ICC arbitration refers to the settlement of disputes under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules“).
The International Chamber of Commerce (the “ICC”), which oversees ICC arbitration, is the largest and most diverse business organization in the world, with hundreds of thousands of member companies from over 100 countries.[1] The ICC has three main activities, which include rule setting, dispute resolution and policy advocacy. Today, the ICC is one of the most widely used international institutions to settle international trade disputes.
ICC dispute resolution services exist in various forms, such as mediation and pre-arbitral referee procedures, but the most popular form is ICC arbitration. For disputes to be settled under the ICC Arbitration Rules, parties merely need to insert the Standard ICC Arbitration Clause in the dispute resolution clause of their contract:
“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.”
This simple arbitration clause will be respected by essentially all national courts, ensuring that commercial disputes are resolved through ICC arbitration rather than through domestic litigation. This is especially useful for international contracts, as arbitration awards, unlike domestic court judgements, can be enforced under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 166 countries as of the current date without the case being reheard on the facts or the law.
History of ICC Arbitration
The ICC itself was founded in Paris in 1919 by a handful of entrepreneurs who decided to “create an organization that would represent business everywhere”.[2] Last year, the ICC celebrated 100 years since its foundation.[3] The first chairman of the ICC was a French politician, Mr. Etienne Clementel. In 1923, four years later, the International Court of Arbitration of the International Chamber of Commerce (the “ICC Court”) was formed.
The ICC International Court of Arbitration
The ICC International Court of Arbitration is not a court. It is the world’s leading arbitration institution, which has provided services for over 25,000 arbitration cases since its establishment in 1923. Frequently confused for a national court, due to its name, the ICC International Court of Arbitration exercises judicial supervision over arbitration proceedings, but it does not itself have the power to render enforceable judgements itself. According to its Statute, attached as Appendix I to the ICC Arbitration Rules, the main role of the ICC Court is to provide supervision of arbitration proceedings in accordance with the ICC Arbitration Rules, including the scrutiny and approval of arbitral awards.
The ICC Court follows its own Internal Rules, which are attached as Appendix II to the ICC Arbitration Rules. The ICC Court consists of a President, Vice-Presidents and Members.[4] Members are appointed for three-year terms by the ICC World Council upon proposals of National Committees and Groups.[5] The World Council is the ICC’s supreme governing body consisting of representatives of National Committees. For its current term (2018-2021), the ICC Court has 176 Members from 104 countries and territories, with equal gender parity of 88 women and 88 men.[6] The current President of the ICC Court is Mr. Alexis Mourre, whose terms expires on 30 June 2021 and who announced he would not seek its renewal.[7] A complete list of Members of the ICC Court is available on the ICC’s website.
The ICC Court’s official working languages are English and French, however, the ICC Court administers cases in any language and may communicate in all major languages in the world, including Arabic, Chinese, German, Italian, Portuguese, Russian and Spanish.
The ICC Secretariat
The ICC Court is supported by the ICC Court’s Secretariat, composed of more than 80 lawyers and personnel. The detailed role of the ICC Secretariat is set out in Appendix II to the ICC Rules (Internal Rules of the International Court of Arbitration). The ICC Secretariat currently has 11 teams organized by regions of the world, which are managed by the Secretary General, the Deputy Secretary General and the Managing Counsel.[8] Members of the ICC Secretariat may be contacted by users of ICC arbitration, for instance to request updates on the administration of arbitration proceedings. The contact details of each Management Team, which are overseen by a Counsel and a Deputy Counsel, are available on the ICC’s website.
The ICC Secretariat’s headquarters are in Paris where seven of eleven teams are based. In addition, the ICC also has offices in New York, Hong Kong, Singapore, Abu Dhabi and São Paulo to administer arbitrations.[9]
In addition to the International Court of Arbitration, the International Centre for ADR provides mediation and other forms of alternative dispute resolution services (“ADR“).
One does not need to be a member of the ICC in order to use ICC dispute resolution services. Parties may use ICC standard clauses, which are available in multiple languages, and may add them to any commercial or construction contract (see ICC Arbitration Standard Clause).
