, there will be at least one, and possibly two, further exchanges beyond the Request and Answer. The terminology for these pleadings varies according to the legal background of the tribunal and parties. The main submissions are often termed ‘Statement of Claim’ and ‘Statement of Defence’. It is also quite common for the parties to exchange ‘Memorials’ containing their submissions and evidence all at once.
Terms of reference
A particular feature of ICC arbitration is the requirement for the parties and the tribunal to draw up Terms of Reference. Under art 18, this is the first task of the tribunal, and should be completed within two months of receipt of the file from the Court (although this deadline may be extended by the Court).
The origin of the requirement for Terms of Reference lies in a historical peculiarity of French arbitration law. It used to be necessary in France (and in many other civil law jurisdictions based on French law) for parties to an arbitration to enter into an agreement or compromis after the dispute had arisen, as opposed to a contractual arbitration clause. That requirement has long since disappeared. However, the requirement for Terms of Reference under ICC Rules – which used to serve the function of a compromis – remains. Although the ICC has considered in the past abandoning this feature, it remains popular with the majority of users of ICC arbitration and with the ICC membership.
The function of the Terms of Reference is essentially twofold. First, in most cases they identify the issues to be determined by the tribunal (although this requirement can be dispensed with if the tribunal considers that the issues have not yet been defined). In accordance with art 19 of the Rules, no party may make new claims which fall outside the Terms of Reference unless it has been authorised to do so by the tribunal. This therefore provides a safeguard against procedural abuses. Early identification of the issues may also help promote efficiency in the resolution of the dispute, and possibly even settlement. Secondly, the Terms of Reference provide an occasion for the parties and tribunal to discuss and agree procedural rules to apply during the arbitration (eg provisions as to disclosure of documents and rules of evidence). Article 18 stipulates certain items of information which must be included in the Terms of Reference, but the parties are at liberty to – and normally do – go beyond those requirements.
It should be noted that, potentially, any award by an ICC tribunal which goes beyond issues fixed in the Terms of Reference – whether the scope of the issues to be determined or procedural matters – may be open to challenge (or a defence against enforcement), on the basis that the tribunal exceeded its authority. Experienced arbitrators will word the Terms in such a way as to avoid this problem; the Court may also draw any potential conflicts between the award and Terms of Reference to the attention of the tribunal at the scrutiny stage (see below).
Documents and discovery
There is no provision in the ICC Rules relating to discovery in the common law sense. Rules on the documents to be disclosed and the timing of disclosure may be agreed by the parties or fixed by the tribunal, in particular, in the Terms of Reference. However, discovery as a distinct procedural stage is not the norm in international arbitration. Ordinarily parties will, however, exhibit all the documents on which they rely.
With regard to requests for production of documents, ICC tribunals have a general power to order parties to produce ‘additional evidence’ by virtue of art 20(5) of the Rules, and this provision covers documentary evidence. However, no principles on which the tribunal should base such an order are specified in the Rules, nor any consequences of non-compliance by the producing party. The ICC Rules are, in sum, opaque on this issue. The approach of the tribunal will depend on its conception of international arbitral practice. However, parties to an ICC arbitration may agree on their own procedural rules, including possible incorporation of the IBA Rules of Evidence (which limit the grounds on which an application for production of documents may be made to what is relevant and material).
Evidence (oral and written; fact and experts)
The ICC Rules provide maximum flexibility to the tribunal to determine the extent and form of witness evidence. Indeed, some parties to ICC arbitrations may be surprised by the lack of precision in the Rules on these issues. Article 20(3) merely provides that the tribunal ‘may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties or in their absence, provided they have been duly summoned’. Again, as with requests for production of documents, ICC tribunals are likely to apply international arbitral practice, or their personal preferences, to issues of witness evidence. If the parties require more certainty they can agree to apply eg the IBA Rules of Evidence. In practice, procedures and deadlines for exchange of witness statements and/or expert reports are normally agreed at the Terms of Reference stage.
Time limits and calculation
The ICC Rules specify various time limits for procedural steps up to and including the signing of the Terms of Reference. Thus, the respondent’s Answer must be submitted within 30 days of receipt of the Request for Arbitration; similarly, in the event the Answer includes counterclaims, the claimant has a further 30 days to submit its Reply. Both these deadlines may, however, be extended by the Secretariat (in complex arbitrations it is usual for the Secretariat to grant to the respondent an extension in time for submission of the Answer). Nominations of arbitrators by the parties are also subject to various deadlines, which depend on whether a sole arbitrator is to be appointed or a three-member tribunal (art 8(2)–(4)). Finally, as mentioned above, the Terms of Reference are intended to be finalised within two months of the tribunal receiving the file.
