How to draft and understand arbitration clauses under the new ICC Rules of Arbitration 2021

by Christian Alexander Meyer, Attorney-at-Law and Arbitrator

While negotiating an agreement or when a dispute arises one may easily get lost, if he is the first time confronted with an ICC Arbitration Clause in an agreement. This article describes the opportunities in ICC Arbitration Procedure.

Simple or complex arbitration case expected

All starts with the quality of a dispute. Is the meaning of a specific wording disputed? Shall performance be ordered and enforced or damage compensation claimed? Shall one be forced to abstain from a specific behavior? What evidence is under the party’s control? Are witnesses known and available? Is time of the essence? Shall specific facts be immediately documented for a later stage? Shall information be given or requested? What amounts are at stake? Are several parties involved and numerous agreements related? Does one know a seasoned litigator?

Choice of procedure

The ICC Rules of Arbitration 2021 regulate Ordinary Procedure, Expedite Procedure and Conservatory or Interim Relief. The parties may chose among the aforesaid options, like to exclude the Emergency Arbitrator.

For urgent temporary relief the parties who signed an arbitration clause have three options: i) A party that seeks urgent interim or conservatory measures may apply for Emergency Measures pursuant to the ICC Emergency Arbitrator Rules prior to the confirmation of the arbitrators by the ICC and the transfer of the documents to them (transfer of file). ii) After the transfer of the file to the arbitrators these arbitrators may order conservatory or interim measures at a party’s request. iii) It is recommended to expressly reserve interim relief from the competent state court, if appropriate.

How to pick the right procedure

The more the case appears complex the more the ordinary arbitration procedure with a three arbitrators’ panel is recommended. With an amount in dispute below USD 3,000,000 in general a sole arbitrator may render an award within six months in a simplified Expedited Procedure. This is the appropriate procedure in cases with less complexity. If the parties do not exclude the Expedite Procedure in the arbitration clause of their agreements it applies to all claims below USD 3 millions. The ICC Court may decide that the rules of the Expedite Procedure shall no longer apply, if inappropriate in the circumstances or upon request of the parties.

Combination of advantages to save costs

The procedure can be tailored to the parties’ needs and combine the advantages of the ordinary and Expedite Procedure. The parties may opt in to the Expedite Procedure notwithstanding the amount in dispute. To increase efficiency or save costs they may limit exchange and volume of submissions or shorten or extend time limits. Experienced business people will opt out from the Expedite Procedure but engage to agree later in a case management conference on a reasonable tight time table with limited submissions and/or the waiver of witness-hearings in the ordinary procedure. This combination increase efficiency and saves time, efforts and costs.

Dispute resolution methods prior to arbitration

If difficulties arise in contractual relationships, the parties shall always make an attempt to talk to each other. Prior to arbitration a pre Arbitration Referee Procedure or Mediation might facilitate a settlement agreement. A multi tiered arbitration clause may provide for different stages to be observed as conditions precedent to arbitration.

Urgent temporary relief

If time is of the essence conservatory or interim relief may be sought. Prior to the constitution of an arbitral tribunal a party may seek Emergency Measures from an Emergency Arbitrator expressly appointed by the Court or go to state court, if the second option is reserved in the arbitration clause. Once the ordinary arbitrators are confirmed by the Court they may order temporary relief and or review a prior order from an Emergency Arbitrator.

The choice between the ICC and the state court option must be foreseen in the arbitration clause. It is further based on the trust of party in the state court jurisdiction available and the expected time period to obtain a state court order for interim relief. An advantage of the ICC Emergency Arbitrator is that the parties can expect an order within fifteen days from the transfer of the file at a flat fee.

Christian Alexander Meyer is a seasoned litigator and arbitrator and would be glad to advise and assist you in adapting your arbitration clause to your needs or resolving your disputes and preserving your rights not only in complex arbitration procedure