Development of the ICC Arbitration Rules
Since the creation of the ICC , there have been thirteen versions of the ICC Arbitration Rules (including their revisions and amendments) (see ICC Arbitration Rules). While the relevance of previous versions of the ICC Arbitration Rules is largely academic, certain rules are still used in practice:[11]
- 1975 ICC Rules of Conciliation and Arbitration (English)
- 1988 ICC Rules of Conciliation and Arbitration (English)
- 1998 ICC Rules of Arbitration (English)
- 2012 ICC Rules of Arbitration (English)
- 2017 ICC Rules of Arbitration (English)
The ICC Arbitration Rules are the cornerstone of ICC arbitration proceedings, containing essential regulations relating to each stage of an arbitration, from the Request for Arbitration to the Final Award. They also contain provisions regarding the constitution of the arbitral tribunal, the conduct of arbitration proceedings and the costs of arbitration. The arbitration rules currently in force are the 2017 ICC Rules, which entered into force on 1 March 2017. The ICC Arbitration Rules are divided into several different chapters, as follows:
- Introductory Provisions (Articles 1 to 3)
- Commencing the Arbitration (Articles 4 to 6)
- Multiple Parties, Multiple Contracts and Consolidation (Articles 7 to 10)
- The Arbitral Tribunal (Article 11 to 15)
- The Arbitral Proceedings (Article 16 to 30)
- Awards (Articles 31 to 33)
- Costs (Article 37-38)
- Miscellaneous (Articles 39 to 42)
- Appendix I – Statutes of International Court of Arbitration (Articles 1 to 7)
- Appendix II – Internal Rules of the International Court of Arbitration (Articles 1 to 6)
- Appendix III – Arbitration Costs and Fees
- Appendix IV – Case Management Techniques
- Appendix V – Emergency Arbitration Rules (Articles 1 to 8)
- Appendix VI – Expedited Procedure Rules (Articles 1 to 5)
On 8 October 2020, the ICC released a draft version of the most recent update of the ICC Arbitration Rules, which are expected to enter into force on 1 January 2021. For more information on the key amendments proposed in the revised 2021 ICC Rules, please see Revised 2021 ICC Arbitration Rules: Key Changes.
The Commencement of an ICC Arbitration
To commence an ICC Arbitration, a party must pay a filing fee of USD 5,000 and submit a Request for Arbitration to the ICC (at either its headquarters in Paris or its offices in Hong Kong, New York, Sao Paulo, Singapore or Abu Dhabi). Payment details for the filing fee are available here.
The Request for Arbitration must, under Article 4(3) of the ICC Arbitration Rules, contain:
a) the name in full, description, address and other contact details of each of the parties;
b) the name in full, address and other contact details of any person(s) representing the claimant in the arbitration;
c) a description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made;
d) a statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
e) any relevant agreements and, in particular, the arbitration agreement(s);
f) where claims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each claim is made;
g) all relevant particulars and any observations or proposals concerning the number of arbitrators and their choice in accordance with the provisions of Articles 12 and 13, and any nomination of an arbitrator required thereby; and
h) all relevant particulars and any observations or proposals as to the place of the arbitration, the applicable rules of law and the language of the arbitration.
Upon receipt of a Request for Arbitration, the ICC Secretariat will notify the respondent or respondents, who have 30 days from the receipt of the Request for Arbitration from the ICC Secretariat to file an Answer, containing similar information to the Request for Arbitration.
The ICC Secretariat will then assist the parties with the constitution of the arbitral tribunal, which will then hold a Case Management Conference where a Procedural Timetable will be discussed that will determine the remaining procedural steps of an ICC arbitration.
A standard ICC arbitration will include two rounds of written submissions, followed by an oral hearing, after which a final award is rendered, but the parties may agree to a different procedure.
In 2019, the median duration per ICC arbitration was 22 months (this, of course, means that half of ICC arbitrations had a duration of fewer than 22 months). The applicability of the ICC’s expedited procedure provisions, introduced in 2017, will typically reduce the duration of smaller disputes.
Selection of Arbitral Tribunals under the ICC Arbitration Rules
Disputes under the ICC Arbitration Rules are decided by either a sole arbitrator or by three arbitrators (2017 ICC Rules, Article 12 (1)). Each arbitrator must “be and remain impartial and independent of the parties involved in the arbitration“, or he or she may be challenged and potentially removed.
Parties seeking to nominate an arbitrator may find resources to search for potential arbitrators online, or request the ICC Court to do this in their place.
If the parties have not agreed upon the number of arbitrators, the ICC Court will appoint a sole arbitrator, unless it appears to the ICC Court that the dispute warrants the appointment of three arbitrators (2017 ICC Rules, Article 12 (2)). In this case, the claimant shall nominate an arbitrator within 15 days from the receipt of the notification of the decision of the ICC Court. The respondent shall nominate an arbitrator within a period of 15 days of the receipt of notification of the nomination made by claimant. In case one party fails to nominate an arbitrator, the appointment shall be made by the ICC Court, as provided under Article 12 (2) of the 2017 ICC Rules.
