International arbitration is governed by a cornerstone principle, the principle of consent. This means that parties are free to include, by mutual consent, an arbitration agreement in their contract. By the same token, they can organize such arbitration proceedings by choosing either an ad hoc arbitration or an arbitration administered by an institution. Nonetheless, the ability to reach an agreement has limits, particularly once an arbitration has commenced. This usually happens at the stage of the appointment of arbitrators, especially when the parties are in disagreement regarding the chair of the arbitral tribunal.

In this respect, when the parties choose an administered arbitration, the arbitration rules of a given arbitral institution usually apply by default.[1] However, difficulties may arise when an arbitration agreement provides for ad hoc arbitration without any specification concerning the rules to respect of appointing an arbitral tribunal. In such cases, parties can reach out to an arbitral institution that would either act as appointing authority, or designate such an appointing authority, or often request the intervention of State courts.[2]

From the perspective of negotiation theory, opting for an appointing authority represents a direct “consequence of non-agreement and, in particular its so-called BATNA (best alternative to a negotiated agreement.”[3] As pointed out by the OECD, “the BATNA of both disputing parties is selection of the chair by the appointing authority. As the parties negotiate, they know that the appointing authority will make or largely determine the choice in the event of a failure to agree. If a disputing party thinks that the appointing authority will be more receptive to its selection criteria than the opposing disputing party, it may hold out for concessions from that party prior to requesting the intervention of the appointing authority. The expected appointing authority action and views about its desirability may thus affect the parties’ bargaining position over an agreed chair and their ability to credibly make the threat to walk away from negotiations over an agreed choice.”[4]

In the following paragraphs, we will discuss the particularities of an arbitration institution which often serves as appointing authority, the International Chamber of Commerce (“ICC”). The 2018 Rules of the ICC as an appointing authority in UNCITRAL or other arbitration proceedings (the “2018 ICC Rules”) have been in force since 1 January 2018.

ICC Services as Set forth in the 2018 ICC Rules

The 2018 ICC Rules set forth a series of provisions permitting “the International Chamber of Commerce or any authority within ICC”[5] to act as an appointing authority either in UNCITRAL Arbitration Proceedings[6] or other arbitration proceedings (ad hoc or administered by other arbitral institutions[7]). In addition to serving as appointing authority, the ICC can provide further administrative services in order to facilitate UNCITRAL and Non-UNCITRAL ad hoc arbitration proceedings.

These services are listed in Article 8(1) of the 2018 ICC Rules, which reads as follows:

The Court may provide one or more of the following services, as requested:

1. a) maintain the file;
2. b) assist with logistical arrangements for meetings and hearings;
3. c) assist with notification of documents and correspondence;
4. d) administer funds related to arbitrators and administrative secretaries;
5. e) administer funds related, inter alia, to experts, hearings, and escrow accounts;
6. f) proofread draft documents of the arbitral tribunal for typographical, grammatical and similar errors; and
7. g) perform any other services on which the parties may have agreed.

Procedure to Select the ICC as Appointing Authority

When the parties have not agreed in their arbitration agreement that the ICC shall act as appointing authority, each Party to an arbitration has a right to send an application to the ICC Secretariat requesting such services. Upon receipt of the application, the Secretariat shall inform the other party/parties. The application is governed by Article 4(1), which reads:

1. When requesting ICC to act under the Rules, a party shall submit an application (the “Application”) to the Secretariat at any of its offices pursuant to the Internal Rules. The Secretariat shall notify the other party or parties, and any arbitrators, if applicable, of the receipt of the Application and the date of such receipt.

Article 4(2) states that the date of receipt of the application by the ICC Secretariat corresponds to the date on which the ICC is requested to act under the 2018 Rules:

2. The date on which the Application is received by the Secretariat shall, for all purposes, be deemed to be the date on which ICC is requested to act under the Rules.

The application shall contain the following information (Article 4(3)):

1. a) the name in full, description, address and other contact details of each of the parties;
2. b) the name in full, description, address and other contact details of any person representing any of the parties, if known;
3. c) the name in full, description, address and other contact details of any arbitrator, if applicable;
4. d) the notice of arbitration and any response to the notice of arbitration, as referred to respectively in Articles 3 and 4 of the UNCITRAL Rules, in UNCITRAL Arbitration Proceedings; or any equivalent document in Other Arbitration Proceedings;
5. e) any relevant agreements and,in particular, the arbitration agreement(s);
6. f) any applicable time limits;
7. g) 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;
8. h) a description of the services requested;
9. i) in the event of a challenge of an arbitrator, the reasons or basis for the challenge;
10. j) any request for fixed costs for multiple services pursuant to the Appendix to the Rules (the “Appendix”), if applicable; and
11. k) any other information that the Applicant deems appropriate.

