ICC Rules Update

ICC Rules Update Extends the Expedited Procedure to Disputes Valued up to 3 MUSD

Summary

• ICC has revised the ICC Arbitration Rules to automatically apply Expedited Procedure Provisions to disputes valued under three (3) million USD in arbitrations commenced pursuant to ICC arbitration clauses concluded after 1 January 2021.

• The expedited procedure provides a six (6) month time limit for the arbitration, which is often unproblematic, but may in some cases be undesirable.

• To avoid automatic applicability of the expedited procedure, the following opt-out language should be added to the arbitration clause: “The Expedited Procedure Provisions shall not apply.”

ICC Rules Update Extends the Applicability of the Expedited Procedure Provisions

The International Court of Arbitration of the International Chamber of Commerce (the ICC) has revised the ICC Arbitration Rules (the Rules) as of 1 January 2021. The revision follows relatively quickly after the previous 2017 revision and provides several practical updates to the rules. Among other revisions to the Rules, the ICC expanded the applicability of the Expedited Procedure Provisions to disputes valued under three (3) million USD. This is a relatively significant increase from the two (2) million USD limit under the 2017 Rules.

In practice, this means that any dispute that is valued under three (3) million USD submitted to arbitration pursuant to an ICC arbitration clause concluded after 1 January 2021 that does not contain an explicit opt-out of the expedited procedure will be subject to an expedited arbitration procedure. The expedited procedure alters the default ICC procedure significantly by (among other adjustments) providing that the final award in the arbitration must be rendered within six (6) months from the case management conference.

This relatively tight time limit may be challenging at least in some cases. For example, if the case concerns events that have taken place over a lengthy period, or if extensive evidence gathering is required, the tight procedural timetable may prove challenging. This is particularly the case if the claimant spends a considerable amount of time preparing their case before the arbitration is initiated, leading to a situation where the respondent has weeks to prepare a defence against a claim that has been prepared for months.

In most cases, however, the extended applicability of the expedited procedure will be a welcome revision. And while the expedited procedure is efficient and generally unproblematic, parties including an ICC arbitration clause in their contracts should still be mindful of automatic application of the Expedited Procedure Provisions, particularly now that the monetary scope of application has increased by 33% to a figure that covers a significant portion of day-to-day commercial contracts.

If the circumstances would warrant an opt-out of the automatic application of the Expedited Procedure Provisions, it is straightforward to opt-out. An opt-out requires the inclusion of the following language to the model ICC arbitration clause: “The Expedited Procedure Provisions shall not apply.”

You can find the full text of the revised Rules here.

Do you want to know more?

Implementing functional arbitration clauses fitting your needs is critical for the successful enforcement of your rights. This is the case particularly when operating internationally. Get in touch at oskar.toivonen@byro.legal and let’s discuss whether your company would benefit from a customized dispute resolution playbook or trainings.