In case the parties have agreed to the appointment of a sole arbitrator, they may jointly nominate the sole arbitrator for confirmation. In case the parties fail to nominate a sole arbitrator within 30 days from the date when claimant’s Request for Arbitration has been received by the other party, the sole arbitrator is appointed by the ICC Court (2017 ICC Rules, Article 12 (3)).
Cost of ICC Arbitration
After paying the USD 5,000 filing fee, the ICC will request the parties to pay advances on costs. The advance on costs to be paid depend upon the amount in dispute, and may be calculated online using the ICC’s cost calculator. In principle, costs are shared equally between the parties. If one party refuses to pay, however, generally the respondent, the claimant may be ordered to pay the respondent’s costs, which may be recovered in the final award on costs.
While parties are not required to use arbitration lawyers or advocates, this is typically wise given the complexities of effective advocacy and arbitration procedure. Legal fees, however, tend to constitute the largest cost of arbitration, along with expert fees. There are a variety of techniques that can be used to reduce the costs of ICC arbitration, but the most effective is to negotiate legal and expert fees.
A successful party may recover all or most of its costs in an ICC arbitration. Under Article 38(4) of the 2017 ICC Rules, “The final award shall fix the costs of the arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties“.
ICC Arbitration Caseload Statistics
The ICC publishes an annual report providing for an overview of cases administered by the International Court of Arbitration and the International Centre for ADR, which includes information about:[12]
- parties: numbers, nationalities, state parties;
- arbitral tribunals: constitution, numbers and nationalities of arbitrators appointed and confirmed, incidents affecting the composition of arbitral tribunals during the proceedings;
- the applicable law chosen by the parties;
- subject and size of disputes;
- places selected as seats of ICC arbitrations;
- awards.
According to the ICC Dispute Resolution Statistics for 2019, the ICC Court registered a total of 869 new cases in 2019 (851 cases under the ICC Rules and 18 under the Appointing Authority Rules).[13] In 2019, the ICC recorded its 25,000th case and announced record arbitration figures. During 2019, the ICC Court also administered 23 Emergency Arbitrator applications (the total number of emergency arbitration cases since 2012, when this facility was first introduced, is 117). The ICC Court also scrutinized 664 draft arbitral awards in over 160 Court sessions.[14]
According to the Queen Mary & White and Case International Arbitration Survey 2018, the ICC, which traditionally stands out as the most preferred arbitration institution in the world for international disputes, maintained first place (with 77% of responses), followed by the LCIA (51%), the SIAC (36%) and the HKIAC (27%).
[1] International Chamber of Commerce, Definition, available at: https://www.investopedia.com/terms/i/international-chamber-of-commerce-icc.asp
[2] See https://iccwbo.org/about-us/who-we-are/history/
[3] For more information on the ICC History visit the ICC centenary website, available at: https://100.iccwbo.org/index.html
[4] 2017 ICC Arbitration Rules, Article 2, Appendix I, Statute of International Court of Arbitration.
[5] 2017 ICC Arbitration Rules, Article 3, Appendix I Statute of International Court of Arbitration.
[6] See https://iccwbo.org/dispute-resolution-services/icc-international-court-arbitration/court-members/
[7] See https://iccwbo.org/media-wall/news-speeches/alexis-mourre-to-step-down-as-icc-court-president-in-june-2021/
[8] The ICC Secretariat Behind the Scenes: A Chat with Ana Serra e Moura, available at: http://arbitrationblog.kluwerarbitration.com/2019/01/03/the-icc-secretariat/
[9] The ICC Secretariat Behind the Scenes: A Chat with Ana Serra e Moura, available at: http://arbitrationblog.kluwerarbitration.com/2019/01/03/the-icc-secretariat/
[10] ICC Dispute Resolution Bulletin, Extract, 2020, Issue 2, available at: https://www.shearman.com/-/media/Files/Perspectives/2020/08/Bull-2020-2-COM-Schinazi.pdf
[11] See https://www.international-arbitration-attorney.com/icc-rules-arbitration-1975-current-rules-arbitration/
[12] 2019 ICC Dispute Resolution Statistics, available at: https://iccwbo.org/publication/icc-dispute-resolution-statistics/
[13] 2019 ICC Dispute Resolution Statistics, available at: https://iccwbo.org/publication/icc-dispute-resolution-statistics/
[14] 2019 ICC Dispute Resolution Statistics, available at: https://iccwbo.org/publication/icc-dispute-resolution-statistics/