Costs of the ICC Acting as Appointing Authority

In accordance with Article 12(1) of the 2018 ICC Rules and Article 1 of their Appendix, “each Application shall be accompanied by a non-refundable filing fee” amounting to USD 5,000.00.

The 2018 ICC Rules envisage two methods of pricing for the above-mentioned services (Article 2 of the Appendix): either as a fixed fee for each service provided separately, or as a single fixed fee for multiple services.

The costs for the specific services are quite reasonable and listed in Article 3 of the Appendix as follows:

Article 4 of the Appendix provides that, should the Parties opt for a single, fixed fee for multiple services, its amount shall be greater, equal to a range of between USD 90,000.00 and USD 150,000.00.

Article 12(2) of the 2018 ICC Rules provides that “after the receipt of the Application, the Secretary General shall fix an advance on costs”.

It is further stated in Article 12(3) that, in a case where ICC services are requested by only one party, “the advance on costs shall be fully payable by such party, unless otherwise agreed.” Should such an Application be submitted by more than one party, “the advance on costs shall be payable in equal shares, unless otherwise agreed.”

Finally, if one or more parties fail to provide payment of their share of advance on costs, “the Secretary General may fix a time limit within which the Applicant or the parties, as the case may be, must comply, failing which the file shall be closed without prejudice to any party’s right to submit the same request at a later date in another Application.” (Article 12(4))

Suggested Model Clause

Parties dispose of a right to request the ICC to act as appointing authority at any time. However, to avoid any disagreement in this respect when a dispute has already been crystallized, they may insert the following model clause in their contract ab initio :

The International Chamber of Commerce (‘ICC’) shall act as appointing authority in accordance with the Rules of ICC as Appointing Authority in UNCITRAL or Other Arbitration Proceedings.

[1] For example, Rule 11.3 of the 2016 SIAC Rules provides that “unless the parties have agreed upon another procedure for appointing the third arbitrator, or if such agreed procedure does not result in a nomination within the period agreed by the parties or set by the Registrar, the President shall appoint the third arbitrator, who shall be the presiding arbitrator.”

[2] For example Article 9.3 of the UNCITRAL Rules provides that “if within 30 days after the appointment of the second arbitrator the two arbitrators have not agreed on the choice of the presiding arbitrator, the presiding arbitrator shall be appointed by the appointing authority in the same way as a sole arbitrator would be appointed under article 8.” In addition, Articles 6.1 and 6.2 state that “unless the parties have already agreed on the choice of an appointing authority, a party may at any time propose the name 9 or names of one or more institutions or persons, including the Secretary-General of the Permanent Court of Arbitration at The Hague (hereinafter called the “PCA”), one of whom would serve as appointing authority […] If all parties have not agreed on the choice of an appointing authority within 30 days after a proposal made in accordance with paragraph 1 has been received by all other parties, any party may request the Secretary-General of the PCA to designate the appointing authority.”

[3] D. Gaukrodger, “Appointing Authorities and the Selection of Arbitrators In investor-State Dispute Settlement: An Overview”, OECD Consultation Paper, March 2018, p. 18, ¶ 41.

[4] D. Gaukrodger, “Appointing Authorities and the Selection of Arbitrators In investor-State Dispute Settlement: An Overview”, OECD Consultation Paper, March 2018, p. 18, ¶ 41.

[5] Article 1.1 of the 2018 ICC Rules.Also, for the purposes of the 2018 ICC Rules, Authority within ICC includes “inter alia, the Chairman and Secretary General of ICC, the President and Secretary General of the Court, and ICC National Committees and Groups”, Article 2(v).

[6] For the purposes of the 2018 ICC Rules, UNCITRAL Arbitration Proceedings are defined as “ad hoc arbitration proceedings conducted under the UNCITRAL Arbitration Rules”, Article 2(i).

[7] For the purposes of the 2018 ICC Rules, Other Institutional Arbitration Proceedings are defined as “arbitration proceedings conducted under the rules of an institution other than ICC”, Article 2(iii).