After the Terms of Reference, the procedural deadlines are either agreed by the parties or fixed by the tribunal in a provisional timetable. This provisional timetable must be produced at the same time as, or shortly after, the Terms of Reference (art 18(4)).
A notable feature of the ICC Rules is the stipulation that the award shall be issued within six months of the Terms of Reference (art 24(1)). However, this period may be extended by the Court if the tribunal makes a reasoned request. In practice, very few ICC awards are issued within this deadline and extensions are routinely given by the Court. However, the need for the tribunal to apply for an extension imposes a degree of discipline on it to keep the procedure moving forward.
HEARINGS
Oral hearing
There is no requirement in the ICC Rules for an oral hearing; however, where a party requests such a hearing it must be held. In the absence of such a request a tribunal may elect to conduct the arbitration on documents only. In practice, in complex cases and cases where witness statements have been produced it is usual for ICC tribunals to hold an oral hearing.
All the parties are entitled to be present at the hearing, either in person or through representatives. They may also be ‘assisted by advisers’ (art 21(4)). However, the hearing may be held in the absence of a duly summoned party that has failed to enter an appearance of any kind and has no valid excuse. Hearings are private, subject to an agreement to the contrary from the arbitral tribunal and the parties (privacy should be contrasted with confidentiality: the ICC Rules do not contain any general stipulation about the confidentiality of the arbitral process).
The arbitral tribunal is in full charge of the hearing. However, in exercising its control, the tribunal must ensure that each party has a reasonable opportunity to present its case (art 15(2)). Similar requirements of procedural fairness are imposed by the laws of most countries in relation to arbitrations held within their territory.
Rights of audience
As indicated above, each party is entitled to attend the hearing, whether in person, through representatives, or with the assistance of advisers. However, the ICC Rules do not prescribe the qualifications that representatives or advisers must hold. In practice, representatives will almost always be lawyers and advisers will be either lawyers or experts relevant to the dispute. It is possible that the law of the seat of the arbitration may impose requirements on the qualifications of legal representatives.
Timing/duration
The ICC Rules do not specifically prescribe when or how long the hearing should last. Nevertheless, the tribunal is bound to ensure that each party has a reasonable opportunity to present its case. When the arbitral tribunal is satisfied that this has happened, it must declare the proceedings closed (art 22(1)). Thereafter, no additional evidence or further submissions may be made unless authorised by the arbitral tribunal.
AWARDS
Prior approval/scrutiny
The ICC is the only major international commercial arbitration institution which scrutinises the draft awards produced by arbitral tribunals before they are delivered to the parties. In accordance with art 27, an arbitral tribunal must submit any award to the Court before signing. The Court will then review the form and substance of the award. It may stipulate modifications as to the form of the award and the award must not be rendered by the arbitral tribunal until its form has the Court’s approval. In contrast, the Court merely has power to draw the attention of the arbitral tribunal to points of substance arising from the award, without affecting its liberty of decision. The Court does not revisit the merits of the dispute.
The terms ‘form’ and ‘substance’ are not defined by the ICC Rules, and in practice the distinction is not always clear. For example, failure to consider matters listed in the Terms of Reference or inclusion of matters going beyond the Terms of Reference (infra petita/ultra petita) may variously be viewed as going to form or substance. Article 6 of Appendix II also obliges the Court, in scrutinising awards, to consider the requirements of any mandatory law at the place of arbitration; such requirements would normally relate both to substance and form.
Essential requirements
Article 25(2) requires an award to indicate the reasons upon which it is based (such a requirement may well also be mandatory under the law of the seat of the arbitration). No specific degree of detail is required. However, it is clear that the reasons must adequately articulate the grounds for the tribunal’s decision.
There is no requirement in the ICC Rules that an award of the arbitral tribunal be rendered in the place of the arbitration. Article 25(3) simply deems the award to be made at that place, regardless of where it is actually signed (again, subject to any mandatory legal requirements of the arbitration venue).
Dissenting opinion
Article 25(1) provides that any award of an arbitral tribunal composed of more than one arbitrator may be given by majority decision. However, if no majority can be formed, the award must be made by the chairman of the tribunal alone. This situation rarely arises but has the advantage of ensuring that there are no substantive differences of opinion that can preclude the rendering of an award.
The ICC Rules do not specifically address the question of dissenting opinions. These do not form part of the award, but are nevertheless usually sent to the parties at the same time as the award (the only exception would be if the Court felt that releasing the dissenting opinion might endanger the enforcement of the award).
