In ICC arbitration, upon the transmission of the case file by the ICC Secretariat to the arbitral tribunal (Article 16 of the ICC Arbitration Rules), the first task for an arbitral tribunal is to draw up the Terms of Reference.
According to Article 23(1) of the ICC Arbitration Rules, the Terms of Reference corresponds to a document providing a framework for the entire arbitration “on the basis of documents or in the presence of the parties and in the light of their most recent submissions.”
Its preparation follows a collaborative logic between the parties and the arbitral tribunal, although, always under the supervision of the arbitral tribunal. The Parties’ active participation and openness to a consensus is, therefore, important.
It is regrettable that parties sometimes take the preparation of the Terms of Reference for a battlefield. As expressed in the Secretariat’s Guide to ICC Arbitration, “such behaviour is generally unwarranted as the parties’ positions can usually be protected by appropriate reservations or caveats.”[1] Also, the arbitral tribunal shall be cautious about the consensual nature of the Terms of Reference and “avoid simply insisting on and pushing through its own ideas where a party expresses genuine concern or justified objections. Rather, it should seek to build consensus amongst all involved through persuasion and/or adapting the draft in a way that removes contentious elements or clarifies that they will be decided in the arbitration.”[2]
Content of the Terms of Reference
Although the ICC Arbitration Rules do not require any specific form for the Terms of Reference, they do impose a series of information that needs to be addressed therein. This mandatory information is listed in Article 23(1) of the ICC Arbitration Rules as follows:
- a) the names in full, description, address and other contact details of each of the parties and of any person(s) representing a party in the arbitration;
- b) the addresses to which notifications and communications arising in the course of the arbitration may be made;
- c) a summary of the parties’ respective claims and of the relief sought by each party, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
- d) unless the arbitral tribunal considers it inappropriate, a list of issues to be determined;
- e) the names in full, address and other contact details of each of the arbitrators;
- f) the place of the arbitration; and
- g) particulars of the applicable procedural rules and, if such is the case, reference to the power conferred upon the arbitral tribunal to act as amiable compositeuror to decide ex aequo et bono.
In addition, the parties and the arbitral tribunal can include supplementary information. Additional information suggested in the Secretariat’s Guide to ICC Arbitration[3] is as follows:
- a summary of the procedural history to date;
- any other issues relating to the constitution of the arbitral tribunal and reference to any agreements between the parties on that matter, such as an agreement on the process for selecting the president of a three-member arbitral tribunal;
- if not contained in the arbitration clause, reference to any subsequent agreement of the parties on the language of the arbitration, the place of the arbitration, and any other procedural matters;
- a quotation of the entire arbitration agreement and choice-of-law clause, if any;
- an explicit indication of the applicable version of the Rules.
Time Limit, Signature of Terms of Reference and their Approval by the ICC Court
According to Article 23(2) of the ICC Arbitration Rules, the Terms of Reference shall be completed within 30 days as of the date of the ICC Secretariat’s transmittal to the arbitral tribunal of the case file.
From a practical perspective, the ICC Secretariat’s “covering letter sent with the case file will remind the arbitral tribunal that the time limit begins on that date. In practice, the Court does not require the signed Terms of Reference to be transmitted to it within that time limit but rather considers the deadline to have been met once all the parties and arbitrators have signed the document, even if the Secretariat has not received the original by then.”[4]
Once completed, in order to confirm the collaborative nature of the Terms of Reference, Article 23(2) of the ICC Arbitration Rules provides that they shall be signed by the parties and the arbitral tribunal. Upon signature, they are transmitted to the ICC Court for approval. Such approval triggers the commencement of the default six-month time limit under Article 31(1) of the ICC Arbitration Rules for issuing a final award.
Amendment of the Terms of Reference and New Claims
The ICC Rules do not provide for amendment of the Terms of Reference since all significant changes that might occur in the course of arbitration can be recorded through a simple exchange of correspondence:
The Rules do not mention whether and in what circumstances the Terms of Reference can be amended. The Secretariat has usually taken the view that amendments are rarely, if ever, needed. If there is a significant change in the procedure or the scope of the claims and issues to be addressed in the arbitration, that change can be recorded simply through an exchange of correspondence or by way of an order from the arbitral tribunal.[5]
Moreover, pursuant to Article 23(4) of the ICC Arbitration Rules, once the Terms of Reference are signed or approved by the ICC Court, “no party shall make new claims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the arbitral tribunal, which shall consider the nature of such new claims, the stage of the arbitration and other relevant circumstances.”
In this respect, the Secretariat’s Guide further explains that “if the arbitral tribunal has decided to authorize the inclusion of a new claim […], that decision can simply be recorded in a procedural order or correspondence without any need to amend the Terms of Reference, unless the law at the place of the arbitration requires otherwise. Any such change should also be recorded in the summary of the procedure included in the arbitral tribunal’s next award in the case.”[6]
[1] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), p. 241, ¶ 3-831.
[2] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), p. 241, ¶ 3-831.
[3] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), pp. 248-249, ¶ 3-859.
[4] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), p. 251, ¶ 3-871.
[5] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), pp. 252-253, ¶ 3-877.
[6] J. Fry, S. Greenberg, F. Mazza, The Secretariat’s Guide to ICC Arbitration (2012), p. 253, ¶ 3-878.