Law Times

Law Times • December 5, 2011 FOCUS ICC launches new rules Changes include power to appoint arbitrator directly BY MICHAEL McKIERNAN Law Times L gal ower costs and greater effi ciency are at the heart of new rules governing the International Chamber of Commerce's International Court of Arbitration. Th e new rules come into force on Jan. 1, 2012. Barry Leon, a partner at Ottawa's Perley-Rob- ertson Hill & McDougall LLP who also chairs the ICC's Cana- dian national committee, says the rules show that those involved in international dispute resolution aren't immune to the issues fac- ing lawyers everywhere. "Here, as in other areas of le- services, corporate counsel have been quite vocal in saying that more attention needs to be paid to making the process faster and more cost-effi cient," says Leon. "Right at the beginning, the ICC said that it wanted to put a heightened focus on what users — companies and states — are looking for in the process." Two senior corporate counsel were members of the 20-mem- ber committee that drew up the new rules, which represent the fi rst modifi cation since 1998. Th e committee has been work- ing on the updates since 2008. When members ran into a con- fl ict, "they gave priority to the concerns of the user, so hopefully what we have is a set of rules that better fi ts their needs," says Leon. Reaction so far has been posi- tive, he notes. "So far, corporate counsel seem to be pleased and states seem to fi nd the changes more attractive and it's seen as giving them another option that wasn't as good before." A key change comes in Arti- cle 22 of the rules that instructs the arbitral tribunal and parties to "make every eff ort to conduct the arbitration in an expeditious and cost-eff ective manner." Th e same article also hands arbitra- tors greater control over case management procedures. "It allows for a number of techniques, such as bifurcation, or various other ways to focus on what's really important and common-sense things like lim- iting the length of written sub- missions," says Leon. "Th ese are the kinds of techniques which in court systems are harder to do because the rules are more carved in stone." Bill Horton, a Toronto arbi- trator and mediator on the ADR Chambers panel, says many good arbitrators were already holding early case conferences, another new requirement, as a matter of course. Still, he notes the new rules drive the effi ciency message home. "It makes it clearer that the tribunal has responsibility to set up an eff ective procedure right from the beginning. It's clear that that's an expectation now and it raises the bar for case management of arbitrations." As well as codifying best practices, Horton says the new rules also represent a laudable Untitled-2 1 www.lawtimesnews.com 11-10-11 8:44 AM attempt to address perennial problems that have evolved in the decade since the last update. In that time, he says the complex- ity of disputes has risen, while the number of multiparty arbitra- tions has increased to the extent that one in every three now in- volves more than two parties. At the same time, the new rules provide mechanisms to consolidate related disputes un- der one arbitration and methods for selecting arbitral panels when multiple parties are involved. "It means there's a greater incentive for parties to choose ICC arbi- tration consistently for the agree- ments that they were party to or even to make ICC the standard dispute resolution organization on a project-wide basis because once everyone is locked in, it gives the ICC Court of Arbitra- tion that much more fl exibility," says Horton. For the fi rst time, the new rules also allow the court to In addition, the new rules mark a step into the world of investor-state disputes for the ICC. "Th e investor-state arbitra- tion dispute area is growing very dramatically with the imple- mentation of more and more in- vestment bilateral treaties," says Horton. "Th ey want to make it clear that the scope of ICC arbi- tration is not limited to business- to-business disputes." One way the ICC has done The changes make the ICC 'more of a one-stop shopping place for international dispute resolution,' says Barry Leon. appoint an emergency arbitra- tor for claimants looking for injunctive relief without hav- ing to go through the process of submitting a full claim and putting together a panel. that is through a new power that allows the court to directly ap- point an arbitrator rather than re- lying on the recommendations of their national committees. Th ose committees have had a reputa- tion for being business friendly because of their affi liation with local chambers of commerce, something the power to make di- rect appointments aims to nullify in investor-state cases. "Th e ICC has always done these cases," says Leon. "But the thinking is that it's an area that has grown signifi cantly in the last 10 years and the ICC would like to have a bigger market share, so they've devel- oped some practices that make it more palatable to states." Th e new rules are available on the ICC's web site. It also plans to publish a practical guide in the new year to ease the transi- tion. Leon says Canadian lawyers should keep an eye out for it. "Because Canadian compa- nies are increasingly active in natural resource construction projects internationally, I think Canadian lawyers who practise in this area and Canadian con- tract drafters are going to see much more use of these rules, so it's going to be important that they be aware of them and the increased options they of- fer," he says. "To me, it's a posi- tive development. It makes the ICC more of a one-stop shop- ping place for international dis- pute resolution." PAGE 11

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