Correction of errors
Article 29 establishes a procedure for the correction of an award after it is issued, in respect of clerical, computational, typographical or similar errors. If the tribunal begins the procedure on its own initiative, it must submit any correction to the Court for its approval within 30 days of the date of the award. If a party initiates the process, it must apply for correction within 30 days of receiving the award. After inviting other parties to comment, usually within another 30 days, the tribunal must submit its decision, under a similar time-frame, to the Court for approval. Any correction is issued as an addendum to, and component part of, the award.
Interpretation of an award
Article 29 also establishes a procedure for the interpretation of the award after it is rendered. This closely resembles the procedure for correction. The arbitral tribunal may not interpret the award on its own motion. However, interpretation can occur by process of application, response, ratification and incorporation set out in art 29(2) and (3). Throughout this process, the arbitral tribunal and the Court will clearly be sensitive to, and prevent, any disguised attempt to reopen the award.
INSTITUTIONAL PROS AND CONS
Advantages
The main advantage of ICC arbitration lies in its institutional nature. When ‘things go wrong’ – eg problems occur with the constitution of the tribunal, or the tribunal delays in issuing its award – the administrative role played by the Court and Secretariat ensures that matters will proceed with due dispatch. Clearly, such is not the case with ad hoc proceedings. The interposition of the Secretariat between the parties and the tribunal also provides the parties with a means of raising issues as to the conduct of the arbitration by the tribunal indirectly (ie applying gentle pressure).
Secondly, the ICC’s administrative services are first-rate. The Secretariat is always efficient and helpful, both in its dealings with the parties and with the tribunal. In addition, the experience of the Secretariat and Court ensures both the high quality of their decisions and the consistency of those decisions with past practice. With regard to the selection of arbitrators in particular, the ICC’s knowledge of the arbitration world generally ensures that suitably qualified individuals are appointed.
In terms of the substance of ICC awards, this depends, of course, on the tribunal. However, the scrutiny of draft awards by the Court is a unique feature of ICC arbitration which provides some safeguard against ‘rogue’ decisions.
It has been suggested that the reputation of the ICC is such that its awards carry more weight than those of some other institutions. This may have an impact both on voluntary compliance with awards by losing parties as well as the attitude adopted by national courts when faced with challenges or opposition to enforcement proceedings.
Finally, from a practical point of view, ICC arbitration may be the most easily negotiable option at the contract drafting stage. This is partly because of the perceived neutrality of the ICC; it does not (unlike some other institutions) associate itself with a particular country by its name, nor, given its role as representative of the world business community, is it linked to any one country.
Disadvantages
The most often cited disadvantage with ICC proceedings is cost. As with any institutional arbitration, the Court itself charges administrative expenses (see ‘Administrative costs’ above), although compared with the arbitrators’ fees these may seem insubstantial. As regards the arbitrator’s fees, because of the ad valorem basis of the ICC’s fee scale, very large cases may generate higher fees than would be charged on an hourly basis.
A criticism that is sometimes levelled at the ICC is the length of proceedings. As a rough guide, an ICC arbitration may take between one and two years; however, this of course depends largely on the parties and the tribunal. ICC proceedings are no longer than those of other major arbitral institutions.
One feature of ICC proceedings which is sometimes subject to criticism, in particular by parties from common law jurisdictions, is the requirement for Terms of Reference to be agreed at the beginning of the arbitration. On one view, the Terms are an unnecessary procedural step which may cause difficulties at the challenge or enforcement stage. However, as indicated, some consider that the Terms narrow the issues and promote early settlement.
OTHER ICC DISPUTE RESOLUTION SERVICES
Appointing authority in ad hoc arbitrations
The ICC is available to act as an appointing authority in ad hoc arbitration conducted otherwise than under the ICC Rules. It regularly performs this role, for a fee of US$2,500. The ICC has evolved detailed procedures, which were revised with effect from 2004 (Rules of ICC as Appointing Authority in UNCITRAL or Other Ad Hoc Arbitration Proceedings, 1 January 2004).
Other ICC dispute resolution services
The ICC offers a Pre-Arbitral Referee Procedure. This allows parties to seek urgent provisional measures from a referee, prior to arbitral or judicial proceedings. Specific provision for such procedure must be included in the arbitration clause (the standard ICC clause alone will not suffice). Other procedures include the amicable dispute resolution mechanisms set out in the ICC Amicable Dispute Resolution (ADR) Rules, expertise under the Rules for Expertise of the International Centre for Expertise, and the creation of standing Dispute Boards under the ICC Dispute Board (DB) Rules. All of the above are explained in detail on the ICC website (www.iccwbo.org/index_court.asp).
